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A Dealers Guide
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for Dealers and Managers in
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JOE VERDE
An Auto Dealers Guide
To Five Quick Ways To Grow
Your Greatest Potential Actually Lies
In The Areas That Are Easiest To Improve!
In this eBook, Ill go through the profit potential that you and your
salespeople have in 5 strategic areas...
1. Selling to the prospects you already have on the lot now
2. Turning your unsold prospects into be-backs
3. Turning your incoming sales calls into deliveries
4. Prospecting for referrals with the easier groups
5. Improving your gross per unit across the board
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Well look at each of these 5 profit centers two ways...
Your Current Lost Sales and Gross Profit
Your Realistic Potential Improvement in Sales and Gross
Grab a pen and paper, and do the math on your dealership
as we go through these five areas to focus on for growth.
Joe Verde Group www.JoeVerde.com (866) 441-4593
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Profit Center #1
Sell More Of The Prospects
You Already Have On The Lot
Well look at your...
Current Lost Sales and Gross Profit
Realistic Potential Improvement in Sales and Gross
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Joe Verde Group www.JoeVerde.com (866) 441-4593
Lost Sales On The Lot Today
We arent missing sales from lack of opportunity.
Were missing sales from lack of training, lack of coaching,
and lack of managing the selling activities that will generate sales.
The Facts
Heres the math on what we know in a 100 unit dealership...
500 people were on the lot
x 20% bought
100 deliveries per month
Which means...
500 people were on the lot
100 bought
400 people didnt buy
Which means...
400
x 78%
312
x 71%
people didnt buy
are buyers (90% buy within a week)
additional sales were missed
found the vehicle they would have bought
lost sales on vehicles that were in stock
221
Which means...
221
sales missed for sure, each month
average gross per unit
x $2,500
$552,500
lost gross profit each month from lost sales
x 12 months
$6,630,000
lost gross profit each year from lost sales
Dealers and managers complain about training being expensive!
Lost sales (on the lot) are 2 times higher than deliveries in most dealerships.
Losing $6,630,000 is the budget for not training managers and salespeople.
Joe Verde Group www.JoeVerde.com (866) 441-4593
Realistic Potential Improvement
For Sales And Gross Profit On The Lot
Two Easy Ways To Increase Sales
To Your Current Floor Traffic
1. Do A Better Job With The Basics Increase Your Closing %
One of the easiest ways to increase sales is to simply do a better
job within the Basics. The math below does not include giving
more demos, it just reflects doing a better job overall of selling,
building value and closing with the customers youre already
making presentations and demonstrations to now.
Assume a 20% closing ratio, a salesperson who delivers 10 units
per month, and talks to 50 prospects per month.
Current Closing Ratio
50 Prospects
x 20% Closing Ratio
10 Deliveries
Improve Closing Ratio To 30%
50 Prospects
x 30% Closing Ratio
15 Deliveries
Value With...
One Salesperson
Ten Salespeople
5 extra units
50 extra units
x $2,500 gross per unit
x $2,500 gross per unit
$12,500 addl. gross / mo. $125,000 addl. gross / mo.
$150,000 addl. gross / yr.
$1,500,000 addl. gross / yr.
Wow a 50% improvement by closing just 10% more.
Just train on the 1st Impression, Greeting, Rapport,
Investigating, Presenting, Demonstrating ... and close more sales.
Joe Verde Group www.JoeVerde.com (866) 441-4593
2. Just Increase The Number Of Demonstrations
Everybody wants a shortcut to selling more units. If thats you,
heres the easiest shortcut around.
Logically, youll sell even more if you do a better job, but you
can increase sales overnight if you increase your current demo
ratio by 50%. And please save the, Were doing 75% demos
right now, story because if you hire a spotter, 90% of you will
find your salespeople are only logging half of their prospects.
Why will you increase sales?
Because 50% buy on the spot with a good demonstration.
Again, assume a 20% closing ratio, and a salesperson who delivers
10 units per month by talking to 50 prospects per month.
Improving Sales
By Improving The Number Of Demonstrations
Sales By Demo Ratio
50 Prospects
x 40% Demos
20 Demos
x 50% Buy with good Demo
10 Deliveries
Improve Demo Ratio To 60%
50 Prospects
x 60% Demos
30 Demos
x 50% Buy with good Demo
15 Deliveries
Value With...
One Salesperson
Ten Salespeople
5 more units
50 more units
x $2,500 gross per unit
x $2,500 gross per unit
$12,500 addl. gross / mo. $125,000 addl. gross / mo.
