Your Closing Ratio should be higher than you think.
For Sales, national statistics were one in five. For Service, selling maintenance, about the same.
Very nice info.,nice delivery too.
Reaching a 70% closing ratio CAN actually happen. I spent some time in NE OK once upon a time on a consulting gig. It was right after an oil glut and the S&L crisis had wrought havoc through that part of the world. This was 1988. A third of the population in the market I was in had declared BK in the last 18 months. One Saturday we closed 28 out of 28 "ups." 3 got bought with a lender.
RE: Selective logging - If a dealership actively works the service department, AND logs ALL contacts, it is impossible to run anywhere near a 70% closing ratio. If one logs EVERYONE, it is equally impossible. WE should be trying to get contact info from EVERYONE to put in our CRM systems. If we are trying to protect our closing ration, we end up with less contact info in our expensive investment called CRM. The prospect these days tends to go to the Internet to gather information, comes to the dealership for a test drive and to get additional information, then leaves to go home or back to work to use the Internet to negotiate the deal. Your sales person could very well be negotiating against your own Internet department. If either the sales person or the Internet department don't log the customer how would your dealership even know?
Your newest and most recently trained sales people don't know they aren't supposed to log everyone. But the eventually learn after getting their balls busted over closing ratio a few times. The old dogs will cue them in.
Only in the rarest of cases will truly high closing ratios occur. BHPH dealers have VERY high closing ratios. OR an established store selling high line cars with a long time sales staff that doesn't advertise to a mass market might achieve such high numbers. A more normal "volume" store with a sales staff that turns over like most do? Forget about it. Concentrate on getting everyone logged and followed.
good stuff. i agree with david regarding the selective logging. i strongly suspect MANY (if not most) dealers don't have accurate showroom data
Jeff, this is the universal truth and a great one too!! We stick to the old notions and do not like to try the new. The 70% ratio is possible and it needs to be practiced to be believed.
According to Ernie "Tex" Prichard, the strongest prospecting line in the business is - "You'd be interested in a new one wouldn't you if we could get you in to one for about what you're paying now?"
This works especially well in the service drive when one has a lot full of CPO inventory and residual based financing to lower the monthly payments. Of course, one has to deal with the service department to keep them calm about the sales department poaching potential gross profit from their customers. In theory, if the customers vehicle is being traded in the work should get done anyway, but for dealers who insist on charging retail for recon, that doesn't always work out. In today's efficient used vehicle market, selling from cost slows inventory turn and costs total gross profit.
Ah yes, closing ratio.... the discussion of which is guaranteed to lead to ever more selective logging. Dealerships with a LOT of repeat business and a sales force that doesn't turn over having the highest closing ratios. Go figure.
Great point Bruce. It is seldom, as you and I know the potential of prospective buyers in the service drive with propensity metrics. TY
Great insight,Jeff. When I used to run stores, I always had a service drive schedule for my sales team. My sales people considered it punishment until I created a "Hot List" for my reps working the drive. Both Reynolds and ADP have the ability to create a list for Sales Managers of open customer pay repair orders with an estimate of $1000 or more and are out of warranty ( $1000 is just the number I used).The rep working the drive would target these service customers and attempt to offer them an alternative to spending $1000 or more on their vehicle when in most cases,the money spent would NOT enhance the value of their vehicle.This little exercise completely changed the mindset of my salespeople working the drive,and accounted for a minimum of 8 to 12 deals per month.It's a great profit center for the Sales Dept. which very few stores take advantage of.These are also people who are already sold on your store, which is why they are in your service drive to begin with.
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