Coaches Corner v.04.06.2023
In Coaches Corner v.04.06.2023, guest writer and Coach Floyd Jerkins writes this week on the topic of Behavioral Sales Metrics for Coaching Equipment Industry Sales Teams.
Every dealership organization is at a different place in time with the diagnosis of their sales teams and processes. The size of complex and level of operational sophistication are factors. Many times, it’s a location issue more than overall company-wide so that requires custom solutions. So, maybe this article is timely and you’re ready to look deeper into how to make real progress in the sales department.
Professional Sales Management and Salespeople
Great salespeople are great salespeople, and in the equipment industry it’s no different than other industries. There are particular aspects unique to every industry due to a product’s life cycle, style of customers and personalities, buying patterns, and market conditions. And the best salespeople know they have to understand these industry specific characteristics to succeed, but there is more. When you learn to sell, you can sell anything. Yea, I know, I know, but it’s true.
Being a professional sales manager or salesperson in the equipment industry isn’t for everyone. There are real superstars doing this work every day and many of them make it look easy. They have a natural and personal approach that gets the job done. Others have tried and failed. Many linger on with average performance. Yet, owners who sell often do not follow the system they expect their salespeople to follow or they have a perceived top producer that no one can touch.
There are typically high and low performers when you have a large sales team. Improving the performance metrics of sales managers and salespeople can be challenging to establish what particular actions need to be taken.
Building a sales team of all superstars is a great plan, but not always realistic or practical. In my experience, sales management and sales teams usually have a mixture of age and talent with varying skill sets and competency levels.
A Sales Managers Rally Cry – To Sell More, Talk to More People
To sell more, talking to more people always seems to be at the top of the list of things to do. Still, if a salesperson talks to a lot of people and prices a lot of people but doesn’t have a good measured closing ratio, it makes me wonder how effective they are and whether they should be allowed to keep talking to your customers. When a sales manager influences the sales team with a whip and chain or talks more about the problems than the solutions, is that the most effective leadership style to use in today’s business climate? I don’t think so.
The traditional metrics for sales success include new and used margins, sales volume, new and used turns, and a mixture of others. To be an excellent asset manager, you must know these metrics and how to positively influence their outcomes.
Performance Metrics Created Before & After the Sale
Like many traditional metrics, margins, turns, and other sales department indicators are created after a unit is sold. The efficiency of your booking and accounting practices determines when the sale appears in a statement. That could be anywhere from one week to sixty days past when the actual sale was made. Once the numbers are current, you can assess what’s going on. If you’ve followed my articles about this, you know where I am headed.
Let me ask a few questions:
- Who do you make more money on, a repeat customer or a customer who has never done business with you or your company before?
- Who do you have the most fun working with, a repeat customer or someone who has never done business with you before?
- Who do you sell in less time, someone you don’t know or a customer who’s bought from you before?
Perhaps you took a few seconds and thought about your answers. I appreciate the effort. Now, consider your answers and what you know and don’t know.
“The goal is to coach performance in the areas that help salespeople become more effective with real-time data. Becoming more effective in sales and marketing your business requires a deep understanding of your customer base so you can focus the sales and marketing team on what matters the most.”
Behavioral Customer Segmentation
The old saying is you can’t improve something unless you measure it. One of the first principles of process improvement is as a process evolves make sure you are measuring the right things.
You probably already know the customer by machine or product sold, sales volume, and parts and service sales, so tracking this kind of customer segmentation can reveal even more real time data. Even a basic CRM system can track these customer categories.
- New Customer- This customer has never been to, called, or emailed your business before.
- Repeat Customer- This is a customer who has bought from you before. Many companies have “orphan owners.”
- Referral Customer- This is a customer who another customer referred to your business or the salesperson.
- New Business- This customer is someone you meet at the gas station or a social event. A brief conversation in almost any social situation generates new leads.
The sale is the end result of all the activities performed by a salesperson. By coaching performance on these sales activities that happen before and during the sales process, we can naturally increase a salespersons effectiveness.
When you measure these you learn a lot about how your sales mix is made up, how effective sales and front-line people are in each category, and even how well your marketing is doing. It also speeds up the learning curves. If you don’t know these, you are at the end of the sales cycle making decisions. When you are looking at unit sales, you are best guessing how effective your sales and marketing efforts are.
A Behavioral Sales Mix- BSM
Each salesperson should log every Customer Contact interaction each day. To get buy-in, a sales manager communicates with the sales team to create the “rules of logging” they’ll follow. For example, if the salesperson is at the parts counter talking with Joe Customer and he asks how much that used machine is, that should be logged. Each person inputting into the system should understand what the code means when they log it. GIGO- garbage in, garbage out.
Salespeople shouldn’t be allowed to post at their discretion, and that’s part of the rules created in the early stages of implementation. You don’t allow your accounting staff to post credits however they like, nor do you allow technicians not to record their time. Salespeople should be required to a certain standard of recording their day-to-day activities. Its good business.
It’s essential to know how many Closes to Face-to-Face Contacts there are in the same time period. This establishes one of the fundamental Closing Ratios for performance improvement.
By tracking these customer categories and how many face-to-face contacts by salesperson and how many closes by salesperson, you are ready to create a new view of your sales mix. Stay tuned, next month’s article will be on the analysis of these metrics.