Are you familiar with the Anna Karenina Principle? This theory was first mentioned in a book of the same title by author, Leo Tolstoy in 1877. The first sentence of the book reads, “Happy families are all alike; every unhappy family is different in its own way.” How does this apply to business?
The Anna Karenina Principle suggests there are many smaller, but influential things leaders can do to avoid total failure. Successful organizations are aligned effectively with each of those “happy” or successful factors. In business, managers are often asked to find out the “one reason” or the “one thing” that is necessary in order to succeed. What if there isn’t any one key action that should be taken?
Applying the Anna Karenina Principle to Automotive Sales
In application of this principle to the car business, a fair translation would be, ”All successful dealerships are alike; all struggling dealers struggle for their own reasons.”
Why are some dealers struggling while others are thriving? The reasons vary, however, dealers who struggle usually find themselves focusing on the wrong things—or focusing on the right things in the wrong way.
Three Factors That Impact Dealer Success
- Factors that are in our control.
Our attitude, our strategy (what we do), and our proficiency (how well we do it) are things that others can influence about us, but only we can control.
- Variables that we can influence.
Process, other people, costs, and efficiency are things that we can influence. But, you need to develop a strategy and get good at executing that strategy.
- Things and events that we have no control over.
There’s a lot we don’t have control over: the weather, the economy, a customer’s credit history. Many struggling dealers don’t understand the principle of keeping first things first by focusing on what can be controlled and influenced. Avoid planning for the uncontrollable and inevitable.
Increasing Sales Through Creating an Appointment Culture
What if we could create an appointment culture every day? What if the focus of everyone in the sales department was on how to get a specific number of people into the showroom every week?
Many of the dealerships I’ve visited focus on Internet metrics including:
- Lead Response Time
- Lead-to-Appointment Ratio
- Closing Rate
- Contact Workflow
The automotive industry has remained laser-focused on response rate for new leads. In many stores, I’ve found sales teams responding live in less than five minutes. Conversely, in these same stores, 15-day-old leads have had no contact in 12 days. There is so much focus on quick response that we fail to engage. We fail to follow a customer until they are ready to buy. We make it easy for an internet shopper to eliminate us from the list of dealerships they plan to physically visit.
We’ve found that the vast majority of dealerships missing their objectives have more than enough leads. In reality, most dealerships have more leads than their staffing or process can effectively handle. However, they are blowing through or ignoring most of the leads while dealers are engaging customers through their product purchase decision.
Activating an Appointment Culture
Metrics and analytical management can help us improve processes, but for results to emerge, the focus should be on creating an appointment culture.
Each day, leadership should ask their sales teams:
- What is the number of appointments set for today and has a manager confirmed?
- How many appointments showed yesterday? How many are no-shows?
- Did we confirm all appointments? Did we call the no shows?
Take It To The Next Level
In conclusion, the Anna Karenina Principle suggests taking care of first things first and factors which can be controlled to avoid failure. With a shift in focus from leadership to sales teams, an appointment culture will quickly emerge and become second nature. After implementing an appointment culture, dealers will be talking more about how their team just made their sales objectives. Remember, we just need to get a little better, not perfect.