$150,000 addl. gross / yr.
$1,500,000 addl. gross / yr.
Holy Smokes another great return on investment.
Double down on demos double up on sales!
Joe Verde Group www.JoeVerde.com (866) 441-4593
The Realistic Potential In A 100 Unit Dealership
By Improving The Basics And Closing Ratio
1. Improving Closing Ratios From 20% to 30%
Realistic Annual Potential
$1,500,000
--------------2. Improving Demo Ratios From 40% to 60%
Realistic Annual Potential
$1,500,000
--------------Wow! Train your salespeople to give a few more demonstrations, teach them
how to close properly and pick up an extra $3,000,000 this year!
= $3,000,000
Total Realistic Potential
So far, your Total Realistic Potential from...
1. Demos and Closing (Above).................... $3,000,000
$3,000,000 Per Year
Joe Verde Group www.JoeVerde.com (866) 441-4593
Profit Center #2
Unsold Prospects
Your Hottest Prospects
Well look at your...
Current Lost Sales and Gross Profit
Realistic Potential Improvement in Sales and Gross
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Joe Verde Group www.JoeVerde.com (866) 441-4593
Sales Potential With Unsold Lot Prospects
We arent missing sales from lack of opportunity, were missing sales
from lack of training, coaching, and activity management.
The Facts
Assume a dealership sells 100 units per month, has an overall closing
ratio of 20%, with $2,500 gross profit front and back.
Heres the math on what you could be doing in that 100 unit dealership...
500
x 20%
people came on the lot in one month
people bought
Which means...
100
deliveries per month
400
people didnt buy, but assume we got...
x 75%
names and numbers with good skills
Which means...
300
who didnt buy but we got their info
300
didnt buy and we got their info
x 33%
who come back with good follow up
100
come back in (be-backs)
100
come back in (be-backs)
Which means...
x 67%
67
x $2,500
$167,500
who buy on their second visit
sales with unsold follow up
average gross per unit
additional gross profit each month
x 12 months
$2,010,000
additional gross profit each year
Wow - Talk about easy sales you could be making.
Dealerships or salespeople can increase sales 67% today, with just
2 good phone calls and one thank you note to everyone who doesnt buy.
Joe Verde Group www.JoeVerde.com (866) 441-4593
The Realistic Potential In A 100 Unit Dealership
With Unsold Lot Prospects
Because most dealerships kinda, sorta try to follow up Unsold
Prospects, to be realistic, just cut the statistical potential in half...
Statistical Annual Potential
$2,010,000
Well assume you do some follow up now, so cut it in half.
Realistic Annual Potential
$1,005,000
Total Realistic Potential
This brings your Total Realistic Potential from...
1. Demos and Closing ................................. $3,000,000
2. Unsold Follow Up................................... $1,005,000
$4,005,000 Per Year
Joe Verde Group www.JoeVerde.com (866) 441-4593
Profit Center #3
Incoming Sales Calls
Turn More Calls Into Deliveries
Well look at your...
Current Lost Sales and Gross Profit
Realistic Potential Improvement in Sales and Gross
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Joe Verde Group www.JoeVerde.com (866) 441-4593
10
Lost Sales And Gross From Incoming Sales Calls
We arent missing sales from lack of opportunity, were missing sales
from lack of training, coaching, and activity management.
The Facts
Dealerships dont track incoming sales calls, appointments they set
and appointments that show. If you do track accurately, use your
numbers. If not, figure (deliveries x 1.5) to get a close guesstimate of
the number of incoming sales calls you get each month.
Heres the math on what we know in that 100 unit dealership...
100
x 1.5
150
x 90%
deliveries per month
number of incoming calls per month
incoming sales calls
will buy within a week
135
buyers call in each month
135
buyers call in each month
Which means...
sales on average from incoming sales calls
129
lost sales from incoming sales calls
129
lost sales from poor selling / phone skills
Which means...
x $2,500
$322,500
average gross per unit
lost gross monthly from poor phone skills
x 12 months
$3,870,000
lost gross each year from poor phone skills
Talk about easy sales you could be making...
Dealerships or salespeople, can increase their sales easily just by
learning what to say on this 1 to 2 minute incoming sales call.
Joe Verde Group www.JoeVerde.com (866) 441-4593
11
The Realistic Potential In A 100 Unit Dealership
From Incoming Sales Calls
Youll never hit perfect on incoming calls, so lets use
just an average return with training on sales to incoming calls.
Statistical Annual Potential
$3,870,000
Cut it Cut it Cut it!
