Move cars off the lot faster than you can drive them
Want better insights into your dealership’s sales triumphs and slumps? Use these key performance indicators for sales consistency throughout the whole year.
Your sales teams seem to be performing well, yet the financials this quarter are way down. Why? It could be a lack of insight in sales measurements. Car dealerships usually analyze performance in a “retrospective” way—review the numbers from the previous month, and then figure out the problems. However, monitoring sales reports will not fix performance issues in the showroom. That’s why you should have key performance indicators for sales teams. Managers can identify issues in real-time and see clear signs of success with these guidelines.
7 key performance indicators (KPIs) for sales mastery: what your sales staff needs to focus on
These KPIs are essential for on-the-ground, real-time measurements. To know which to create and monitor, you need to keep these three factors in mind:
- Each one is “key” to the overall success of your dealership.
- It’s focused solely on “performance” in a consistent, measurable manner.
- It “indicates” the source of a problem or repeated success.
We live in the “Data Age” of car sales now. Your sales team’s performances can be defined, monitored, and assessed on a daily basis.
1. Hitting weekly prospecting quotas
In the car business, sales people can’t sit around and wait for the marketing team to generate new leads. Inbound leads are only one piece of the generation wheel—they can’t wait for hand-outs. Your reps should be committing to a set number of outbound contacts every week.
Prospecting can range from emails to phone calls to even hand-written letters, so find a way to track these efforts. If you notice that the converting ratios are not up to par, it’s possible that your team needs further training on cold calling or delivering a sales pitch.
Remember: sales is a numbers game more than anything—the more people contacted, the more chance you have to close a deal. If you set a KPI for outbound efforts, focus on setting a base number of attempts per week.
2. Timely responses to lead assignments
Fresh leads don’t have a long time frame for follow-up; sales reps need to respond as soon as possible.
Response time (how long it takes to hear back from a sales rep) is a key performance indicator for turning leads into genuine opportunities. The faster you respond, the better chance to close a deal. The longer it takes for you to contact a lead, the more likely he’s already spoken with someone at another dealership.
If you don’t already have lead assignment rules set up, it’s time to plan out how your salespeople are assigned leads, and what happens if a prospect isn’t contacted in a specified time frame.
3. The amount of follow-up attempts in a certain timeframe
You don’t always reach the customer on the first try. However, the real problem is that sales reps don’t persist and try again (and again) if necessary. Repeated follow-up is essential to the sales process, both before the customer reaches the dealership and afterward.
Do you know how many times your sales reps have attempted to contact a particular lead? Track these key performance indicators for sales improvement on a week-to-week basis.
4. Conversion rates per qualified lead
How many qualified leads does your average salesperson convert into buyers? We’re not talking about any old lead; we’re looking at how he handles leads who have a strong potential to buy. Closing a qualified lead is a salesperson’s bread and butter. If you want a firm understanding of his or her ability to sell cars, track this KPI, too.
5. Social media engagement
Define how you want to measure your social media KPI. Salespeople who integrate social media strategy into their daily workflows will perform better than those who don’t. LinkedIn, Facebook, Twitter, and Instagram (and others) are business tools for salespeople. Use them wisely and efficiently.
Here are a few ideas to measure social media engagement:
- Share two posts a week of dealership promotions and special deals.
- Comment on relevant posts that target customers are interested in.
- Send X number of outbound prospecting messages per week.
6. Email click-through rates and responses
Do your sales managers and team members write successful emails? They should—email is a widely used tool for B2C sales. You need to know if leads, contacts, and past customers are ignoring your emails. If your managers send email blasts to groups of potential buyers with a new promotion, they should know if it’s going straight to trash bin.
Key performance indicators for sales emails have valuable insights. For example:
- How many people respond to your emails?
- Figure out the click-through rates.
- What promotions perform better than others?
7. The amount of referrals per sale
The sales process never ends; it just moves forward. When your salesperson sells a vehicle, his next step is to turn that customer into a referral source. Those follow-ups after the sale broaden your lead generation outlets. A good referral is the best lead you can find, so train your staff on continuing relationships after the sale.
If you have a process for turning happy customers into referrers, break down the steps into measurable and trackable steps.
Use these key performances indicators for sales consistency throughout the whole year
KPIs are not meant to “micro-manage” employees. These indicators help everyone to understand their goals. It takes the guesswork out of sales reports or trying to fix financial slumps. With KPIs, you can figure out what’s working, what isn’t, and how to execute a better plan moving forward—all in real-time.
Do you have any key performance indicators for sales teams that we missed? Share your thoughts!