Are We at a Cross Roads with our Auto Sales Staff?

Even if you don’t believe, as I do, that high sales staff turnover is the number one issue facing the auto industry today; we certainly can agree it is right at the top of the list. There is not one positive thing that happens at our dealerships as a result of high turnover, and the benefits of low sales turnover are so obvious that I don’t need to list them.

High sales turnover has completely undermined training efforts. It creates the mental attitude amongst many managers to not bother training at all because they won’t be here in 6 months or others take the salmon going upstream approach; if they survive then we will invest some time into them.

Meanwhile over the past 10 years our customers have become more and more acclimated to the Internet and are gobbling up as much information as they can on product and price prior to coming into our dealerships. By most accounts 75-90% of our customers have done most of their selection process before they ever step on our lots.

This is leaving many dealerships in the position of having the least educated salesman talking to the most educated consumer. Since we can’t uneducate the consumer we better start investing and educating our sales staff.

I believe the manufacturers play a major role in helping us to resolve this problem and should work closely with their dealers about salesman’s retention programs. With all of the dollars that are budgeted for incentives they should slice out $100 or $200/car and designate it to our sales departments and reward top performers.

Short of having these conversations with your manufacturers or dealer council reps we can only effect what we can control at our dealerships and we better start getting serious about training so we can give our salespeople the tools they need to EARN a good living.

Let’s face it we are not brain surgeons or scientists !!! We are only selling cars and if we hire motivated, personable people that care, we should be able to make it a personally and financially rewarding career. Here are a few items that I think many of us miss with our sales staff:

1) Know what each salesperson’s personal financial needs and wants are?

2) Ask each salesperson what they feel they should produce to achieve their needs or wants. You may be very surprised how far off some salespeople are with what they think they need to produce vs. what they will earn if they produce what they say. It is in everyone’s best interest to clarify their earnings potential based on expected performance.

3) Train, Train, Train, Train- Take the approach of a college student that gets a degree and then goes after his Masters.

The college degree would be the basics:

Product knowledge
Meet, Greet, Qualify, Road to the sale etc.
CRM- Your salespeople should know their CRM tool inside and out. They should look at it as if it was their own private secretary or marketing department that you gave them at no cost.
Networking and Referrals- The lost art of the auto industry!!! Let everyone know what you do and ask for referrals. This is a must for any salesperson that wants to make serious $ in this business.

The Masters program would be the training on the following topics:

a) Internet Sales

b) Phone Call Sales

c) Service Retention-Equity Mining

d) Lease list and owner loyalty

e) Social Media as a way to sell cars TODAY!!! For the first time, technology allows your staff to effectively market themselves at no cost to the dealership.

As a dealer you need to be clear of what your expectations are from your sales staff. This might include:

Sales goals
CSI Goals
Dress Code
Attitude

Both setting processes and expectations is a great step in making sure you and your sales team are following the same path, and hopefully are on a long road together.

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Comment by Michael Del Priore on April 16, 2014 at 1:18pm: Excellent Post

Comment by Robert Nolan on April 14, 2014 at 4:01pm: Interesting article, it sounds like it could apply to any business today especially one that deals with customers. I agree that as high as 75% of buyers have spent time doing their homework before leaving the house to make a purchase. This type of buyer has their mind made up regarding everything from color to style, to warranties, financing, lease or own. They may even have visualized themselves sitting in the car they have designed. They might feel the quality of the seat, how well it’s constructed and the softness, or they may just be interested in the sound of music coming from the well-designed interior.

In order to receive the college degree provide some courses in: Observation, Listening, and Responding. They will receive a degree in Rapport.

Comment by Mark Dubis on April 14, 2014 at 1:20pm

Auto dealers spend over $1 Billion a year in recruiting, hiring and training.

Here is the chart to show the numbers.

While the OEMs should want to improve employee turnover, they have only implemented solutions that treat the symptoms and do not address the cure (a stable work force).

Any OEM incentive monies for sales people will come from the dealers anyway, so it makes no sense to have an oem mandated program which will most likely not be the best solution for every dealer.

