The Truth About Trust: Earn It to Sell More in BHPH and LHPH

Like respect, trust has to be earned in my book. No one can demand those. Obedience and compliance, sure. But earning trust requires “making deposits.” More to come on that.

At conferences, across social media and all points in between, there is plenty of talk amongst Buy Here Pay Here (BHPH) and Lease Here Pay Here (LHPH) dealers about inventory sourcing, closing ratios, average down payments, repo rates, etc. My wife and business partner, Michelle Rhoads, and I refer to topics of that nature as “straight-line” business matters. Undoubtedly, those are important things to understand and strive to improve in any BHPH or LHPH operation. In addition to operational nuts and bolts, Michelle and I have begun to incorporate more “squiggly-line” subjects when we teach. These can include things like culture, leadership and today’s subject of trust. Though these are less tangible, we view them as foundational and having significant impact on all facets of any business, but especially vital in BHPH/LHPH where there are so many “departments” that our customer interacts with and a longer, ongoing relationship with the dealership.

Dealers know that earning the trust of consumers in their respective communities translates into more sales. Of course it does.  Our own Facebook polls in February of 2023, revealed that an overwhelming majority of dealer respondents agreed. 175 of 178 (98%) said ‘Yes, trust = more sales.” That is easily the highest percentage of any such poll we’ve done. Yet, dealers across our industry continue to be car-forward in most of their marketing efforts. While we certainly recognize that promoting nice looking cars can attract buyers, we suggest that A-B testing can be a valuable tool in analyzing car-focused campaigns vs people/program campaigns. Hopefully with the help of a good CRM and ongoing tracking, we will see how valuable it will be in BHPH to determine which group of buyers performed better over time.

In an August presentation in Arizona, Michelle and I dove deeper into the idea of becoming “known, liked and trusted” and how doing so can increase sales, boost morale and much more. We referenced author Bob Burg who, in 2010, wrote about how “All things being equal, people will do business with and refer business to, those people they know, like and trust.” 

Then, in our BHPH and LHPH businesses, we have a different and much longer ongoing relationship with the customers we serve. With typical contracts now running about 3 years, we not only want to earn our customers’ business, we want to re-earn it - day after day, month after month. Clearly, a level of trust can go a long way in that regard. 

Some months ago, I started to refer to the relationship between BHPH dealers and their customers on the whole as one that has a lot of “friction” in it. Across the entire industry, there is a high level of distrust and conflict. We know that it’s fixable, at least for the vast majority of those relationships. At its core, distrust is rooted in fear. It’s not a stretch to say that dealers have some level of fear of their customers and vice versa. Reduce that bi-directional fear and you go a very long way toward reducing repo losses and interest rates. Imagine the difference. The fix, then, is in improving communication. It may just be that the dealer who is providing financing can be totally trustworthy. But the customer probably doesn’t know that. Oh, the customer may see the dealer’s lips moving on Facebook reels, etc. but who are they really? “What will their (the dealer’s) language and tone be after the contract is signed?” Rather than view this as an indictment of dealers, I urge everyone to see this simple awareness as a tremendous opportunity. For those playing what Michelle and I refer to as the “long game” in BHPH/LHPH, learning to really connect with their customer and community and earn trust is huge! Dealers who learn to do this well can expect to have staying power.

As we know, trust goes both ways. This suggests that the customer should also be looking to establish a level of trust. After being a dealer for nearly a decade and having been in this specific industry for 26 years, I can say that it is absolutely possible to develop mutual trust with BHPH/LHPH customers. Of course, the customer has to earn it in the same way the dealer does. Considering the tarnished history of this segment of the used car industry, patience on the part of dealers is in order. Give it time. Lean in. Then, lean in again. And if need be, lean in again. Be transparent. Be consistent. Show that your commitment to earning the trust of the community is embedded in the fiber of your entire team. You see, it will take more than just words to win the trust of this often-mistreated customer. It’ll also take showing empathy, kindness, and showing that, as a dealer and upstanding member of the community, you genuinely care about the success of your customers. Learning how to communicate authentically and better tell that true story will allow you to win and keep more customers. As industry expert Ken Shilson has said, “BHPH is about keeping them sold.” Mutual respect and trust are important ingredients in that recipe.

As mentioned earlier, trust is about making deposits. When I say “leaning in again and again,” I mean that it helps to think of this part as a bank account. More specifically, let’s call it a trust account - one that is shared between you and your customer. As an account holder, you can make deposits - trust deposits. As dealers, trust deposits might come in the form of quickly honoring a warranty claim. Or, calling the service customer before they call you can represent a small deposit. As the customer sees these figurative deposits being made, they naturally conclude that you mean what you say in those ads on social media. Your trust account is growing. Plus, if the relationship were to face a setback, those trust reserves will have a very positive impact on the actual dialog and sharply increase the chance of a successful resolution. Dealers who live the principles of the White Hat Way understand this and strive to add to that trust account often.

What is White Hat Way, you ask?  In White Hat Way, Michelle and I have simply been creating an identity (white hat cowboy/farmer/rancher)  with trust at the core. And while there are other elements, it all ties back to trust and to a decision to make a difference. 

The origin story of White Hat Way comes from my high plains upbringing. I grew up around hard-working farmers and ranchers. And, as someone who has always enjoyed a good Western on TV, I came to view the cowboys in white hats as the “good guys.” In the end, WHW is an identity and one that is meant to represent something important. We are working to help all dealers better connect with their customers. It has been fun teaching all of the dealers out there how to become known, liked and trusted as the “good guys” and “good gals” who operate businesses that are clearly an asset to their respective communities.

Again, according to 98% of dealers, being trusted translates to more sales. Clearly, learning to establish and “communicate/sell trust” would translate to more sales as we step into the new year. Then, showing ourselves to be trustworthy over and over would help to keep those BHPH customers sold as they continue to refer lots of friends and family! As an industry, we’ll all be well-served to talk more about trust and about making a difference. You’ll find us doing that. Come join the conversation!