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There's
a term that I suspect many of you aren't familiar with, and
it's a key piece of information for any retailer - including
construction equipment dealers. It's something you'll need
to know to gauge how well your dealership is serving your
customers and to determine appropriate staffing levels.
The
conversion rate is the number of times that an inbound
telephone call or a customer walk-in converts to a sale. We
will deal here strictly with telephone calls to your parts
department, although the same needs to be done for walk-in
business to that department as well as for calls and walk-ins
to the service department.
If
you're like most other equipment distributorships, your parts
department receives more calls than any other area in your
dealership, and your service department is a close second.
Do you track the number of telephone calls to each? Do you
know what they're about? How can you measure the effectiveness
of your employees if you don't track the rate at which they
convert inbound telephone calls to sales?
In
this day and age of the Customer Revolution, knowing your
customers' needs, wants and expectations is key to getting
the business. When it comes to parts and service, I would
propose that one of the key ways of measuring your dealership's
ability to satisfy customers' needs and wants is employees'
conversion rates - not just their "sales per employee."
But
before we can convert a simple telephone inquiry into a sale,
we need to find out what the customer is calling about. Is
it a price inquiry? An availability check? A technical repair
question? A job status update? In most equipment dealerships
today, we have no way of knowing until an employee answers
the telephone. That's because most of our customer service
delivery systems are generally the same ones we've used for
the past 30 or 40 years.
True,
some of our customers place orders directly into our computer
systems, and the Internet is becoming a viable order-entry
vehicle. But for the most part the work of your parts employees
at the counter and on the telephone has not changed - except
for the volume and complexity of the calls that come in. Given
our highly competitive industry, price checks are much more
common; with downtime so critical for machine owners today,
so are availability checks. Machinery is more complex, requiring
more technical understanding to determine parts needs. The
bottom line? Your employees need to spend more time with the
customer before order processes can begin. And they are answering
a lot more calls than they used to.
Unfortunately,
the increase in the number of calls to your dealership, combined
with the pressure to keep staff levels in line, has put significantly
more pressure on your telephone and counter sales staff, and
it probably shows. Do you hear any "smiles" in their voices
while they're on the telephone?
Perhaps
construction equipment dealers need to take a page from other
businesses that use the telephone for inbound orders. For
instance, how about a menu choice for the customer when they
contact the parts department? Something like: "Push or say
'one' if you want a price or availability information, push
or say 'two' if you need assistance with an order, push or
say 'three' if you are checking on the status of an order,
or stay on the line if you are not sure." Technology gives
us this ability today. (And while we're at it, perhaps we
also should relay the message that "calls are randomly recorded
for customer-service purposes.")
Using
this type of filter would allow your dealership to match the
skills of employees with the specific needs of customers and
save both parties valuable time. The ability to route phone
calls to the proper employee is particularly important now,
when there is a shortage of not just mechanics but experienced
parts people. An availability check or a price inquiry does
not need to be satisfied by a highly skilled parts specialist,
but technical parts requirements do. The job must be re-examined
to provide job satisfaction for the employee and a high level
of service to the customer.
One
of the key management measures for parts department employees
is "sales per employee." But if employees are handling fewer
orders and more inquiries into price and availability we won't
know how well we're serving customers if we rely too heavily
on sales per employee. The conversion rate will tell what
percentage of those calls result in sales - or are simple
inquiries that take an employee's valuable time and energy.
Now,
please don't get me wrong - we need the sales-per-employee
measure. But we also need some measure for customer service
and satisfaction. We need to start tracking conversion rates.
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