By on July 12, 2016

Couple buying cat Courtesy chronicleherald.ca

Every year, Pied Piper Management sends phony car buyers into dealerships to rank how much deal-landing prowess their salespeople can muster.

This year’s dealership effectiveness rankings put a number of high-end automakers at the top, but the industry’s most innovative company sits at the very bottom for the second year in a row. According to Pied Piper’s Prospect Satisfaction Index, Tesla Motors ranks last by a mile.

Why does an automaker that builds fast vehicles have so little hustle in the sales department?

It all comes down to consistency between dealers, said Fran O’Hagan, Pied Piper’s president and CEO. Sales processes aren’t always followed to the letter, and the greater the variation, the lower the score.

“Tesla leaves me scratching my head,” O’Hagan told WardsAuto. “They own all of their stores, so you would think each one would be doing the same thing. But they’re not. Tesla is consistent in its inconsistencies.”

The variation in sales effectiveness between Tesla retailers is great, O’Hagan said, with some salespeople performing very well and others acting like “museum curators.”

Pied Piper’s index ranks Infiniti as the best-performing brand, earning a PSI score of 114. Close behind are Lexus and Mercedes-Benz, each with 112. The industry average is 103.

Tesla’s score of 86 is by far the lowest, with Volvo ranked second last at 96. Mitsubishi, Mazda and Jeep round out the bottom five.

The mystery shoppers sent into dealerships rank salespeople on specific actions. In the latest ranking, dealer staff improved in the amount of times they offered different financing and lease options, asked about factors preventing a sale, and listed features not offered by other automakers. The downward trend involved salespeople asking why customers chose the brand, how the vehicle will be used, and offering printed materials.

According to Pied Piper, high PSI scores pay off. On average, brands in the top quarter of the ranking sell 16 percent more vehicles than those in the bottom quarter.

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59 Comments on “Mystery Shoppers Rank Tesla Dead Last for Sales Effectiveness Again...”


  • avatar
    CoreyDL

    Mazda just has bad sales effectiveness because the only people who pull onto the lot are looking for the run-down K-Mart which used to be there.

    • 0 avatar
      zerofoo

      The whole Mazda phenomenon is a weird one. The Mazda 6 is pretty nice – drives really well. The new MX-5 is great looking, and the CX-5 seems popular.

      I’m not really sure why Mazda is struggling – do their sales teams really stink that badly?

      • 0 avatar
        JimZ

        no, it’s because Mazda spends a lot of effort on handling and other driving dynamics, which 99% of the car buying market don’t give a s**t about.

        • 0 avatar
          PrincipalDan

          @JimZ, ding ding ding.

          Everyone who cares about that is already registered to comment on this website. Unfortunately for Mazda a significant percentage of those people care more about 0-60 and NVH than they do about “engaging to drive.”

        • 0 avatar
          HotPotato

          I think it’s more that their cars, the 3 hatch in particular, are overpriced when reasonably optioned, and a little odd looking to boot. My ’06 3 hatch was a good value–looked like an atomic cockroach when new, but had plenty of cargo space, and the styling eventually became mainstream. The current generation’s styling–Jaguar E-Type meets mealworm–isn’t settling in so well, and is tight on interior and cargo room…but more to the point, getting one with alloy wheels and the big engine puts you into holy-smokes-no-thank-you pricing territory.

          • 0 avatar
            orenwolf

            No doubt – getting a full Mazda 6 GT with the tech package brought the cost of the car disturbingly close to RX8 territory.

      • 0 avatar
        CoreyDL

        -Lousy salesman
        -Lousy retail outlets in bad parts of town (and few and far between)
        -Lousy brand recognition outside Miata
        -Bit expensive compared to their big rivals

        • 0 avatar
          TrailerTrash

          The only experience WORSE than a car dealer is walking into a Lazy Boy store.
          You get psyched up emotionally ready a little before you enter…knowing as soon as you get in the Night Of The Living Dead begins. Zombie like creatures come out from the shadows, dragging their feet slowly towards you from all isles…agonizingly groaning as they try to grab your arm.
          Terrifying.

        • 0 avatar
          Ryoku75

          Lets add rust to that list, yes Mazdas still have issues with rust popping up after…16 months?

