Now that we are moving deeper into the selling season, it’s a great time to rethink your sales strategy and commit to firm sales goals for your dealership and each individual salesperson.
Earlier this month, I was on a webcast with a young sales manager of a 3-store dealership discussing the importance of setting sales goals. He commented about how difficult it was to hit sales goals because you can’t predict what the season would be like.
I discussed with him the importance of tracking the sales activity for each of his salespeople and holding them accountable on a daily basis and weekly basis for hitting certain activity goals. He was a young manager, but I have found that most sales managers, regardless of age or experience, allow their salespeople to wonder aimlessly through the day waiting for something to happen. They have no focus, no goal and no understanding that their job is not to wait for something to happen, but to make something happen.
In a dealership, each department manager has numbers that they are accountable for and should be reporting to the owners on a daily and weekly basis. For instance, the service manager is responsible for the tracking and reporting of time recovery, which is how much time they purchased each day and how much of that time was sold by each technician. The parts manager is responsible for tracking and reporting on the total parts sales for each day — how much each parts person sold and the average of each sale made. The sales manager should be responsible for accounting and reporting on the activity of each salesperson. You see, in sales, it is not the actual sale itself that we track, but the activity that led up to the sale as well as the value of that activity. Sales are the end of the process not the beginning.
Sales managers need to know how many people a salesperson needs to “touch” to get one of them to buy and then the value of that sale. As we work with sales managers and dealerships to improve their sales, I ask each salesperson to track their activity for 2 weeks and the sales that resulted from it. As a manager, once you have those numbers, you have all the data you need to effectively set sales goals and to have a high probability of hitting them.
I encourage each of you to do the same thing with your salespeople. Each day, have them keep track of everyone they touched in some way. It could be a phone call coming in, an internet lead, someone walking in or someone emailing them for a quote. It doesn’t matter whether they were qualified or not, just that they were touched in some way by the salesperson. At the end of 2 weeks, total all the activity that was produced by the salesperson and divide that by the total dollars they sold during that time. Now, you have everything you need to set that person’s sales goals.
For example, let’s say your salesperson touched 50 people over the 2-week period and, during that time, they sold $50,000 in equipment. Divide the 50 touches by the $50,000 in sales, and you now know that each person they touched has a value of $1,000 in gross sales to your dealership.
If you need the salesperson to produce $1,000,000 in sales for the dealership this year, and each touch is worth $1,000, the salesperson would need to make 1,000 touches over the next 12 months to hit their sales goal. If we assume that the salesperson would be selling 50 weeks per year, they would need to make 20 touches per week or 4 per day over a 5-day period. That is just one touch every 2 hours each day. I am confident that every salesperson in every dealership could hit that number.
It’s important to keep in mind that sales is a business of averages. Like baseball, if you have a .400 batting average and you get up to bat enough times, you will get on base 4 out of every 10 at bats.
In my experience, most salespeople just don’t get up to bat often enough. They sit and wait for something to happen instead of picking up the phone and calling those valuable past customers you have in your database and making something happen. If you take the time to calculate the value of a touch and manage sales activity each day for each salesperson, 2017 can be your best year ever.