The solutions are simple to implement:

No manager gets any bonus or raise if the employee turnover for the dealership is more than XX% (pick a number)
Managers need to explain what they did to improve an employee's performance before they are allowed to fire any employee
Give employee's flexible hours to maintain a positive family life (Implementing this will determine if a dealership really cares about their employees. Just saying "well that's the car business" doesn't cut it anymore)
Allow sales employees time to network in the community (should be 2 or 3 hours a week)
Pay a good base living wage and a bonus or commission program that has good folks making at least $40 to $60 K a year.
Offer solutions that make an employee accountable for the customer relationship and gives them credit for doing a good job. This builds their personal brand and enhances customer loyalty.

The answers to the problems are simple, The implementation and commitment to improving the situation are not.

Comment by Lisa Bundy on April 14, 2014 at 12:26pm: Love the article and agree with all the points. I have spent many years either being at a dealership in management or training with other speakers to increase profitability thru sales and marketing.

What I see is that it all comes from the top, if the owner or senior management wants quality then there is some attention and funds committed to it, if they are just interested in profit NOW, then it is every man (or woman) for himself. Now I am not saying that all are bad but I certainly see a lot of self serving managers that have no patience for training or mentoring staff.

Tim Deese taught me that profit comes from the black top up. Managers and owners get a raise when our sales staff sells, so whatever we can do to get them selling more is profitable for the dealership. I would love to see the dealerships make sales mentoring and training a high priority but until then we are only throwing money at the ones that won't spend it now to better the industry.

The same is true for marketing, I rarely see a dealership that links all their campaigns together and then makes sure everyone in the dealership is aware and EXCITED! about the offer or strategy. Like soldiers in an army, you can't win big with everyone having a different vision or directive. Just a "car girl's" perspective.

Comment by David T. Gould on April 14, 2014 at 12:25pm: Paul, Nicely stated. The hidden "cost" of turn over remains the Achilles Heel of any business. Turnover historically is high in the automotive business, every dealer should track turnover, demand a solution and hold managers much more accountable for (their) turnover / salesperson's failures. Note: Not all stores have high turnover. Provide basic needs / wants along with a positive work environment and most quality sales reps will stay. Good Selling! DTG

Comment by Ian Woodward on April 14, 2014 at 12:13pm: Overheard this conversation once upon a time

Big Cheese says - "If we train our staff, they might to leave us"

Training Manager replies - "What if we don't train them and they want to stay"

The usual dichotemy faced by many.

No quick answers, but to slowing down staff turnover should be a high priority for all managers, both line and senior. Having better, more competent staff leads to better results. Full Stop.

I seem to recall an example post 9/11 of the investment made by one of the american airline companies in training their staff to be the best when sales were falling due to the perceived increase in risk of travelling. Once confidence was re-established they flourished and out-performed their competitors becasue of the investment which everybody else had withdrawn as a cost saving measure!

Comment by Joe Clementi on April 14, 2014 at 11:41am: Thanks for the share Paul. I believe that the mmanufacturers could also play a role in helping improve our sales processes. Perhaps, instead of utilizing stair-step plans to incentivise volume for gross - they could set aside money for training of experienced sales associates?

@Mike- I agree with your assesment with regards to advertising versus training dollars. Let's understand the reasons why our sales managers' don't, can't or will not train. If you factor in the dealer trade calls, follow-up calls, handling that special customer need, a due-bill problem, employee issues and the myriad of other daily tasks they have...it's becomes evident why they don't train. Training requires a skill of translating information into actionable items.

Comment by Mike Warwick on April 12, 2014 at 9:32pm: Great post Paul. How much do we spend on advertising and how little do we spend on training - it's absolute insanity! Many dealers don't seem to recognize why their managers don't train their salespeople. The answer is often so simple that it is completely overlooked. Their managers have no clue how to train. Being able to stand in front of a group of salespeople and train is a skill that most managers have never developed so they avoid it at all cost. Dealers expect their managers to have this ability so the real question is, what if they don't?