The Appliance of Science

1. TheAppliance of Science The Paradigm of Pareto Sales & The Art of War

2. Question If as we are encouraged to believe, the Retail Motor industry along with many other sales environments, benchmark themselves at a minimum of 33% closing to total contact ratio.... what happens to the other 67% ?

3. Answer • The question is of course is not new and has invariably been answered vaguely, suggesting that.... ‘...such and such percentage are ‘time wasters’, another percentage bought an alternate brand, another are postponing their purchase, some are fleet buyers and sadly although only very few, buy from a competitor.’

4. Reality Strangely we use statistics and probability on the one hand to set the standard and then make excuses and ‘guesstimates’ to justify them... In reality we really don’t know the answer........ Largely because all we focus on is the 33% & partly because, we just don’t care and yet scratch our heads for novel ideas of how to deliver exceptional customer service.

5. Context The chart in Fig 1 is representative of a total capture of 300 customers for pure mathematical ease. We have assumed an industry average of 33% closing ratio and have assumed 20% ‘wastage’ or 60 contacts, based on Pareto Principals; leaving almost half or 141 potential customers out in the wilderness and a large black hole in the balance sheet.

6. Month 1

7. The Science • Invariably what we do, on the first day of month 2 is concentrate again on capture, striving to resister 300 customers and achieve our 100 sales of the previous month. • As opposed to systematically applying the principles of economic convention and focussing most on the wealth already in your possession- the unspent database from month 1. • Statistics suggest a dilution of the closing ratio by 50% to 16.5%, nevertheless this would still yield 23 sales from the enquiries taken in month 1; if all other factors remain at a constant the gross sales for month 2 would be 123

8. Month 2

9. The Science • Month 3 in the 3 month cycle is by far and away the most difficult and requires far more concentration; • There is still an unspent database of 118 remaining from month 1, although sales closing ratio is further diluted to 10% or 12 sales. With sales from month 2 following the precedent set in the previous months amounting to 23, the total yield for the last month will be 135. • Statistics for the quarter indicate a close to 40% closing ratio, or 358 sales from a footfall or total contacts of 900.

10. Month 3