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Jim Kristoff

Jim Kristoff President

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Goal setting for Automotive Salespeople

 

Goal setting for Automotive Salespeople

 

 
Goal setting for Automotive Salespeople
 
 
All too often in the Automotive world, we let our salespeople fend for themselves every month. There are not enough dealerships, managers or salespeople that sit down at the beginning of every month and set a REAL goal for each person on their sales team.
 
In most dealerships, there is NO GOAL SETTING being done at all. And in some dealerships, the goal setting goes something like this…..”okay John, you sold 10 vehicles last month! This month….lets do 12!!” This type of goal setting accomplishes nothing!! We haven’t given the salesperson a REAL plan of HOW they are going to get to their goal.
 
 
When sitting down with your salesperson to set their goal, they have to see the old“W.I.I.F.M” (what’s in it for me). The best way to do it is to forecast how much MONEY they should make. And while money is NOT the only motivation that a salesperson has, it is how they pay their bills!
 
To start, you are going to need some simple metrics. I like to take the last 90 days worth of sales and commissions that an individual salesperson has accomplished.
 
Metrics needed:
 
  1. A monthly average of total money earned
  2. A monthly average of total vehicles sold
  3. A monthly average of commission earned per unit
  4. A monthly average of the total amount of clients that they spoke with
  5. A monthly average of their closing percentage
 
 
Let’s use these numbers for an example:
 
  1. Monthly average money earned - $ 2,750.00
  2. Monthly average cars sold – 10
  3. Monthly average commission per unit - $ 275.00
  4. Monthly average of clients spoke with – 50
  5. Monthly average closing percentage – 20%
 
 
NOW…when you sit down with your salesperson, you can “goal set” intelligently!
 
When the Manager counsels the salesperson on a daily basis, they can track and look for ways to increase the salesperson’s metrics.
 
I believe the goal setting for the month should reflect a 10% increase for the individual salesperson. And remember, I like to “goal set” using money.
 
A 10% increase in money for this salesperson would be another $ 275.00 or a total of
$ 3,025.00.
 
The salesperson now has to see what they will have to do to earn the 10% increase. There are several ways the salesperson can get there.
 
  1. If they maintain a 20% closing ratio, they would have to speak with an additional 5 people during the month or a total of 55. Let’s say they work 24 days out of the 30 in the month. They would need to speak with an average of 2.3 potential clients per day. When the Manager is doing their daily counseling with the salesperson, they can track this metric to make sure the salesperson is speaking with enough clients to reach their goal.
 
  1. What if the salesperson develops their skills and increases their closing percentage to 22%? The salesperson could then speak to the same amount of clients, (50) and sell 11 vehicles and thus meet their goal for the month.
 
  1. What if the salesperson develops their skills and averages a higher commission per unit? If they average $ 303.00 commission per unit they would also meet their goal.
 
 
Heavens forbid that the salesperson actually speaks with MORE clients, closes them at a HIGHER percentage and averages more PROFIT per sale! That would be the Monthly trifecta of car sales!! (I will get off my soapbox)
 
As leaders in the industry, it is our MISSION to get our people better! They need guidance, motivation, education and stimulation. They need discipline, practice and skill building. BUT FIRST…….you need to have a REAL plan on how you can help them get there. A “roadmap” of how to make more money, sell more vehicles, close more clients at a higher percentage and make a higher average commission per sale. The individual salesperson must SEE the metrics to genuinely understand HOW they are going to reach their goal!!
 
Otherwise……..we are just “hoping” that they will get there on their own!!
 
 
About the Author: With 30 years in the retail Automotive Industry, from a Salesperson to a Dealer, I have a vast amount of experience in all areas of the automotive environment.
 
You can follow me on:
 
My website: www.JimKristoff.com 
Twitter: @jimkristoff
WordPress blogsite: http://jimkristoff.wordpress.com/
Bryan Armstrong
Jim, This is right on the money, as usual, and a formula I have used for years. It is absolutely thrilling to over the course of a year by 10% increase help a "10 car" salesperson become a 28.5 unit a Month powerhouse. The greatest thing isfinding their motivation factor. I used to use strictly the moey principle describied here, but have found that with a new Generation, it's sometimes better to offer unique perks for Goal achievement. For example, what if hitting your goal for 3 consecutive Months earned you a 3 day weekend? Or the right to choose your own schedule? Obviously, the caveat being that 1 Month below projected performance starts the whole 3 Month cycle anew. Motivation can be found in many forms and for some it isn't always monetary. Don't miss out by assuming that all are motivated the same way we are. Thanks for outlining a useful tip!
Antwaun DeGraffinreed
GREAT POINT! As with anything in life..."A person without goals is like a rudderless boat, going nowhere in calm waters, tossed around in stormy weather, and sinking well before reaching shore."
Jim Kristoff
Thanks Bryan! I agree with your take on what motivates certain people. I have a great 3 minute video on that subject titled, "Do you know what motivates every individual" It is on my website, JimKristoff.com under the "motivation" tab. Here is the link: http://www.jimkristoff.com/Videos/Motivation/DoyouknowwhatMotivateseveryIndividual/tabid/99/Default.aspx
Jim Kristoff
Thanks Antwaun! That is a great quote!
Bryan Armstrong
Great stuff. Antwaun- Love the quote!

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