How Much Can You Improve in 2007?
By J.P. Lepez
When I demo our software I get a lot of "ooohs" and "aaahs" as managers and owners begin to see the potential of what our tools can do for their business. Yet, it's hard for some people to quantify how much more money they could actually make by simply using the proper prospecting and sales software. I will never forget one small dealer I met at the Tunica Tradeshow one year who saw no value in tracking prospects. His selling style was merely to allow prospects to come onto his lot, look at a few houses and if "they wanted to buy then they would buy. If not they didn't." No taking down information, no following up with a phone call. No asking how they happened to find him.
I took this gentleman's information and put it into our computer system to remind me to call him in a about a year. Surprisingly, he was still in business though things weren't going so well. While other dealers in his area were flourishing he was still doing no better than the year before and a couple of his salesmen had left to join the competition. Was he considering changing the way he did business? Heck no! Because of his stubborness and unwilling to change, he will be doomed to a life of getting the same results over and over again.
Yet, it's amazing how many others in the manufactured and modular housing business are just like this guy. They don't realize that by using the proper tools they can exponentially increase their bottom line!
For example, let's say our friend Barry is the owner of XYZ Homes. He has 3 salespeople working for him and they collectively sold 72 homes this year. That means that each salespeople sold an average of 2 homes per month (72/12=6 divided by 3 equals 2). If the average gross profit of each home sold is $10,000 that means that Barry and his salespeople raked in $720,000 in gross profit this year. Now Barry gets smart and realizes that his salespeople could sell more if they were able to track their hot prospects and the ways they are finding their business, create custom professional quotes, print call reports, etc. (all the tools that sucessful salespeople use). If each salesperson were now able to sell just one more home every two months that would equal 90 homes for a gross profit of $900,000. That's a difference of $180,000 a year or $15,000 per month! Now if an extra home every two months sounds difficult to achieve then you better check your pulse.
Barry is also concerned that he has no idea how much XYZ homes did in Service this year. They have a manual system that calls for a lot of filing, handwriting and multiple trips by his techs. He thinks they may have done about $40,000 in billbacks last year. They have a big problem charging for parts as most things are bought last minute.
If Barry's average home cost is $30,000 that means that he had $2.16 million in gross cost this year. The industry average for bill backs is 4% of the cost of the home. That means he should have billed back $86,400 this year and in effect left $46,400 on the table in unclaimed bill backs! However, by using an easy to use Work Order and Invoicing System like HOME/TRACK he knows that 2005 is going to be different and that he will reclaim the roughly $3,800 a month and add it to his bottom line.
Would you like to see the same calculations for your business? I've created an ROI Spreadsheet where you can input your own numbers and see the effects yourself. It works in Excel and all you need to do is type in the numbers in the yellow fields.
J.P. Lepez is the marketing manager at Alpha Data Systems, makers of the HOME/TRACK Professional Suite of products for the manufactured home industry. If you would like to see a demo of the HOME/TRACK system please call him at 800-476-3857 ext. 212.
