In its most basic form, a data-driven sales funnel is a visual process that shows how Leads move through the sales process. A quick glance at a dealer’s sales funnel should show all of the opportunities in progress to a sale.
Seems simple, right? However, in a recent study conducted by Vantage Point Performance and the Sales Management Association, 44% of managers revealed that they believe their businesses are ineffective at managing their sales funnels. This is because effectively building, maintaining and optimising a sales funnel is a lot more complicated than pouring leads in and getting sales out. Doing it right requires taking a data-driven approach.
There are three fundamental steps every dealership needs to take toward building a data-driven sales funnel to drive predictable and sustainable sales growth.
Building: Define Your Sales Process
In its most basic form, a data-driven sales funnel is a trackable representation of the sales process. It outlines the exact steps sales consultants need to take in order to move a Lead from one stage to the next. That’s why the very first step to building a data-driven sales team is to put a process in place.
When a Lead comes in through the dealer website, brand website, social media, walk-in, or phone – what happens next? And after that?
These are the steps that you want to start tracking immediately. Having a clearly defined sales process in place is the most important first step, as it leads to a series of consistent data points that can be measured to understand, predict and improve sales performance over time.
Research shows that there is an 18% difference in revenue growth between businesses that define a formal sales process and companies that don’t.
These steps should then be mirrored in your Sales & CRM tool for every sales consultant to follow. Which brings us to point #2..
Maintaining: Track Data-Driven Sales Funnel Stages Daily
Once you have a sales process in place, it’s important that your dealership has a transparent, real-time tool Sales & CRM to track each stage of the Lead until it reaches a sale. In automotive, the stages of the sales funnel should mirror something like this: Lead, Prospect, Test Drive, Quotation, Finance, Order Intake, Delivery. Therefore, at any point in time throughout the month, each sales consultant should be assigned his/her own Leads to action in order to progress the opportunity through the sales funnel.
As soon as a Lead comes in, it should be assigned to a sales consultant for immediate follow up. From there, it will progress to a Prospect, contingent on the sales consultant’s actions, or lack thereof. As it continues to move through the funnel, every action and follow up should be tracked for a quick analysis and point throughout the month. I.e. if there are 5-10 Prospects stuck in the funnel prior to Test Drive, it will become the assigned sales consultant’s priority to promptly schedule a test drive booking for each idled Prospect.
Optimising: Focus on Conversions
As mentioned earlier, the most important key to unlocking a successful, data-driven sales funnel is the collection of data points throughout the month in order to use them intelligently. If this is done correctly (refer steps 1 & 2), sales management should transition from managing the outcome of the sales process (i.e. # of cars sold every month) to managing the input of the sales process, and all of the activities in the sales funnel, in order to gain much more control over the end result. Achieving target is the outcome of a well managed process rather than a number that magically appears at the end of the month.
Therefore, once you have defined a sales process, broken it down into stages, and begin tracking stages daily – it’s time to use the data points to manage and inform your team’s decisions and actions. The data you’ve been collecting can easily point to opportunities and gaps within the sales funnel that can impact targets & KPI’s.
The quickest, and most impactful way to improve sales numbers is to focus on your conversion ratios.
What does this mean? Once you have a baseline of data points in your Sales & CRM, you will be able to calculate the number of Leads, Test Drives, etc. required each month to reach targets. If your prospect > test drive ratio is lower than normal, you know to start scheduling test drives ASAP. If the number of Leads in the database isn’t enough to convert to sales given historical Lead to Sale ratios, you will need to better optimise your marketing campaigns. If the majority of Lost Leads are buying the same car of interest at another dealership down the road (I promise it happens a lot more than you think) then it’s time for the sales manager to step in to help with closing.
Without data, it’s impossible to know how and where to begin to improve your sales numbers. However, once you do the hard yards to put a process in place, break down the right steps, and track consistently, you will have the data on hand to inform decisions. It’s the difference between a good sales team and a great one. Or a missed KPI month, and a slam dunk.