Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions

Developing performance standards to increase sales: NADA guide

November 9, 2010

The average closing ratio at a dealership hovers at 18 percent to 20 percent, meaning dealers sell to just one out of every five prospects. However, other findings show more than 90 percent of all prospects buy within one week. Why, then, aren't closing percentages higher?

Sales performance can be improved, but the basis is deeper than the number of units sold each month. How many of the questions posed by the NADA survey can be answered accurately by Dealership A's sales manager? How many by Dealership A's proprietor?

Without the information, a sales staff will continue to repeat the previous month's performance. With the information, profitable performance standards can be developed.

One way to get the information: Install a CRM system for tracking sales and follow-up. For the verage dealer, proper control results in a sales increase of 40 percent. How many more sales per salesperson, per month, can occur when salespeople perform to their highest levels, under the following circumstances?

Salespeople contact all unsold prospects within 24 hours. Further follow-up, as appropriate, is conducted under daily management guidance.

Salespeople conduct effective, daily prospecting, guided and controlled by management.
Salespeople contact all owners regularly to secure additional sales and referrals, guided and controlled by management.

Management institutes a daily work plan that includes meeting one-on-one with salespeople to set daily goals for prospects seen, improvements (such as presentation), and demonstration.
Excerpted from an NADA management guide, "A Dealer Guide to Taking Charge of New-Vehicle Sales." Order the guide by calling 800-252-6232, ext. 2. Cost is $25 for NADA members, $50 for nonmembers, plus shipping.