Car sales prospecting review for year 2006


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Presentation focuses on Capturing of Lost Sales for a Car Dealership. Having Categorized the reasons for lost sales we try and look at each category to assess how to minimize Lost Sales thereby increase sales...

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Car sales prospecting review for year 2006

  1. 1. Car Sales Prospecting Review for year 2006 Prepared By: Ghassan Kabbara January 4th 2007
  2. 2. Summary of Prospect Utilization  Since Inception the Prospecting Application has not been utilized in an effective manner.  Our measure is very clear in the sales Figures for 2006 for individual customers.  There has been no improvement versus 2005 Sales
  3. 3. Now some good news  How ever despite the fact that we have not achieved any added value to our business in terms of KD Sales, we have gathered sufficient Data which we will now review that can help us with the days to come. That is to improve our 2007 Sales.  In other Words: Yesterdays bad news can help us solve tomorrows problems…..
  4. 4. Assumption  All Data Inputted into the Prospecting System is accurate and represents the true efforts of Sales men Information Collection in the last year.
  5. 5. The Facts  We have introduced a Prospecting Application 4th Quarter of 2005.  The Salesmen have a target of 100 prospects per month. Else they will receive a KD 50 deduction for not achieving the target. This has changed a couple of times.  This could to a certain extent compel the salesmen to input “Inaccurate Customer info” into the prospecting database; hence the Assumption mentioned in the previous slide is no longer valid.  Over 6500 Prospects have been inputted into the application.
  6. 6. More Facts  To create a prospect the salesman has to feed in the following minimum Information: – Name – Address – Phone Number  Over half the Prospects Created did not have the Civil IDs inputted.  Average number of Follow-ups per Customer is 1.5. – 65% of the prospects were contacted only Once – 18% of the prospects were contacted twice – 17% of the prospected were contacted more than twice
  7. 7. Even More Facts  Out of a total of 6600 Prospects – 3400 have Civil ID’s – 3200 do not have Civil ID’s  The Lost Sales Ratio for those Prospects that do not have Civil ID’s is 93%.  The Lost Sales Ratio for those Prospects that have given us Civil ID’s is 51%  What this could possibly mean is that those Customers that give us their Civil ID’s we have a better chance of closing the Deal; then those customers that do not provide us with Civil ID’s. We can then Focus and Follow up on only those Prospects that are cooperative, who provide us with their Civil ID's
  8. 8. A Tool to assist Salesman for acquiring prospects.  We have even provided the Sales man access to Service History for all our Customers which can be used as potential prospects.  As Dealer believes that we should focus on existing customers
  9. 9. Prospecting System Objectives for Sales Men  A tool for the Salesman to capture all Prospects into one database. (To eliminate the manual Dairy).  A tool used to Follow-up with Prospects and try and close a sales deal.  A tool to send customer promotions, well wishes on B- days, Eids, etc.
  10. 10. Prospecting System Objectives for Customer Relations  To follow-up and confirm Salesman Information.  To log the outcome of any discrepancies of Prospecting Information and what Customer actually Said.  To confirm Salesman Targets.  To provide Management with Reports.
  11. 11. Prospecting System Objective for Management  A means to Capture the Conversion Ratio. (Sales / (Lost Sales + Sales)  To Measure Reasons of Lost Sales and take the appropriate Action to mitigate the Lost Sales where possible.
  12. 12. To many pending Prospects Closing Ratio Too High
  13. 13. Aging of Pending Prospects for 1434 by Month 2 2 5 18 62 45 83 126 178 149 298 466 0 50 100 150 200 250 300 350 400 450 500 1 2 3 4 5 6 7 8 9 10 11 12 All These Prospects should have either a Done Deal or a Cancelled Status with Lost Sale Reasons. We should not have this many pending. This is proof that we are not following up with our prospects.
  14. 14. Pending Prospects by Sales Man Vs Month of Prospect Creation Should Not be Pending
  15. 15. Let us now Focus on those Lost Sales those Cancelled Prospects. After All one of the Objectives is to monitor the Lost Sales and Focus on the Reasons as to why they occurred
  16. 16. Top Ten Lost Sales Reasons Not to Customer Specs 23% Price too High 18% Finance Co. Not Approved 16% Color Not Available 6% Trade in Value too High 5% Parts too Expensive 1% No Answ er 1% BlackListed Customer 1% Not Happy w ith Service 1% Out of Stock 28%
  17. 17. Top Ten Lost Sales Reasons Lost Sales Reasons for 2006 (source Prospecting Application) 0 100 200 300 400 500 600 700 800 900 1000 Series1 943 734 590 507 201 155 37 31 19 19 Out of Stock Not to Customer Specs Price too High Finance Co. Not Approved Color Not Available Trade in Value too High Parts too Expensive BlackListed Customer Not Happy w ith Service No Answ er Assumption that Salesman have confirmed with Prospect the Real Reason (s)he didn’t buy a Dealer
