Thursday, February 18, 2021

Way Back - A Car Sales Rant


A younger man I mentor from time to time was talking to me about managing salespeople. A mutual friend from back in the day likes to say, “Tank was bad at walking customers”.

The rule on every lot is, nobody walks (customer) until at least two people have talked to them. If you are not getting anywhere, you “turn them through the desk (manager)”.  Was I a frequent violator of this rule? Yes I was!

As I explained to the young man, few people in the car business know who the customer is. Very few sales are cash deals. The customer is the lender and the lender will only “buy” the deal if the structure of the deal meets their requirements.

I was fairly good at qualifying and wouldn’t waste my time, or anyone else’s, on someone who couldn’t finance steam off a hot dog. Was I always right? Of course not, but had a high batting average.

A professional will track their performance as follows.

How many “ups”? How many “ups” went on a test drive? How many test drives resulted in a write up? How many write ups resulted in a sale? You should frequently be looking at these numbers and percentages to see where you may be weak and need to improve.

Historically, I made one sale per 4.2 “ups”. I’ve read the nation average is around one in eight.

The best salesman I ever knew was Dirty Al Imhoff who averaged one sale per three “ups”. He would spend hours with a customer. If the female was attractive…………..  At the end of any given month I would sell more cars than Al, and my “wash out” check would be bigger. So who was the better salesman?

As a manager I encouraged the “pro’s” not to waste time on losers. Of course, if you were on my crew you were a pro.

The lesson I offer to the young man? Work smarter and know where the money comes from.

As always, some who read this will be, “Yeah, but” brothers and sisters. That is ok, just keep doing what you are doing. Or, pull your head out of………… and start making money.


Old NFO said...

It's ALWAYS about the Benjamins in the pocket at the end of the day.

Well Seasoned Fool said...

Exactly so, as the Russians say.

Wild, wild west said...

When I first got into sales, as a direct employee of the manufacturer, some body told me you get 80% of your business from 20% of your customers.

I'm not very smart but eventually I figgered out that means you gotta kiss a lot of frogs to get 20% of your income.

I discovered that if I spent 80% of my time with the aforementioned 20% who were doing most of the buying, my sales actually went up and I had to kiss a lot less frogs. Also I had more time to identify which frogs might turn into princesses and could spend more time kissing those. Also I discovered, it was a lot less work.

Granted selling machinery is probably a different tempo than selling cars but I think there is some correlation there perhaps.

Another thing I noticed was that like 80% of our warranty claims and B.S. problems came from maybe 5% of our customers. Eventually I came around to the feeling that the customer is N-O-T always right, so I fired those mooks. Suddenly, we had less warranty claims and B.S. finger-pointings. That was a lot less work too, and I saved a lot of money on antacids.

Well Seasoned Fool said...

Thanks for the comment. It echos my point of thinking where does the money come from. Concentrate there.

Fredd said...

Although I put food on the table via commercial sales, sales savvy is universal: size up the 'customer' as quickly as possible and don't waste time on 'tire kickers,' 'lookie Lou's' and other non-serious buyers who will suck your time with no intention on buying.

Lots of ways of doing this, lots of styles, but while Dirty Al may have closed a higher percentage of those 'ups', he spent way more time getting those kind of numbers than the next guy.

I would say that at the end of the day, when Dirty Al only dealt with three potential customers and closed ONE, the other guy that dealt with 8 customers and closed TWO would get my salesman of the week plaque.

Well Seasoned Fool said...

You have a clear view of the field. Dirty Al got personal satisfaction out of "winning" plus he enjoyed a good seduction after the sale. My cold heart was warmed when I deposited my earnings. When I ran things, there were no plaques or "atta boys" at meetings; just cold, hard cash.

LSP said...

Sound advice. Know your people. And with that in mind, don't judge a book by its cover. Easy mistake to make, of course, and it's bitten me a few times.

And I agree with Fredd.

Well Seasoned Fool said...

Making a living working on commission makes you emotionally hard. It also attracts bullies, especially car sales. I may have worked with them but never had one on my crews for long.

The Yeah, but chorus shouts out, "You have to take control, yada, yada....." They seldom wanted to accept my point of view. The customer came to the lot to buy a car. Let them! Control? You have the car, not them, and the biggest tool you have is, "No".

OK, they have the power to leave and go elsewhere. In dealing with a few thousand people, I know they don't want to leave and start elsewhere. Let them! I'm selling the store's property for a price and terms, including any trade, that meets the store's goal, not the retail customer. Grow a pair.