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Automotive Moneyball

Anyone who had the privilege to hear Billy Beane speak at the last DrivingSales Executive Summit held in Las Vegas left a bit star struck. His influence over baseball, and more specifically, his success using sabermetrics during his tenure with the Oakland As, is so legendary they made a movie, MoneyBall, out of his story.

 

According to Wikipedia

The central premise of Moneyball is that the collected wisdom of baseball insiders (including players, managers, coaches, scouts, and the front office) over the past century is subjective and often flawed. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of a 19th century view of the game and the statistics that were available at the time.

By ushering in a new way to look at the stats and focusing on things like on-base percentage and slugging percentage, Beane and the Oakland A’s were able to draft players considered to have lesser-valued skills, thereby making them cheaper to obtain.

This method made it possible for the Oakland A’s to compete with a $41 million salary against teams like the New York Yankees with a $125 million salary.

 

What Does That Mean for You?

It’s a fascinating way to look at the value of players. Most, if not all, of the sabermetrics philosophies can be used in your dealership as easily as they can be used in baseball.

Take a look at your Retail Sales Process (RSP). Chances are good you see holes where your sales staff can be doing a better job. Who on your team is undervalued? Which sales member is doing average but could be doing great? Are your transaction-ready customers being closed on their first visit or are they leaving your store without a test drive and heading home to access a leading provider for the lowest price?

 

Create Success and Reinvigorate Sales Staff

1. Batting Order:Sabermetrics lead the A’s to buck the trend of looking at Runners Batted In (RBI) and Stealing percentages and instead of focusing on stats like on-base percentage. It taught the A’s to look for the team players. Perhaps not the fastest super stars, but rather the players who fought to win for the team.

You can apply this in your dealership.

Those stores who have gone to a closed sales floor, see an increase in performance for employees across the board.

Why?

Because, like the overlooked baseball players, you may be ignoring your strongest players. Perhaps one of your sales team is more aggressive at getting ups and, as a result, does not take the time and effort needed with each and every guest.

By moving to a fair system that hands leads out to each staff member in turn, your team knows they’ll each get the same amount of ups, so they must make each one count. A salesperson can’t “run back to the well” if they have to wait for their next lead to come up in the queue.

A closed floor makes them take their time and ensure the proper steps to sale. Most importantly, you can ensure test drives are done. This will lead to additional write ups and eventually, increased sales.

2. Undervalued Players. When you’re looking at your Retail Sales Process (RSP), can you identify the undervalued players? Don’t just look at your sales board to get this information. More often than not, your best salesperson on paper is not your best salesperson on the showroom floor.

Why?

Because the most aggressive sales member is more than likely the one always “at bat”, but also burning through the most ups as he looks for the low hanging fruit.

 

Who Is YOUR Power Player?

Instead of going by sales numbers alone, seek out the sales member who is bringing back the most guests.

A dealership needs to be bringing 20-30% of guests back in through their showroom doors to be successful. Nextup data has proven “be back” leads close at a much higher rate than new leads, often between 40 and 50 %. Those are percentages you just can’t ignore.

Look at your numbers. Who’s your power player in terms of getting guests back into the dealership?  This is where the idea of sabermetrics comes into play in the dealership. Look beyond the average stats of your sales star.

Who is killing it in other areas of the game like follow up, test drives, CSI scores? Help these team members play to their strengths.

Like the philosophy made famous by Billy Beane, dealers need a consistent “batting order” across their entire team.

It’s the reason professional teams track every pitch and every play. They want to condition the players and build a better team.

Finally, by keeping the process fair and playing to the strengths of seemingly undervalued players, many dealerships can see results within 60 days of implementing a closed sales floor. These strategies will help ensures success for the entire team, not just the one or two superstars stealing the glory.

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