Beware of the High Closers

Showroom staffers with customer sales-closing rates better than 20% are employees of the month at many dealerships.

But to the Asbury Automotive Group, such employees are doing something wrong: not following up on enough leads.

“We take an opposite approach to employees with high closing ratios,” says Allen Levenson, vice president-sales and marketing for Asbury.

“High closers should be slapped on the wrist because it means they are lacking in unsold follow-ups,” Levenson says. “If you are closing above 20%, you are not going after all your prospects.”

Managers should vigilantly track the sales staff's attempts at pursuing prospects and making appointments more than on their actual sales, he says.

“We need to spend more effort and resources on the 85%-90% of shoppers who do not buy.”

Asbury uses customer relationship management (CRM) software systems so sales personnel can capture customer data, input it and then systematically pursue leads. Such systems also allow sales managers to trace employees' efforts on a daily basis, Levenson tells ENG's 2005 Automotive CRM Conference here.

“CRM makes tremendous sense for this industry since a relatively small number of customers generate high lifetime value,” he says. It's important not only to cultivate those people but to keep them as sales and service customers.

Yet, dealership CRM attempts to do that often fail or fall short.

Levenson says one reason CRM efforts go wrong is that they require the involvement of front-line sales and service people, yet such staffers tend to think short-term.

It is hard to convince them that if they capture customer information on preferences and buying habits, such data will help in selling a vehicle to the customer four years down the road.

“They are not thinking four years down the road,” says Levenson. “The good ones are; the vast majority is not.”

Moreover, dealerships' high employee turnovers can steam roll over long-term thinking.

“The industry is of an immediate gratification mind set,” says Levenson. “Sales people tend to wait for customers to walk in rather than generate prospects.”

He suggests offering incentives to staffers who faithfully use CRM systems to follow up leads and mine for prospects. He says it should be a condition of employment.

It is also important to get not only top managers but middle managers on board, because “they are where the rubber hits the road,” he says.

But he warns: Middle managers often are “old car guys” who might need convincing that modern CRM systems are the way to go.

Other tips from Levenson on how to make CRM work:

He sees CRM as a potential solution to high employee turnover at dealerships.

He explains: “Salesperson economics is not working. The typical salesperson still averages only eight vehicle sales a month and averages $35,000 to $42,000 a year income, while working too many hours.

“If CRM and an appointment mentality can move that average to 10 vehicles sold per month it will result in higher income, lower turnover and will fix the industry's economics. We're working on that.”

Asbury also is working on streamlining its array of CRM systems at its dealerships concentrated in the Southeast, South Central and West Coast regions of the U.S.

“We are currently using an absurdly large number of different CRM software systems,” says Levenson. “Decentralization works well in many ways, such as preserving the entrepreneurial spirit and keeping dealerships as local businesses.

“But technology isn't one of those ways decentralization works, which is why we are trying to reduce our CRM systems from a lot to a few. I can't imagine Wal-Mart letting all its stores run on different systems.”