‘Check Out’ the Competition to find your Competitive Edge?

When customers call into you banding rates about “I’ve got this APR” and “I’ve got that APR” and you run around after them trying to match the deal to get the business whilst cutting your own profitability, have you ever stopped to think “I wonder if this person is telling the truth?” or “Sometimes I wonder why I bother doing all this work for very little return”? Then, in some cases, after proposing the deal to every finance company you deal with, you manage to ‘scrape’ the person through who was supposedly ‘Squeaky Clean’ and been offered this wonderful rate? Frustrating isn’t it, however, when was the last time you paid a visit to your local bank or building society to find out what level of service they have to offer and what rates they actually quote you whilst sitting in front of them. Have you called the Alliance & Leicester or Tesco’s to obtain a quote or try to get finance, to see if their ‘Headline Rate’ is as attractive as they make out? My guess is that not many of you have done this for some while now, if ever. Nearly every advertisement you see has got this marvellous ‘Headline Rate’, however, the magic words “Subject to Criteria” always appear on these, my advice to you is don’t forget this as in some circumstances it can make a difference of 7 percentage points!

Visit Your Competition

Let me share a recent experience with you. I was carrying out a business manager’s course and one of the tasks set during our course, is to spend a couple of hours finding out exactly what the competition is really like. The delegates visited a number of local banks & building societies to see the level of service, how quickly questions were answered, and what quotations were given, the information required & how long it would all take. The results of which were staggering.

One Bank advertising 9.8% APR actually quoted the equivalent of 16.9.
When asked how long it would take to get an answer another said “within 48 hours”.
One building society would not consider you for their rate unless you had a mortgage with them.
Another bank virtually insisted you had to take the protection otherwise you wouldn’t be accepted.
Product knowledge in all, bar one bank, was poor.

This list is not exhaustive, however, it really is an ‘eye opener’ when you consider how many people call into your dealerships banding figures around without realising how much effort it could take to get the rate suggested in advertising or literature. Now it may be that the branches visited were particularly poor, however, it just goes to show how often you underestimate your own professionalism and hunger for your customers’ business.

Visit Your Competition

With the bank that actually came out quite good during the visits, the main thing the delegates realised was that they had to offer a faster, more professional service than this provider and set up a credit line quickly. They also realised the importance of getting in front of the customer during the first visit to the showroom to ensure this is achieved. Therefore, they had to ensure that their salespeople were qualifying correctly and involving them from first point of contact.

How do you feel?

To emphasise the point of setting up a credit line immediately, how do you or your salespeople feel when they are applying for Hire Purchase, a personal loan, or a mortgage? Think back. Do you start to wonder how easy will it be for me to get this? Do you start to analyse yourself and think “Well, I’ve only been in my new job for six months due to moving to gain promotion?” or “My last two credit card bills were paid late because I was on holiday, or working away from home.” All these points, and more, are going through your customers mind when they call into see a vehicle first time. They are not aware at this stage how much they will get for their trade-in vehicle, and therefore do not know how much to borrow. Ensure the customer is introduced immediately to the business manager and, even if you cannot get a firm commitment, set up a credit line. Then by the time (if not before) they get home you have called them and said, “Your finance has been agreed, which colour would you like?” How do you think that customer would feel? In nine out of ten cases, as long as the car was right, the customer would take your finance. You have just saved them the hassle of ‘phoning or visiting their bank & if the payments fit their budget, you have just earned another finance case. You tend to forget the level of service, which you can provide. My advice to you is “Don’t”.

A good friend of mine applied for a loan with a top direct lender recently, and they were virtually insisting he took the payment protection. After stating he really didn’t require this (all be it the fact he is self-employed and should really take it) the loan was turned down. He has a credit history that is second to none, and owns one property outright. He was accepted by another finance company automatically, without question. This was a real situation, and he would not approach the direct lender ever again. You cannot be more convincing with your customers than when you use a true story.

Get salespeople to visit

Check your competition by visiting, or calling, at least one institution per week. More importantly get your salespeople to visit as well. After all they are normally the ones who come to you stating; “Mr & Mrs Bloggs have been quoted X by their bank, you’ll need to do better than that to get their business”. Yet half the time they are not aware of the level of service offered by the branches. You are great (well some of you are) of keeping regular checks on your local dealer competition; however forget to look at the finance companies.