          Then theres the Honda Accord, for $1000 more than the 6 you get something engaging, and actually built decently.

          • 0 avatar
            SP

            @Ryoku75:
            Honda’s record on rust prevention isn’t exactly spotless, you know. I have seen more Accords with rusted out rear fenders than I care to count.

            Out of curiosity, are there any cars you do like? Just the Accord, is that the only one?

    • 0 avatar
      Kendahl

      Three years ago, we bought a new car which would be mostly my wife’s. After reading a good bit, especially here on TTAC, we looked at only two candidates — the Ford Focus and the Mazda3. The Focus won because it was a bit more refined than the Mazda3. Of course, it should have been because it was only a year out of a redesign while the Mazda was the old model with the maniacal grin. If we were making the same comparison today, I would expect the redesigned Mazda3 to come out on top.

      Both the Ford salesman and Mazda salesman were pleasant to deal with. The only negative in the purchasing process was the time wasted saying “No” to the series of people trying to sell us high-profit add-ons that we knew better than to buy. We selected dealerships on the basis of their stocking manual transmission cars. Most dealers didn’t and I make a point of telling each one that their failure to do so cost them their chance to make a sale. Bringing in a manual transmission car from another city, after we committed ourselves to the purchase, wasn’t good enough.

      • 0 avatar
        SP

        Both cars are actually great. The current Mazda 3’s interior and ergonomics are much better than the current Focus, though. The 2015 Focus redesign did correct a lot of the issues like the crazy center stack buttons, but it didn’t fix the problems with the gauge cluster. (Overly bright trip computer, trip computer closer than gauges forcing eyes to change focus, gauges blocked by the wheel and driver’s hands, gauges off center relative to the wheel.)

        Still, I would recommend either car to anyone.

        I live near Philadelphia and I have actually really enjoyed my experiences with the Mazda dealer. The salesman was polite, friendly, and let us drive the conversation. And the service advisor has actually talked me out of services on occasion. (?)

    • 0 avatar

      You need to Google Street View ‘Friendly Kia’ in New Port Richey.

      The answer will amaze you.

  • avatar
    zerofoo

    So car buyers like pushy and uneducated car salesmen so long as they can take their trade off of their hands?

    No wonder the car dealership experience sucks – it’s exactly what the car-buying public wants.

    • 0 avatar
      highdesertcat

      “No wonder the car dealership experience sucks”

      It’s been that way, seems like forever. The sales staff has to meet the daily quota, so they have to get results. And in order to get results, they have to be pushy.

      Years ago, when I taught a graduate course in Sales and Marketing at the University, I challenged my students to take a sales job in automotive sales, even if only on their days off, for Commission only.

      Several did. And their work/study papers were marvels in the human experience.

      Every single one of them who took this extra work/study part-time job selling cars said that there is nothing that can prepare you for it.

      • 0 avatar
        tjh8402

        I worked as a salesman at a new car Carmax dealer. I was amazed at how many customers were willing to screw over other car buyers. We would have people bring us a car to trade or sell and our buyers would find accidents, hidden rust, and other issues uneducated buyers would likely miss, and the customers would turn us down implying that they could get more $ by not telling a private party buyer about the cars problems (they were probably right). The biggest selfish bastard I remember was a guy who brought us a van to trade in. Very nice van, we offered him like $2k over KBB. He said that wasn’t enough and he wanted another $2-3k on top of that. We told him that was likely the price we were gonna sell it at. He said “well its worth more than that retail. you should sell it for a few thousand more”. We said yes it might be possible, but just like you’re getting your new van at a substantial discount off the sticker, we would want the next buyer of your van to also enjoy a good deal. He said nope and walked out. He wanted us to overcharge the next buyer just so he could get more for his trade while still buying his new van at a discount. SMH. That was probably the beginning of the end of my foray into car sales.

        • 0 avatar
          28-Cars-Later

          You’re better off.

        • 0 avatar
          highdesertcat

          tjh8402, at least you, the dealer maintained control and that trade didn’t become a loss-leader on the used-car lot.

          I had a philosophy during my affiliation of 30+ years in new car retail sales. There are minimum fixed-costs that had to be met during each sale and everything else above that was gravy.

