In the third of a series of insights into running an efficient dealership, Thurlby Motors managing director Chris Roberts looks at sales targeting.
In most organisations where a dedicated sales team is employed it is generally the case that individuals are targeted not only on an annual objective, but more often than not on monthly, weekly and daily targets too.
Strange then that in our industry, even though the sales operation is a key function, many businesses do not target the individual sales people in a detailed and specific way.
Of course, the sales manager generally has a budget detailing most objectives, including units, grosses, costs and profit. But how aware of these numbers are the sales team and do they know how their individual contributions add up to make the budget achievable?
It is certainly not a perfect world and many factors will influence an employee in either over or underperformance: ability, skill level, training, product knowledge and management support to name a few.
So how do we ensure the team knows what is expected and how can its performance be easily measured?
Here I want to talk about a very basic tool to give sales departments a way to set transparent individual objectives, monitor performance and also add a little competitiveness to the sales role; a sales league.
Admittedly there are already many businesses out there that run these well, but in my experience the majority of businesses only target the manager on performance and judgement on the ability of individual sales people remains very subjective.
To implement a sales league the team need individual targets. I would suggest these are set at the same level for everyone regardless of historic performance.
This target should be termed a “minimum performance” level and be an expectation of what a good sales person should achieve each month.
A minimum of 13 units per month gives you 156 units per annum, six higher than the industry benchmark.
Obviously, this figure can be set higher or lower depending on your own circumstances.
The league should be compiled based on the number of invoiced units month to date and sent out several times during the month to keep the team regularly informed about their current performance.
As I like visual aids, I recommend a traffic light for each person, red, amber and green.
This gives a very clear illustration of who is achieving an acceptable number of sales at a glance.
Keep in mind when running a sales league that it is important for the manager to stay focussed on gross profit to ensure units are not sold cheaply to gain volume.
To get the best out of the sales league it should be used as a tool to develop and grow each team member through regular monthly reviews.
There, you can highlight strengths, weaknesses and training needs to ensure that each person’s abilities are maximised through the use of a detailed action plan.
Using a sales league allows you to focus individuals on delivering their element of your plan. Leagues can be motivational, rewarding, developmental, competitive and fun. Why not give it a go?