Auto Dealer Monthly Magazine is the daily operations publication serving the retail automotive industry. This automotive publication serves dealer principals, officers and general managers with the latest best practices.
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industry expert / service Since When is Selling a Bad Thing? Don Reed is the CEO of DealerPro Training Solutions. Don has 26 years of success in the automobile business as a Dealer, General Manager, Sales Manager, Parts and Service Manager, Service Advisor and Salesperson. DealerPro Training specializes in dealership service and sales solutions. Don can be reached (888) 553-0100. DReed@AutoDealerMonthly.com this strange notion that increasing sales was a good thing. We trained employees in all departments how to be- come better salespeople, how to provide our customers a higher level of service through effective communication, and of course how to increase gross profits. As a dealer or department manager, how do you expect to increase net profits and earn a reasonable return on the dealer's multi- million-dollar investment if you don't increase sales? So again I ask my question: Since when is selling a bad thing? Allow me to explain my point W hen I was a dealer working in the retail world, I had by sharing with you some real-life examples of what I'm talking about. I have personally spoken with, preached to and worked with thousands of dealers across the U.S., Canada, the United Kingdom, and most recently, Poland. I have found that far too many dealers and man- agers have a great divide within their dealerships. I like to call this divide the demarcation line. It divides the variable operations (new, used, F&I;, special finance) from the fixed operations (service, parts, collision center). When some of these dealers cross over the demar- cation line from the variable operations to fixed operations, the word "selling" takes on a whole new meaning. For example, when I ask a dealer what he/she would do with a salesperson who only sells five cars a month, the most common response is, "Get rid of them and replace them with someone who can sell." Conversely, when I ask that same dealer what he/she would do with a service advisor only selling 1.0 hour per repair order (HPRO), far too often, the response is, "He's a good guy. Everybody likes him, and I don't want him to oversell our customers." By this logic, this dealer would fire a salesperson for under- selling and fire a service advisor for overselling? Let's take this one step further. Using this example, you would fire a sales manager who could only close 10 percent of the sales opportunities coming in the door because he is underselling and losing you thousands of dollars in gross profit each month, and you would fire a service director who is closing 50 percent of the service menu presenta- tions in the service drive because he is overselling and making you thousands of dollars in additional gross profit each month? Really? Dealers tell me they don't want to oversell their service customers, yet they cross the demarcation line to the variable side and tell me they expect their sales team to maximize F&I; revenue per retail unit (PRU) with 100 percent turnover from the salespeople, 100 percent F&I; menu presentations with 100 percent finance presentations. They expect a strong closing ratio of 25 to 30 percent on the sales floor with above-av- erage gross profits PRU, 100 percent turnover to a sales manager by the salesperson, minimal wholesale losses from used cars and a 45-day turn on inventory. The managers responsible for achieving these sales benchmarks are usually supported to the max with healthy advertising budgets, professional training pro- grams, and full accountability for their end results. These same dealers cross over the line to the back end of their dealerships and tolerate far too many under- achievers who are losing thousands of dollars in additional gross profits with 46