Larry Smith

HOW often have we heard that the business of selling cars is a numbers game? It is just arithmetic. Do the math.

That is the mantra of Absolute Results, a company that has been operating in Australia pretty much under the radar for close to four years now.

It has been working and perfecting for dealers Down Under proven sales results for dealers in North America, Britain and Europe as well as Singapore and Malaysia and New Zealand.

By doing the math, Absolute Results is able to add, in a one-day private sales event, an extra week of sales to a dealer’s month.

It does this by applying its systems to a dealership’s database and through extensive analysis is able to identify the most likely customers to take advantage of a special, customer invite-only offer on sale day.

The dealership’s sales staff are trained in “intelligent phone conversation” to recruit into the showroom people who are loyal customers. The sales staff are then supported and ready to convert those who turn up into repeat and new customers.

It is a training and events system based on a dealership’s existing customers that has sold more than 750,000 vehicles globally and, in the past three years, nearly 15,000 vehicles in Australia.

The company has achieved this Australian number by securing roughly 58,000 appointments from which nearly 30,000 people have showed up to more than 1100 events.

At a dealer level, here is a scenario. Do the maths.

• Absolute Results identifies 150 customers per active salesperson to contact.
• Invites and electronic direct mail communications are sent and followed up by phone.
• The ‘confirmed’ appointment target per salesperson is to secure 15 people to attend the sales event.
• The four sales staff would secure 60 appointments.
• Half of those (30) will turn up.
• Half of those (15) will buy a car at the event.

To sell those 15,000 vehicles in Australia, Absolute Results in the past three years has performed 1100 events for about 550 unique dealers – about 1.7 events per dealer.

Here is how it works…

Larry Smith, director of sales for the Australian arm of Absolute Results, told GoAutoNews Premium that the first step is to analyse a dealership’s client data for both sales and service.

“We deduplicate it and analyse it to ensure the information and records are as current and accurate as possible,” he said.

“From this data, we identify the most loyal customers or those who have bought and use the service facilities. We also identify those customers who have bought elsewhere but prefer to service with the dealership.

“Then there are those customers who are moving away from the dealership. Specifically, they have not done business with the dealership in any capacity, sales or service, for more than three or four years.

“From these various client groups, we determine the ‘most likely’ clients to connect with. This number will be determined by the active number of salesperson or available staff to train and call customers. It is very targeted.”

Absolute Results says that it likes to send out invitations to 150 prospects per salesperson in the dealership. Over the first two days of the event, each salesperson is expected to call their 150 prospects and achieve a “challenging but doable” target of 15 appointments each.

“So on a five-person sales team, we would mail 750 customers and get the salesperson engaged in calling the customers and having a very positive relationship with them,” Mr Smith said.

In the lead-up to the event, Absolute Results does two days of training in both making the calls to recruit customers and then training in making sales at the event itself. The training has an emphasis on converting the sales staff focus into an appointment-driven culture that lasts in the showroom well after the event has finished.

“We spend time in working with every dealership in preparation for the event and we try to understand the dealership’s DNA or culture. What is the experience of your sales team? What are the dealership’s objectives, volume targets, challenges? What are the inventory challenges by model? What are the most desirable models for trade ins? Are you volume oriented? What is your sales process? This knowledge assists in being ‘ridiculously prepared’ to execute the plan. This is a very co-ordinated effort,” Mr Smith said.

“We are not just a ‘cookie cutter’ solution. We prepare the management team and the sales team to be ready, understanding and committed to the effort required to achieve the sale results.

“We will tailor the offer and the message to address the issues of the moment in that dealership. So we can be very surgical in determining the prospects list and very ‘on point’ with the offer or message. Unlike some competitors, we will not employ the use of unnecessary mass mailing or sending out EDMs to everyone in the database as it is a complete waste of opportunity.

“What we do is not magic. We spend time preparing, understanding our customers’ objectives and putting some science behind it.”

The cost averages out at about $500 to $600 per car sold. That is a reasonable return on investment compared with a shotgun blast on radio and print, but the true ROI is even more favourable when accounting for the following:

• The value of the training which lasts in the dealership well past the actual event and develops a more appointment-driven business.
• Stimulating the database for the event generates incremental sales thereby creating momentum in a market that is presently declining. The sales generated from a ‘private sale’ event are incremental to a dealership’s average sale rate.
• The OEM bonus cheque paid for meeting the sales target that month without having to register cars or sacrifice margins at the tail end of the month.
• The conversion of service-only customers into owners.
• Reintroduction of lapsed customers back into the business.
• The introduction of new owners to the business. Up to 30 per cent of the names on the sale day are new to that dealership because of word of mouth about the event through ‘friends and family’.
• The opportunity to convert through follow-up calls the 50 per cent who, for whatever reason, did not turn up on the day.
• The value of sourcing scarce, good quality trades for the dealership’s used car stock with a potential to gross between $1500 and $2000 a car. The new cars sales on an event day generate a high percentage of trades for stock.
• Penetration in aftermarket product sales is typically 80 per cent on the sale date compared with 45 per cent on normal days.
• Generation of F&I sales commissions and origination fees with conversion rates at the events typically higher than on normal trading days.

“We are a viable alternative to what the dealers are doing with their marketing money. There is the training element and then instant sales results,” Mr Smith said.

“We don’t normally do more than two events for the one dealer each year. Obviously this is determined by the size of the dealer’s database. Some dealers can do three or four events a year without even talking to the same customers.

“The dealer feedback is that they love not giving the perception that they are ‘on sale all the time’. It is ‘below the line’ marketing without the need to increase public marketing spend to try and pull the market forward. There is no sense beating a dead horse. We don’t mail to any customer who has bought a car within the last 18 to 24 months. And we talk with the dealers to make sure the dealer is making a good, viable offer.

“So if you are selling 40 cars a month and you have three salespeople we want to give you 10 cars on sale day – incremental to your normal rate of travel.

“We are not out there blasting in the airwaves. We have gone to your database – surgically – and that should be incremental. And that is what is happening because we are not wasting advertising dollars.”

Mr Smith said that several OEMs are working with Absolute Results to organise events for their dealers and in some cases are assisting their network with the costs. He said an event organised by one luxury brand for its dealers in Melbourne will now be run in Sydney and Brisbane after it generated sales of more than 300 cars during past sales in a specific market.

He said a special program for smaller dealers called the ‘Accelerator’ was designed to keep the overheads lower in keeping with their sales and ROI.

“We did one of these dealers selling 12 cars a month and we did 12 cars in one day for him,” he said.

“We recently did six dealers in Melbourne with a Japanese brand; three one weekend all at the same time and a few weeks later we did the other three all at the same time. They had record events and they have now re-signed for another six in Melbourne and more in Sydney.

“One example of a recent customer identified the dealer had about 2600 customers who were very loyal who bought there and serviced there. They had 1100 who had not bought from them but serviced with them but they had 12,100 that were not active for three years or more.

“So there is a huge opportunity in bringing those customers back. It’s actually a ‘conquest’ approach to customers who may or may not still have their vehicle.

“If we get a confirmed appointment we know 50 to 55 per cent will show up on the day and we will close at 50-plus per cent.”

“Our trainer is skilled at meeting every single customer at the registration desk. They have a quick and focused discussion and interview. They know the customer has taken the time to come into the dealership for a reason because people do not have the time to waste.

“They get to know the customer a bit over three to six minutes and assess their readiness to buy so they get a really quick profile that is turned over to the salespeople and managers proactively. So the pace of the interview is to show the customer is in buying mode and that helps achieve the 50 per cent.”

By John Mellor