Is there a formula for how many
salespeople we need for coverage?
    We have a problem before I even start to answer this question,
    which affects almost everyone. So first I need you to verify a few
    things. These are all true, but I need you to make a mental note of
    only the ones you really believe:
Copyright© 2008-2010 Automotive Dealers Network. All rights reserved.
By Joe Verde
President
Joe Verde Sales & Management Training
email:
jverde@automotivedealersnetwork.com
Joe Verde Sales & Management Training is the largest sales
and management training company in the Automobile, RV
and Marine industries teaching their exclusive formula for
success. Joe Verde Sales & Management Training has a 23
year, verifiable track record of success and over half the top
500 dealerships are their customers. Additional information is
available at www.joeverde.com.
AutoPro Training Solutions            I               Motorcycle Dealers Network
SM
AutoPro Training Solutions            I               Motorcycle Dealers Network
SM
       Repeat customers are 5 to 7 times easier to close than walk-ins. Walk-
    ins close at a real 10%, while repeats are at 50%–70%.

       Gross profit is 40% higher on repeats than walk-ins. Walk-ins don’t like
    us, know us or trust us and are price shoppers. Repeat customers buy
    because they do like us.

       Repeat business is critical to developing a ‘base’ of sales. We’ll always
    advertise (some), but if we are a 100 unit dealership with a consistent base of
    70% repeat, starting each month knowing we’ll have at least 70 sales takes the
    pressure off trying to have a month based on advertising results.

       Repeat business will improve our CSI because they like us!

       Repeat business lowers our cost per sale and increases our net profit.
    Not only is our gross profit 40% higher on each repeat sale, we did not have to
    spend that $300–$500 in advertising on each repeat sale. All of the savings is
    net profit, and 60% of the extra gross becomes net profit.

       Repeat business in sales improves our service business. Retention is
    the perfect circle in business: The more customers we retain in sales, the more
    business we do in service. The higher our retention in service, the more repeat
    sales we’ll get.

       To develop our repeat business, we have to retain high achievers in sales
    who build their own solid customer base. Low achievers, negative salespeople,
    and constant turnover in the sales department will kill our long-term retention.

       A BDC or Internet department can help us retain a few more customers
    than we would without the department. Because making the sale is dependent
    on the relationship though, if we can’t retain high achievers in sales who
    maintain the personal relationship with their customers, we will not develop
    anything close to a ‘solid base’ of customers.

Don’t agree with them because you’re supposed to. They’re all true in
your mind, but only check the ones you really do believe.
Bookmark and Share
The problems with average schedules...

• Bad coverage.

With half the salespeople on early and half in the afternoon, that assumes half of your customers will be in
early and half will come in later in the day. But that isn’t true. If you’ll track, 30% of your traffic is early, and
70% is afternoon and evening.

The solution: Track your traffic and match your coverage to your traffic.

• Wrong salespeople on shift at the wrong time.

With a rotating shift, every other day, you’re rotating your worst salespeople through your highest traffic
times each day. Because a 5 car guy can’t sell, you’re guaranteeing lost sales every time you put them in
front of more people.

The solution: Be like a bar or restaurant and put the lowest achievers on the worst (morning) shift. Then
spend an hour every morning training them to become high achievers, so they can work better hours.

When the 6-car guy cries foul, “How come I have to work the crummy shift?” ... be honest, “Because you
can’t sell, I thought you knew.”

Actually, I’m kidding on the honest part. If you want real honesty, if they aren’t good, look at who hired them,
who trained them and who is supposed to be managing them.

• You’re killing your high achievers with long hours – for no reason.

OK, it’s 8:30 and your 20-car guy and your 6-car guy are on early. The problem: When does your 20-car
guy do most of his business, at 9 in the morning or the afternoon and evenings?

Exactly, most high achievers with a customer base do most of their business later in the day. So while the 6-
car guy leaves when the bell rings at 3, the 20-car guy is forced into another ding-to-dong day because of
a bad schedule.

Solution: Write two schedules, one for floor traffic coverage, and one ‘work schedule’ for your highest
achievers (using our levels program).

How many do you need for coverage?

Let’s say you have 10 salespeople, you’ve tracked your traffic, done the math on how many customers a
salesperson can effectively talk to on a shift and decided you need 10 for walk-in coverage.

The problem: using our example on the left, you don’t have 10 available for coverage. You have one who
doesn’t take ups and 2 who are doing about 50% each in repeat business with only half their time available
for ‘ups’. That
means of your 10, you only have 8 available for walk-in traffic. So you need to hire 2 more people for
coverage.

You need two schedules: a coverage schedule for floor traffic and a work schedule for your highest
achievers.

If you use our Levels program, because it ties to salespeople’s current averages, figuring work schedules is
easy. If you’re a Level 3 (90 day average of 15+), you’re off of the coverage schedule and on a consistent
work schedule.

Tip: When you have an honest to goodness high achiever who is building their (your) business, stop
worrying about when they work and have them work when they can be most productive.

A typical work schedule for a high achiever might be 11-7 with the same days off each week, at least that’s
what I worked. That’ll let them sleep in, take
the kids to school and I’ll guarantee they’ll still be there before 11, and stay later than 7 most days. But the
value of having that consistent schedule will increase (your) sales, and their attitude.

On the coverage schedule, keep using the rotating schedule if you want, but start putting low achiever on
mornings and spend extra time training them.

Oh, and when someone does cry foul and says, “It’s not fair that Joe gets his own schedule,” just reply,
“When you hit Level 3, I’ll let you go on the same work schedule. So if you’re serious, let’s get to work on
improving your skill development every morning, and I’ll help you get there.”

Retention is critical and I’m trying to squeeze a ton into a short article. Get to our Team Leadership
class and learn how to better develop your team.
This is critical ‘Business 101’ stuff we’re talking about here. Every successful business model relies on retention to drive
down costs, improve profits and to grow every year. The problem is that almost all of us in sales, sales management
and as dealers were taught the opposites, and developing high achievers and retaining customers is not on our radar.
That’s why unit sales per salesperson averages about 8 units, and why retention hovers in the 25-30% range in most
dealerships.

OK, that makes sense, but what does repeat business have to do with writing a
coverage schedule for salespeople?

Everything! Look at the average dealership with 10 salespeople for example...

• 1 salesperson sells 15 to 20 and does 75%+ of their business with repeat and referrals and doesn’t take
‘ups’.

• 2 more sell 11 to 15 per month with +/– 50% in repeat and referral business.

• 2 are practically worthless (in sales) and shouldn’t have been hired.

• That leaves 5 who are somewhere between the bottom of the top and the top of the bottom in every area.

To understand why they’ll never develop their repeat business, just look at the numbers in this typical dealership. They
don’t have but 1 or 2 salespeople who are competent enough to pull it off.

Add a typical bad schedule to a bunch of low achievers and you have a complete ‘retention prevention’ process.

Why does the schedule make it worse?

Because 80% of you are on a rotating, split-shift schedule. And you have some variation of ‘half of the salespeople on in
the morning and half on in the afternoon’ with one long day per week, so the other crew can have a day off.

That schedule costs you sales every month, runs off some of the brightest and best, and kills your chances of
developing more repeat business.
TM