Loan Forms

You can organise a credit line very simply for every customer because of the low level of information required. Keep loan application forms from the banks, building societies and off the web sites to show how much more information they require. For example, credit card details with outstanding balances, whether you have pension arrangements, savings plans & their balances, store cards & the outstanding balance, other loans & Hire Purchase agreements & the balance outstanding. These are just to name a few. You don’t need all this information. Tell the customer this and prove, by showing them leaflets collected, that you know what you are talking about.


Competitive Edge

Your ‘Competitive Edge’ over the competition is that you can offer a quick and efficient service without the need to ask all of the information that the banks, building societies require. Use the information gathered and most of all:

Visit or make enquiries to your competition regularly.
Ensure your salespeople visit the competition as well as yourself.
Look at what is bad about the competition and how you can use this to your advantage.
Look at what is good about the competition and how you can improve your service to give you an advantage.
Remember how it feels when you go into buy goods and apply for a loan, and what you require. Your customers’ needs would probably be similar.
‘Headline Rates’ are to attract the initial ‘phone call, and in a lot of cases the customer doesn’t get the advertised rate.
Ensure you are introduced to the customer after the first point of contact and set up a credit line in all cases.

Sometimes you forget just how professional you are, and the level of service you offer. Pressure is on to achieve targets and there is more competition around in the market. However, sometimes you are all guilty of giving away rate just because the customer has told you what they are getting, without checking all the facts out. Evaluate your competition regularly and this will certainly gain you extra finance cases along with increased earnings in the long term.

CRM comments

What does CRM mean to you?

Last month’s article on Customer Relationship Management generated a lot of interest from some of our readers. So this month we asked some of the country’s top dealers and manufacturers, including Martin Conlon at Motor Distributors Ltd, Merlin O’Reilly of Merlin Motor Group and Michael Herbert of Windsor Motor Group, what does CRM mean to you? Essential to success in the 21st Century business world? Or simply the latest management buzzword?

I don't view CRM as a buzzword”, said Michael Herbert, “however it may have become one. CRM encompasses a large number of functions within our business, some of which I believe we do well and some we can improve. We must continuously strive to do them all better because our future business is so dependent on repeat custom.
“Within The Windsor Motor Group, we have a dedicated team who manage the database and the direct mail part of our CRM programme. We keep in touch with our customers on a very regular basis about new products, new offers, service reminders, warranty reminders, etc. We also generate anniversary listings on e-mail for salespeople to use to keep in touch with previous customers on the anniversary of their purchase.”
Michael added: “One area I believe that we could improve is CSI information. We don't ask our customers often enough if they were fully satisfied with us, whatever their requirements were – be it a service, body repairs, car hire, sales, etc. Manufacturers tend to do this from time to time, but not in a way that gives us regular and accurate feedback on all aspects of our customer care. Naturally we do an element of CSI research, however this is an area earmarked for improvements.
“CRM is now an integral part of managing a modern day motor dealership. Done badly is nearly worse than not doing it at all. Done well, it improves the image of our industry and the dealership in particular.”

Clearly aftersales is a key driver of CSI, as it’s one of the main reasons customers have for coming back to the dealership they bought their car from. But having closed down their service department last year, Merlin Motor City no longer has this opportunity. One of the things Merlin O’Reilly has done to address that is hold a €5,000 cash prize raffle every three months. Everyone who buys a car is eligible to enter, but they can only claim the prize if they actually turn up to the draw.

“After they’ve bought their car we write back to them and invite them to come back for the raffle”, says Merlin. “On the day we have a check-in desk where you register and your name goes into two main draws – €5,000 for everyone who’s bought a car, and €1,000 for everyone who’s taken a test drive. We also have a dozen other prizes like DVD players, bottles of wine, etc. We do the raffles on a Sunday, so there’s a bouncy castle for the kids as well. Most people bring somebody with them, even if it’s not their whole family.

“The first time we did it we got 82% of the purchasers, which was great. I’ve never seen as many people in a garage as when we have the raffle, it’s much bigger than any dealership opening I’ve been to. We’ve even had people cancelling weekends away to attend! We’ve done three so far and have another one planned for late September, on the same day as the All-Ireland final.

“Because the raffle does interfere with sales. There could be 1,000 people here, so it can be hard for new customers to get attention. The people who have come for the raffle aren’t necessarily looking to buy a car now either – everybody leaves as soon as the last ticket is drawn. They are only there for the chance to win some cash.”