  18. 18. Why we have not utilized the Prospecting System?  A Deduction of KD 50 is enforced if Target for Prospects are not fed in monthly.  There is no discipline to follow-up with prospects periodically. (i.e. at least 3 follow-ups should be made before Canceling the Prospect)  No Peer Pressure is being enforced to maximize benefit of system.  Is the Lost Sales Reasons the true measure why we Lost Sales Deals?  There is no formal procedure in place for approaching existing customers.
  19. 19. Lost Sales Reasons  Let us now address what action we could possibly take as Sales men and management to improve our sales based on the lost sales reasons that has been captured by the Sales men. Again on the assumption that the Reason(s) are genuine.  Let look at a few Lost Sales Reasons.
  20. 20. Out of Stock  We have over 900 Out of Stock reasons. This means that we have lost sales because we did not have the car the customer wanted when he made contact with our salesman.  Is this a valid reason? Did we really lose customers because we had no cars in stock?  Did the Salesmen have information at his disposal as to when the next shipment would arrive? Was the prospect contacted?  Let us do more research on this and list these customers, the dates, and the cars they requested. Maybe this can help us in determining our forecast and stocking levels.
  21. 21. Not to Customers Specs  We have over 700 lost sales due to this.  What were the specs requested? We need to list all those specs and see what can be done to address this issue?  How important was the spec to the customer that compelled him/her not to buy? Could we have convinced him/her otherwise?
  22. 22. Price too High  This is a classic one. We have 600 lost sales due to our prices being too high?  If we have captured the right price that the customer would have bought then we can use this data to review of our discount strategy or pricing levels.  Again I would ask the following question, Did we really lose these deals because of our price? Did the Sales man approach Sales Manager on these cases? Is the Price that the customer was willing to pay captured?  When Prospect says price is too high, compared to what? His Budget, Another model, or too prices he picked up from the Internet.  We can even work on a Critical Volume Gain model to analyze what the right price should if we were to have the 600 extra sales made due to price reduction.
  23. 23. Finance Co Did not approve  We have 500 lost sales due to this.  Is this also because the price is too high? Or is it because the customer was unable to purchase due to unfeasible installment scheme?  What are the conditions of the Finance Co? How much time did we spend with the customer before his application was rejected?  Could the salesman have made the decision without having to discuss Financial particulars with the Finance Co.?  Can we make this information more visible to the customer by having pamphlets or posters?
  24. 24. Color not available  We have over 200 lost sales due to this.  Do we use this information when placing orders? Or do we only rely on actual sales?  This could also be addressed by converting the customer to another color that exists? The Sales man sales skills come into play here.  Did we follow-up with the customer to see what he purchased and what color he chose? Was he honest in his excuse?
  25. 25. Trade in Value too High  We lost 150 customers due to this.  30% of our sales are based on trade-ins and this needs to be scrutinized.  Possibly our appraisal on Used cars needs to be refined. Risk of taking car into Used Stock Vs. Getting the Deal needs to be made.  We need to refer to our appraisal documents to review all these cases for improving the Conversion Ratio of Sales due to trade-ins.
  26. 26. Conclusion  If we break down Lost Sales due to Internal & External Problems. We can then do the following:-  Share with Dealer the Lost Sales due to external Reasons. Such as No Stock and Not to Specs. (Lost sales should be shared with our supplier in order that we can have more cars allocated and a more accurate forecast.)
  27. 27. Think about this for a while!!  It seems very surprising that the Salesman is Losing a potential deal due to No Stock.  How is that possible?  When the cars eventually do come, do we contact those customers? – Is it because we have already “Cancelled” this prospect and are looking forward to a new one?
  28. 28. In my opinion  In order to Manage and Improve our Sales we need to utilize the Prospecting Data & measure, monitor and take action on the Lost Sales Reasons at the earliest. Each LSR can be addressed.  There needs to be a means to reward the Salesman for accurate Prospecting Information.  Maybe we need to review the Lost Sales Reasons, for more accurate capture of Information that can help us in the future.
  29. 29. New Modifications for Prospecting Application WIP  Control the flow of information between Prospect / Reservation / Sales Input.  Prevent Cancellation of Prospect if less than 3 follow-ups are made.  Provide an option for salesman to input probability of success of closing the deal by putting a percentage value every time he follows-up with prospect.  Provide a New Conversion Ratio Report showing figures in KD Value so when we see the Lost Sales Value, it becomes painful to us & to think twice before Canceling a Any Prospect.  Provide a Report showing prospects in the pipeline based on Probability of Success.  Near Future: Sending SMS to Prospects automatically every time a follow-up is made.
  30. 30. We have the Tool. Lets Use it
  31. 31.  Thank you For your Time.  QA  Ideas!