“Track me, no way” This used to be my response to any sales manager who tried to implement a sales tracking system at the dealership.
If you can track me, then you will know if I'm a bad, average or good sales person.
I guess I can handle you knowing that I'm an OK sales person but I definitely don't want you to know if I'm no good or need help. This is America, land of the free; Big Brother certainly is not watching me nor is he trying to control me.
So why would anybody want to track me then? When I look back, I realize how much I was mistaken.
A co-worker once told me that he closes 50% of the people he sees in a month. I was impressed. So I decided to determine this on my own. As an initial attempt, I proceeded to ball park how many potential buyers he saw in a day. I would ask him every other day how many people he had talked to.
He would say, “Only about seven people.” Understand that my intent was not to embarrass him, but rather calculate and get a real idea of what he truly closed at.
By the end of the month he had delivered 10 units. By my calculation, he dealt with about 68 potential buyers that month. This meant that his actual closing percentage for the past month was 15%. Still a reasonable performance, but if he closed at 50%, like he said, he should have delivered 34 units. Even at a 25 % closing ratio he would have delivered 17 units. I never did tell him his real closing percentage.
Much research indicates the average automobile salesperson's closing is 12% to 15%. Another well known industry statistic states 10% of the people who walk through the dealership door are lay downs. If this is true, why are so many sales people only closing an extra 2% to 5%?
Let's look at a performance“Score Card” (below) that charts hoe three sales people are doing. Let's also determine where these three have problems.
Problem Areas: Introduction, prejudging, handling customer objections and carding. John has talked to 60 people but only taken 24 to the level of a vehicle presentation. He definitely has a problem with first contact and handling prospects saying, “I'm just looking.”
|Total Customer Opportunities||60||40||50|
|Work Sheets Done||18||25||9|
|Time Spent per Customer||30 hrs.||60hrs.||150hrs.|
|Gross Profit per Vehicle||$1600||$900||$1200|
|Total Month End Gross Profit||$16,000||$5,400||$6,000|
He probably hands out his business card to all 60 people which also means that these customers have been carded and leaves no opportunity for another sales person to sell to this person.
Problem Areas: Closing the sale, negotiating and maintaining gross. Sue is a great person, but she has become such good friends with her customers, she can't close. She let's them leave halfway through the negotiation, to think about it. Her deals low grossers because she's scared to ask for all the money.
Problem Area: Getting customers into a demo drive and he talks too much. Paul can't get his customers to the demo because he has spent too much time chatting with them. When he gets to point of the demo, he asks if they would like to go for a test drive, the customer says, “We don't have time right now.” It's hard to teach a sales person not to talk too much. All Paul has to do is listen more.
Historically, most management teams will fire these people if their performance does not increase. This is one reason there is a high turnover in our business. People get fired or just quit.
But what's easier: frequent hiring of new sales people and incurring the associated costs or training and improving the ones we already have? If you know precisely where your sales staff is having a problem, then you can fix it. It's all a matter of “tracking.” Professional sports teams track every statistic so they can be better prepared to win.
If you know the past you can change your future. Imagine the benefits! You have the power to increase sales for the benefit of the dealership, the sales staff and customers. Everybody wins. If we can increase our sales peoples closing percentages by 5%, what would be your overall increase in sales and profit? Imagine a 10 % increase. Wow!
Darin George of the Automotive Sales College does dealership sales training and tracking, featuring new software. He's at 1-888-681-7355/[email protected] and at the Ward's Dealer Business Booth 1553 at the 2003 NADA Convention in San Francisco.