From Merlin’s point of view, it is more of a thank you in advance – rather than waiting 27 months until we want to do business with them again. In that sense it is a bit of a gamble, he says but at least it gets them talking about the garage that evening, whether they are in the pub or having dinner with relations or friends. “You can’t beat the power of a good referral”, he says. It seems to have worked – in fact the concept has already been copied, twice by local garages.

“One of the main reasons we introduced the raffle”, says Merlin, “was because we were starting to question the value of newspaper advertising. I noticed that sometimes if we missed the copy deadline for the ad, our unit sales over the weekend would be no different. So instead of giving the newspaper €3,000, why not give the money back to some of the people who have actually supported us? It is probably a more targeted spreading of the word than a page in the paper. Salespeople can use the raffle as a closing tool as well.

“In fact we have just had our best period this year and we didn’t spend a single cent in the papers in the past four weeks!” That is an alarming statistic.

Another statistic that will be of great interest to everyone involved in the retail motor business comes from some research just completed. It was conducted by e-GoodManners, who produce an internet-based sales diary system and it clearly shows the value of keeping in contact with customers – which is what CRM is all about, according to Martin Conlon, representing VW and Audi Ireland.

“CRM is about staying in touch with the customer”, he says. “Not by farming it out to somebody else, but through the actual person who sold the car keeping in personal contact. That is hugely important in the car business.

“But what we’ve found through market research is that one of the big weaknesses of dealers in Ireland is that they don’t keep in contact with the customer. Both between the order and delivery, and after they have taken delivery. Customers often think the salesperson has forgotten about them. Whereas if a salesperson does follow-up and does phone back customers, they particularly appreciate it and are much more likely to buy the car from your dealership. That’s why we are encouraging our dealers to take up e-GoodManners”.

e-GoodManners, and systems like it, are designed to make the salesperson and the sales department more productive, by ensuring all potential customers are followed up effectively and by increasing test drives and other activities that have been proven to increase sales. And because they are PC-based, they enable the dealership and manufacturer to get a more accurate picture of what is actually going on in the business compared to paper-based manual diary systems.

What the eGM research has identified, in a project conducted for one of the UK’s biggest manufacturers, was that 4%+ of the total sales of dealerships using the eGM system happened after the sixth pro-active follow-up sales call. It’s clear evidence of the link between consistent customer follow-up and incremental sales. As we approach the final quarter, make keeping in touch with customers and prospects a top priority for your business – not just to sell them a car today, but to make sure they come back to you when they are ready to change.

Half time budget review

Introduction


Most sales managers tend to approach budgeting simply by looking at the figures. Here, Brian Milsted looks at a different approach - one which he implemented at a dealership towards the end of last year.

He has approached the budget by looking first at what activity is required to sell the number of cars required according to the budget. If you are planning to review your annual budgets at the half-year point, this is worth considering.

The half-time budget review

I STARTED by looking at how many units were sold in each month of the previous year, and then converted each monthly total into a percentage of the total (alternatively, you could take the average monthly sales over the past three years, to iron out the effects of any special promotions). I was working on the basis that those percentages were unlikely to be significantly different in the year ahead.

Next, I took the 2003 sales target (3,300) and broke that down into 12 monthly targets, based on the previous year’s percentages. From that I was able to work out how many prospects the dealership would need to talk to (based on a 20% closing ratio, which I believe is the industry average - if your sales team is highly experienced they may well be closing 30% of the prospects they talk to) to achieve the required level of sales each month.

Staffing levels
From this you can calculate how many salespeople you actually need to do the job, and whether you currently have enough or too many. In this example, the dealership currently has eight salespeople. They will require an extra two to meet the January target, two more in February, and a further one in March.

By the time April comes around you might think the sales department will be over-staffed, but of course you have to remember that, one, there will be a degree of staff turnover and, two, you also have to cover holiday and sickness as well.

Test drives
Having determined that the sales team needs to speak to 1,200 prospects in January, it follows that they will need to give 600 of them a test drive.

Again, that is based on standard industry figures - for every ten prospects you demonstrate to, you should sell four cars. So, for example, in January 600 demonstrations should lead to 240 sales.

