Notifications & Messages

Jared Hamilton
From: Jared Hamilton
Hey - It’s time to join the thousands of other dealer professionals on DrivingSales. Create an account so you can get full access to the articles, discussions and people that are shaping the future of the automotive industry.
Josh Blick

Josh Blick Dir, Implementation & Learning

Exclusive Blog Posts

How Local Influencers Can Boost Your Business

How Local Influencers Can Boost Your Business

‘Live On Location’ radio shows are still a staple in Saturday morning car sales. It’s been an effective way of capturing an audience&…

Fast vs First to Market

Fast vs First to Market

In a business where speed wins, first steps can lose.   Reasoning being—the distinct possibility—like is the case in any race&mdas…

Powerful Sales Questions to Ask and Sell More Cars

Powerful Sales Questions to Ask and Sell More Cars

  Using powerful questions in sales is one of the best ways to build rapport while gathering important information about your customer. …

Ways in Which Automotive Dealer Management System Helps Boost Profits and Minimize Expenses

Ways in Which Automotive Dealer Management System Helps Boost Profits and Minimize Expenses

Although most of the industries of today are transforming digitally, some skeptics do exist when it comes to investing in an automotive dealership manageme…

The secret of effective Japanese human resource management

The secret of effective Japanese human resource management

Human resource management is critical to the success of your business. And it seems that Japanese businesses understand the importance of this most. Be…

How to Avoid Sales End-of-the-Month Catch Up

If you're in dealership management you're probably familiar with the routine. No matter how great your intentions are to keep a steady sales pace all month, it’s month-end and you're playing catch up. Even worse, sometimes you believe it's going to be a great month until a nasty number shows up on your balance sheet during the last week.

Ultimately it's the General Sales Manager who is responsible for making sure there are no nasty end-of-the-month surprises. Fortunately, these days it's pretty easy to track Key Performance Indicators (KPIs) to avoid last minute scrambles.

I suggest you review the following KPIs on a daily basis, not just to see where you are, but to find out ‘why’ you're there. Knowing the ‘why’ behind the where allows the GSM to take immediate action, bringing greater consistency into the sales process and departmental success.

1) Units Sold to Budget

When you wake up in the morning, this is your basic scoreboard. Where are you pacing with both new and used? If you are behind more than your three-day, red alert. For example, if your goal is to sell 100 units per month, that means your average is 3.33 units per day. If at any given time you fall more than 10 units behind it's going to be very difficult to catch up to goal.

If this KPI signals a problem it's time to light a fire under someone's behind. To find out who's behind, drill down to the following:

  • Salesperson activities. Is there a salesperson that hasn't delivered a car in the last three days? If so, are they doing what they're supposed to be doing? If not, they may need a friendly counseling session.
  • Total appointments. Is the store averaging two appointments per day, per salesperson? That's a reasonable goal for any sales team.
  • Confirmed appointments. How many appointments were confirmed by a manager one day prior? This metric has been proven to increase shows and the goal should be at least 50 to 75 percent of appointments confirmed by managers.
  • 3-day ‘no sale.’ Which Salesperson has gone 3 working days without a delivery? Identify this individual and sit down for a one-on-one review of his/her CRM. The strongest move is to cull the CRM with the Salesperson and call active clients to get an appointment. Nothing is more motivating.

2) Gross Profit

Similar to units sold, this KPI should never fall behind your three-day average. So, if your monthly goal is $100K gross profit and you're down over $10K at any given time, there's an issue. To find out where the issue lies, drill down to the following:

  • Is the first pencil at maximum gross profit? Review your last 25 deals, see what the initial offers or counter-offers to your customers were. You may have a manager or salesperson who feels compelled to discount.
  • Is your trade appraisal process being followed? A lot of gross profit can be lost in trade appraisals, with missed opportunities in both under or over allowance. It's very easy for salespeople to shortcut this process, especially if they are behind. Nine times out of ten if there's a problem it's only going to get worse. Dig in and watch an appraisal. Or, better yet, do an appraisal yourself.
  • At what point are managers getting involved in the deal? The earlier the introduction, the more likely the deal will close. Ideally the manager gets involved just prior to the demo/test drive, or just after. This should be recorded in the CRM, but if it's not, it can be discovered by talking to the sales team, or by observation. Believe 80% of what you see, only 20% of what you hear.

3) F&I Reconciliation

If this KPI is greater than five percent less than your gross profit goal, someone is making some serious mistakes. For example, if you believe that you have $100K in gross profit but the F&I reconciliation comes in at $85K, that's $15K in errors somewhere.

To find out where these errors are occurring, take a closer look at what your finance managers, salespeople and accounts receivable/payables are doing:

  • Is the finance and sales manager including items such as shipping and other chargebacks? If these aren't added right away it can lead to large discrepancies when they are finally reconciled.
  • Are your sales managers submitting capped deals with all ‘We Owe’ items accounted for? Make sure all the "We Owes" and reconditioning charges have been included in the paperwork.
  • Is your AR/AP person posting all expenses on a daily basis? Two or three days of delays can make a big difference to your current gross profit.

Keeping a close eye on these KPIs helps General Sales Managers take care of problems as they arise so they can avoid nasty end-of-the-month surprises. As a result, your sales team won't have to frantically play catch up to meet goals.

Which sales KPIs do you review on a regular basis, and how do they help your team stay on target?

 Unlock all of the community & features  Join Now