By John Spader & the Spader Business Management team
As published in RVBusiness, November/December 2022
As market conditions tighten, and we move back to something closer to a zero-sum game when it comes to RV buyers, dealers would be wise to investigate the current state of process control in their sales departments. For several years, it hasn’t really mattered how well your team has managed their leads, their closing ratios, or your CRM: since June of 2020 there has always been another customer … or two or three … ready to snap up whatever inventory you were able to get your hands on.
But for a multitude of reasons, the market has changed. Manufacturer production is up, dealer inventory levels are up, floor traffic has slowed, and selling margins are slipping. In other words, after two and a half years of pandemic boom, more normal conditions are returning to the RV industry.
It is not time to panic, but it is time to get back to the fundamentals of solid dealership management.
During the height of the market boom, there was the sense that no matter what we did there was another customer waiting. Salespeople became order takers, and the classic hallmarks of good sales management – building a pipeline, carefully managing leads, and tracking sales activities and ratios – seemed immaterial. That is not the case anymore.
Start by asking yourself this: In truth, what are my sales people doing today? Not what are they supposed to be doing, but what are they actually doing? If your honest answer is some version of reading the newspaper, jawboning with each other about last night’s game, and waiting for the phone to ring or a prospect to drive in, then it might be time to re-evaluate your sales processes.
The most efficient and profitable sales departments take the activities of the sales people very seriously; everyone comes to work to work, not to wait. All salespeople have minimum daily outbound contacts, required activities with their current prospects, regular training, and regular shifts responding to internet leads in a timely manner. Everything is monitored and tracked so management has good visibility on everyone’s activities and – most importantly – on the sales pipeline. Without functioning and well-managed sales processes, the dealership is relying on the most difficult-to-predict and least-profitable client interaction: the random walk-in customer.
Growing sales markets are an outside game. Our most important questions about the dealership involve external factors. When sales demand is abundant, we ask, “How am I doing compared to the competitors?” “How much inventory can I get to meet the customer need?” “How can I attract employees to my business?”
But flat or shrinking markets are an inside game. This is not to say that there aren’t always questions about impacts external to the company, but dealers who thrive in tough markets make sure their internal organization is optimized before looking outside for opportunities. They ask, “How am I doing compared to my goals and budget?” “How can I right-size my business to maintain profitability no matter what my competitors are doing?” “How can I fine tune my systems and processes to best manage the customer interactions I do have?” And, importantly, “How do I best manage the performance of the individuals who create the results for the business and create an environment that motivates high performers?”
All of this is true across the entire company, of course, but sales departments will have a special challenge converting back to the normal disciplines of good process management after the boom of the last couple of years. Dealers should look internally now, and ensure that their sales departments have returned to the basic daily disciplines that are critical to success in a normal market. And they should do so urgently, as if their life savings and business depended on it … as they well might.