Realistic Annual Potential
From just 30 additional units per month @ $2,500 each.
$900,000
Total Realistic Potential
This brings your Total Realistic Potential from...
1. Demos and Closing ................................. $3,000,000
2. Unsold Follow Up................................... $1,005,000
3. Incoming Sales Calls................................ $ 900,000
$4,905,000 Per Year
Joe Verde Group www.JoeVerde.com (866) 441-4593
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Profit Center #4
Get More Referrals
Through Daily Prospecting
Well look at your...
Realistic Potential Improvement in Sales and Gross
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Joe Verde Group www.JoeVerde.com (866) 441-4593
13
Prospecting Opportunities Each Month
The Facts
30% of all the people have a family member who will be buying or
trading vehicles within the next 90 days. 62% of the people know
someone who will be buying or trading within 90 days.
Heres what you could be doing in that 100 unit dealership...
1. Prospecting In Your Service Drive
250 contacts (10 SP @ 1 each x 25 days)
x 30% family member trading in 90 days
75 Hot Prospects in Service
2. Prospecting In Your Existing Sold Customers Database
2,500 contacts (10 SP @ 10 calls each x 25 days
x 30% family member trading in 90 days
750 Hot Prospects
3. Prospecting Calls by Salespeople to Friends / Unsold Prospects / Etc.
1,250 contacts (10 SP @ 5 calls each x 25 days)
x 30% family member trading in 90 days
375 Hot Prospects
Total Above : 1,200
Contacts With Hot Prospects Per Month
Using the statistical average, youd get 60% appointments = 720.
Lets cut 720 in half, just to make sure were totally realistic...
360 Schedule appointments (30% of 1,200)
216 60% show for their appointment
108 50% of those who show, buy (average)
x $2,500 average gross per unit
$270,000
potential monthly from prospecting
x 12 months
$3,240,000
potential each year from prospecting
Why worry about running more cheap price ads???
Just teach your salespeople to prospect by phone and in service.
Joe Verde Group www.JoeVerde.com (866) 441-4593
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The Realistic Potential In A 100 Unit Dealership
From Prospecting In Those Three Areas
You may not be able to make every call listed,
but you can certainly improve your unit sales today.
Statistical Annual Potential
$3,240,000
Realistic Annual Potential
(This was already low at only 30% appointments.)
What the heck cut it in half, anyway.
$1,620,000
Total Realistic Potential
This brings your Total Realistic Potential from...
1. Demos and Closing ................................. $3,000,000
2. Unsold Follow Up................................... $1,005,000
3. Incoming Sales Calls................................ $ 900,000
4. Prospecting (All three areas).................... $1,620,000
$6,525,000 Per Year
Joe Verde Group www.JoeVerde.com (866) 441-4593
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Profit Center #5
Raise The Gross
On Every Sale You Make
Well look at your...
Realistic Potential Improvement in Gross
Our Sample Dealership
For all of our examples, Ill use a typical 100 unit dealership, that
has 10 salespeople, closes 20% of their traffic, and has an average
gross of $2,500 per unit, including Finance.
Joe Verde Group www.JoeVerde.com (866) 441-4593
16
Gross Profit Improvement Opportunities
The Facts
Gross profit is 40% higher overall with Joe Verde Training.
The average first discount by a salesperson is $844, and by the
time salespeople have a commitment and are ready to work a
deal, the average discount is $2,062.
Gross is 40% higher on repeat and referrals than walk-ins.
Heres the math on two easy ways to raise the gross...
1) Stop talking price. Let us teach your salespeople how to avoid
price, build value, close on value, turn price objections into
budget objections, and refocus price back to down and payments
in the negotiation, so you can raise the gross 40%:
100 units
x $2,500 average gross per unit
$250,000
total gross
x 40% increase
$100,000 additional gross per month
$1,200,000 additional gross per year
2) Build Your Repeat Business By 20 Units. Even if you dont sell
more units, youll pick up $1,000 (40%) in extra gross profit for
every repeat, referral, or service customer you develop and sell to.
Example: (Read this slowly.) If youre selling 30 repeat, referral
and / or service customers, and 70 walk-ins now if you do follow
up and increase repeats to 50 and walk-ins drop to 50, you still
pick up...
20 additional rep/ref/serv. customers
x $1,000 in additional gross per unit
$20,000 additional gross per month
$240,000 additional gross profit per year
Additional Gross Profit potential is everywhere you look.
We lose gross by focusing on walk-in traffic, by salespeople selling price
not value, and by closing on price and focusing the negotiation on price.
