Automotive News Canada - December 2021 - 7

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It's time to Re-evaluate the Potential of Your Customer Portfolio
SALES LEADERSHIP
Can your
portfolio provide
a daily stream of
appointments
and deals?
By JEFF WILLIAMS
President & CEO, Absolute Results
Insights & Selling
Strategies
less focus on operational diligence,
coupled with an expectation of continuous
growth, increase the monthly
sales and profit from the existing
customer base?
For most dealers, the last six weeks
of each calendar year are all about reviewing
financial statements and setting
forecasts and budgets for the new
year. Every line item in the current
budget is carefully evaluated based on
dollars spent, replacement cost, and
ROI. Sales targets are negotiated with
the distributor or OEM. Contracts
with suppliers are reviewed before
they are renewed, and dealership pay
plans are often adjusted based on
the potential of the next year's sales
performance and profit.
This level of financial accountability
is essential, especially in the hyper-competitive
retail auto industry
that has historically thrived on such
tight margins. And just as important
to each car dealer's financial success
is the underlying entrepreneurial
expectation of growth. Each year, the
management and sales team must
grow sales and profit. Period. This
drive to improve and grow fuels the
dealer's success, the OEM's success,
and their community's economic
engine.
But what if dealers were to apply
comparable evaluation principles to
the sales potential in their customer
portfolios? Could a similarly relentAs
I travel every month, I meet a
growing number of dealers who are
tired of the 30-day hamster wheel
of conquest sales. They know that
of the thousands of brand-loyal past
customers from their dealership who
will be ready for a trade next year,
their sales teams will only renew a
fraction. Every day, these same dealers
also see dozens of customers who
bought from competitors in their
service drives, and they know those
customers are driving vehicles the
used car manager desperately needs
to fill today's market demand. They
also know that few, if any, of those
customers will engage in a quality
conversation with a member of their
sales team.
The dealers I speak with know
their portfolios hold the potential
for a steady stream of sales
appointments and deals every
day. Their portfolios probably
hold enough quality opportunities
to hit 50 per cent or more of
their monthly sales target. What
they need to know is how to
accurately evaluate the potential
of their customer portfolios.
try standards, but the best starting
point usually comes from firsthand
experience talking with customers
on the showroom floor. The third
step is to put in place a sales plan
that measures performance month
over month and contains rewards for
achieving incremental sales growth.
Here are three reference points to
help dealers understand the current
state of their portfolios:
1. How many active sales and service
customers does the dealership
currently have?
2. What is the dealership's current
sales-renewal rate (the percent
of monthly sales from previous
sales customers)?
3. What is the current service-conversion
rate (the percent of
monthly sales to customers who
bought elsewhere, but service
with the dealer)?
THIS DRIVE TO
IMPROVE AND GROW
FUELS THE
DEALER'S
SUCCESS
Just as with a financial review, the
first step in evaluating portfolio potential
is identifying its current state:
examining both the health of the
database and the number of historical
sales from the dealership's active
customer base. The second step is to
set goals to grow the sales and profit
from previous customers. Ideally,
these goals would be based on indusABSOLUTE
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INCREASED
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I recommend that dealers put the
following showroom activity plan in
place to better understand their portfolios'
potential. For three consecutive
days, dealers should ask their sales
teams to introduce them to every
client with a sales appointment who
previously bought from their dealership.
They should take five minutes
with each customer to thank them for
their loyalty and to ask them about
their experience with the dealership
during their ownership cycle. Doing
so will not only provide valuable
insights on customer experience, but
it will also reveal the amount of daily
selling opportunities currently being
realized from their portfolio.
They should spend two mornings
in the service drive, asking that the
service manager introduce them to
every customer whose vehicle wasn't
purchased from their dealership.
Customers should be thanked for
their business and asked why they
have chosen this dealership for service.
Dealers should finish by asking
if there's anything their sales team
could do to earn their business in the
future.
Finally, dealers should meet with
their leadership team to review
the current state of the dealership's
portfolio, the portfolio appointments
they met in the showroom, and the
conversion opportunities they discovered
in the service drive. Together,
the leadership should develop a plan
to convert more service customers
and to grow portfolio sales by making
more appointments with past sales
customers.
The portfolio sales plan might
include such strategies as a weekly
phone blitz to service customers
who are driving vehicles the used car
department needs while paying the
sales team a " buy-in " fee equivalent to
a sales commission. It might include
tracking the number of sales each
sales team member made to past customers
and paying a " repeat " customer
bonus when a sales team member
renews three or more customers in a
month. It might also include using a
tool like Absolute Drive to create and
serve daily offers to every qualifying
service customer.
Once the plan is established, it's important
that dealers measure the performance
of the three key reference
points so they can track the growth
of the dealership's active sales and
service customer base, the increase
in sales renewals, and the increase in
service conversion.
Dealers, you spend the last six weeks
of the year evaluating your dealership's
financial performance and
setting targets for the new year. Take
a week at the start of the new year to
evaluate the potential of your customer
portfolios and to put a plan in
place with your leadership team to
grow portfolio sales. You might just
discover that the sales potential in
your portfolio is massive, and a few
hours of planning can not only save
you thousands in conquest advertising
costs, but it can also produce
a daily stream of appointments and
sales.
To learn more
about Absolute
Drive and other
portfolio tools,
scan this QR code:
Success
Story
PLUS
Automotive News Canada - December 2021

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