Customer follow-up
Similarly, with customer follow-up, experience suggests that each prospect who leaves the showroom without buying a car needs to be contacted three times (including deliveries).

The first follow-up is usually to thank them for visiting the dealership, and to establish if there are any other ways in which we can help them. That contact, whether it is by phone or a handwritten note, should be made within 24 hours of their visit to the dealership, unless they have visited on a Saturday in which case Monday is the best time to re-contact them - Sunday is a bit too intrusive.

Caution!
If you are doing three follow-up contacts per customer then you are working pretty hard. Chart I shows that 360 follow-ups are required per salesperson during January - that’s around 15 for every working day of the month. 15 call-backs per day is basically two hours work on the phone, which is probably as much as a salesperson can productively manage, bearing in mind that most of them are probably doing a delivery a day as well. So, any more than that and you are probably going to have to give your sales team some extra support

That is the trouble with most budgets - we tend to budget for results when what we should be budgeting for is the salesperson’s activity levels. If you want your salespeople to be effective then you simply have to budget for their time to follow-up prospects. If you don’t, you will probably find that your team is not big enough and inevitably they will reduce the number of follow-up calls they make. This in turn will reduce their effectiveness.

Does it stack up?
The next stage is checking to see if this all stacks up as a budget. This year, in our example, we are requiring 24 unit ales per salesperson per month on average. Last year it was 22.

So the question is, can we expect to get an 8% increase out of our sales team? In this particular case the answer was most certainly yes, since we were working with a more experienced sales team now. Also, in 1999 the average per salesperson was 19 units.

F&I potential
On a 50% finance penetration in January, the dealership would sell 120 cars on finance and get $87,000 in finance commission. But if they could just raise that penetration to 60% they would sell 144 cars on finance and bring in $105,000.

If an extra 10% penetration means an extra $200,000 profit over the course of the year, you have to ask if it would not be worth considering investing some of that money in a second business manager to ensure we get that extra revenue? Or, it might mean looking again at the way in which we sell finance to try and maximise the potential.

Sheet 2
Sheet 1 was my first attempt at the budget, using only the dealership averages. Sheet 2 is based on actuals, which means I am now developing a budget that is based on each of the salespeople’s real activities. It’s a much more accurate way of looking at whether or not we can achieve what is on Sheet 1. Effectively it is a cross-check.

First we look at what the individual salespeople should be able to contribute during the year in terms of units, and at what activity levels are required. Here we are working on the basis that for every two demos you do you will sell one car.

When we come to look at F&I, we see that if they continue this year as they did last year then they should be able to bring in $1.2m of F&I commission, which is in line with the projection on Sheet 1. It means we are going to have to do something with finance to get to $1.4m.

So this now becomes a very good check against the original activity-based budget. If that came in at $0.9m, for example, we’d have to do something radical with finance. But as we are in the ball park in this example then we can be confident that there is definitely an extra $0.2m up for grabs.

Sheet 3
Sheet 3 refers to retail sales only. It could of course be broken down into new and used, with a separate budget for each.

The beauty of developing your budget on an Excel spreadsheet is that you can interrogate it to ask ‘what if?’ for example, the sheet in our example shows 1,050 units. Replace that with, say, 550 and all the other figures will change accordingly.

Looking across the top of Sheet 3, sales turnover is based on average selling price. If you changed the average selling price from $13,500 to $12,500 the figures would change again.

You can use this to get a feel for the volume of sales you think you are going to do, which will be important to you in terms of identifying cash flow and for making your cash flow projections. Say you have 50% finance penetration, 60% trade-ins and you sell a car for £13,000. For three days you will have outstanding, say, $8,000 worth of finance and you might also have a trade-in that is tieing up your cash.

Most dealerships will only do Sheet 3 when it comes to putting together a budget. They don’t tend to think through what their salespeople are going to have to do to get there. And there’s no cross-checking.

Dealerships need to look at what they have done this year before they start budgeting for an X% increase next year.

You can contact Brian Milsted on 01276 29758 or at brian@saleslynx.co.uk for the budgeting spreadsheet

Product driven CRM

Product-driven CRM – the key to long-term profit
Dealerships looking to increase their profits in the sales department have traditionally focused on two areas – increasing the prospect conversion rate, and increasing gross profit per sale. That is what the vast majority of sales training programmes today are dedicated to. But there is only so far you can go with that.

