Every store has their sales process, their Road to the Sale, that starts with a proper Meet & Greet.  But what about before the Meet & Greet?  In a recent article by Chris Saraceno, “Secrets of the Best Sales Consultants”, Chris listed many of the things a salesperson must do today to be successful.  Technology has helped salespeople become more efficient, but the various modes of communication and social media have added more work for salespeople.

How can you help your salespeople get everything done?  Create processes for critical activities performed BEFORE the customer is greeted.  There are too many to put into one article, but here are three:

1) Assign BDC appointments ahead of time
If your store has a BDC that sets appointments and then turns the customer to a salesperson, assign the salesperson well ahead of the appointment time.  The salesperson can review the customer’s needs and have TWO vehicles prepped for the customer to test drive.  Of course, that requires the BDC do a good job of identifying the customer’s needs. 

In his book, High Profit Selling, Mark Hunter says a salesperson should identify at least six needs for every customer.  Your BDC department should provide RECAPS of every customer’s needs:
                R – Reliability
                E – Economy
                C – Comfort
                A – Appearance
                P – Performance
                S – Safety

Based on the identified needs, the salesperson should make sure the requested vehicle is prepped, and have a second vehicle ready to show.

2) Make taking a test drive easy!
One of the most time-consuming steps in the Road to the Sale is not the test drive, but retrieving the vehicle to be driven.  It’s a hassle for the salesperson and frustrating for the customer as they wait for the vehicle to be retrieved.  As a result, salespeople are quick to skip the test drive if the customer shows any reluctance.  Two ways to increase the number of test drives is by creating a demo line and mapping a comprehensive test drive route.

A demo line should not include every model the dealership sells.  It should only include models with a monthly retail volume greater than 10.  The average store should have 3 test drives for every sale.  If you sell less than 10 per month of a particular model, that’s less than 30 test drives per month (1 test drive per day) – not enough to justify maintaining in a demo line.

For those models that average more than 10 units per month, divide the monthly volume by 6 to determine the number of units required in the demo line.  For example, if you sell 30 Corollas a month, you would need 5 demo units.  The vehicles should be clean, gassed and close to the front door to encourage the customer to take the test drive.

One argument against a demo line is that we want the customer to drive the exact vehicle they might buy and “fall in love” with it.  However, according to The Next Up (www.thenextup.com) over 40% of customers don’t take a test drive.  Which is better: test driving a demo line unit and having the opportunity to discover more of the customer’s hot buttons or immediately going inside and working up numbers?

An additional aid to convincing the customer to take a test drive is to have a specified test drive route.  The route should be designed so that the primary driver of the vehicle is behind the wheel for at least 15 minutes.  In most areas, that means a route of at least 10 miles.  The route should include roads that will highlight the performance of the vehicle and be typical of everyday driving: side roads, highways, and parking lots.

3) Create a process for who greets the customer
How many total hours are wasted with salespeople standing around, not wanting to miss an opportunity?  In a recent article by Clint Burns, “Is Your “Open Floor” Showing Potential Customers the Open Door?” (see the entire article here: http://bit.ly/WPckmT), Clint states that an open floor costs the dealership sales.  But an open floor is also very inefficient for salespeople.  The benefits of creating a salesperson rotation include:
a) When reps are placed in a consistent, fair rotation they can schedule their day more effectively, and
b) With a closed floor system, follow-up becomes just as important as the sale.  If a salesperson is at the bottom  of the rotation, they have confidence that they have the time to follow up with prospects and will still get their fair share of the customers who walk in the door.

We ask salespeople to do more than ever – let’s look at ways to help them be more efficient!

As the economy improves and everyone looks to increase market share, dealers are struggling to take advantage because they can’t find enough good salespeople.  As a result, the customer experience suffers, guests are not logged into the CRM, and sales opportunities are missed.  But there are 3 places where good salespeople can be found:

YOUR SOCIAL MEDIA
If you are seeking a younger, more technologically advanced salesperson you have to go where they are – online.  Whether on craigslist, Career Builder, facebook, or other social media sites, your message has to stand out.  Advertise for a customer service representative or product specialist like this:

SEEKING CUSTOMER SERVICE REPRESENTATIVES
Women and Men – College degree preferred

• 40 to 45 hour work week
• Medical/Dental/401(k) benefits
• Paid training
• Compensation averages $40-50,000 annually

Of course, pay plans and operating philosophy have to agree with your ad.  For a selection of sample pay plans, send an email to bbowers@thenextup.com with “PAY PLAN” in the subject.

