No, the title is not a typo. We work with hundreds of dealerships and have key analytics on every single showroom transaction that happens within these dealerships. As we walk through the data with managers to help improve their productivity each month, it’s worth noting that the most successful dealerships all have one thing in common—their sales staff spends a certain amount of time per day without customers.
The sweet spot, to maximize both closing percentage and gross, seems to be 4.5 hours per day not with a guest. That’s right, four and a half hours of free time. I’ll explain below why this “free” time is the key to your success.
This theory holds true regardless of the size of a dealership’s staff. An easy way to determine staffing based on your floor traffic is to look at this 4.5 number as your mid-level line. Based on the assumption that a fresh guest should take about an hour and a half and an appointment is about two and a half hours, your sales team really should not be talking to more than one or two guests per day. If sales staff sees more than one or two fresh guests per day, inherently the value of each guest decreases and reps will skip steps to the sale and fail to convert clients into buyers.
How does your sales staff fill the 4.5 hours they’re not with a guest per day? Do they follow up with previous walk-ins, work the service drive, answer email questions and set additional appointments? Our data proves an appointment closes at 48% while a fresh guest only closes at 14% nationwide. It stands to reason that a successful dealership’s goal should be to focus their staff on appointment setting for maximum success. Our back-end data has proven that the GMs who move to this mindset see at least a 12% increase in sales. Imagine a 12% increase to your monthly bottom line without paying to bring in additional floor traffic! The best way to focus your staff on appointments is to ensure that 4.5 hours per day is not spent with guests.
Here’s an example: we have one dealership that was able to double their sales per month while floor traffic remained the same. How? When we looked at their data we found that the sales team members actually were given too many opportunities. They were seeing more than two to three guests a day, and as a result, they were spending less time with each guest and not working through the proper steps to the sale. Reps weren’t “loving the one that they were with” at the time, they were qualifying and quickly moving through guests and then grabbing at the next one.
Through our analytics, our team worked with this dealership and got their ideal average guest time to an hour and a half for a fresh guest and two and a half for an appointment, with no more than one or two guests per day. Let’s take a minute to think about what one to two guests per day looks like for your sales staff. If each team member is seeing two guests per day, that’s roughly 60 guests per month. If we look at the 4,3,2,1 rule (4 guests will equal 3 test drives, 2 write ups and 1 sale) that team member should be making 15 sales per month. Not a bad average. When staff has fewer opportunities, the team member pushes harder for a test drive, correctly follows the proper steps and closing percentage increases. And that’s exactly what happened with the dealership in the example above—when we cut the total time each sales person spent with guests each day (less opportunities!), sales actually increased with the same amount of total floor traffic.
It’s not rocket science; time is the differentiator. I like to tell dealership clients that time management is the Holy Grail for sales. Spend 1.5 hours per fresh guest, with two guests max per day and your closing ratio and gross will increase. The moral of it all is to ensure each and every customer feels valued. The way to do it: spend less time to generate more sales. Try it. You’ll be surprised with the outcome.0