High Cost of Customers

Lee Iaccoca once said manufacturers and dealers spend millions to draw buyers to showrooms where, too often, untrained and poorly managed sales people end up “blowing these prospects out the door.”

Around the time he said that, I had lunch with a highly successful dealer and his general manager. They shared their concerns that sales people and even department heads were neglecting follow-up telephone complaint calls as well as sales follow-ups. Believe me, I knew what they were talking about from my years as a dealer.

That was then, this is now. And guess what? It's still a problem at a lot of dealerships who do a bad job of monitoring their sales staffers.

How much are you spending in local advertising dollars per new vehicle delivered? What type of controls are your managers using to guarantee each prospect is being properly handled after the store spent so much to get them in?

Many automobile sales people are paranoid about making sales follow-up calls. Maybe they dislike that form of telemarketing. Perhaps it's because they are super-sensitive about prospects, called at home or work, launching into negative comments about automobile people in general and dealership people in particular.

There are solutions for the chronic problem of dealership personnel ineffectively utilizing the telephone. Much of it centers on basic training.

In many new-car dealerships, sales people must submit a daily log showing contacts they made that day. It's not a bad idea. But in many cases, the logs become creative and misleading masterpieces, demonstrating the imaginations of the sales people. But fibbing on the logs only buys time. The ultimate performance gauge is units delivered, not filling in blanks on a log.

Some sales consultants, realizing the potential phony content of daily logs, simply removed this “sales tool” from the sales person's responsibility and placed it squarely on the backs of the floor managers.

George Libin was a pioneer in developing automotive track selling in which the prospect's visit to the dealership is constantly monitored.

He says that the moment the prospect enters the sales area, dealership personnel should be interacting with them.

At some dealerships, it begins with a greeter who logs in the pertinent information that the client shares. Generally, the greeter gets as much information as allowed by the prospect, then turns this over to the floor manager who assigns it to the appropriate salesperson

At that point it becomes the floor manager's responsibility to monitor the transaction so the prospect's needs are met.

This portion of the “track” makes it clear the prospect belongs to the dealership and impresses upon all concerned that a salesperson must observe all the requirements of the dealership's selling process.

Today, customer relationship management software systems allow dealerships to track progress with a customer and tailor specific marketing to that person.

But the companies that sell such systems are quick to note that they are only as good as the people using them.

No matter what selling system is employed, sales people are not entitled to wing it as they go along. That doesn't mean they should act like automatons and stick firmly and dully to a script.

But the prospects are the property of the dealership that's spent a lot of money to get them in the door in the first place.

Accordingly, salespeople must adhere to sales practices set by management.

That said, it's up to management to show competency in setting practices, training staffers and monitoring how they do.

Nat Shulman is a retired Massachusetts dealer now living in Hawaii.