From the archives: Accelerating your growth
This year’s Marine Dealer Conference & Expo (MDCE) is just around the corner, so we thought we’d take a look into the past, at an article posted after the 2011 MDCE, featuring some of the best practices garnered from that event.
If you find these tips helpful, there’s no doubt you’ll take away even more from the 2013 MDCE.
In the mean time, check out these interviews with industry experts we found in the archives.
Although it might not feel like it, the economy has grown for each of the last nine quarters, albeit slowly. The consumer is returning (also slowly), and retail is up in many segments with overall growth in sight.
That was the sentiment shared by Jeff Malehorn, president and CEO of GE Capital, Commercial Distribution Finance, at the 2011 Marine Dealer Conference & Expo (MDCE), Nov. 6-9, at the Gaylord Palms Resort in Orlando.
While this outlook is good news for the marine dealer community, having endured the challenges of the marketplace for the past several years, few dealers are satisfied with the pace of this recovery.
Therefore, Boating Industry has identified several key areas on which dealers can focus to accelerate their growth in 2012 and beyond. In fact, these topics were among the highlights of the educational agenda presented at this year’s MDCE. Our editors worked with these marine industry experts to offer you tips, advice and best practices you can use to outperform the market.
Closing more sales
Boating Industry magazine interviewed Don Cooper, a sales trainer and consultant who is also known as The Sales Heretic, about how boat salespeople can increase their closing ratios and therefore sell more product.
What are the biggest missed opportunities during the closing process for boat salespeople?
The biggest missed opportunity is when the salesperson simply doesn’t realize the prospect is ready to buy. The salesperson doesn’t listen very well, and as a result, misses the buying signals and just keeps talking. Frequently, the salesperson will hand the prospect some literature and invite them to return to the dealership, but never actually ask for the sale.
How important is a salesperson’s attitude when it comes to being effective at closing?
It’s huge. All too often, salespeople convince themselves that a prospect isn’t going to buy — because it’s their first visit to the dealership, because of the way they’re dressed or because they didn’t bring their spouse along. Our beliefs and attitudes affect our actions, so if we believe a particular prospect isn’t going to buy today, we’ll subconsciously sabotage ourselves to make sure the outcome matches our belief. It may sound crazy, but there’s a ton of scientific research to back it up.
Is there a single, best closing tactic?
No. There are lots of closing tactics, and none of them are inherently better than the others. Some may work better than others for you personally, so you should experiment with several to see which are most effective for you.
The best closing tactic for any given situation depends on the prospect and the circumstances. That’s why it’s good to have two or three different closes in your repertoire, so you can use the one you think is most appropriate for the situation.
Do salespeople need to be good negotiators to be good closers?
Yes, they definitely do. Whether your dealership negotiates every deal or you’re a one-price-period-no-games type of dealership, being able to negotiate is vital. Unfortunately, it’s a skill many — if not most — marine salespeople aren’t well trained in.
Bear in mind that negotiating doesn’t just mean haggling over price. It’s about reaching an agreement both parties are happy with. That includes learning what’s important to the prospect, determining their priorities and options, and making the case for why your boat and your dealership are the best choice for them.
Consumers these days are more skilled at negotiating than ever before. Marine salespeople need a good understanding of what negotiating is and how to do it well. It can mean the difference between closing the deal and losing it.
Often times, salespeople close the boat deal and forget about the opportunity to sell other products and services. What are the keys to success in selling these “add-on” items?
This is a beautiful — and often wasted — opportunity. Salespeople need to recognize that this is actually the best time to sell additional products and services, for three reasons:
1) The customer is excited, happy and in a buying mood. So they’re very receptive to buying more. 2) Compared to the price of the boat the customer just bought, the accessories and services seem cheap. And 3) Ancillary products and services can often be bundled into the financing, making them even more attractive to the customer.
Should this be a part of their sales process map?
Absolutely. It should be part of a salesperson’s routine. They should walk the prospect over to the service department, parts department and accessories department, introducing them to the appropriate people and making recommendations based on how the prospect said they were going to use the boat.
Should boat sales staff receive incentives for selling these “add-ons” and if so, how?
Sure! After all, accessories and services carry a higher profit margin than the boats themselves do, so dealerships can afford to pay incentives for selling them and still come out way ahead. And the fact is, people respond to incentives. If you want more of something in your dealership (or less of something, for that matter), incentivize the behavior you want.
How can dealership principals help their sales staff get better at closing?
Train them! Buy them books, audio programs and video programs. Bring in a sales trainer or send your salespeople to seminars and workshops. Training has been proven to deliver the highest ROI of any business investment. Marine-specific training is ideal, but even if the training isn’t specific to boats, your salespeople will learn valuable skills that will improve their closing rate and your bottom line.
More menus = more profits
If the goal of your business is to make a profit, you need to make it as easy as possible for customers to spend money with you — both for their convenience and your own bottom line.
What easier way to do that than by letting them order off a menu? It’s a system that has been shown to increase profits in a dealership’s service and F&I departments.
In the service department, according to David Parker of Parker Business Planning, the first step to creating a menu-selling culture is to convert all charges to flat rate billing.