          So my advise to sales managers was to weigh cost of vehicle, time the vehicle was on the lot, plus fixed overhead expenses as the bare minimum sales price. Plus tt&l of course.

          Take-ins at KBB trade-in value, no more.

          Factory incentives would only be applied if the buyer pressed the issue, OR if the distributor needed to move stock pronto to make room for the next model year.

          And that formula worked surprisingly well.

          Program cars (fleets, rentals) made a lot of money for the dealerships and people would stand in line to buy them.

          There is surprisingly little money in new cars like the bread&butter Camry L and LE. But as long as all expenses were met in the transaction, it was better to make the sale to keep another dealer from getting that money.

  • avatar
    Pch101

    The primary mission of a typical car dealer is to get you into a car — any car — today.

    The primary mission of a Tesla store is (or at least should be) to evangelize the benefits of electric cars.

    These aren’t really comparable approaches, nor should they be. The typical car salesman doesn’t have to educate the customer about the benefits of internal combustion, while the Tesla folks have to make sure that the customer is a believer in the underlying technology.

    That’s also the reason that Tesla needs to run its own stores. It does not want its car to be competing with other brands and used cars peddled by the same franchisee. Turning Tesla shoppers into BMW customers won’t work for Tesla.

    • 0 avatar
      CoreyDL

      I think the reverse end of the spectrum also applies for Tesla customers. They’re coming there for a very specific car, and many will know all about it already – and have discussed it with their financial planner and accountant.

      It’s like when someone goes into a Volvo dealer for an XC70. The car is the very end of the process, and they don’t need to be sold anything.

    • 0 avatar

      Tesla customers are probably more parallel to mid/high-end boat customers than retail new car customers. They already have the product knowledge, they aren’t ‘switchable’, and its a want – not a need – for them to purchase the product.

      • 0 avatar
        28-Cars-Later

        I’d like a boat which I can also drive on land, can you help me sir?

        • 0 avatar
          orenwolf

          “I’d like a boat which I can also drive on land, can you help me sir?”

          There’s a video for every need: https://www.washingtonpost.com/video/business/technology/watch-elon-musks-tesla-car-being-used-as-a-boat/2016/06/22/6c2f7982-3898-11e6-af02-1df55f0c77ff_video.html

          :)

      • 0 avatar
        Pch101

        I would presume that many of them are typical of tech early adopters — they want to feel as if they’re ahead of the curve and wish to be assured that they are forward thinkers, etc.

    • 0 avatar
      brn

      This thread pretty much nailed it. Anyone walking into a Tesla dealership either:
      A) Has no intention of buying the car
      B) Knows exactly what they want and how much they’re paying for it.
      Traditional sales tactics do not apply, so a traditional sales survey shouldn’t apply.

      • 0 avatar
        JMII

        Bingo. The Telsa sales process is more like taking an order. Given the low number of cars they produce the whole “what do I have do to get you in a car today” BS doesn’t happen. My guess is they just ask for your checking account number to transfer the funds and report back and when you can pick up your order. If the proper balance isn’t shown they ignore you. Everyone I’ve seen at a Telsa “showroom” (which is located next to the Apple Store at your local high-end mall) is just window shopping. They ain’t buying a car today.

  • avatar
    sirwired

    I remember this survey from last time… it was an arbitrary pile of junk then, and it’s no better now. I don’t know why it even deserves being reported on by TTAC, except to mock it.

  • avatar
    nsk

    It seems like this survey is for car industry folks, by car industry folks. They’re prioritizing deal closure over providing a good customer service experience. Glengarry Glen Ross and all that.

  • avatar
    Fred

    I’ve been in the Tesla dealer at the mall, they pretty much ignored me when I said I was just looking. Which is fine by me.

  • avatar
    orenwolf

    wow, this is crazy, I had no idea about this. I’m not surprised that Tesla has been at the bottom three years in a row, but what amazes me is the reasons:

    1 – They “shied away from asking for the sale in an ill-advised demonstration of underselling”
    2 – They didn’t ask about trade-ins
    3 – Didn’t discuss financing/lease options
    4 – didn’t discuss reasons you may not be willing to buy
    5 – Didn’t discuss the vehicle use case
    6 – They did, of course, score highly on what differentiates their cars

    Looking at the list, #1 is probably a) not a bad thing IMHO, but possibly the result of being supply constrained? If you’re selling every car you make, you don’t really need to give a hard sell, right?

