Market Coverage

Being all things to all people has long been impossible. Yet many dealers continue to operate without a strategy for market coverage and as a result continue to do what they have always done. Treat everyone the same, until that special customer has a problem.

To make matters worse for our customers – somewhere in the 1980’s resulting from the huge run up in interest rates, enacted by the Paul Volcker Federal Reserve, dealers made the decision that they didn’t have enough money to provide face to face market coverage. So they cut back on the number of salesmen in the field.

The intent was to reduce sales costs, read market coverage costs, but it meant something else. It meant that the decisions made on market coverage were made by a salesman not by the company. The salesmen were confronted with a time limit – they could only work so many hours. This left them with the decision of who to visit and who to ignore. I remember an old story about a dealership hiring a salesman. He visited with the Sales Manager on first day on the job and was given a customer list, the keys to a vehicle and the boss pointed at the door saying – “here is a list of your customers, your vehicle is parked outside the door, there is the door – see you.” I am sure this is fictitious aren’t you?

The trouble is we have not done a very good job of determining a market coverage strategy. It is all about market segmentation. You need to determine which of your customers you want to have a salesman touch in the field and unfortunately, due to costs, you have to decide who you don’t want to have assigned to a salesman. This can only be done with a proper and complete market segmentation plan – more on that in a future blog. The time is now.