Are Your Salespeople Sales Efficient

Are Your Salespeople Sales Efficient

That is the critical question.

What makes certain franchise specific dealerships more successful than others? What is the magical blend of process and training that works better for them than for their peers?

Much of their success (not all, but a lot) has something to do with sales productivity. Obviously, the more sales productive the dealership, the greater the ability to generate gross.

How do you become more sales productive? There are two components to sales productivity and each must work well in order to succeed. The first is sales efficiency and the second is sales effectiveness.

To start with, some clarification is in order as the terms sales efficiency and sales effectiveness appear suspiciously similar, but the meanings are actually very different. What do these terms mean and where do they differ?

• Sales efficiency: Simply put, sales efficiency is getting in front of the appropriate number of the right customers. Here I’m referring to showroom traffic or service lane traffic in the service department.

• Sales effectiveness:
Once you get in front of the right customers, sales effectiveness is how effective are you in generating the sale and turning that customer into a loyal customer.
Luckily, there are indicators that confirm whether a dealership is sales efficient rather than sales effective. Once this is determined, you can concentrate on improving sales productivity.

Here are some examples that may fit the above scenario. A salesperson who sells a lot of cars, but takes very few fresh ups is considered sales effective. He probably sees fewer customers than the rookie trolling the sales floor, but he sells more cars because he is very effective with those he comes into contact with. On the other hand, the rookie works long hours seeing as many people as possible in order to have a decent month.

Successful high volume stores that have low customer retention are sales efficient, while a store that thrives on repeat business may not necessarily be sales efficient, but is obviously sales effective. So, as you can see, the answer is not always clear cut and simplistic. What is best? Obviously, it is a combination of both. Being sales efficient helps drive traffic into the store while sales effectiveness touts a high closing ratio and, more importantly, a transaction process that steers folks back to the store time and time again.

Not to complicate things, but there is another twist to this and it is that sales efficient salespeople have to work harder and longer to make more sales because they need to see more customers in order to have a good month. On the other end, you have sales effective salespeople who don’t work harder; instead they work smarter to achieve higher sales goals.

There is yet one more important management characteristic that ties in with these two components that we need to look at. Sales efficiency is dependent on organizational structure, high marketing costs and a top down management style, while sales effectiveness is more dependent on one-on-one training, mentoring and a bottom up management style leaving many of your strong producers with minimal reporting chores.

Bottom line, you need to work smarter, not harder and allocate more of your resources to transitioning your high potential salespeople to a more sales effective role. You not only need a strong marketing presence, but you must also become more effective with the customers you see. Unfortunately, you don’t always know which components need the most attention because they are not clearly defined, but once you know the difference between efficiency and effectiveness, you will be able to demarcate your organizational needs and plan accordingly to address them.  The differences may be sublime; however where you choose to direct your efforts is critical.

This article by Jeff Sacks originally appeared in Dealer Magazine.

Jeff Sacks, president of Jeff Sacks & Associates, is an auto industry speaker, consultant and trainer and is actively involved with dealership and OEM consulting and training.
His website is www.jeffsacksauto.com and his phone number is 800-867-2160.