Joe Verde Group www.JoeVerde.com (866) 441-4593
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The Realistic Potential In A 100 Unit Dealership
From Raising Your Gross Profit In These Two Areas
Gross is one of the easiest things to improve,
and you can do it almost overnight.
Statistical Annual Potential
$1,440,000
Realistic Annual Potential
(This is realistic this is what you should expect.)
$1,440,000
Total Realistic Potential
This brings your Total Realistic Potential from...
1. Demos and Closing ................................ $ 3,000,000
2. Unsold Follow Up.................................. $ 1,005,000
3. Incoming Sales Calls............................... $ 900,000
4. Prospecting ............................................. $ 1,620,000
5. Raise the Gross (Two ways).................... $ 1,440,000
$7,965,000 Per Year
Joe Verde Group www.JoeVerde.com (866) 441-4593
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I know its a lot so if you cant quite see...
$7,965,000
If $7.9M is bigger than your imagination,
no big deal just cut it in half.
$7,965,000
$3,982,500
Still too high at $4M, cut it again,
to just 25% of your real potential.
$3,982,500
$1,991,250
Still too high at $2M cut it to 12.5%.
$1,991,250
$995,625
Still too high at $1M cut it again to
only 6% of your real potential.
$995,625
$497,813
And in real life, youll still probably
triple your net in that 100 unit dealership.
No matter how you cut it you have potential.
Step One: Start believing you can improve in todays market.
You can the key questions are will you? and by how much?
Joe Verde Group www.JoeVerde.com (866) 441-4593
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RECAP OF THIS EBOOK
Cut It Cut It Cut It
No matter how (far) we cut it, there are sales to be made
and more gross profit to be earned, right now in todays market!
1. We do not sell all of our floor traffic and we can increase sales to
people who are already on our lot now.
True False
I think we can increase by ____ units per month within 60 days
We can do that by... ( Answer this in your notebook
)
2. We do not sell everyone on the first visit and well sell more if we get
more unsold people back in for another chance. True False
I think we can increase by ____ units per month within 60 days
We can do that by... ( Answer this in your notebook
)
3. We do not sell all of our incoming sales calls and well sell more
if we get more of them on the lot.
True False
I think we can increase by ____ units per month within 60 days
We can do that by... ( Answer this in your notebook
)
4. We do not prospect, or prospect well enough, and we will easily
improve sales by prospecting more effectively. True False
I think we can increase by ____ units per month within 60 days
We can do that by... ( Answer this in your notebook
)
5. Gross is relative to value so when we learn to build more value and sell
the vehicle, not the price, gross will improve.
True False
I think we can increase by $____ per unit within 60 days
We can do that by... ( Answer this in your notebook
)
Tip: Use Your Ad Money To Cut Your Ad Expense By 75%
You arent missing sales because you lack traffic youre missing
sales because your salespeople and managers lack skills. If youll use
25% of your advertising money to teach them skills, your units will
go up, your gross will improve, your expenses will drop and youll
eliminate the need to advertise for more hard to close walk-in traffic.
If your ad budget is $400,000 use $100,000 over the next 12 months to
train, and in about 90 days (based on your efforts) you will come close
to eliminating your need to spend the other $300,000 on advertising.
Joe Verde Group www.JoeVerde.com (866) 441-4593
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Books by Joe Verde
How To Sell A Car And Close The Sale Today
38 Hot Tips On Selling More Cars In Todays Market
A Dealers Guide To Recovery And Growth In Todays Market
Earn Over $100,000 Selling Cars Every Year
Manage Your Career In Sales Goal Setting For Salespeople
Joe Verde
Copyright 2009, Revised 2013 by Joe Verde
ISBN 978-1-60530-842-5
7th Edition Printed in the United States of America
All rights reserved. No part of this book may be reproduced or utilized in any form or by any
means, electronic or mechanical, including photocopying, recording or by any information
storage and retrieval system, without permission in writing from Joe Verde or Joe Verde Sales
& Management Training, Inc.
Joe Verde Training Network, Joe Verdes Training Network, JVTN, VSA, The New Basics
and Joe Verde when it relates to the automotive industry, are all registered trademarks of
Joe Verde, Joe Verde Sales & Management Training, Inc.
Inquiries should be addressed to Permissions Department, Joe Verde Sales & Management
Training, Inc., 27125 Calle Arroyo, San Juan Capistrano, California 92675-2753.
joeverde.com jvtn.com
Toll Free: (800) 445-6217 International: (949) 489-3780
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Joe Verde Group www.JoeVerde.com (866) 441-4593
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