Selling a vehicle is always good news: it boosts revenue, the salesperson gets their commission, and the dealership is a step closer to its mandated sales objectives.
Still, dealers seldom analyze the circumstances that brought about the sale, i.e. they don’t look at their sales process or ask themselves what happened to the rest of the prospects that did not buy.
By analyzing the evolution of the dealership’s sales stages through a Sales Funnel report, the Sales Manager can understand what happened in each case.
A CRM – ideally integrated with the dealership’s DMS – allows the Sales Manager to define the stages in the sales process. The salesperson registers each interaction with the prospect in each stage of the sales process, detailing their comments, ideas, commitments made, etc. The sales funnel is created by registering the transition (or not) from one sales stage to the next.
With this information, the dealership Sales Manager can quickly detect the actual efficiency of each salesperson. In addition, they will be able to identify the stages that need improvement in order to increase sales and reach the dealer’s sales goals.
Let’s take a look at an example. The UltraMotors dealership closed 200 sales last month… but is this a good number? At first glance it might seem so, but upon further review of the sales funnel generated by the CRM, they found the following:
- In order to close 200 sales, they needed to create 1200 leads. In other words, 16% of leads were converted into new customers.
- Out of the 1200 contacts, the sales team followed up on only 45% (540 contacts). This means that many leads did not receive a follow-up call or contact from the dealer.
Taking this information into account, the Sales Manager comes to the conclusion that if they keep working this way, they will have to generate twice the number of leads in order to double sales, which is not easy at all.
However, a better practice would be to analyze the number of leads in each stage of the sales process. For example, if only 45% were contacted and just 16% converted into new customers:
- In which stage is the dealer losing most prospects?
- Are they generating more leads than they can follow up?
- Are they generating leads that are not useful and in fact a waste of valuable time?
- Should the dealer expand its marketing/sales team so as to do proper follow-up of all leads?
- Are the sales staff recording each contact in the CRM?
The conclusions drawn after analyzing the sales funnel will help the dealer improve its sales process, avoid wasting money on pointless leads, and detect if the sales staff needs training in order to use the DMS and the CRM effectively.