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Recently I had a reader suggest that we cover the four-square selling method as a blog topic.
I am unfamiliar with this particular selling method, but did a little research to try and understand it a little better.
From my research I learned that the four-square method is a selling technique that employs a worksheet some dealers use to negotiate the sale of an RV, boat or car. This worksheet is separated into four squares, hence the name.
The four squares represent the trade-in value, purchase price of the vehicle, down payment numbers and monthly payment numbers. Sales people crunch numbers into the different squares to attempt to view the overall profit of the dealership. Some even refer to this method as “working the numbers.”
This method could be considered controversial because buyers who are unfamiliar with how the method works could perceive a deal that isn’t really there.
In researching this topic I found more articles on how to avoid getting “trapped” by this four-square method.
I would like to get a discussion rolling on the four-square selling method. Do you, or any of your sales staff, currently use this method? Have you ever experienced this sales method while purchasing a new vehicle. If you do use this method, is it effective? Is this sales method controversial or cross ethical lines? I want to hear your thoughts.
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Top Right Box is the ACV (Actual Cash Value) of the vehicle being traded in. The bottom left box is for the down payment which will be inserted at a percentage normally required by a bank i.e.20% of MSRP regardless and box Bottom right is the payment calculated at an undisclosed rate.
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[…] at one year ago, near $140. The term uranimania was coined by Bob Bishop, if I’m not mistaken. …RVTradeDigest.com Blog The Four-Square Sales MethodRV Weekly: The Four-Square Sales Method … Bob Bishop Says: June 10th, 2009 at 10:14 pm. Jackie, […]
July 27th, 2009 at 9:05 pm
I am a salesman not a dealership, and I would like to learn the four square selling system do you know where I could get it on cassette or dvd or cd? any informations would be helpful—-thank you
July 21st, 2009 at 12:11 pm
The “Four Square” (and I am an expert on all the nuances and it’s “Power”) was designed because buying big ticket items and financing them, which 95% of buyers do, is more complicated than it seems from a superficial point of view.
Buyers do not like to make mistakes, and grey areas create doubt and insecurity and cause many a buyer to leave and “sleep on it” and the heat of the moment wanes and the dealership loses deals.
The “Four Square” is good for both parties. It provides clarification of the four main ingredients of a sale to the buyer which in turn allows the process to move forward for the dealership.
It also provides a forum for negotiation where all is spelled out and a clear financial decision, on both parts, can be made.
Most everyone in this informed society knows that a dealership has three profit centers…the sale, the trade, and finance. The Four Square is where both parties negotiate these issues and “YES!” a dealership is in business to make a profit, but you may still negotiate a great deal that satisfies both parties.
Please visit my website if you would like to have a conversation…. EJ
June 16th, 2009 at 7:51 am
I’m wondering if one of you proponents of the four square would offer a reason why knowledgable sophisticated buyers are not considered to be good candidates for this sales technique. From what I can tell, it’s almost universally accepted that “high end” buyers should not generally be presented with the four square and that when they are, the outcome is not what the salesperson wanted.
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June 10th, 2009 at 10:14 pm
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The Four Square has been used by sales people for more years than I care to admit having been a salesperson (more than 40). It is nothing more and nothing less than a simple method of negotiating the price, and considering the factors that effect the customers decision to purchase. The Selling Price, the Down Payment, Trade Value and the Payment that those factors represent.
It is a realistic tool that allows the customer to make a commitment to purchase, and it allows Management an opportunity to provide the customer with a new vehicle or product by meeting the customers true desire. It is not a financial disclosire statement - it is a worksheet that clearly allows the customer to present what he or she feels he is prepared to pay for an RV or car or a widget!
June 9th, 2009 at 8:42 am
Wow,all I can say is you folks are taking the high road on the use of 4-square. The purpose is not to fully disclose the customer about anything. The purpose is to identify the type of buyers emotion and focus on generating the highest margin by directing the customers attention on that square and give them what they want.
Most customers do not understand financing and are focused on one of the topics in the square. At most they will focus 2 of the squares. We have all had the guy come in and believe his trade is worth way more than market value or the guy who says I want that RV and I only want to pay $500.00 a month for it when we know it will be more like $1000.00 a month with conventional financing terms.
Almost everyone is concerned with payment or out of pocket cash. The salespersons goal is to make the sale but make money doing it.
Find some high producing car sales people and ask how they use 4-square. They make a higher margin on every sale and the customers thatnk them for it.
