How to turn around a failing business
Last week we talked about poor client service.
I want to share this story with you.
It’s about an auto dealer and his sales people.
He bought the business from a retiring owner.
Over the years, the owner’s passion had cooled.
It took three years to position his business for sale.
His accountant helped as best he could.
Those were three hard years of hard decisions.
Nevertheless, he ignored a major problem.
The new owner assessed what he had bought.
Sales had leveled out over the last 10 years.
Net profit showed little year-to-year gain.
Sales were stagnant for two reasons:
1. Lack of marketing and advertising.
2. An unmotivated sales force.
Two sales people, he found, really worked.
They represented 75% of his sales.
They accounted for 85% of his net profit.
The other seven were unproductive.
They wasted time. They complained.
Family problems, they said, distracted them.
He made a tough decision and fired seven.
He recruited two other sales people he knew.
He worked to energize his team of four.
They held weekly sales meetings.
They discussed what worked and what didn’t.
All five of them learned from each other.
He began an aggressive marketing campaign.
He advertised online, in print and cable.
He measured his results from each medium.
He tracked offers which produced the most.
He measured his Return on Investment.
Which offers attracted the most prospects.
Which offers produced the most revenue.
He concentrated on offers than produced revenue.
In a year, his sales increased 6%.
His net profit increased 10%.
The business was making a recovery.
Next: What business forecasters predict.