    I wonder if #2/3/4 are just artifacts of selling luxury cars combined, again, with low supply?

    For #5, I wonder if this is because the model lineup is so small that there’s not a lot of cross-selling between models? I’d expect a dealer to be interested in vehicle use-case because they may want to redirect your attention to another model (either because it’s the better choice for you, or the dealer has more inventory, or better margins on that model)?

    All in all, I suppose it reinforces the idea that Tesla is really trying to not be a “typical” dealership. As to whether or not that will be an issue when the model 3 enters mass production and pre-orders are filled (meaning they need sales now) remains to be seen, I guess.

    • 0 avatar
      MrGreenMan

      It’s still not a great thing to not ask for a sale, to put you on a list, to make the buyer do something to commit. Elio asks for you to buy a spot in line. There’s an adage in selling anything – you don’t get 100% of the sales you never ask for – perhaps Elon has some theory behind this, but you know for certain that PayPal asks you to create an account at every single touch point, so he had no constitutional disposition against asking for the sale with that thing.

      • 0 avatar
        smartascii

        “You don’t get 100% of the sales you never ask for…” I don’t know about the average car buyer, but the average Tesla buyer knows what they want and plans to buy before they enter the dealership. It would probably be easier for most of them if there were no salesmen and they could do everything online. And in my experience helping friends shop for cars, it’s the car that does the closing, although the salesperson can absolutely make the experience awful enough that they change their minds and go buy something else.

  • avatar
    SCE to AUX

    Tesla, Volvo, Mitsubishi, and Jeep (4 of the bottom 5) are experiencing robust growth in the US market.

    Obviously, uneven sales approaches aren’t the worst thing to beset a mfr.

    [Edit]: Using the keyword “Tesla” in the headline is good for click-bait. It could just as accurately said “Volvo Sales Are Growing, Despite Ranking Near Bottom in Sales Effectiveness”.

    • 0 avatar
      CoreyDL

      Well when you sell about 500 cars a year, it’s easy to become robust with a few coupons or something. (Tesla excluded here.)

    • 0 avatar
      Pch101

      Volvo and Mitsubishi are both sucking wind on the whole, so neither of them have much to envy.

      Jeep is in another league altogether — it’s obviously on fire — while Tesla is in a specialty niche that really does need to do business differently due to its unique constraints as an EV seller.

  • avatar
    tonycd

    Pied Piper, according to its own website, is a private consulting firm that “works with most auto and motorcycle OEMs and national dealer groups.”

    http://www.piedpipermc.com/who-we-are.htm

    In other words, they’re a firm with a gigantic conflict of interest, conducting a study that was quite possibly commissioned by Tesla’s mortal enemies specifically to discredit the Tesla retail model.

    TTAC is not helping its own credibility by running posts like this without conducting a little rudimentary due diligence first. If I can do it, TTAC itself can do it.

    • 0 avatar
      Madroc

      This same fact was pointed out by numerous commenters when TTAC ran the same story last year. At minimum, TTAC doesn’t care. This is not the site it used to be.

      The study only checks boxes on all the traditional dealership sales techniques. It does not even try to measure consumer satisfaction (and probably a good thing too, given who is funding the ‘research’), and it doesn’t examine whether those sales techniques add value to anyone but dealers. Does anyone with the resources to buy a new car at any price really need some foursquare jockey to “explain financing options,” or is that just something dealers do to distract buyers from the transaction price?

      Tesla doesn’t even have “dealers,” it has showrooms where prospective customers can kick the tires in person before purchasing their car via the website, which is the only way to buy one. Because the showrooms exist to advance the brand, not to move metal, their approach is different. Very much like the Apple Store down the hall, where they really don’t care if you play with their device for an hour and then buy it somewhere else.