There is undoubtedly some potential to improve the prospect conversion ratio in most dealerships. The true industry average is no more than 10% or so. Many dealerships believe their figure to be higher, but they often fail to take account of selective logging in the showroom. The top performers are probably achieving 20%. But even with a tightly-controlled sales process in place it is hard to go beyond the 20% level – not least because of the quality of people employed in the industry, and the prevailing salary/commission structures.

Increasing the profit per sale is even tougher. In a mature, competitive market, raising your prices is often not an option. And raising your gross profit by a significant amount without raising prices is extremely hard work – even before you take into account the increasing costs of holding a franchise in the post-Block Exemption environment. You don’t just have to sell better, you have to buy better as well.

One alternative is to sell more accessories, or more finance. F&I has long been seen as a way to increase profits, but that too is under increasing pressure, not least from the legislative authorities. And if you look at the trends in the USA, with the controls they now have coming in such as the disclosure of finance commission, that pressure seems certain to increase.

During the past ten years the industry has focused more on increasing the customer’s repurchasing frequency as a way of increasing profits. Ford set the ball rolling when it brought out the Options PCP. It was designed to increase the frequency with which customers change their cars, and to make sure they came back to the dealership they bought the car from in the first place. When they saw how successful it was, the rest of the industry soon followed. But because PCPs are linked to residual values there is a risk involved, as the industry found to its cost on both sides of the Atlantic.

Now that residual values appear to have stabilised, the PCP is regaining popularity. But there’s a clear need for the industry to develop new products that lock customers in and drive them back to the dealership, which are not tied to residual value risks. We’re seeing some of those products being developed in the USA today, in the form of tyres-for-life and engines-for-life programmes. Dealers who have embraced them are achieving some success in terms of getting customers to come back to the dealership more often – or even at all!

The tyres-for-life guarantee is not sold as an add-on product, it is built into the selling price of the car and customers have to come back to the dealership every three months or 3,000 miles for a quick tyre inspection. The engine-for-life package requires customers to keep coming back to the dealership in line with the manufacturer’s service intervals.

With tyres for life, the warranty company that funds the programme can buy the tyres in bulk, which keeps the cost down and makes the programme viable. It is based on the fact that the average customer changes car every 27 months, which typically equates to one set of tyres (it also helps the used car department, because every used car that goes out has a new set of tyres on it).

Customers who keep their cars for longer than that are more likely to come back to the dealership when their tyres need replacing – where else can they get them for free? And that gives the dealership an opportunity to sell other products and services if it is handled in the right way by the service advisor. If not, it may be perceived as a rip-off. The customer may feel you are simply loading as much as you can onto the invoice.

Increasingly, US dealerships are putting more of their marketing budget into activities like these, and reducing the amount they spend on newspaper advertising. That represents something of a sea-change.

The motor trade is less good than some other industries – companies like Dell, EasyJet and Ryanair spring to mind – at marketing additional products to their customer base. On a regular basis the online computer and travel firms will come back to you offering additional products and services. If you buy a computer from Dell, for example, they will continue to offer you consumables, or a new laptop 12 months after you’ve bought one, or an upgrade to your home system 12 months after you’ve bought one. Easyjet and Ryanair sell travel insurance, hotel bookings and car hire, plus of course their in-flight services.

For the motor trade, satellite navigation systems are an equivalent example. A dealership database is perfect for marketing these to. Who’s to say that of the 5,000 or so customers you have on your database, 200 – 300 aren’t going to be interested in a SatNav system right now? It is good CRM.

But the next generation of CRM strategies will encompass products that lock customers in to the dealership – because if you have got your customers locked in, once you start to tweak their repurchase frequency through your marketing activities you can start to see serious growth in your profits.

A key concept here is customer lifetime value – or what US business guru Jay Abraham (www.abraham.com) calls their ‘marginal net worth’ to your business. Marginal net worth is a key performance yardstick for an increasing number of the world’s most profitable businesses. It helps them to focus their marketing efforts on doing more business with the customers they already have a relationship with, retaining them for longer and gathering referrals.

