Steve has just provided a quick update on the property KPI article we released a couple of weeks ago .
How quickly the worm turns , everyone is happy and changing the world when things are great , but every dollar of lost gross comes off the bottom line . We are in the gross , not sales , making business .
When the first 4 cars sold each month just covers the property holding costs and the next 30 just covers the rent , selling 150 retails per month off your sales site , new and used is essential today to make a decent return .
To sell 150 retails ( 90 new and 60 used ) , you will need to keep about 20 new cars on site ( 10 in the showroom and 10 demos out the back ) . If you sell used cars well , you should turn your stock 1.5 times a month , so need 40 used cars on the front apron in front of the showroom.
At , hopefully $2500 per new and used retail ( fingers crossed ) , you 150 cars should deliver $375,000 of front end car gross or $6,250 per display space .
This is how you have to think to win in this market , I need to $6,250 gross per display space per month selling cars ( don’t cheat and throw in F&I ) .
With the exception of the demos out the back , each display vehicle needs 6sqm each to open doors and do a 6 point sell easily . So with 10 new showroom display and 40 used out the front , that’s 300 sqm of display space in total .
If you have that currently and aren’t selling 150 retails ( not fleet , the internet sells them ) you are not optimising your opportunities and are compensating by looking busy with stock .
If you lots more display space than 300 sqm and not selling 150 , you have enormous potential .
All we are asking is that you do the maths and maximise your potential, don’t let the tail wag the dog .
Your biggest enemy in these markets is your lost opportunity.
To make money in this market focus on what you failed at , not what you succeeded in .
Valuations per sales consultant of 75% of all show ups , a win ratio of valuations over 60% , test drive ratios of 90% of all show ups , F&I doing test drive forms and doing early game planning , slowing the sales process down and only letting the sales manager talk price , 3 appointments per day per sales consultant and targeting a 60% Monday to Friday order write ratio , nobody leaves until they see the manager , starting each negotiation stage at full RRP and show discount each time , one big win then floor mats and boot holders .
The aim of the game is stop losing opportunities and improve your win ratio , they come to buy cars , sell them one .
Show your sales consultants their monthly lost commission reports , how much commission they didn’t make by losing opportunities. It makes you cry and can really refocus performance.
Too often we accept losing as part of the business
It’s your showroom , you make the rules and you control the customer , you need $6,250 gross per display space , don’t accept less .
