What is your strategy for working a deal at the sales desk in your store? Whatever your answer, I'd suggest you observe deals being worked and audit worksheets to see the real story.
Would you like to raise your closing ratio and gross profit by at least $300? Let's take a look at how you can accomplish that through effective deal strategies.
First let's look at the typical sales transaction in many stores today. The salesperson brings his deal to the sales desk and the manager says: “Let's check his temperature, and if he blows up we'll peel him off of the ceiling.”
The chances are that someone in your store has had a similar conversation with a salesperson today. How confident and excited is your salesperson about presenting these figures?
Since the salesperson doesn't believe in the first pencil, they present it poorly to the customer and say something like: “What did you have in mind”
They then get a ridiculous response or counter offer from the customer, write it down and use the old tried and true: “So what you're saying is that if we can get this done, you'll drive it home now?” They then have the customer sign it and run back to the desk. Not only is this ineffective, it demoralizes your sales team and creates problems for the managers.
Wouldn't it be more productive and practical to get buy-in from sales people, and make sure they present the first pencil effectively? Where is the most gross profit? In the first pencil. Plus, 80% of all sales happen after the fifth attempt to close the sale.
In many stores I visit, they are negotiating price until they have no room left in the deal. Then they begin to use strategies to justify the numbers. That thinking is backwards. Let's use our closing strategies on the first two pencils and hold our profit.
With this in mind, let's set a standard that the sales people have to attempt to close the deal on the first pencil at least twice. This will create a few first pencil closes but more importantly send the signal that the numbers are real and we aren't going to simply drop the price.
It also sets the tone for the second pencil and the reality is that if you want to improve gross profit, you have to do it on the first two pencils. On the second pencil the salesperson should attempt at least three closes before returning to the desk with a counter-offer from the customer. That gives us our five closes. What should that do to our closing ratio?
Now we've set a standard but we need to give the salespeople the tools to accomplish it.
We teach more than 25 closes in our sales classes and ask sales teams to pick their top 10 and learn them. As managers, coach your team and practice with them to improve their skills. Once the closes become reflexive and a habit, you will be much more effective in working deals with your sales staff.
When a salesperson comes to the desk after the first pencil, ask what closes he or she used. “I used the maintenance close and the gas-savings close,” the sales person may say. On the second pencil, he or she uses the time-is-money close, the reduction-to-the-ridiculous close and the 1-10 close. That's five attempts, so we know we'll have some sales by this point. If not, it's time for the manager to go in with the third pencil. Every manager should be able to go through five more closes.
The key is laying out the strategy, presenting it and getting buy-in from your team. Practice and drill with each team member. Then execute. Track your results and watch the numbers grow. I'll bet you make at least $300 additional gross profit on average.
Let me know how you are doing or if you have any questions.
Steve Epperson, a 30-year veteran of auto retailing, is a national trainer with Assurant Solutions. He's at 1-877-651-1032.