These articles recap some of the opportunities uncovered by our GSA powersports consultants during actual consulting visits. These are followed by recommended actions that address these opportunities. Our goal is to provide you with ideas to help improve your dealership.
This small dealership is in a market area containing around 150,000 people within a 50-mile radius. This number increases considerably during the summer months because of the large number of seasonal lake homes in the area. They sold just more than 200 units in the past 12 months.
The current owners are powersports enthusiasts who were customers of the original dealership. After the buyout, they built a new facility on a state highway with good traffic volume. They also acquired an additional major powersports product line.
Since they are not visible from the freeway, they have used billboards located near the freeway off-ramps to help draw additional business. They have sold their other large, successful (nonpowersports) business and have good capital to back the dealership.
In the first part of this series on this dealership, we analyzed the entire store’s operations. For this second part of the series, GSA consultants analyze the sales department.
The sales manager is one of the three people responsible for most of the sales. Thanks to his previous experience and training, he has a working knowledge of some of the processes that should be in place for this department. However, he has not been tracking, training or enforcing these processes.
New and preowned unit sales margins are not sustainable. With low sales volume, they must make considerably more profit in order to attain an acceptable bottom line.
They were strongly encouraged to aggressively grow the preowned business. It offers higher margins without the pressure of competitors for the same product. It is important to understand the local market value and use it as a basis for the trade allowance. Determine what it will sell for and subtract the needed margin
(18 percent-plus) and the reconditioning costs to come up with the trade allowance. Always use an appraisal form as a tool to justify your price to the customer.
No one inspects the showroom log or uses the information collected to prospect for sales. The customers who are logged are primarily those who actually buy a unit. The salespeople do not have goals for sales, prospect calls or kept appointments. There is no sales process being followed. There are no daily huddles, sales training, coaching or counseling activities taking place. There is no process to ensure that customers are introduced to clothing and/or accessories after the unit sale is closed.
There is no tracking of basic sales data, write-ups or closes.
They are not using a worksheet for each sale. That means there is no dialogue for getting down payments and helping customers move to payment buyers. That also means there is no documentation of the sales discussion. The worksheet provides protection for both the customer and the dealership and helps secure additional profitability. Since there are no worksheets, no one is desking the deals to ensure profitability in the sale.
There is a lot of opportunity for improvement in both sales and profit.
• Raise the overall major unit gross profit by
• Complete worksheets on all major unit sales. This helps protect the dealership as well as the customer.
• The sales manager must desk every deal. No deal can be completed without approval.
• Utilize the showroom log/traffic log. Review it daily. Use it to drive prospecting activities with the sales staff.
• Provide prospect forms for the salespeople to record their individual activities. Set weekly goals for prospect calls and appointments. Provide rewards for exceptional performance by the sales staff.
• Implement and enforce the use of a structured-selling process. Spend the majority of the time in the meeting and qualifying steps of the process.
• Teach salespeople how to build value
to overcome price objections. They must
build value in themselves, the dealership and the products.
• Sales must make follow-up calls with all unit purchasers within 72 hours. Solicit referrals and address any issues.
• Ensure all major unit purchasers experience your P&A department prior to delivery of the unit.
• Track logged customers, sit-downs, write-ups, closes, deliveries.
• Consider a pay plan that compensates salespeople based on gross profit.
• Sales staff should walk the inventory on a regular basis. Know what you have and where it is at all times.