This is a re-post from a discussion I started on DealerElite.net and wanted to share it with you here as well as a few responses, Id love to hear your comments in the sections below.
I was at a Dealership the other day that had laid-off the receptionist. She was also the person that managed the Traffic Log. So I asked the Sales Manager, “who is taking care of the traffic log ? ”. “I am”, he said. “Well, when you step out, who manages the log?” ... “The salesmen”, was his answer.
The quickest and best way to check sales effectiveness is with an accurate, up to date Traffic Log. It is a gauge on how effective the sales department is ... and it is especially important after new sales people are hired and in the process of being trained.
YOUR SUCCESS AS A MANAGER
Your success is based not only on volume and profit, but on your closing ratio as well. (The number of customers closed) ÷ (The number of customers seen in the showroom) = (your effectiveness as a Sales Manager). A high closing rate, approximately four or five out of ten is achieved with a properly trained and motivated sales force ... one that is developed and supported with sound and consistent management practices.
In many dealerships, the salesperson selling the most vehicles is not necessarily the best salesperson. A top salesperson that sees twice as many customers but sells only a few more units than the second ranked salesperson is not maximizing opportunities and actually losing money for the Dealership. This type of top salesperson is actually turning away customers who might have been sold if the sales process had been used effectively.
For example: If John saw 11 customers and closed 4 ... his closing percentage is 36%. However, Mary saw 6 customers and closed 3 ... her closing percentage is 50%.
While John’s closing ratio does not seem to be a great deal lower than Mary’s ... John lost more customers than Mary saw all day. Obviously, John needs some help in improving his closing ratio and reducing the number of lost opportunities.
The Traffic Log can tell you a lot more than just closing ratios ... it can show you exactly how effective each salesperson is at performing the Steps to the Sale. You can determine how effective your salespeople are at applying the seven step sales process by performing a Traffic Log Analysis. However, this requires carefully kept and accurate recordings in the Traffic Log. I will write more on how this should be done soon ... but to the point of this blog ... who is one of the most valuable employee’s on the sales support team ? Yes, the answer is: The Traffic Log Receptionist.
Replies to This Discussion
- Reply by Rick Bryant on December 13, 2010 at 10:20pm
For way too long managers have thought of employee's by numbers yet management feel their business is down 10% so they need to cut 10% of the overhead staff. BIG MISTAKE as you read above they cut a low paying receptionist, whose value can not be easily measured. ie a upset customer being sent to voice mail for the third time who vowels to himself he will never come back to that dealership again, or the customer wondering around the sales floor while no one else is around. Then there comes the referee as to who the customer is there to see. Just a very bad scene
- Reply by NANCY SIMMONS on December 14, 2010 at 8:11am
Abe! Great topic!
It is funny how in this business we get so accustomed to asking the very familiar question, "How many do you have out the door?" You will hear people asking sales consultants, dealer to management, dealer to dealer, manager to manager, and so on! What would happen if we started to ask, "How many missed opportunities did you have this month which equated to lost sales?" WOW! Too often we forget about the prospects who were true buyers but just did not buy from you! If we put these scenarios under a microscope and dissect the reasons (honest reasons usually discovered by a follow-up call from management), perhaps we could tweak our processes, retrain a sales consultant, or maybe even as harsh as replacing a sales consultant, to recapture this lost market.
So try this next time you go to ask the infamous question, "How many missed opportunities did you have today?"
- Reply by Ernie Kasprowicz on December 14, 2010 at 1:42pm
The traffic log is the accountability log. The expression "inspect what you expect" starts with the traffic log. As you said Abe, accurate information is the key. It is the desk managers responsibility.
- Reply by Ralph Rasmuson on December 14, 2010 at 1:51pm
I do not think you can use your customer log as a "closing ratio" tool, unless you have an independent person controlling the log. If managers put the names on the logs, they have a tendency to "pick and choose" who goes on the log. A guy comes in for parts and a sales person talks to him, gets his name, and he says he might be in the market in the next six months to a year. Should he be put on the log? Why not? He drove here and has a car, doesn't he? And, odds are that he will be buying another car someday and knows of other people who will be buying cars. I'm just saying that everyone who walks through the sales department should be logged.
- Reply by Tobias Sedillos on December 14, 2010 at 2:27pm
I learned a very important lesson from one of my mentors – if you do things long enough, and track the results you will begin to see a pattern… Here's the best part – the pattern usually continues. Unsuccessful people usually try to change the ratios of things they can't control – and successful people usually recognize the pattern and put it to work for themselves. How can you put a ratio to work for yourself, if you don't know what it is?
- Reply by Craig Lockerd on December 14, 2010 at 4:50pm
How many stores don't have any log at all I wonder?
- Reply by Paul Hardy on December 14, 2010 at 10:39pm
Having a log and using the log Craig is 2 different things! I do not think I have ever been to a dealership who didn't have one but it goes back to who's really paying attention?? Then you also have to ask what's logable, that's my new word for the day. The person who says he's "just looking" that wanders the lot and leaves. The service customer who you spoke to just for a minute, the person who was just kicking tires? Now I got a real up, because they bought a car. 1 logged= 1 sold I am at a 100% close, right?? The others didn't really count. Everyone should be on the log!
- Reply by David L Hoier on December 15, 2010 at 11:47am
Socrates said, "the only way to achieve true knowledge, is to question all that you know". We can only improve by knowing where improvement is needed. To often the sales log is used by managers as a form of punishment instead of a teaching tool. Therefore salespeople see it as a negative and "fudge" their numbers. If they see the advantage, positive reinforcement and direction from management, you will get "real" numbers. With information like that comes greater control and profit.