YOUR CUSTOMER BASE
Customers who bought and service at the dealership are a great resource for recruiting new hires.  You can utilize them by:

• Prominently displaying a “NOW HIRING” button on your website home page or your service appointment page
• Place a life-size image of a female sales associate holding a “NOW HIRING” sign in your customer lounge
• Post in your newsletter or on your facebook page: “If you liked buying from us, you’ll LOVE working with us – NOW HIRING”

YOUR SHOWROOM
You have excellent salespeople, the question is how to make them more productive.  The answer is to close the floor.  A few things happen when a store converts their showroom from an open floor to a closed floor.  In a closed floor scenario, the sales representatives are put into an online queue and alerted when it’s their turn on the floor. The remainder of the sales rep’s time can be spent following up with prospects and creating lifetime value for each customer. There are many benefits to a closed floor:

• A consistent, equal approach to how traffic is handled.  When reps are placed in a consistent, fair rotation they can schedule their day more effectively.
   
• Follow-up becomes just as important as the sale.  If a salesperson is at the bottom of the rotation, they have confidence that they have the time to follow up with prospects versus missing out on the next up who walks in the door.
   
• A closed system enables managers to better determine the success of their sales reps.  Maybe one of the less aggressive sales reps has the best closing ratio and just needs more opportunities to be at the top of the sales board.  With an open system, a manager doesn’t know if a sales rep sold 15 units because he talked to 100 guests or because he better managed 50.
   
• A closed floor system provides an immediate increase in the perceived value of a customer.  When a salesperson knows they will cycle to the bottom of the rotation by dropping a guest, they will treat that opportunity differently and are more likely to follow the proper steps to close a sale.

By changing your floor to a closed system, sales reps know that they won’t be able to burn through showroom traffic.  They’ll see they have to depend on follow-up and cultivating the business they do have to sell more vehicles.  The result is not only more names and numbers in the CRM system, but more sales in your showroom.

Utilizing the Next Up technology, a dealer recently went from test driving 56% of guests to 82%.  Their closing ratio increased from 19% to 30%, and the average units sold per person went from 10 to 13!

The Next Up utilizes web-based technology to help dealers better manage their sales teams. 
For more information, visit www.thenextup.com or call 866.673.1230 for a free demo!

Many dealerships today are struggling recruiting salespeople, especially Gen Y and women.  Gen Y has their own unique characteristics (more on that in another post), but both are affected by the culture in the typical showroom, as well as long hours and confusing pay plans.  In her book, Ladies on the Lot: Women, Car Sales, and the Pursuit of the American Dream, Helene Lawson writes to succeed salespeople “need to have a healthy distrust for….management and co-workers who want to take away their commissions any way they can.”  Not exactly an environment which you would like your wife or daughter working in every day.

A closed floor, where the salespeople are put into a rotation (usually in the order they show up) and notified when it’s their turn on the floor goes a long way to creating a better showroom culture.  In my last post (Forget Transparency, Be Transaction-Ready) I talked about the benefits of having a closed floor:

• Never missing a guest, as one person is always vigilant, looking for the next opportunity
• Eliminating the gauntlet of salespeople near the front door that is a turn-off to many guests, especially women
• Controlling the “ups burner”, the aggressive salesperson who sells a high volume but has a low closing ratio, and giving everyone a fair chance
• Freeing up salespeople on slow days to do follow-up and prospecting without the risk of losing an opportunity with a new guest

 A closed floor creates a level playing field for salespeople that would be appealing to Gen Y and females with natural selling skills who would not normally consider selling cars.  But what about the hours and pay plans?

Hours should be based on traffic flow, not the showroom hours.  Another benefit to a closed floor is the ability to accurately track showroom traffic, not just what salespeople choose to enter into the CRM.  A dealer in California, whose showroom is open 7 days (and 84 hours) a week, tracked their traffic by day and hour for an entire month.  What they discovered is very typical for stores that are open on Sunday.  Although your store may be more of a night-time store, this store typically sees:

• On Monday thru Friday, 70% of the day’s guests arriving between 10am and 4pm
• On Saturday, a spike at 10-11am and then a slow-down until 3-4pm when the traffic picks up again
• On Sunday, traffic does not pick up until after noon

What can a dealer do with this information?  Create three person teams that will attract Gen Y and women salespeople, who are more comfortable working in groups to achieve goals.  Consider this team:

• Justin, 23, a recent college graduate with 850 facebook friends
• Jessica, 28, with 8 years of non-auto retail experience
• Ashley, 35, with a daughter in the 3^rd grade

Each person works Saturday but gets two consecutive days off each week:

• Justin is off Tues/Wed and snowboards during the winter
• Jessica is off Thurs/Fri and volunteers at the local pet shelter
• Ashley is off Sun/Mon and spends time with her husband and daughter

On the days they work, one person of the team opens and the other person closes.  They are both working in the middle hours of the day (when the dealership is busiest) so they can coordinate any activities to help the TEAM sell more cars. 

