Article

Your Sales Game Plan: Does It Include Improving Processes?

February 2008, Auto Dealer Today - WebXclusive

by Michael Rees - Also by this author

Most, if not all of you, have prepared your budgets, business plans and goals for 2008. If you haven’t, it’s not too late. I know a couple of dealers who are “battening down the hatches.” They think 2008 will be worse than 2007, so they are cutting as many expenses as possible in preparation of lower income. Although monitoring expenses is good practice, it’s not the only solution.
If you believe industry soothsayers, business will drop by at least 10 percent this year, and the more new vehicles you sell, the higher this percentage will be. If a dealer has been selling 100 new and used vehicles a month at an average gross profit of $1,850, it would mean at least 10 fewer deals a month and a reduction of $18,500 in monthly gross profits. Some dealers will accept that and find a way of saving that money each month by reducing advertising, cutting personnel, etc., so they continue to get the results they got in 2007.

What if instead of cutting expenses, the same dealer makes a plan to implement and follow proven sales processes? Instead of worrying too much about volume and gross goals, concentrate on how well your sales team follows your sales processes. If you focus on closing ratio, for example, your sales manager and team will increase that ratio. However, more often than not, they increase the closing ratio by logging fewer customers. If everyone is following the processes correctly, the closing ratio will take care of itself.

The first step of the proven sales process is a proper meet and greet and is followed by a meaningful interview, which will set the correct tone for more customers to want to do business with you. Remember, it is a business, so treat your customers in a business-like fashion.

A proper meet and greet should start with the word, “Welcome,” and the salesperson’s introduction. Eye contact is imperative; if the customer can’t establish eye contact with your salesperson, they won’t trust them and probably won’t do business with them. A firm, professional handshake and a genuine smile should be natural ingredients in the meet and greet. Your salespeople should easily obtain your customers’ names if this is all done correctly.

The meet and greet is designed to professionally ease into the interview. The ideal place for the interview is inside, either at the salesperson’s desk or at a round table in the showroom. Your team needs to remember this is to be a conversation, not an interrogation, so make sure they conduct the interview appropriately. Building rapport is key, and one of the best ways for your salespeople to do this is get the customers talking about themselves. Open-ended questions are a great way to get things started. For example, ask who, what, why, how, when, and “tell me about” questions—basically, the kind of questions a talk show host would ask guests.

After the meet and greet, your salesperson should get your sales manager involved. I recommend that your sales manager get up and introduce him/herself to the customer at this time. One of the reasons your sales managers are appointed to that position is because they have excellent communication skills. Have your manager put these skills to work with your most important asset, your customer, and do it early on in the process. It is not conducive to selling if your salesperson introduces your customer to your sales manager at the end of the process, either to “glad hand him” on his way out or to try and hammer a deal the customer is not comfortable with. Making sure the manager is introduced to every customer early should increase your closing ratios immensely.

Once your salesperson and sales manager have decided which vehicle to show your customer, your salesperson should bring the vehicle to the showroom instead of taking the customer to the vehicle. This will show professionalism and great customer care, and it will allow the customer to focus on one vehicle instead of cruising the lot. A full-feature benefit presentation is key to build value. Remember that your customers buy the benefits, so make sure your salespeople describe the benefits of each feature.

The demo drive is when your customers’ feelings and emotions will be at their highest peak, so have your salesperson drive the vehicle first. Then, switch drivers at a secluded halfway point. If your salesperson asks every customer at the half-way point, “Where will you be going on your first trip in your new car?” it will help each customer take mental ownership of the vehicle, so closing the deal should be a snap.

Before negotiations start, every customer needs to be shown the service and parts departments and introduced to key personnel in these departments. This step will help sell the dealership; then have your salespeople lead them back to the showroom.

If every one of your salespeople followed this process 100 percent of the time, and your sales manager got involved with every customer early in the deal, what do you think will happen to your sales and profits? Let me show you.

A dealer selling 100 cars a month probably sees 500 customers a month, which equates to a 20 percent closing ratio. As discussed earlier, if the industry drops by 10 percent, this dealer will have 10 percent fewer customers, or 450 a month. By following the processes just described, I know that you will increase your closing ratio to at least 25 percent, more likely to 30 percent. That means instead of selling 100 vehicles from your 500 customers, you will now sell 112 from 450 customers. Therefore, instead of losing $18,500 a month and searching for ways to cut expenses, you now will make $22,200 more each month (12 extra deals @ $1,850 each). That equates to over a quarter of a million dollars in extra gross profit in 2008—a year that some people expect to be worse than 2007. Even if I am wrong by 50 percent, is $133,200 extra profit a good number for you in a down year?

Vol 5, Issue 1

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