One of the most difficult challenges that my retail 20 groups grapple with is how to manage their sales and advertising efforts. When I first ask group members how much they spend in advertising and marketing dollars per lead, per up and per sale, they often don’t know.
In the years I have moderated 20 groups for NIADA, I have seen first-hand how understanding these metrics is vital to a business’ success. Members must measure these all-important metrics to answer several critical questions:
1. Am I spending too much or too little on advertising.
2. Is my advertising effective or not? If not, why?
3. Should I add more salespeople to handle my lead count more effectively or do I have too many salespeople?
4. Do I need a sales manager (or another one) based on the amount of activity that is flowing through my website and advertising efforts?
5. Which lead source is performing well and which lead source is performing poorly?
6. How much am I spending per lead, per up and per delivered sale?
When running any size sales operation, the general manager should know the answer to these questions. As an owner, I would demand it.
Gone are the days when a store staffed its sales department based on the number of cars it wanted to sell or because it has always operated with a set number of salespeople.
A decade ago, many operators simply employed one salesperson for every 10 cars they needed to sell on a monthly basis. This usually worked because the average salesperson sold eight to nine cars per month and there were always salespeople on vacation, sick, or leave for personal reasons. It was also easy to attract and hire salespeople then. This is not true today.
Decisions about staffing size and demand are more complicated today. While it may still be easy to hire bodies, it is much harder to hire true “worker bees” who grow to love the car business. Hence, the need to make decisions based on data and not “gut feelings” or because “that’s how we have always done it.”
See full story in the November issue of UCD.
