The pros will tell you, it’s all about the follow-through — baseball, golf, selling vehicles; whatever it may be. Your game is only as good as your follow-through. And in order to have a solid follow-through, there must be procedures in place to measure and find areas of improvement before and during the follow through. The evaluation aspect is simple: assess the outcome, e.g., did a vehicle get sold. But to assess the outcome is where it gets complicated, you must dig through the different metrics and ratios to determine where your dealership can grow.
Below are four metrics to use when evaluating the sales process within your dealership.
1. Closing Rate
Closing rate can be calculated over the big picture, by salesperson, and/or by lead source. This is where you can determine the strength of certain individuals as well as the usefulness of various lead sources.
Closing rate is one of the most basic measuring points for a dealership. It measures the basic success of sales activities: converting leads to sales. This can be calculated using your CRM since many systems auto-calculate this percentage, but it can also be done on your own. Divide sold leads by total leads and multiply by 100. Dealerships should aim to have a closing rate of 12%-15%.
2. Appointments Set Ratio
Appointments set ratio helps shed light on the details of responses your sales team is providing. Everything from CRM response times, personalization techniques, and opportunity management best practices.
Oftentimes, a vehicle cannot be sold without some sort of appointment. In this day, consumers research vehicles prior to coming to the dealership, but still want to test drive and get an in-person feel for the vehicle. To calculate the appointments set ratio, divide total appointments set by total leads and multiply by 100. Auto dealers should be looking to hit between 40%-50%.
3. Appointments Shown Ratio
Appointments shown ratio takes a deeper look into the general appointment confirmation processes in place: the touch points, follow-ups, and groundwork salespeople should be following.
Setting the appointment is only half the battle, ensuring appointments show up is the other half and it’s just as important. If the customer doesn’t show up, no sale can be made. To determine the numbers here, divide the total appointments shown by the total appointments set and multiply by 100. A goal of 50% or higher show rate helps assure your sales staff is making the most of their opportunities.
4. Appointment Sold Ratio
The appointments sold ratio delves into the fundamental effort of the sales team to make the sale.
The ultimate goal of your sales team is to make the sale. The simple way to measure your team’s success is to look at the total units sold. But a different approach can more accurately tell if your team is working at its full potential. To calculate, divide the total appointments sold by total appointments shown and multiply by 100. The sales standouts can sell 50% or more of their appointments.
These four metrics, if measured and followed closely, will make follow-through the easiest part of your sales process. And effective follow-through means vehicle sales! A little initiative will take your dealership to the pro status! Drop me a message at firstname.lastname@example.org with any questions related to this topic or anything regarding your dealership. I'm here to help you succeed!