RV PRO

September '14

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46 • RV PRO • SEPTEMBER 2014 rv-pro.com Editor's note: Columnist Lee Berryman acknowledges that many of the underlying ideas for this guest column come from the book "Up Your Business," by author Dave Anderson, who urges his readers to "Declare War of Poor Performance." A re you guilty of hanging on to low producers? Do you consistently accept mediocre or even poor performance over long periods of time? From my nearly 30 years of experience, most dealers have done it, or are doing it right now. Have you ever calculated the cost of a poor performer? Let's take the case of a salesman who averages three units per month. Your benchmark, depending on your sales mix of motorized and towables, is six to eight units per month. Here are the calculations for your loss: • Unit sales lost per month: Benchmark of seven units – minus the actual sold total of three units – equals four lost sales per month. • Unit sales lost per month: 12 times the four units lost units equals 48 units lost per year. • Average front-end gross: $5,500 multiplied by 48 units equals $264,000 lost gross. • Average back-end gross: $1,500 multiplied by 48 units equals $72,000 lost gross. • Number of lost trades: e average trade ratio is 40 percent. e lost trades are 40 percent of 48 units, for a total of 19 lost trades. ose 19 lost trades multiplied by the front- and back- end gross of $7,000 equals $133,000. • Fixed operations (PDI): You will be losing out on PDIs for 67 units. e average PDI charges vary wildly throughout the industry, but I will use $1,000 per PDI. e lost amount is 67 multiplied by $1,000, or $67,000. • Fixed operations (future warranty and customer pay labor): ere are no industry benchmarks for percent of customers held by dealerships or the amount of labor per unit after it is sold. Let's suffice it to say that it would be a significant amount for 67 additional units. • Repeat customers: How well does your business Declare War on Poor Performance Given their huge financial cost, you owe it to your business to train, transfer, or terminate poor-performing employees. LEE BERRYMAN is the founder and president of the RV Profit Group based in Daytona Beach, Fla. He can be reached via email at lee_berryman@cfl. rr.com or by phone at 386-235-5038. Poor-performing salespeople in an RV dealership can potentially cost the business more than $5 million in lost business over the course of 10 years. Given that, it's vital that owners or managers endorse the "TTT" philosophy, which stands for Train, Transfer or Terminate.

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