I was sitting in front of a friend of mine the other day that is the GM at a fairly large store. He was looking over his advertising budget for the month and discussing with me how he should approach the upcoming month. He had two different ads that he was thinking of running.

The first ad focused on the mainstream and highline vehicles that he carried. The second ad concentrated more on the lower dollar vehicles and below average credit customers that he knows is generally in his demographics. These were two drastically different approaches.

I asked him which cars he was currently selling the most of and what seemed to be the creditworthiness of the average buyer. He explained that based on his previous sales the typical customer seemed to be mid to high beacon score, with an average income of about $48K. Not bad! His customers bought everything, but definitely gravitated towards the more expensive models in the line.

This being the case, I was curious as to why he was thinking of running the second ad at all. He said that the dealership was located in an area where the immediate demographics were lower income families. They just didn’t appear to be interested in purchasing from his store. He had therefore adjusted his inventory to accommodate those that would come in and buy. He would just occasionally run ads that he felt would accommodate his immediate market, in hopes of drawing a new crowd.

So, I asked him why he felt these ads were ineffective. He said that while the ads would increase lower cost new and used car sales, the increase was very modest. Additionally, his up count really did not change that much. Which, confirmed his belief that these customers were reluctant to come to his store.

I have seen this problem many times, especially since my company started producing our DeskLog™ product. The problem here was that this store was only tracking the customers that had purchased cars, not the ones that had come in and left without purchasing. There was little or no information about the customers that did not buy. Therefore, since the only information the dealer captured was about the customers how did purchase, all the dealer could do was quantify that information. He was only addressing the needs of those customers.

We instituted a process where the sales desk was able to consistently capture address and zip code information on a much greater portion of the dealerships customers. The store began to capture info on all their customers, not just those that had bought. At the end of the month we ran reports to quantify the information. The outcome was very interesting.

Though it was true that his closing percentage stayed the same, and that those that closed seemed to be coming from the same areas as previously recorded, we found that the vast majority of the store’s ups had been coming from a lower income area, much closer to the store. More than 40% of all customers that had come into the dealership had come from the two closest zip codes alone! Amazingly, this area had never really been addressed with marketing or advertising from the dealership.

So, for the next three months the store focused their marketing efforts directly at these constituents. More affordable new and used cars were brought in, and more attention was placed on financing for customers with less than perfect credit. It was surprisingly difficult for some of the sales staff to adjust to the change. It was a change of mindset and a change culture. There were those who were resistant, and fought the change, saying that they were making a mistake.

All told, at the end of the three months the proof was there. Overall closing percentage increased from 18 to 27 percent. Additionally, everyone was happy to see that there was an increase in front-end gross of 9 percent per deal, and an increase in F&I gross of 12 percent per deal. Certainly significant! It made believers out of almost everyone.

In the end, the moral is simple and two fold. First, people are generally resistant to change, but effective managers and salespeople look to change to make things happen. Secondly, if you want to learn how to sell more, you need to know all your customers, not just the ones you think are buyers. Then, you need to address their needs…not yours.