Warning!! You’re selling too many cars!

22 October 2013

The new Car Market continues to go from strength to strength in the UK, and the latest profitability figures from ASE reveal that by the end of August the average dealer was achieving 1.34% Return on Sales. That’s 146% of last year’s figure!

Warning!! You’re selling too many cars!

Many of the Key Performance Indicators have shown significant improvement in the last couple of years, none more so than Sales per Sales Executive, which is running at 197 units per executive against a benchmark of 150. Great news! Or is it?

This has been bothering me for some time.

At an average of 197 Sales per Executive, are Sales Executives hungry enough to present additional products and services in an appropriate manner? Are the extra earnings this brings making some of them too comfortable?

Several business owners have told us recently that once the sales per sales executive reaches this sort of level, some Executives take their foot off the gas and cherry pick what they will sell. It all becomes a little too comfortable for them, and some of the high value incremental products, that are important to the business, may not be seem so important to the sales executive.

So having a very high throughput decreases upsell as well as watering down the customer experience.

Sales Executive pay plans should provide an attractive OTE calculated around delivering the desired mix of products, volume and profit.

I would urge every business to review the level of sales per executive, to establish whether an increase in unit sales is having an impact on ancillary, but often high margin products and services. If it is, then consider appointing additional Sales Executives. The cost is negligible compared to the additional revenues and customer experience this will deliver.

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