June 8th, 2009 at 5:46 pm
I am so happy this discussion came up. I just finished another RV selling blog covering the workings of a 4-square. For anyone that would like to read it go to http://hubpages.com/hub/4-Square-Sales-Presentation–is-it-GOOD-or-BAD
I will be glad to answer any and all comments concerning the 4-square blog. I have other blogs related to RV sales there as well.
Thanks Jeff
June 5th, 2009 at 11:42 am
i have been the sales manager at 2 of the largest dealerships in indiana and i can assure the 4 square works. it gives the customer trade value, cash down, and monthly payment. i have tried other ways, but the 4 square is the best way to make sales.
June 5th, 2009 at 9:24 am
Hi Jackie, I am familiar with the 4-square, as a matter of fact we have invented an electronic 4-square and integrated it into our web site as a means to allow internet shoppers to negotiate their purchase on-line. go to http://www.4squareanywhere.com to learn about the uses, or go to http://www.rvmall.com, and attempt to buy a unit to see it in action. I believe that their is nothing shady about the uses of it. It is designed to give the customer full disclosure, and essentially as a number in 1 box changes so will it effect the numbers in a different box. Price, rate, term, trade value, down payment are all presented in 1 easy to use format. The design of the 4-square can change, but those numbers will always be important to the buyers of the sale. To learn more about the system or to set up an interactive demo please contact me at matt@rvmall.com.
June 4th, 2009 at 11:13 am
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June 4th, 2009 at 9:30 am
Hello Jackie
The 4 spuare method. After pricing the customer’s model and option requirements to determine the MSRP. This # goes into the top left square. Top Right Box is the ACV (Actual Cash Value) of the vehicle being traded in. The bottom left box is for the down payment which will be inserted at a percentage normally required by a bank i.e.20% of MSRP regardless and box Bottom right is the payment calculated at an undisclosed rate. The purpose is to determine what square is the most important to the buyer. Everything is upfront and the buyer is informed.
June 4th, 2009 at 7:48 am
Ed,
It takes a while to put this process in place, but once done, the salesperson should be able to present the numbers professionally on a sheet divided into 4. The top left is usually the selling price of the vehicle, the top right is the trade, the bottom left is the cash investment we ask the customer to make, and the bottom right is the monthly budget. Please note the verbiage - we don’t call it money down or payment.
A real pro will present something like this:
“As you know, Mr. Customer, the selling price of your new vehicle is $xxxxxx, and right now we have our sale going on, bringing that number down to $xxxxxx. The current market value of your trade is $xxxxx, and we are able to give you all of that. Most banks today like to see 25% cash investment for preferred terms, which in your case is $xxxxx, and with that cash investment, it brings your monthly budget all the way down to between $xxxxx and $xxxxx, now, back to that $xxxxx cash investment, you can handle that, right?”
This makes sure that we disclose ALL the numbers in the transaction. The bottom 2 numbers are normally the ones the customer will focus on - how much out of his pocket and how much a month. We know that more often than not, most customers will struggle with the size of the cash investment we are asking for, so we go right to it at the end. We all know that the deal is easier to put together the more cash investment the customer makes, so let’s ask for it.
I will be covering this in detail at the RVDA convention in October - make sure you catch my workshops!
June 3rd, 2009 at 3:44 pm
Could someone give me a real world working example of the 4 square system.
I learn better by seeing and doing rather then reading.
Thanks
June 3rd, 2009 at 2:28 pm
Jackie,
I am very familiar with the four square and why it does and does not work.
First, it received a bad name from mis-use in the auto industry. Car dealers were not using it the way it was designed, instead they “converted “it to pretty much a 2 square. What they did was just present the cash and payment squares. This is why a lot of customers thought they were (and probably right for thinking so) getting duped. They were never told how much they were paying for the vehicle they were buying, nor how much they were getting for their trade.
With the need for compliance in today’s market, I cannot think of a better way to present numbers to customers than with the use of a 4 square - done right! This will disclose every number to the customer, properly, hiding nothing so the customer has all the information necessary to make an informed decision. Every dealer we work with is taught how to present numbers properly, with full disclosure, using a 4 square. It will create more deals and more gross profit - again, run properly by both management and salespeople.
June 3rd, 2009 at 1:37 pm
Hi Tim,
As mentioned I have not experienced the four square sales method. From what I researched, most don’t seem to think highly of that particular sales tool. I am also interested to hear what others think on the matter.
June 2nd, 2009 at 4:47 pm
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