Most dealerships already have the ability & traffic to double their sales within a 6 to 12 month period but are not firing on all the cylinders that make it possible- and all 6, commonly referred to as the 6 P's, need to be in sync to achieve these results.

Over the next several blogs I want to share with you the 6 P's and how our team achieved these results, and to offer ideas you may want to consider. In my automotive career, every dealership I've managed, our team has doubled or tripled its sales and profits, outsold our competition up to 4:1 all during the good, the bad, and the ugly times. Our profits averaged around $1200 more per vehicle than our competitors.

The 6 P's include: People, Procedures, Product, Promotions, Pricing, and Place (Dealership)

In a recent independent survey that asked over 250,000 customers, representing 250 dealerships they shopped across the U.S., the reasons they did or did not buy at a particular dealership. The primary reasons given for not buying involved some aspect of the 6 P's. The survey also indicated that approximately 33% of the customers, who did not buy, would have given the dealership another chance to sell the car. Therefore, a total of approximately 67%, said they purchased from another dealership- and most within around 24 hours of visiting your dealership. So, if you could save and sell just 50% of these customers, you are closer than you may think to doubling your sales as most dealerships have enough traffic.

Without People ,#1 of the P's, none of the other 5 P's really matter. And, People was the #1 reason given, by customers, as the primary reason they did not buy from a specific dealership. “Someone” said or did “something” that alienated the customer which caused them to leave the dealership. The survey indicated the customer told the sales person they needed to “think about it”, “had a better deal”, “were out of time”, etc. (Please note these are excuses, not objections)

The actual national closing ratio is around 18%-20% and, as an industry, we usually just accept it. The independent survey also validated these averages when they interviewed the customers who purchased and did not purchase. Therefore, approximately 80% of most dealership customers, as a overall national average, are walking out of the dealership and buying from another dealership. For those new in the business, a similar survey nearly 20 years ago resulted in the same conclusions- the same reasons given then for not buying were the same as today. The only major difference was the time frame. Prior to the internet, it took longer for most people to shop other vehicles, dealerships, and conduct research.

I use, and recommend, a very selective process to determine if the dealership is hiring a sales person with a “sales aptitude” (is the person “motivated” by money, recognition, family etc or do they come to work because it's a “nice place” to work). This process and technology is rarely used by dealerships and, in my opinion, it is one of the most important tools the dealership should consider. I had a manager tell me the other day that "he would hire and give anyone a TRY". In most cases, hiring just anyone and giving them a "try" is a significant reason for excessive turnover and a major reason you could be losing a lot of sales.

What if, with the “right” sales person, you could close an average of 50%-70% of your customers? Our management team accomplished these results, and we did it consistently for over 20 years. Double your closing ratio, double your sales!

Next blog post, I want to discuss the #1 “P”, People, and share proven practices to develop an entire dealership of 20-40+ Car-A-Month Salespeople.