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Talent vs. Skill: the truth behind today’s shrinking gross P.V.R.

“The separation of talent and skill is one of the greatest misunderstood concepts for people who are trying to excel…Talent you have naturally. Skill is only developed by hours and hours and hours of beating on your craft.” – Will Smith

Today’s low gross P.V.R. is not market driven, its skill driven.

There has always been fierce dealership competition; and yes, some consumer Internet tools limit gross on some deals. When I started selling, cars misinformation or lack of information had the same effect. Fortunately,  most shoppers today do not believe we pay $3000 for the $7990 new escorts like they did in 1986!

Unfortunately, most talented Sales Consultants and Managers have never been trained to build desire and value or to close for both maximum closing % and gross P.V.R.

They sell a lot of cars because they are driven, naturally gifted, and have a knack for developing relationship and rapport. We know people buy from people they like. This is where the industries “you either have it or you don’t” thinking came from.

Unfortunately, without proper training, most never fully develop their talent. As a result, these naturally talented people use the “art” of discounting or working the desk (discount, appraisal bump, rate discount, etc.) to put deals together. They simply don’t know a better way.

This not only costs us deals, but it also creates today’s dismal gross P.V.R. and fills our lots with overvalued trade-ins.

The good news is that this offers most dealers an immediate and ongoing Growth Opportunity!These talented Consultants and Managers already have the most important skill, building relationships. They are driven, and they already know the product. Let’s teach them how to capitalize financially on these strengths by professionally building desire and value. Let’s teach them how to close for maximum closing % and maximum gross opportunity on each sale!
Check out the results ASC training had on gross at this area VW dealership:

Real Results: Gross to Sales for 2013: (from VW’s “Peer vs Peer” reports)

  • ASC Trained and Managed VW store: 5.3%
  • VW Region Average: 2.3%
  • VW National Average: .06%

Like most, this dealership had a tenured staff that fit this exact description. They were responsible for the lion share of volume, but their gross PVR was dismal.

As the chart below shows, training immediately increased their gross $600, and it continued to grow, almost doubling their profit!

ASC Training Creates Real Results: (real sustainable results)

(Effect of ASC Training and Management on P.V.R. of existing and tenured staff)

The top Sales Consultant initially fought new training, “What can you tell me? I am already the top salesman.” That says it all right? Forced to attend training he quickly adopted the principles ASC taught. As a result, he sold more cars and increased gross over $1000 a unit (see the chart below) and maintained it. He also consistently has the highest CEI scores.

Ask him about the turnaround. He will tell you, “I just didn’t know; I had never been trained before.”

These changes in thinking, process, and skill were the catalyst that made this particular VW dealership one of VW’s most profitable.  In 2013, these changes earned them VW’s highest award for excellence, the Diamond Pin, (a 4-year award for excellence) which was awarded to only 5 dealerships in the U.S.

Gross is not the enemy. Underdeveloped Sales Talent is!

Great leaders constantly ask great questions:

  • Are you happy with your P.V.R.?
  • How much difference would $200-$500 additional gross PVR make on your bottom line?
  • How much professional hands-on training has your team had?
  • How do they build desire and value in themselves, the car and your dealership?
  • What do your Sales People say when asked for a price on the lot?
  • How do they handle a low counter-offer during the close?

If you haven’t worked the floor for awhile, you owe it to yourself to spend an afternoon observing and listening in on the negotiations at the desk and outside the SC office. What do you think you will hear?

Most dealerships work very diligently to cut expenses to improve profitability. Most spend thousands of dollars to reach out to more customers. The truth is very few work diligently to increase their effectiveness with the opportunities they ALREADY have. This is your untapped profit source!

What are you doing to improve your effectiveness (closing %, gross profit and real employee and customer satisfaction) with the opportunities you already have in your dealership?

Will what you are doing create the change or improvement you desire?

Automotive Sales Coach can help. Our training Co-Op provides today’s dealerships with affordable, proven, professional, ongoing training to help them:

  1. Sell more cars!
  2. Hold more gross profit!
  3. Create excited, loyal, lifetime customers and employees!

Access additional free training today. Learn a powerful new approach to handle the very common question, “What’s Your Best Price?”

Your salespeople hear this question on the lot and on the phone every day and most do not have a solid plan of how to answer the customer’s question and move the sale forward without causing confrontation or promising deep discounts. Go to this page right now and learn a simple solution to this common issue that will help you earn more deals and retain more gross!

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