Cheating Customers on Discounts
Ford’s lease training included instruction on how to misquote monthly payments to cheat customers out of negotiated discounts. If a customer said that he would not OK a deal unless they gave him a price discount on a car, they were taught how to trick him into believing that a smaller payment reduction was legitimate.
A number of documents in the training manuals told salespeople that the proper monthly payment change for each $1,000 in gross [price] was $50. Page 2-30 in the 1993 manual says, “Rule! $1,000 in Gross = $50 in Payment. We can simplify by using a ‘rule of thumb’ Factor of 2.” And page 2-34 in the same manual says, “We know that $60 in payments is equal to $1,200 in Gross.” It also mentioned the “Factor of 2.”
However, on a page titled, “What Kind of Discount Are You Giving Me?” (3-9 in the 1993 manual), salespeople were told to use a different factor to figure payment reductions for discounts. The manual tells how to do this in front of the customer “Write down the discount amount, then using a “3” factor, convert that to a lower payment amount:—$ 1,500 discount equals $45 per month.”
Since the monthly payment reduction they were quoting (for 2 years) was about the same as the real one on a 3-year loan, most people would not have known that they were being cheated out of 40% of their discount.
Tags: Business