Stop Whining and Sell

How bad is your business? Some people think the automotive market stinks right now. The economy is unstable. Commissions, profits and revenues are down. Traffic is off. And on and on.

It's a prevailing negative trend in attitude found in many dealerships today. And it is exactly that attitude that will drive any business down — even in the best of times. Dealers and their managers shouldn't nurture such negativity.

Consider the story of the man who sold hot dogs. He didn't listen to the radio, watch TV or read the paper. He simply sold hot dogs. He put up signs saying how good they were. He stood on the side of the road and cried: “Buy a hot dog, mister?”

Because he was so enthusiastic, people bought. His business grew. Then his son came home from college to help him out. His son said, “Haven't you heard? The economy is in terrible shape.”

The father thought, “My son's been to college, he reads the newspaper, he listens to the radio, and he ought to know.” So he cut down on his meat and bun orders, stopped advertising, and no longer bothered to call out with enthusiasm when hawking his hot dogs.

Sales fell virtually overnight. His conclusion: “My son was right, we are in a depression.”

The retail automotive business is at a crossroads, and dealers and managers have a critical choice to make.

They can buy into the negativity and cut key expenses, such as jobs, advertising, inventory, promotions and training. Or they can stick with the basics that drive success and, beginning with themselves, hold every individual in the organization accountable for doing their job and driving success.

Manage by numbers, not financial statements. It's time dealers stopped managing their business based on the month-end financial statement, and start “closing” the month every day with every customer.

According to the National Automobile Dealers Assn., the average salesperson sells 8.5 cars per month.

According to Automotive Profit Builders' customers, their salespeople sell an average of 10 cars per month.

Using this data, let's consider two dealerships — Store A and Store B — both selling an average of 100 cars per month, both exposed to the same negative external influences, but each taking a different approach to managing by the numbers.

Dealership A's management uses the monthly financial statement as the basis for management decisions with a history of old data. Since the dealership typically sells 100 cars a month, they employ 11 salespeople, in line with the market averages.

Anticipating a decline in the market, the dealer decides to protect profits by cutting back on advertising and training. He lays off people, cuts inventory by 50% and eliminates perks and promotions.

But instead of cutting just the fat, the dealer cut the muscle — important basic requirements of running a successful dealership. At the end of the month, the historical financial statement shows that business is down, profits have dropped, and sales have fallen. In essence, everyone's negative expectations have been met.

Dealership B's management uses an accurate count of the showroom traffic that comes through the door each day, week and month, say an average of 400-450 opportunities.

Despite averaging only 100 sales per month, the dealer decides to stick with the basic concepts for running a successful business.

The dealer adds sales people, manages inventories, keeps people and processes the same, and focuses on relationship selling and the red-carpet treatment of customers.

Dealer B puts a process in place that holds every employee accountable for job performance. It is measured daily. The dealer and managers develop a plan to hit a specific gross revenue target in the month.

This is divided into weekly and daily goals, and spread across every part of the business. It is communicated to every employee.

On a daily basis, the dealer holds managers accountable, and the managers hold their teams accountable for hitting the goals.

In this way, the dealer, managers and sales people have an exact traffic count and know what happened to every prospect each day, why it happened, and what to do to improve. The result? Store B's financial statement no longer shows peaks and valleys.

The key differences in these scenarios — as with the hot dog vendor — are attitude, accountability, communication, confidence and comprehension.

These differences start at the top. Dealers and top management succeed in all markets when they nourish a positive attitude and eliminate external negativity, hold their managers and teams accountable while giving them the tools to succeed, communicate the goals, measure progress and act confidently in their decisions to stick to the basics.

After all, consumers are still buying cars, aren't they?

In an uncertain market, successful dealers realize there is an opportunity to build. Yet many others put the brakes on success by feeding into the negativity.

Success, attitude, accountability and the will to win start at the top. Dealers and managers must create a mindset so that every individual who comes into the showroom is seen as a customer, a person who engages the professional advice or services of another.

They become clientele when they turn to your dealership again and again for professional counsel, vehicles, service, parts, and accessories — everything to meet their transportation needs.

Sales people cultivate customers through prospecting and referrals. They convert customers into clients by establishing and maintaining personal communication that allows them to build a sense of trust. It is this trust that allows clientele to rely on the salesperson for advice, and allows the salesperson to secure referrals as well as higher value and volume sales.

The ability to prosper in any economy is in the hands of dealers and managers.

It takes a commitment at the top to create a positive mindset, train sales people, hold them accountable and stick to the basic game plan.

“Tough times” represent an opportunity to build and to go back to the basics of what made dealerships successful in the first place.

When a customer walks in, build a relationship, find out what they want, and sell it to them. It's that simple.

Richard F. Libin is president of Automotive Profit Builders Inc. focusing on sales and service customer satisfaction and maximizing gross profits. He is at [email protected] or 508-626-9200.