Photo by nortonrsx via Getty Images

Photo by nortonrsx via Getty Images

For most dealerships, selling more typically means spending more on marketing. This usually involves purchasing more leads for prospects and investing in more sales training to close deals. But what if there was a better way to turn up sales, hold down expenses, and boost the bottom line, all with greater predictability?

Just shifting your marketing focus slightly can significantly impact your dealership’s sales and profits. The secret lies in knowing how to manipulate the two main components of the sales formula: leads and closing ratio. In short, leads multiplied by closing ratio equals sales. So 1,000 leads at a 30% closing ratio results in 300 closed deals. Raising your closing ratio means squeezing out extra sales — and more profit — from the same number of leads.

Remarkably, however, most dealers appear to be unknowingly doing the exact opposite of what’s needed to increase profits. Let’s look at how most stores operate and then look for an alternative.

Leads Impact Closing Ratios

More than half of vehicle sales leads enter the dealership by way of a phone call, and with continued advances in mobile phone technology, that percentage is rising. According to Search Engine Watch, by 2019, smartphones will facilitate about 162 billion consumer-to-business phone calls, and automotive will be the leading vertical.

But raising the volume of phone leads requires a large investment in marketing, typically involving lead providers and media sources. There are times, however, when buying more leads of any kind can be counterproductive. This is because leads are not cheap, and the cost of buying more can have a negative impact on the bottom line.

There is also a lead saturation point at which the effectiveness of buying more leads diminishes. For example, when sales teams have more leads than they can handle, they typically start “cherry-picking” the best ones at the expense of those they believe will take more effort. This can have a negative impact on sales and costs that quickly bleeds into your closing ratio.

Sales Training Impacts Closing Ratios

When it comes to converting leads to sales, you can’t simply purchase a higher closing ratio the same way you can buy more leads. Instead, closing ratios are typically increased by employing traditional sales training methods to fine-tune the sales team’s closing skills. This is done with the goal of maximizing your ratio of phone leads to set appointments.

Although effective sales training is critical to increased sales, when dealers try to improve closing ratios, frustration with training is a common result. Why? Because expensive obstacles suddenly start appearing.

To fully understand how to unlock more sales without more marketing expense, let’s examine two of the most common training obstacles to improving closing ratios of leads. More importantly, let’s expose the secret key to overcoming both:

1. Phone training alone rarely sticks. Let’s say you decide to call a trainer in specifically to lead sessions on closing appointments by phone. Your trainer is likely to measure the effectiveness of this training by (1) taking attendance of those who watched the training (either live or online) and (2) quizzing trainees on the material presented.

Does this method truly measure the effectiveness of phone appointment-setting closing results? No!

For argument’s sake, let’s assume the training material is really great information that’s delivered by a highly skilled professional. Unfortunately, watching training videos or sitting in a classroom does not guarantee salespeople will apply what they learned with actual leads on the phone. Many of today’s salespeople are seasoned multitaskers whose dwindling attention spans prevent them from focusing sufficiently in training or remembering the material once their session is over.

And what about those quiz scores? Like everyone else, salespeople are creatures of habit. They know they are not being monitored after the trainer leaves or the video training session is over. Even if they get a perfect score on the quiz, most will fall back on their old habits the very next day. This creates dealer frustration, because you’re left in the dark, not knowing whether all this extra training expense is actually increasing sales.

This is not a criticism of professional trainers or the training material imparted. It’s a matter of not knowing whether staffers are applying the material taught to actual prospective customers when they pick up the phone.

Without call scoring and follow-up coaching sessions, sales pros are likely to fall back on old habits once their trainer departs. - Photo by gpointstudio via Getty Images

Without call scoring and follow-up coaching sessions, sales pros are likely to fall back on old habits once their trainer departs.

Photo by gpointstudio via Getty Images

2. Effective training requires individualized coaching. Skilled trainers typically rely on auditing in the form of call scoring to determine whether a given salesperson followed their checklist of set criteria. They might listen to and grade recorded calls on their own or listen to them with each trainee, and they may share their scores with you, your managers, or directly with staff.

Sounds good, right? But does this method accurately measure the effectiveness of phone appointment-setting closing results? No!

This approach does attempt to hold salespeople accountable for applying training material. But it falls short in the most critical way: By itself, call scoring fails to produce measurable appointment-setting results. There’s no evidence that call scoring or trainee evaluations sell extra cars that can be calculated each month, yet everyone just seems to accept that they do.

Yes, call scoring can be a beneficial tool — assuming the scoring method is statistically effective. But if that training component alone really sold more cars, wouldn’t you be hearing about it from specialized trainers every month?

A Simple Solution to Training Obstacles

Most dealers are experts at measuring the ROI of various lead sources. Few have the same measurement standards for closing ratio sources. The secret to overcoming both training obstacles and improving closing ratios is the same as measuring the ROI of any investment: What do training vendors cost, and how many extra sales does the training measurably generate each month?

The ability to conclusively measure results has never been more achievable with today’s CRM technology. With all this information so accessible, however, it’s important to remember the old adage: “Just because something is easy to measure doesn’t mean it should be. Just because something is hard to measure doesn’t mean it shouldn’t be.”

The question is, what’s most important to measure? Is it training attendance, test scores, and call scores? Or is it knowing the amount of extra sales generated from training each month and the resulting ROI?

When using any training service for improving appointment-setting results, or even when attempting this internally, a measurable increase in sales must be verifiable each month. This is the key that unlocks more sales without more marketing expenses. It’s something every vendor — and every internal dealership department head — should enthusiastically demonstrate to strengthen the value of their service to the dealership.

Likewise, every dealer should require a significant improvement in sales results from the training, just like many do from their lead providers. This is the only way to ensure the expenditure for training is directly increasing closing ratios and sales with a solid return on investment for your dealership.

David Nassief is the founder of and a 30-year industry veteran with expertise in sales and sales management. Email him at [email protected].