It is a relatively straightforward exercise to work out much the average customer is worth to your sales department. To find out, you need to know:

• What is your average gross profit per sale? In the sales department, that might be £750 on the sale of the car, plus F&I income of £250 per retail delivery (50% penetration, at £500 per case financed), and £100 from accessories (not just accessories sold with the car – have you considered sending your customers a brochure with ideas for Xmas gifts that they can buy from your dealership?)
• How many times a year does the average customer buy from you? If the customer changes car every three years, it would be 0.33. If it’s every two years it is 0.5. Clearly, the higher the number the better.
• For how many years does the average customer buy from you? An entry-level franchise such as Fiat might find it difficult to retain customers for more than six or seven years. But for franchises with a broader range, like VW, Toyota or Ford/PAG for example, there may be scope to hold on to them for longer.
• How many people does your average customer refer to you? Typically, dealerships get an average of 1 referral per customer, with the top-performers achieving 2 or 3 per customer (including the second car in the household).
• What % of these referrals actually become your customers? The industry average for converting referrals is around 40%. But with the right systems in place, many sales executives achieve more than 50%. Issue 1 included some best practice guidelines on how to become more successful with referrals. If you missed it and would like a copy, email Brian at brian@saleslynx.co.uk.

Armed with the above information, you can fill in the table below to determine the marginal net worth of your average customer:

A Average gross profit per car sale =
B Number of car sales per year per customer =
C Number of years customer buys from you =
D Number of referrals from customer =
E % of referrals who become customers =
F Gross profit per year per customer (A x B) =
G Gross profit over life of customer (F x C) =
H Referrals who become customers (D x E) =
I Gross profit from referrals (G x H) =
J Total value of one satisfied customer (G + I) =

You might be surprised at how much one customer is worth – and that does not take into account the value of any aftersales work!

CRM in the motor industry today is hampered because people have not yet recognised the true power of the marginal net worth of a customer. If they did, they would make sure their CRM programmes were working effectively. And they would invest money not just in technology but in people to make sure their customers are locked-in for life. Programmes like tyres-for-life and engines-for life could become the model for a product-driven CRM future.

Increasing sales from incoming telephone enquiries

Increasing your sales from incoming telephone enquiries

Over the last 5 years, most management teams have at one stage or another discussed the area of incoming telephone sales enquiries.It has probably been a subject that has been discussed at least once a year for the past 40 years if the truth be known, yet the incoming telephone call issue remains for most dealerships one that is unsolved. Most of the reasoning behind this is simple-it has been made more complicated by many than it really is.As with most things in life, it is better to keep it simple. Most areas of the sales funnel go back to the law of averages; every sales department is based on the numbers game or supply and demand (unless you are Microsoft).

Your dealerships success is based on how many people are calling into the dealership on the phone or face to face, and then on how many you are able to motivate to purchase a vehicle or service product.It doesn't sound that difficult, yet there is so much difficulty in creating a process that allows dealers to be confident that they are maximising their results from the phone enquiries received, and from their advertising and marketing efforts and expenditure. Experience shows that it is due to not having a basic infrastructure and or not having a consequence for poor performance.If a salesperson within your dealership does not know how to effectively handle an incoming phone enquiry, then giving them more of these enquiries during the course of a month, without guidance, will only create a challenge and will not solve it.There are sales managers and dealer principals out there who have completed some training within the last 5 years and it did not make any difference, yet training alone will never solve the incoming telephone call issue.

Without incorporating the accountability issue, most sales people will revert back to what they were previously doing.The key elements of solving incoming telephone call sales conversion within your dealership is as follows:

Education
Accountability
Managing the information and results
Installing consequences for non-performance, to encourage correct behaviour.

Without all of the elements detailed above you will not be able to fully maximise your phone enquiries, however if you complete just some of the above fundamentals, then you will improve your results dramatically and quickly!


The key elements
Look at each of the above key elements individually:

Education. For anyone to expect better performance, additional training may be required. Challenges arise when there is no apparent improvement following the training. This is normally due to the fact that the good education of any employee is about repetition & reinforcement, unfortunately, people are sent to a training session (whether in-house or an outside source) and there is no follow-up to the initial training. This results in the student normally reverting back to their old habits, due to the concept that to alter behaviour in any human being requires initial education followed by supervision and reinforcement until the new behaviour becomes natural.

Accountability. This is an area consistently raised in the past, because it is difficult to alter behaviour without a person being held accountable for a particular action. This is true in any area of the business (and life) and yet there is a reluctance to hold people responsible (and praised) for a job well done.

