Don't hang up! Your phone skills can improve your closing ratio

I was recently attending a dealer 20 group meeting where the homework assignment had been to call the service and sales department for the dealer on the roster below them. Dealers came to the front of the room, hooked their cell phones to a speaker and played their mystery shops for the group in real time.

I’ve never seen so many dealers squirming in their seats. Some calls were so bad, all you could do was laugh. Some were not horrible, but they weren’t good, either, and some were pretty solid. But in every case, not one of the dealership’s staff in sales or service tried to set an appointment with a customer. One dealer was so ticked off after hearing his team’s phone skills that he immediately called his store and told the service manager what had happened and why his job was now in jeopardy (this is not a recommended 20 group best practice, by the way).

Here’s why the telephone is so important.

From advertising to store location and merchandising, everything is designed to generate customer leads. So how can a customer respond? There are really only three primary ways: walk in, call on the telephone, or contact the dealership online.

Do the math

Let’s take a look at 100 customer responses and see how many are linked to the telephone. Let’s say that 50 customers are walk-ins, 40 call in, and 10 are online customers. A really good closing ratio is 20 percent, so of the 50 walk-ins, that’s 10 unit sales, which leaves 40 unsold customers that are in need of follow-up. If you add those 40 unsold customers to the 40 phone-ups on the telephone side, that’s 80 out of 100 customers that are related to the telephone.

Now, what about the 10 sold customers? By following up with sold customers, you not only improve your customer satisfaction index but also have a greater opportunity to receive referrals and earn repeat business. So 40 phone-ups, 40 unsold walk-in customers, and 10 sold walk-ins totals 90 out of 100 customers that are linked to the telephone.

That leaves us with the 10 online customers. It’s important to realize that while these customers may prefer to communicate by email, it’s difficult to develop rapport or perform a proper interview that way. Therefore, after sending an email reply, you should also contact all Internet leads by phone. It’s the one-two punch and it’s a proven formula. So you can add the 10 online customers to the telephone side as well, which means that in this example, all 100 customers are associated with the phone.

This is a great math exercise to cover in your next sales meeting. Let’s recap: out of 100 total responses, 50 customers walked in, 40 called on the telephone, and 10 submitted an online request. You had a 20 percent closing ratio with the walk-ins and made 10 sales. We added the 40 unsold customers to the telephone side because you need to follow up and get them to come back to the store. We added the 10 sold customers to the telephone side because they need a “thank you” call so you can earn their repeat and referral business. We also added the 10 online customers to the telephone side because of how difficult it is to develop rapport and perform a proper interview through e-mail.

As proven in the 20 group mystery shopping exercise I witnessed, most dealerships have an entire department they didn’t even know existed. It’s called the sales prevention department and, unfortunately, it’s usually run by the front-line staff, which has the highest customer contact ratio.

The purpose of every inbound and outbound phone call should be to invite the customer into the dealership via an appointment. It’s proven time and time again that conversion ratios more than double when a customer shows up to a kept appointment.

Name + number = unit sales

I know your sales people will tell you the customer wouldn’t give them their name and number, or they weren’t serious, but the stats say differently. Studies show that the average incoming sales call will close around 5 percent.

Let’s say a salesperson takes 15 incoming calls in a month and he doesn’t strive to set any appointments, so we multiply that times 5 percent, and that equals less than one unit sold.

Take those same 15 calls with a trained phone professional, and he’ll capture 90 percent name and numbers and set 60 percent appointments. Even if only 60 percent of the 60 percent show up, with a 50 percent closing ratio, that makes two sales. Multiply that times 12 months times five salespeople and you’ve just picked up another 100 unit sales.

And we haven’t even talked about how appointments can improve your service business.

The telephone is an untapped marketing weapon that can have a significant impact on your bottom line, but you can’t improve it if you look the other way.  

A former dealer principal, Rod Stuckey is the founder and president of
Dealership University and Stuckey and his Dealership University team will bring an exclusive, three-part local store marketing educational program to the DX National Retail Conference, Dec. 4 in Chicago. Register for free at