Your growth in the market depends upon the following pillars:
- Brand Demand
If some person from a large and prestigious advertising agency (who shall remain nameless) says that it’s all about marketing, they are a big time KoolAide drinker.
I’ve discussed opportunities vs. capacity and I have discussed opportunities vs. conversion. Your capacity should be looked at as your potential (inventory, staffing, brand). Conversion is how far you get towards realizing your potential.
With that said, let’s look at opportunities vs. conversion. Forget about what you think your closing ratio is, you’re most likely very wrong. You don’t count all of your opportunities and you know it.
Years of studies have shown that just on incoming sales phone calls, the closing ratio is between 1% and 3% – that’s all! 800 sales calls come in a month and you can only count on between 8 and 24 of those people who called are going to buy from you. So, there are opportunities that are created by your marketing, signage, brand and reputation that are either being discouraged from buying from you, or in most cases, discouraged from buying anything in the near future. A study of 1063 people who visited a very prominent Toyota dealer in Texas who didn’t buy during their initial visit were tracked using tax data from Harris county. Over a 3 month period, only a handful of those people (less than 30) bought from other dealerships during that three month period and only ONE bought from another Toyota dealership. However, a larger number did come back and buy from this prominent dealer in the same period.
What does this tell you? Just what I said, your sales training discourages people from buying because it alienates the buyer. Yet very well known (again nameless) training professionals teach a method that would not work if used on them…or you for that matter. So, who does it work on? Aliens?
It also tells us that ‘be-backs’ do come back more often than going somewhere else to buy in a 3 month period…but not as many as put it off for longer than 3 months.
Instead of conversion of opportunities, we have strong evidence that because of the experience potential buyers get from dealerships, they put off buying for months. And when they finally do buy, it’s more than likely not from you.
The formula for growing market share is to increase opportunities to meet the potential of your capacity, which means increasing conversion of those opportunities. From a marketing standpoint, this means staying in front of the people who are looking to possibly purchase, and, from the conversion side, NOT discouraging people from buying by using counterproductive sales techniques.
If you are interested in a low cost counter intuitive training/review program that, depending on compliance, will triple or quadruple the conversion rates, I want to talk to you. A 20% boost in market share can mean between $250,000 and $1,000,000 a year in EXTRA PROFIT – all based on incremental sales derived from market share gain (the only way to calculate this accurately).