Managing the information and results. No matter what information you gather in regard to any area of your sales department, unless you take action on the good and poor behaviour then the chances of improvement are dramatically reduced.

Consequence for non-performance. If a salesperson is taking incoming calls in a dealership without regard to results, and they are able to continue taking incoming calls, the chances of your overall results improving are slim to none. You must reward and encourage the correct behaviour by ensuring that there is a consequence for poor behaviour installed in your business.

The overall conclusion to the above guidelines is that you cannot have any one salesperson dictating the end result to your incoming telephone call and consequent sales volumes.

It is a combination of good technique and fundamental management processes that enable your sales staff to perform to an above average delivery ratio of 15% sales from your enquiries.What are the basic elements to increasing your incoming telephone call sales 50% to 200% without any additional spending?

It simply has everything to do with increasing your sales, through managing the opportunities you currently have available to you, more effectively than you have in the past. Lets face it the market place has been tough this year in cars sales across every market in Europe.


100% Logging of all Incoming Calls

As I have mentioned so many times before, without accurate logging of all of your incoming calls how do you know the quantity of calls you are receiving? More importantly, what type of increase is available to you?

Just keep in mind that the average dealership in Ireland and the UK probably has a 3-5% delivery ratio opposed to a 15% one that is easily achievable to you (an increase of up to 10% hence the increase in incoming telephone calls to sales of 50% to 200%).

Step 1. All you need to do to get a 100% accuracy level is have your receptionists log every call prior to handing it to a sales person, this enables you to have a log of each and every call and once the sales person realises that they are now going to be held accountable, a greater awareness is automatic.

Step 2. Introduce a document or electronic database capture format that the sales person has to complete while on the call and then incorporate management inclusion by not allowing a sales person to complete the process without management signing off, what is called the "fifteen minute window."

Step 3. Follow up and follow through of all existing leads! This one key area of activity will influence sales. If your sales people won’t do the management must. You should follow up every prospect (telephone or face to face) a minimum of 3 times if you seriously want to improve your sales.

Step 4. Managing accountability. With the above information now available, it must be managed on a daily and weekly basis! Do not monitor once a month because in most cases it will be like taking action after the horse has bolted, because incoming telephone call enquiries purchase in a short time frame (3-5 days).

At the very least, evaluate your performance on a week-to-week basis making sure you take action where necessary. The first step would be to start taking incoming calls more seriously, you will find an immense upside to a minimal of time required to make a significant Increase in sales.

Step 5. Educate your sales team. Create an expectation level within your dealership of what you expect from an incoming call in regard to the results in each area (i.e. 90% names and numbers, 55% appointment ratio, 40% show ratio, 15% delivery ratio, etc.). To achieve these numbers, it will require a commitment of the management team to train the sales people, reception, and, just as importantly, themselves!

Logging should not be installed to beat up on your sales people. It should only be installed if you are prepared to address the weaknesses that it will identify and praise the strengths of the sales people measured.



Introducing standards

The only way you can make a significant improvement in sales from your incoming sales enquiries is to have a minimum standard within your dealership.

This would mean that if someone falls below this standard, then action is taken. In most cases, it would be in the form of training and development first, followed by more dramatic action if the person does not respond.

I would suggest you start with a minimum standard of 8% delivery ratio ( from telephone enquires) in month one, followed by 10% in month two, and 12% in month three etc. This means that if anyone falls below these minimum standards, then they should be suspended from taking any more calls until they have fully maximised the ones they have already taken.

This will create the behaviour you are looking for, because your sales people will now understand the importance of taking the responsibility of a phone enquiry. If you are not prepared to have a consequence for non-performance, then you are automatically restricting your business’s ability to increase sales.

Increasing your telephone sales is as simple as taking them seriously.

Sales is a numbers game-to increase sales, you either have to increase the number of opportunities that are available to you, or more effectively manage the ones you have.

First start by motivating more customers to visit your location, followed by a more structured process to maximise each and every opportunity.I hope I have given you a few things to consider on your quest for an increase in sales in the last 5 months of 2004.

Cheers



Brian
P.S. There is another way to increase your sales from your telephone enquiries, but it’s a bit radical for most. If you are interested drop me an email and I’ll forward it onto you. It’s not dodgy or manipulative and I have statistical, proven, evidence that it works.
Tel +44 7720 558 510
Email:brian@saleslynx.co.uk