As a follow-up to my most recent Internet sales training post, one of the easiest things to control at your automotive dealership is how you visualize success. Although it’s traditional to celebrate gaudy volume and total gross numbers, it’s to feel like you’re doing a good job where there are no cars to sell on the lot. And, no worthwhile leads in the CRM, sales activity is slow, and traffic is down…OH MY GOD!
I want to address the elephant in the room right off the hop. Per vehicle revenues are the highest they’ve been in generations. The grosses are literally gross. It’s awesome for the sales staff…maybe the store can finally afford that corporate-mandated facade. But, like every lavish affair, everyone knows it’s not sustainable.
More importantly, the OEM doesn’t see a dime of that gross profit. If they don’t build millions more cars, they can’t sustain the business long term. They’ve already started scrutinizing dealerships for the littlest of things, and are practically forcing subscription-based services to recuperate lost revenue. In this environment, it will only get worse.
I’ve written plenty about metrics in the past. And I am regularly invited to speak about effective Internet sales training, teaching sales professionals and other automotive industry experts on the matter. Without trampling over the same old ground, creating sales forecasts and measuring yourself against volume is a surefire way for synthetic failure. If you think things are bad, you will make them so, especially when a pay plan is based on close rates is involved. That’s right, friends, your apprehension and personal misgivings will reinforce themselves when you’re in a cyclical business that measures itself in thirty-day cycles.
Visualize Success & Control What You Can Control
The antidote to this type of thinking for any sales leader is mindfulness. Control what you can control, and don’t worry about the rest. Control your reactions, focus on solutions and be present in the moment. Easier said than done, I know. Especially when it feels like the world is ending outside your dealership, as I mentioned in my previous post, if you make a concerted effort to change your perceptions, you can put your mind at ease when you visualize success.
In my Internet sales training courses, I typically recommend that dealerships measure themselves in a year-over-year manner. In this case, you can change the way you perceive success. Inventory availability and incentives typically follow the same patterns in any given month, barring external factors and new vehicle launches. Using percentages takes volume out of the equation, which leaves a dealership with a much clearer understanding of the sales team’s success or failure trajectory.
Given the circumstances of the 2021 chip shortage, along with the lingering effects of COVID-19, year-over-year measurements of sales goals aren’t as accurate as they usually are. After all, inventory trickles onto dealership lots in a wildly unpredictable way. It’s pretty hard to maintain an appointment set ratio when the amount of vehicles the dealership has is 20% lower than usual.
Low vehicle inventory has impacted the sales performance of every store in almost the same way. Plus, the incentives that have been practically omnipresent for an entire generation of car buyers have pretty much disappeared. If we can’t treat our sales processes as business as usual, why should we measure our sales reps the same way?
1 Important Sales Metric that Matters Most Today
With the chaotic nature of the car business, most dealerships need a true north. That’s especially true right now (even for high-performing dealerships). Instead of measuring the improvement or decline of our sales KPIs when the critical elements of success were readily available, we can choose to look elsewhere for comparative performance measurements. If the dealership wants to look for a ray of happiness right now, it should gain market share. Given the scarcity of inventory and customers (and most likely low-interest rates), your percentage of the smaller pie matters most.
Sales managers should train more on offering customers more options. That will be critical to success when all the low-hanging fruit is gone. When all the Ford Raptors have been traded-in, with all their glorious positive equity, those who NEED to buy a car will be those who you’ll be talking to the most. Chances are, you’re not going to have the right vehicle for the bulk of those customers. The good news for you is that no one else will have it either. As it was for decades, those who do an excellent job of processing wants and needs into compelling buying options are going to thrive in this environment.
As a one-time “order-taker,” my sales skills supported my family just fine on acquiring just the right vehicle for all my customers. However, while the Goldilocks vehicles are six to nine months out, you can offer what matters the most today. If you don’t provide the reality-check to customers immediately, someone else will, and they’ll get the deal in these circumstances. Don’t forget that the trade-in you didn’t want to overpay for is a vehicle that will sell in a scarce environment. With a finite amount of buyers with a limited amount of available vehicles to sell, every single conversation represents a percentage of that pie.
After the pandemic started in 2020 and the chip shortage of 2021, it’s easy to think 2022 will be worse. But, like anything, it’s a matter of perspective. In all likelihood, you won’t hit the volume, or even the gross numbers, you achieved last year. But, if you are getting more than the guys down the road, you are still winning the battle for customers. That means more service customers tomorrow and a better chance to lock that customer in when things return to something like normal. When times are tough, it’s much easier to achieve what seems impossible. Those are the sales and marketing stories that people tell their friends. That should still put a smile on your face as you visualize success for the new year!