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Sunday, October 2, 2011

How many Managers, understand this concept, the 4-3-2-1 rule?

October 2, 2011

It will provide you with an actual value of what you are getting for your advertised dollar. Simple but very useful tool, to understand and apply it each and every day....If you where a Manager was working for me and you could not provide me these number daily, we would have a problem?

Who has used this rule in Their Dealership?

Part One. This formula allows you and your Sales Manager to see your progress with how you are handling customers. I will tell you how many customers you had for the day, week and the month. Part two it will allow you and your Sales Manager to know what percentage of the customer are taking a demo drive. Part three it allows your Sales Manager to know how many offers you are getting from your walk in traffic as a percentage. Part four it indicates your closing ratio from all of your efforts....When you understand this concept, you will know where you will need additional training. We are all aware you will always have 100 percent customers so the top number will always be 100 percent.

Part Two is the demo drive....when you take the number of clients and divide them by how many demo drives you had it will provide you with a percentage. I good number is 75 percent of customers should be going on a demo drive.....if you're getting let's say 44 percent you will need to work on how to get more demo drives why are your clients not taking more demo rides with you.

Part Three. Is the offer how many customers are you getting an offer from after you have taken them on a demo drive. It's imperative percentage. It is where most sales people get week or do not have the proper training to get a customer to present an offer; no offers no sales... if your only getting 30 percent of the customers to make an offer, then you will need to focus on what you are not doing....Once you learn this, it will increase, and you will have more sales.

Part Four. Is the actual close, when you make a purchase, you have done all the steps in order, and correctly, now you have earned a commission for your efforts. A good closing ratio, depending on how many customer you spoke to is in around the 17 percent.

Let's review the 4-3-2-1 Rule

4 - is the number of how many clients you spoke to today, so it is always a 100%

3 - is the number of how many clients you took on a demo drive, so it is 75%

2 - is the number of how many clients presented you with an offer, so it is 50%

1 - is the number of clients you close using the above steps, so it is 25%

You made a sale, means you made a commission.. so if you want to make two sales, just double the numbers.

Now that you have an understanding of how this works, please feel free to ask any additional questions on this subject. The most competitive formula you should be sharing with your sales staff, as a Sales Manager. Learn this and you keep your job forever, and more than likely get recruited by other dealers who see your value.

All the Best,

Joseph F. Botelho One Gram at a Time

Joseph Botelho

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