Tenure is only accomplished through success; that is, the sales personnel making money.
Here's a news flash: Some dealers are behind in their year-to-date sales and profit forecast. Obviously, I'm being facetious. As we all know, many, if not most dealerships, are not performing at the level anticipated when we sat down for our 2001 forecasting session in late 2000.
Does this mean that we abandon ship? Of course not. But it does mean that, if we haven't already done so, we must look at the “charts,” determine our “location,” get the ship back on course and try not to lose any more time and ground. How do we do this? Well, as I so often hear, especially this year, it's time to get back to the basics. But, just what are the basics?
When I first started writing this monthly article almost six years ago, I made a personal pledge that I would not devote this space telling you how to sell new and used vehicles and I intend to honor that pledge. What I will do though is present some reminders-thought starters that might make a difference in your sales operation.
I have the privilege of moderating a 20 Group of general sales managers. We meet three times per year to discus this very topic, the basic processes. It is amazing and rewarding to watch the improvement of new members who join this group and buy in to the process. Not that members of this group have any new methods of achieving volume and gross, but they do have precision with which they perform their day-to-day business.
One area we discuss at each meeting is sales personnel performance. We all know that the average sales person sells 10 retail units per month, right? (Close, 9.2, combined new and used average for the average NCM client.) So, if we want to sell 180 retail units per month, we should have 20 sales personnel. This is correct as long as each of them performs at this (10 units per month) volume level.
If we are only averaging eight units per sales person, do we need to increase to 23 staffers? Loading the floor with sales personnel isn't the answer. This will cost you and your sales staff money. The most successful clients I work with appear to have the greatest tenure among their sales staff. Tenure is only accomplished through success; that is, the sales personnel making money. The managers consistently — daily — monitor individual sales personnel performance and train and counsel when an area of opportunity is identified.
If you have an unusually high turnover rate in your sales operation, is that OK, because obviously this is an industry problem? No it's not OK and you, as the “captain of the ship” have to determine the reason for this.
Is it the person we hire, or is it management? Are we providing the new-hire the opportunity to be successful through proper and consistent training? Are we monitoring their daily performance according to the seven or 10 steps to a sale? Are the other sales associates caring and are they committed to helping the newly hired personnel become successful? Only you can answer this.
There's more I could write concerning this subject, but I'll close with a couple of reminders. These are the basics that successful volume dealers employ:
Cash is king. Remember what happens when our average cash down per deal increases?
A consistent dealership method of working deals. A dealer I work with sits down with his managers every morning and collectively they review each sold deal and unsold opportunity to ensure consistency. This is not to belittle or admonish anyone, but to obtain consistency. He will tell you that this one process has helped him obtain market leadership in his franchise, high CSI and a highly productive sales organization.
Training where needed. For example, if a sales associate has a low demo percentage, you train on demonstration.
You will have your ship back on course by not only getting back to the basics, but by ensuring that you have a process in place to keep the basics in your daily sales operation. Can you make up for lost time? It requires a genuine commitment from everyone coupled with proper and professional execution, but yes you can begin making up lost time and ground.
Tony Noland is director of international operations for NCM Associates. He has 30 years of automotive retail experience.
For information to obtain a complete analysis of your financial operation in comparison with Best Practices benchmarks, fax a written request to (913) 649-7429.