It’s Time to Revisit Sales Processes
Congratulations! You and your team have likely enjoyed the greatest run of net profitability in the history of your store!
Of course, so has every other (non-Carvana) dealer in America.
What a great (and weird) time it was to be a car dealer. Tight inventories created discipline at the sales tower resulting in huge front-end grosses. You were able to sell every vehicle you stocked, and you even turned a wholesale profit on the few vehicles you sent to auction.
Plus, if you’re like most dealers, you were able to do all this with fewer salespeople and without managing those pesky sales processes. Your team was running on autopilot because, well, what difference would it make if you responded to leads quickly or if you logged every Up in the CRM? Would you sell any more vehicles?
Certainly, you’ve heard the adage that bad habits are created in good times… and times (from a profitability standpoint) have been very good. However, this begs a few questions: What will your grosses look like when we’re back to 90+ days of new car inventory? What will your used car inventory turns look like? What about your wholesale losses?
More importantly, what are you doing today to sell vehicles at the beginning of a recession, when there is no more stimulus money heading consumers’ way, and buyers are beginning to pull away from high retail prices?
In normal times, great processes that are strictly enforced are the biggest difference between dealers profitably growing market share and those just treading water. Where will your team be on this spectrum when (if) we return to normal times?
The good news is that it’s never too late to revisit your sales processes. By starting today, your team will be well equipped to manage the current market slowdown and whatever the new normal becomes. The great news is that it’s not complicated or time consuming to get the most important processes – those that will drive future sales and profits – back in place.
A Few Key Processes
If I was starting from scratch on sales processes in today’s market, there are four important ones that I’d want in place first. In no particular order, I’d want to make sure we had a super-fast response to every lead, that we called our sold database on a sensible schedule, that we focused on setting appointments that showed on time, and that we logged every Up in the CRM. Here’s why:
Response Times: We know from the data we’ve reviewed (both pre-covid and recently) that the first dealer to reach a new lead is three to four times more likely to sell them a vehicle than the second dealer who connects with them. This is because today’s consumers have all the pricing information at their fingertips. So, there’s no reason for them to deal with multiple dealers at once – even when they submit leads to several of them.
Ensuring your team is responding properly (by phone, text, and email) to all leads within 15 minutes is critical to closing these above an acceptable level.
Database Calls: When your previous buyers catch New Car Fever, what guarantees do you have they’ll buy from you again? None. By reaching out on a sensible schedule and offering to buy back their vehicles (perhaps as you upgrade them with a custom factory order) or ensuring they ground their leased vehicles with you is the only way to remain in their consideration set when they’re ready for an upgrade.
Strong Appointments: Appointments that show on time are four to five times more likely to buy than when these same prospects walk in unannounced. Plus, your team spends less time per sold customer, and your grosses and CSI are higher with appointments. Period. End of story.
Logging Ups: Probably the biggest miss for most dealers today is the proper logging of Ups. This once mandatory practice has fallen by the wayside as we face more “unreasonable” buyers (for example, those who say they will never pay MSRP and/or don’t want to order a vehicle).
Imagine if every Up who was looking for a specific model and didn’t buy was properly logged in your CRM. What could your team do with that information when (not if) you have plenty in stock and the manufacturer was now offering an extra $2,000 in rebates? In most CRMs, it would take less than ten minutes for you to send a quick email to all these prospects detailing the current deals and inviting them back into your store.
Selling Cars Isn’t Hard
While today’s salespeople have basically become – through no fault of their own – order takers, tomorrow it will take some work. Of course, selling cars isn’t hard, it just takes work. That work is simply the processes you and your managers should begin creating and enforcing today so that you’ll continue to enjoy success even when we get back to normal… whatever that means.
Automotive Sales Books by Steve Stauning: