When asked about the cost of sales training, the real question is, “What’s the cost of not providing effective sales training?”
Here’s the answer.
We studied more than 500 tire industry salespeople over the past year. We listened to more than 45,000 calls about 50% of which are sales opportunities. That means we listened to the call, identified sales opportunities, and then determined whether it was the customer that made the commitment to come in, or if it was the salesperson who made the commitment to confirm the visit to the store.
Our closing percentage in this case is based on whether or not a commitment was exchanged on the phone for the prospect to come into the store. That’s the key issue.
There’s no guarantee that they will come in, but you’ve got to start with the most important question: “Was a commitment exchanged at all?” and “Who generated that commitment?”
With all this data in mind, here’s what’s important for dealers to consider.
1. If as a company your closing percentage is north of 70%, you’re in good shape. High 70s into 80% and above, and you are at the top of the food chain.
2. At the same time, if you have a salesperson or a couple of salespeople who are averaging 45% to 55% on a day-in and day-out basis, they could cost approximately $500,000 in lost sales each annually.
If you don’t believe me, do the math. One lost tire sale per day and one lost brake job per day takes you to $221,000 without blinking.
If you’ve got a busy store and the phone is constantly ringing, double it. If you’re a multi-store operation, and you have one person in the 50% range in every store, you are getting killed. That’s the real expense of sales training, and the risk of not enforcing what they’ve learned.
If you struggle with what to do when it comes to questions like “Do I spend more on advertising?” or “Do I train my team?” my recommendation is to measure closing percentages, get them fixed as needed and then advertise to make the phone ring.