Many professional sales and sales management trainers believe that you have not "maxed out" on a vehicle buyer until that buyer initiates one additional sale (additional household vehicle or personal referral) during his/her normal purchase cycle. Mathematically, here's how the "one additional sale" concept works:  

Assume that the normal customer purchase cycle for your dealership/franchise is 5 years, and that a new salesperson delivers 96 retail vehicles during his first year. The one additional sale concept would then portend 96 additional vehicle sales cumulatively over years 2 through 6, or approximately 19.2 incremental sales per year. This, of course, assumes that the dealership is committed to customer satisfaction and retention and that the salesperson practices customer follow-up on an intelligent and consistent basis. The concept further includes the rule of averages, acknowledging that not all customers will buy an additional household vehicle or refer an additional buyer, but that some will, in fact, buy and/or refer the sale of several additional vehicles.   

The key to effectively applying this concept at your automotive dealership is to ensure that each salesperson continually maintains and works a viable list of potential referral prospects. One of the easiest methods of developing this list is by employing the Delivery Referral Process, which is one of the focus subjects taught in the General Management and General Sales Management courses at the NCM Institute Center for Automotive Retail Excellence.  

As a dealer, I first learned about and implemented this process in the early 1980s. My source was Tom Stuker, Stuker & Associates, Inc., with whom I initiated a telephone training engagement for my sales staff. Tom's philosophy was pretty simple:  During the vehicle delivery, ask for referrals the same way, every time, NO EXCEPTIONS! Tom believed that if you throw enough stuff up against the wall, something will stick! And at my dealership, that proved to be correct with the Delivery Referral Process. 

Tom recommended a basic 6-step process, which always began with the same dialogue:  

"Bill, Mary, could you do me a small favor? ALL of my customers ALWAYS do one thing for me before they leave. What I need is three prospects (low-key, no pressure). They don't have to be hot prospects, just the best three you can think of. Maybe a friend, relative, neighbor, someone at work, or someone that knows you're buying this car today, who one of these days might be thinking about a new or pre-owned car, truck or van themselves."  

The names and contact information for each of these referrals is then input into the dealership CRM as "non-current prospects," and a contact nurturing program is originated. 

Is this all there is to developing a list of referral prospects? Certainly not! It's just a beginning, but it will provide your salespeople with a good starting point. Throughout my many years of retail coaching experience, I have found that this process works best with buyers of new domestic, new import (non-luxury), and pre-owned vehicles. Finally, as discussed in a recent Up to Speed article, the Delivery Referral Process is one of the activities that should be scorekept and scoreboarded...at least until it has become a habit and fully integrated into the culture of your vehicle sales department.

The professionals at NCM Associates are well versed in the Delivery Referral Process, so don't hesitate to reach out to your 20 Group moderator, Retail Operations coach or any of the NCM Institute instructors for more information.