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August 14, 2006: Improving profit starts with sales training

August 14, 2006
Filed under Archives

This series of articles recaps some of the opportunities that were uncovered by Gart Sutton & Associates powersports specialists during consulting visits. These opportunities are followed by recommended actions that address the issues.
The goal of this series is to provide you with ideas to help you improve your dealership.
Following the needs assessment of the facility and the processes, GSA consultants prepared a list of recommended actions and reviewed them with the dealer principal. The goal of this review was to determine if the dealer principal was willing and capable of accomplishing the action. Once the level of commitment and capability was established, the recommended actions were prioritized. In the case of this dealership, the highest priorities were assigned to increasing unit sales and profitability per vehicle sold (PVS).
Last issue, we examined the culprits behind a dealership’s lagging profits.
Dealership Details
The subject dealership is located in an affluent suburb. They have recently moved into a well-designed, new facility. They are selling 1,100 units per year, but their overhead is high and profits are minimal. Their F&I department has low penetration rates on the few products they sell. The focus of our visit was to provide the dealer with a needs assessment of the facility and the sales and F&I departments. The goal for the recommended actions was to (a) increase their unit sales, (b) create an effective F&I department, and (c) increase overall profitability per vehicle sold (PVS).
Issue: Lack of profitability and productivity in the sales department
Recommendation: A structured selling process must be followed with every sale. All customer contact information must be captured for future prospect follow-up. Goals and incentives for sales and prospecting must be provided to stimulate sales and create accountability. The sales department compensation plan must be revised to include a commission based on gross profit. The sales manager must be on the floor monitoring the salespeople and providing coaching, training and counseling as needed.
Solution: GSA consultants provided the sales manager and sales staff with training in a five-step, structured sales process. This included utilization of a showroom log and prospecting system, and purchaser follow-up. A customer path process was defined to ensure every customer has the opportunity to experience every department in the dealership prior to the final F&I procedure. Sales management training was provided for the sales manager. Utilization of goals and incentives to stimulate and reward performance was discussed with management. The following tools were provided: Showroom Log Form, Prospect Contact Form, Purchaser Follow-up Form and a sales process workbook.
Issue: Lack of productivity, profitability and privacy (security) in the F&I department
Recommendation: A knowledgeable, trained F&I staff is vital to success in this department. All F&I products should be available, and must be offered to every purchaser utilizing a menu system for the presentation. Goals and incentives must be provided to stimulate sales and create accountability. F&I offices must be sound-proof, and customer records must be protected.
Solution: GSA consultants provided the F&I staff with training on selling and presenting F&I products, and protecting and securing customer records. A plan was developed to divide the current F&I office into two secure offices. Guidance was provided for the F&I staff and dealership management on acquisition of additional F&I products and financing sources. A menu-driven selling process was developed.
Our consultants assisted management in creating a written procedure for the operation of the F&I department. Management was advised to restructure the compensation plan to include commissions for F&I products sold.
Issue: Showroom atmosphere is not conducive to sales
Recommendation: The volume and type of music in the showroom must be adjusted to reflect the customer demographic for this area. Seasonal clothing and accessories displays must be relocated near related units. Lifestyle displays — showing the products in natural settings — should be created. Displays must incorporate units, clothing and accessories to help customers visualize themselves using the products. A comfortable waiting area must be developed for customers waiting for sales, F&I or service.
Solution: GSA consultants discussed the customer demographics and the type of music and volume level that would relate to them. Plans were created to define the location of clothing and accessories and lifestyle displays in the showroom. A Display Planning Checklist was provided to help them organize the contents of these displays. The location and construction of the customer lounge and waiting area was discussed, and a plan was created for implementation.
Author, speaker and educator, Gart Sutton has been retained by every major powersport manufacturer/distributor. He is a frequent keynote speaker for national motorcycle conventions and state motorcycle dealer association events. Visit www.gartsutton.com. psb

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