This (often missing) vital part of our business has been on back order
[dropcap]W[/dropcap]hen’s the last time you went riding on a unit with a faulty fuel gauge?
We’ve all done it.
You keep getting that sick feeling in the pit of your stomach, just knowing you’re going to hear that horrendous sound of the engine coughing from a lack of fuel … and then you’re done.
The funny thing is most of us will ride that same unit with the same problem the next weekend because it’s just an inconvenience, not a deal-breaker.
The same can be said of a broken business practice in our dealerships. Many of us have run our sales departments with a vital part missing: closing ratios.
Unlike the fuel tank gauge that we chose not to fix, the lack of closing ratios isn’t anything we could’ve repaired. It was – because of a lack of efficiency in our business systems – like a part that we ordered ages ago and never received.
But what a part to be missing! Closing ratios are key data components that ultimately tell us if our sales process and personnel are successful. Or not.
[pullquote]“Closing ratios are key data components that ultimately tell us if our sales process and personnel are successful. Or not.”[/pullquote]
It’s so important that many dealerships have tried to find work-arounds. Some dealers have counted the number of leads they receive and then divide that by their number of unit sales to identify a closing ratio percentage. Unfortunately, many of us aren’t disciplined enough to log all of our leads, so our closing ratios become like Monopoly money – not worth taking to the bank.
“Joe, what’s your closing ratio this week?”
“Thirty-three percent, Boss!”
“Wow! That’s incredible. So, Joe, how many leads have you logged this week?”
Another work-around approach has been the door swing counter. Divide the total number of people who walk into the store per week by the number of unit sales to get the closing ratio percentage. Except then you have to guess how many of those door swings were actually your personnel, not customers. Oh, and 80 percent or more of our customers start their shopping online, meaning a huge percentage of them might complete their shopping even before they register on our door swing counter.
So how does that work?
The only true closing ratio we can trust is one that’s generated by our business system. It should work like this: A consumer goes online, identifies a model of interest and leaves us an email asking for a quote. That email flows from our online marketing vehicle into our lead manager. We work the lead and, hopefully, land the sale within a few weeks. Then, because our marketing and lead management systems are talking to our accounting module, our management platform clearly reports this success as part of our closing ratio.
Equally important – but probably not cheered on by our sales folks – any web-generated lead that doesn’t lead to a unit sale is part of an accurate closing ratio.
This key to a true, accurate closing ratio is now available in cutting-edge dealership management platforms. In other words, that vital part you ordered several years ago has finally arrived.
Also now available to our industry, thanks to more efficient management platforms, is the ability to improve your lead gathering.
One of the biggest wastes for our sales departments is the number of consumers that call in but are never logged. They’ve expressed interest in a model or accessory, but we never hear from them again. What’s worse is we didn’t get their phone number – or didn’t place it in our lead manager – so we never get to market to them either.
It’s a lost opportunity, and it probably happens several times an hour at your store.
How do you improve? You automate the process as much as possible.
You use a special call tracking number that allows you to capture the caller’s number and potentially more information in your dealership management platform. Your sales team can then find that information in your system and expand on that contact information with details that could lead to a sale, like the particular model or accessory the consumer was interested in.
More effective lead gathering and the first true look at your sales staff’s closing ratio should bring some exciting returns this spring and summer.
Your broken fuel gauge? Heck, it can wait.