When creating flat rates, one method is to simply list all service and rigging jobs and assign hours to complete each one. Parker cautions to be generous with the hours, since jobs typically take longer than you think.
Creating flat rates can be time consuming, so an alternative strategy is to purchase a flat rate manual and customize it to your dealership.
The next step is to set up tech pay incentives for billable work including retail, warranty and rigging jobs. Parker suggests paying techs a higher hourly rate for billable work, creating an incentive for them to do income-producing work.
Once that is complete, setting up menus is fairly simple.
“Basically, menus are nothing more than bundled flat rates,” Parker explains.
Common menu jobs include: basic winterization, upgraded winterization, oil changes, winter storage, and 50-, 100-, and 150-hour service packages.
Less common but more valuable menu jobs include 400- or 500-hour service packages where all the belts and hoses are replaced, premium detailing packages, preventative maintenance programs, heated winter storage and other premium services.
There are two kinds of service menus. There’s a working service menu, where you have a summary description of the service and price as well as a check box for people to agree to the service. And there’s a display service menu, which does not include the checkbox.
The menu design should emphasize simplicity and be attractive to look at. It should feature an “all inclusive price” that includes taxes, shop supplies, etc. Parker suggests that dealers strive to charge less than that quote, which helps build customer loyalty.
These menus should be available in the dealership, but winterization menus, for example, can be mailed to customers.
Implementing these menus makes life easier for the customer (which they’ll appreciate) while at the same time making it easier for you to provide recommended services before a boat breaks and it becomes an unhappy emergency.
Breaking down your dealership’s walls
Eliminating the barriers between departments is the key to increasing both employee and customer satisfaction, which drives up profitability, says Lynn Bradfield, co-owner of Five Star Solutions.
Although each department has its own goals, they need to come together to provide a seamless experience for the customer, who views the dealership as one entity, according to Bradfield. By developing connectors, opportunities for profitability also arise.
Connectors are established by creating cross-functional roles between departments, with the help of a management philosophy that encourages the teamwork atmosphere.
Escorting new customers from sales to service is one of the easiest connectors, she says. Sales staff should provide a list of all new customers to the service department, who will call to ensure their new boat is working correctly. Service should also be included on boat deliveries and demo drives to answer any questions, Bradfield adds.
In turn, service can help new boat sales, according to Bradfield. For example, service should be appraising boats while they are in service, while also providing the pricing sheet for a newer boat of the same model or a similar one. Bradfield also recommends the service department give a list of the day’s appointments to the sales staff, who can then give customers a tour of the showroom while their boat is being repaired.
Service-to-parts connectors may be something as simple as picking an accessory to highlight monthly to service customers. Service technicians can also remind customers about parts and accessories that were recommended when the boat was bought, but were not purchased.
Parts can help service increase its sales by offering parts customers the option to install the part for them, even offering a discount for the installation of parts that were bought at the dealership’s parts department.
Generating ideas for connectors can be difficult, so Bradfield recommends gathering all staff to brainstorm connector ideas. To make this successful, only tackle one connector a day by assembling teams that represent both sides of the connection, like employees from the service and sales departments.
“The smartest thing you can do is get everyone in your dealership together and think of connectors,” Bradfield says. “The dumbest thing you can do is sit by yourself and think of them.”
Stocking up on talent
A company’s most important resource is its talent, but as baby boomers retire, this resource is dwindling.
To adapt to today’s environment, companies need to adopt a talent mindset, replacing their marginal employees with high performers, says Brooks Marine Group President Neal Harrell.
“Often, the most marginal performer is the most tenured individual — been with the company for a long time, does a good job, but is on cruise control now,” Harrell says.
To replace these employees, companies must constantly look for talent, from senior managers to technicians.
“Go be a student of your industry, always be looking for talent, always be recruiting,” Harrell says.
A large subset of talented prospects are attracted to the lifestyle of a marine career, which offers flexibility and the opportunity to work with exciting product, like boats, he says.
“We work in such an awesome industry, now we need to sell that to the people with talent,” Harrell says. The following are his recommendations for how to accomplish that goal:
1. Create an analysis profile for the open position – Discuss the title for the position, which should not be overly flashy, Harrell says. Furthermore, the profile needs to outline superiors, responsibilities, qualifications and competitive compensation.
2. Write a compelling job description – Be sure to sell the position, using phrases like “beautiful,” “high performance” and “state-of-the-art.”
3. Solicit employee referrals – It is important to do this in a proactive way by constantly soliciting referrals from employees by reaching out to them, Harrell says.
4. Post the position where your talent is – This includes trade sites, marine publications and social media.
5. Create an electronic database of talented people – Whether you read about them in a marine publication or met the person at a trade show, you can search this database when a position opens.
6. Rank your candidates – Organize the resumes as “high priority,” “need more information” or “let down.”
7. Set up a telephone interview for those outside a five-hour drive and ask qualifier questions to gauge their strengths and interest.
8. Set up the face-to-face interview – Try to schedule the interviews in successive days to keep all candidates top of mind.
9. Perform reference checks – While checking with references who are often their peers, it may be worth seeing if they are interested in a position.
10. Give the offer – It is important to get it right the first time, so the offer is all spelled out, including any extra perks. Also, discuss the employee’s plan if a counteroffer is proposed.