Apr. 21, 2008: How to improve a dealership selling 2,500 units
April 21, 2008
Filed under Archives
These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits.
These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.
This older, large, multi-line dealership is located in a southern town of 50,000 people. Because of its strong reputation, the dealership draws business from several rural towns and a city of 200,000, located almost
80 miles away. They had been a high-volume, low-profit operation for many years. As economic situations changed, they were forced to modify their business model or risk losing their dealership. Although still a bit light on margin, they have successfully changed to a more profit-oriented structure. They are still doing a volume of more than 2,500 units per year.
Gart Sutton & Associates’ consultants were called in to help them improve the store’s processes and profitability in every department. This series will first look at the sales department.
The sales team is composed of three team leaders. They are each accountable for four salespeople. The team leaders are managed by a general sales manager. The general sales manager has risen up through the ranks. The majority of his experience is derived from on-the-job training. He can describe how the current sales and F&I process should happen, but he is experiencing difficulty consistently implementing the process. He is very open to change and is looking forward to the direction this visit will bring.
The general sales manager mentioned the need for updated job descriptions. He would like to give them out when he gives evaluations to team leaders. He feels this will help clarify his role and the roles of his subordinates.
All the team leaders and the general sales manager appear to understand the need to plan, but they only do limited daily planning. None of the team leaders or the general sales manager carry or use a day planner system. This lack of organization is particularly evident during sales meetings, when almost nothing is written down, making follow-up difficult.
Little prospecting for new customers was observed. The sales staff appears to have become overly dependent on the showroom traffic, and they are not actively using traffic logs. They are recording prospects into an electronic log, but there is some question as to the accuracy of the log. As the economy continues to tighten, additional unit sales need to be generated from the traffic logs, previously sold customers and referrals.
All sales staff should be using the prospect sheet form in their electronic log. These prospect sheets should then be used to set appointments. By setting and confirming sales appointments, the closing ratio will increase, the salespeople will sell more and they will be less dependent on showroom traffic. The team leaders and the general sales manager need to follow-up and ensure accountability for the prospecting process. Our consultants recommended the general sales manager create a “non-negotiable standard” regarding the appointment policy, requiring one confirmed appointment per day, per salesperson.
In the sales process, the salespeople spend too little time on the meet and greet, understanding the customer’s wants and attempting to satisfy those wants. They do not consistently use F/A/B (features, advantages, benefits) during the selling process, nor was anyone observed using a 10-point walk-around. They focus on the trial close and commitment stages, resulting in very little value demonstration and an early emphasis on price comparison. This focus tends to lead to lower front-end margins and reduced customer satisfaction.
The general sales manager needs to stress the customer-satisfaction sales process, incorporating the F/A/B and using product knowledge to close the customer on the correct unit.
There is no standard policy for follow-up after the sale. We recommended the general sales manager institute a standardized post-sales follow-up program:
The team leaders are provided with team goals and individual salesperson goals for unit sales by the general sales manager. He understands the need for additional performance goal-setting but does not know how to accomplish this task. Gart Sutton & Associates’ consultants spent some time discussing this with him. It was explained to the general sales manager and the general manager how to use the standard powersports benchmarks and apply them to the dealership’s goal-setting process.
Gart Sutton has been a leading provider of on-site dealer consulting, dealer 20-groups, online financial composites, accounting rescue services, and OE and dealership training solutions for nearly 30 years. For additional information on these services, visit www.gartsutton.com.