The results of a 1-question informal survey show how auto-retailing feels about quantity over quality.
Over the past 18 months, I’ve done a 1-question survey of about 50 dealership operators and general managers.
I’ve asked them: “If you have $4,500 to spend this month on only one of two things, sales staff training or more showroom traffic; which will it be?
All 50 (100%, to you statisticians) replied: “More traffic.”
Our industry is addicted to showroom traffic.
“That doesn’t make sense!” some people will say. Yes, it does. Why? Let’s look at America’s pastime for the answer.
In baseball, we’d normally look forward to playing more games to improve our batting averages, RBIs, ERA and won-loss record.
If the car business was baseball, however, we will just play more games to get the same, say, 20% of sales per prospect. So 100 “ups” leads to 20 sales. And 500 ups will get us 100 sales. Yay.
We accept this because we can average $1,500 in front and back gross so just staying with the same 20% average means that if sales went from 15 to 75 units, we’d get $90,000 more gross (60 x $1,500).
And that is why most dealerships prefer traffic over training. They’ve decided the answer to more sales isn’t to improve closing rates but rather to increase the sales opportunities with more traffic.
But this one-track habit can result in some undesirable side effects. Those include customer-satisfaction problems, low use of customer-relationship-management systems, intentionally not logging traffic to artificially inflate closing ratios, abandoning processes and half-hearted business-development efforts.
Traffic over training is one approach. But let’s face it, it’s the wrong approach.
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Author: Digital Dealer
Digital Dealer exists to help dealers and their managers sell more vehicles more profitably by creating the best live events and media in the industry.