The problem facing you is selling more cars and making more gross. Here are some typical responses managers give. This should illustrate the point that we think we know what to do, but do we really? The important thing to learn is the process of problem solving and applying it to everything you do or are considering doing. By utilizing this approach not only will the problem get fixed, the cure will be long lasting because the things we identify as the problem aren't always fixed by the obvious.
IDENTIFY THE PROBLEM
1. We are selling enough, the gross isn't high enough.
2. We are making gross, we aren't selling enough.
WHAT IS CAUSING THE PROBLEM?
1. We aren't asking for gross while working the deal.
2. We ask for gross and get it, we need more customers.
HOW DO I FIX THE PROBLEM?
1. Mark the cars up (used cars), start every deal from sticker minus ACV (new cars)
2. Advertise more
WHAT STEPS DO I NEED TO TAKE?
1. Re-price the used car inventory, pencil every deal from sticker minus ACV
2. Talk the GM into increasing the ad budget to drive traffic
HOW DO I MEASURE THE RESULTS?
1. Simple answer here, look at your travel and gross and compare to previous performance
Some of your responses in this exercise may be close to these. It looks pretty simple. It might even cure your immediate problem. Until we learn to change our thinking, however, the cure will be short term and eventually we will be right back in this situation.
IF YOU ARE COMMITTED TO A SIGNIFICANT CHANGE IN WHAT IS HAPPENING YOU MUST ALSO BE COMMITTED TO A PROCESS THAT WILL ENSURE THE CHANGE IS BENEFICIAL AND LONG LASTING
WHAT IS CAUSING THE PROBLEM?
Is it your attitude about the competition, their pricing methods and advertisements?
Your mindset regarding what is going on in the market has an impact on how you pencil your car deals. Because you are in the car business you are more sensitive to and pay more attention to radio, television, billboard and print ads. Never make the assumption your customers pay that same kind of attention.
Have you established, in writing, what your objective is for both unit sales and gross per unit?
Telling yourself you need to make more gross isn't a written objective. Write down and share with your fellow managers what you expect in terms of sales and gross. Hold yourselves accountable.
Have you kept accurate records so you will know how many ups you see each month and what the result with each was?
Without the ability to track your business you will achieve inconsistent results. How many customers are falling through the cracks due to lack of follow-up, not re-looking at each opportunity or not being aware they were in your store?
Have you kept accurate records so you will know how many ups and what the results were for each of your salespeople? Have you identified areas of needed improvement in your salespeople? It is much easier if you are tracking their performance and reviewing it on a constant basis.
Have you analyzed how many salespeople you need in order to be effective and sell the number of units you desire?
Take an honest look at your staff. Set performance objectives for them. Hold them accountable.
Have you analyzed your inventory in order to ensure you have enough stock and the proper stock?
Do not assume anything. Inventory management is critical. It must be sufficient to create the numbers you forecast and must be the right stuff. Look at it every day.
Have you analyzed your traffic to determine the effectiveness of your advertising?
Spending your ad budget just because money is allotted to it is not going to be the best use of your money. Do you have a method established to determine what is bringing your customer to the dealership?
Is your management team fully trained in order to be effective?
Does everyone know what their part in increased sales and gross is? Look at the numbers that measure the effort and effectiveness of management. Have you established a policy concerning penciling deals for gross?
Is your sales force fully trained in the skills they need to be effective?
Without the proper skills it is hard to do the proper job. How is their product knowledge? Are your sales training efforts effective and beneficial? How often do you conduct training devoted exclusively to holding gross? Do you get the GM and GSM involved in the training?
HOW DO I FIX THE PROBLEM?
Write down every item that comes to mind that might be causing the problem. Analyze why you feel that way about each of the items. Think about what might happen should you decide to change something. Plan a course of action that will deliver the desired results.
WHAT STEPS DO I NEED TO TAKE?
Inform the concerned parties about what needs to change and what the benefit will be. Lay out your plan of action and make certain the responsible parties fully understand it and what their role will be. Set a schedule to accomplish the task and stick to it. Create a method to measure your progress against the objective. Hold yourself accountable for the results.
HOW DO I MEASURE THE RESULTS?
Look at your travel rate and gross, compare to previous periods. Look at each item that creates sales. #of UPS, Demo, Write-up, Sold, Delivered and see what they are telling you.
USE THIS METHOD EVERY TIME YOU SEE AN AREA WHERE YOU CAN IMPROVE …… ANYTHING LESS IS A TEMPORARY FIX
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