      When I told the Tesla people I might be looking to buy a Model 3 in 4 or 5 years, they took me out for about 40 minutes in a Model S and let me play with all of the features, including autopilot and multiple 0-60 launches in Ludicrous Mode. On the other hand, when I went back to the Ford dealer where I bought my 2013 Mustang GT and test drove a GT350 — LOL, j/k, they’d never let me touch one of those. But apparently the Tesla model was deficient because they didn’t explain how a car loan works, or harangue me about what’s stopping me from doing business TODAY.

  • avatar
    dwford

    Takeaway: “Tesla is bad at all the things car buyers hate about car salesmen”

    That’s a bad thing???

    • 0 avatar
      heavy handle

      Yeah. This survey is about “upsell effectiveness,” not sales effectiveness.
      That’s important for independent dealers, but not for Tesla’s business model.

  • avatar
    VoGo

    “My boyfriend forgot to wear a shirt with a collar.”

    “That’s OK. I’ll give him this key, if he will just write his name on the line at the bottom of this random piece of paper.”

    “Great. When do I laugh like a horse?”

    • 0 avatar
      MrGreenMan

      Which one of the two is the problem?

      They’ve been trying to buy this car for years now!

      Perhaps she had bad credit and has beaten his FICO down, so they’re trying to see if he alone can get the financing?

  • avatar
    28-Cars-Later

    MR BURNS [To Reverend Lovejoy]: Too late! You’ve already signed the deal!
    LINDSEY NAGLE: Actually he hasn’t.
    MR BURNS: Oh…well then we welcome your input…until you sign the deal! [shakes fist]

  • avatar
    3XC

    I read Pied Piper and immediately thought of the jacket from Silicon Valley, and laughed.

    I wonder if this Pied Piper consulting firm realizes that a TV show has made their corporate name absolutely hilarious.

    • 0 avatar
      Pch101

      The Pied Piper dealt with his disgruntled clients by manipulating and kidnapping their children. Hard to think of a more appropriate name for a dealership consulting firm.

  • avatar
    yankinwaoz

    Oh for Christs sake. This survey is a joke. You have to compare apples to apples man.

    Tesla’s sales channel is totally different than the franchise dealership channel. They put their stores inside shopping malls. They only have 1 (now 2) products to sell. Most of their customers are just curious people who went to the mall for other reasons.

    No one pops in to a dealer franchise just for fun. People pop in to Tesla stores for that reason.

  • avatar
    TMA1

    “asked about factors preventing a sale”

    In other words, the dealer wants to know “why aren’t you buying today?” If there’s one thing I love, it’s having to justify to some idiot why I don’t want to give him $30K+ for a car that is “close” to the one I want.

  • avatar
    05lgt

    I might use this survey to figure out who to avoid (top scores are not in the customers interest), but I’m pretty sure it’s not even that useful to me. I will never go to a car dealership looking to buy “something from here, I’m not sure what, but it’s got to be from this location now.” I save that behavior for my wife.

  • avatar
    SCE to AUX

    Tesla spends $6/car in advertising:

    http://insideevs.com/teslas-advertisement-cost-just-6-per-car/

    So the ‘sales’ process is pretty much moot.

    • 0 avatar
      ToddAtlasF1

      Exactly. You know who had terrible salesmen? Honda in the early ’80s. I knew a Porsche salesman who demanded bribes for a spot on the 944 waiting list when they first came out. You don’t have to be nice when demand exceeds supply, nor do you want to dilute your desirable brand with subsidized leases like the crumbling former status symbols from Germany. Why pander when the customer wants to buy the whole cow?

  • avatar
    mchan1

    Why should Tesla care?

    Tesla sells its cars to people with money! Period!
    The average buyer can not afford a Tesla.

    I equate Tesla as the automobile’s version of Apple.
    Tesla is a ‘brand’ and it’s a luxury brand which very few people could actually afford.
    There’s a ‘demand’ for Tesla vehicles and people are willing to pay. When you have a demand for a product, why do you need to advertise or make nice with the person who walks into a Tesla showroom to ‘look’ at a Tesla?

    Whether one likes Tesla vehicles or not, it’s a brand that sells and people want to be seen driving in, you know, to help satiate their E-G-O!

    • 0 avatar
      SCE to AUX

      You’re mostly correct for now, but the mid-range Model 3 – starting at $35k – is just about what the average car sells for today.

      And its pre-order count matches a year’s worth of Honda Accords.

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