However, they are only scheduled for 37 hours each week.  Why?  Because they are paid hourly with team bonuses:

• $17.31 per hour for 40 hours = $36,000 per year
• Team bonuses for volume, accessories and F&I products can add another $9,000 per year per person
• The team is given and paid on weekly goals so they push to sell each and every week (52 weekly closes compared to 12 monthly closes)

Note: The 37 hour schedule allows for instances when a salesperson stays late without the dealership having to pay overtime.

If the team is given a goal of 7 cars a week, and hits their accessory and F&I goals 75% of the time, they will achieve:

• 7 cars per week = 364 cars per year = 10 cars per person per month
• Average compensation = $350 per car
• Annual compensation = $42,500 per person

Of course, critical to the success of this plan is proper recruiting, training, and managing of the team.  In addition, goal setting is very important.  Since the team is paid hourly, if a team does not consistently hit their weekly goal, the compensation per car rises.  At 5 cars per week, for example, the average compensation per car goes up to $415 per car.  If you would like a spreadsheet with the showroom schedule, pay plan and compensation calculations, please email me at brad@bowersgb.com.

With a closed floor and teams of salespeople working together, you are well on your way to being Transaction-Ready!

Next step: The Transaction-Ready Process

The talk these days is all about “transparency”.  Since consumers are doing tremendous amounts of research BEFORE visiting a dealership, since they are so well-informed, since they know what they want, dealers need to be transparent about everything.  One cannot argue with the data.  According to studies by R.L.Polk/AutoTrader and Google/Shopper Sciences:

• The average car shopper starts the process online, spends
• 19 hours doing research, and
• References 18 different sources, but
• Only visits 1-2 dealerships!

If shoppers are ready to buy and are only visiting 2 dealerships, are you closing 50% of your first time guests?  If not, I don’t think it is because you are not transparent, it is because you are not Transaction-Ready.  Sounds strange, right?  Of course your sales force is ready to sell a car. 

However, salespeople today are victims of technology.  Once a salesperson makes the initial contact with a car shopper, the number of communications escalates.  They call, email, and text each other many times.  And salespeople are constantly reminded to be responsive and get back with the shopper right away!  So who is “on point” looking out for the next opportunity?

Transaction-Ready Selling starts with being ready when the shopper is ready.  According to AutoTrader, even after consumers have done all their research, 69% do not phone, email, or chat with a dealer.  They just walk onto your lot!    Since there are fewer ups per dealer, your sales force needs to make the most of each opportunity, and that is best achieved with a closed floor.

With a closed floor, you are assured that someone is always vigilant, making sure no guest is missed.  There are no more pages for “Any available salesperson to the showroom”.  Guests do not make it all the way to the sales desk and ask, “Can someone help me?”  Managers are not telling salespeople who are standing around to “Go do your follow-up”.  And guests (especially women) do not have to run the gauntlet of salespeople standing outside the dealership waiting for the next opportunity. 

One argument against a closed floor generally pertains to wanting your best salespeople greeting the majority of guests.  Is that even possible?  Your best salespeople should have a lot of repeat/referral business so they are unavailable when guests come on the lot.  As a result, the majority of first-time guests are greeted by your most aggressive and greenest salespeople.  Neither group are high closers, but why give more opportunities to an aggressive salesperson who burns through a lot of ups?  This would be like moving a .250 career hitter higher up in the batting order so they can get more at bats!  It’s better to give more opportunities to the green peas and determine sooner if they have what it takes, or better yet, what they need to work on (more on this in the next article).

The other argument against a closed floor is that it is unproductive to have 1 or 2 people “on point” when there is no traffic.  However, it is impossible to predict when guests will step on the lot, so which is better: an open floor that NEVER matches traffic flow, or a closed floor that is organized and helps a salesperson manage their work?  With a closed floor, salespeople have MORE time to call back shoppers, answer emails, respond to texts and prospect. 

Finally, a closed floor helps you sell more cars without having to add salespeople.  Every Transaction-Ready guest is greeted promptly and given full attention, since the salesperson knows they will not be getting another opportunity until everyone else gets one.  By tracking each opportunity and the result, managers are able to identify areas that salespeople need to work on.  Interesting article on showroom statistics is here: http://bit.ly/WPckmT.   And managers become more productive since they do not have to babysit the floor. 

A closed floor is a big step towards being Transaction-Ready. 

Next step: Staffing the Transaction-Ready Sales Floor