Understanding potential sales opportunities

This article was originally published in the Autofile Magazine - March 2017 issue. 

Make your advertising dollar go further

Whilst I’ve talked about this before over the years, it is another area that not many dealerships seem to understand or really value.

I have had many a conversation about dealers wanting to increase advertising spends across their various channels in a hope of increasing customer enquiry. I then pose the question - “How many customers do you come into contact with and NOT sell to each month?”

Establish your opportunity-to-sale ratio

Why try and pour more customers into the top of the funnel if you have no idea how many there are already and how many you are converting to sales.

Increasing your conversion of the enquiries you get now is the place to start, before pouring more in to the top. Once you understand how many you currently have, you can work towards converting them. Then, when you do boost your advertising, your precious advertising dollar goes a lot further.

The first steps to measuring your dealership's customer activity is to ensure every opportunity is loaded into your Dealer Management System (DMS) or, at the very least, recorded on an old school piece of paper. To be honest I much prefer the discipline of having a good process around entering information into a system, then you can track activities against a vehicle and determine actions relating to activities or lack of, a lot more efficiently.

The key activities that should be recorded as opportunities include:

• Phone enquiry
• Email enquiry
• Physical appointment
• Walk in
• Test drive
• Sale

To go one step further I would also suggest recording the referral method or medium from which each of these activities came - e.g. website, TradeMe, repeat customer, referral from a friend, walk in etc. This information then allows you to establish your return on investment in each of those areas and the effectiveness of what you are doing in those spaces.

Once you can establish how many unique opportunities (individual customers) present themselves each month to your dealership, you can then very quickly establish what your opportunity-to-sale ratio is and use this as a benchmark each month against which to track your performance.

Example

In this example there are 270 customers that didn’t purchase from the dealership! Measuring this over three months will start providing you with a good average to work from, benchmark against and improve upon.

By a customer making some form of contact with your dealership they have indicated that they are in the buying cycle somewhere. This cycle could be 10, 30, 60 or even as long as 90 days. Therefore doesn’t it make sense to make a plan as to how you can retain, engage and sell to the 270 that chose not to complete the buying cycle? Be proactive with these customers and take action now.

Measure, quantify and do!

Having a good CRM or DMS system that allows you to record, track, communicate to, and monitor your opportunities is so important. The opportunity to increase sales is right there in front of many of you. The key is measuring activity, quantifying your opportunities and then doing something about it.

If you want to learn more about maximising your opportunities and what steps to take to convert as many of them as you can, then please contact our team today. 

--

Disclaimer:
The Motorcentral blog is intended for educational purposes only. All writers opinions are their own and nothing published on this blog should be interpreted as a recommendation or advice in any way. Motorcentral is also not responsible for and does not verify accuracy of any of the information contained within this blog.
In the event third parties are referenced within this article, Motorcentral is not necessarily affiliated with those third parties.