You Can’t Fix What You Don’t Measure

Brian Kidder

09 September, 2019

Automotive sales managers are a different breed, in many ways. They often have been promoted for their sales acumen, and have had to learn the management-of-people and business aspects of the position on the fly.  

Sales is a big-picture endeavor; a good sales person often gets bogged down in minute details, but has a firm command of the overall landscape. Sales assistants are common to sales people, for this reason. But when it comes to running a business, good managers must wear many hats, and some of them involve an in-depth knowledge of details. Those who are well-rounded and adept enough to excel at wearing these hats are often lured away to other industries offering better executive development.

You can’t get where you want to go without first knowing where you are.

If you’ve never been on a public company’s earnings call, they can be eye-opening. The managers are very quick with answers, when asked by institutional investors. The investors ask, and the managers rattle off figures and facts like a well-known song. This is more than just expected; it’s required. If you’re the CFO of a public company, and an investor asks you about your accounting conventions used to compile your component costs, you’d best be able to rattle off a precise answer and rationale. Forward looking guidance is almost always offered, and targets have to be hit. And everyone who reports to the CFO has a target they’re accountable for, and must also share their knowledge of framework, and what components drive what outcomes.

“The vast majority of customers (85%+) who do come in, call before doing so. And it’s these last few inches of the sales funnel where things get clogged up, and sales are lost.”

But this is largely in contrast to what we hear in our conversations with many dealership management personnel. Our service is geared toward taking the giant sales funnel at most dealerships, and making it more efficient. At most stores, they are spending tens of thousands of marketing dollars to produce one of a handful of outcomes: someone walking into the store, someone calling the store, or someone filling out an online form and opening a dialogue. In either of the last 2 scenarios, another person interacts with the customer to get them off of the phone or computer, and into the store. The vast majority of customers (85%+) who do come in, call before doing so. And it’s these last few inches of the sales funnel where things get clogged up, and sales are lost.

Most customers call before they come in to a car dealership.

We use science-based methods to train dealership personnel handling the phones to set better quality, more regular appointments, to shore up the bottom end of that sales funnel. People who call first purchase a vehicle about 50% of the time, once they’re in the showroom. Compared to cold walk-in customers, who tend to purchase around 20% of the time, this is a better focus of attention by a factor of 2.5. Our training plugs those leaks in the bucket, and makes the most of those marketing dollars being spent up at the top of the funnel.

Many managers, however, don’t keep accurate track of their data. They often have no idea what percentage of the time any one of their sales or BDC people book appointments, they usually don’t know what the overall percentage is, and half the time they know what their overall sales volume is, but when we ask what their goal is, they offer a vague answer, like “more.” Imagine an investor asking that question and getting that answer.

“We can produce very precise, high-level outcomes for managers and others who do measure and monitor results accurately.”

What percentage of your phone ups are being set as confident appointments?

There are only 3 overarching figures you have to know to be more effective as a manager:  you have to know the lifetime value of a customer, you have to know the cost of acquiring a new customer, and you have to know how to reliably exploit that difference to scale.

This represents a huge opportunity for those willing to embrace precision in measuring and driving progress toward concrete goals. Rather than throwing rice at the wall and then aiming more rice at places it stuck last time, we can produce very precise, high-level outcomes for managers and others who do measure and monitor results accurately. With good data, we’ve been able to train dealership personnel to consistently obtain 90% appointment rates, 80% show rates, and over 33% overall sale to call rates. Read: they sell a vehicle every 3rd time the phone rings. But we could not have done this by just shotgunning the approach. They monitor the data, and share it so we know how to customize our training.

There are many different phone call monitoring services that integrate with your technology stack and allow you to use a scalpel instead of a sledge hammer when it comes to your training. We see excellent results at stores we train, for example, using software solutions like Callsource or Call Revu, because they work to identify, often in real time, opportunities that are escaping, thus identifying areas where we can intensely focus our training techniques.

Technology can work for you and be your store’s best friend, or it can continue to drive customers into impersonal, robot-driven solutions, and thereby become your worst enemy. Humans want to interact with other humans; what they don’t want is the experience of dealing with poorly-trained sales people whose interests may or may not be in line with theirs. Most stores have done a lot of work to make their in-store customer experience exceptional, but they’ve forgotten that experience most often begins with a phone call.