Car Dealers, Fire All Your Salespeople Today!

Can the argument be made that today’s car dealership would increase earnings if they fired all salespeople and implemented a new process from scratch?

Let’s start with creating a BDC. We would hire women between 35-50, pay them $20 an hour to set appointments. Most of these women would be moms with kids in school so getting to the dealership by 8:00am would be no problem.

After the BDC confirms the appointment and the customer shows up, they are welcomed with signs “putting the fun back into buying a car!” The signs also explain that no one is on commission.

We will also recruit women between 21-28 years of age to be “Ambassadors” of the dealership which consist of an attractive personal appearance, strong verbal skills for product presentation, enthusiasm, and interpersonal skills. These Ambassadors would take the customer through a detailed list of to do's including the vehicle selection, walk around, test drive, etc.

After the test drive, the “Ambassador” ask the customer if they would like to buy the vehicle. If they say yes, we just escort them over to the F&I manager.

I can see the happy faces now of the customers. No longer do they feel intimidated or controlled. They can finally relate!

If all this sounds familiar, that means you have read Kurt Baumberger’s book “Adapt or Die”. Not only does he suggest this formula, dealers are already doing it! Is it the right thing to do? Oh, by the way, it is suggested that the salespeople could all be moved to selling only used cars since there is more profit in used cars and “there is inherently less trust between buyer and seller anyway”. (Again, in the book)

The argument is that we automate to eliminate. With all the technology today, has the salespersons duties been eliminated?

Another book, Cars and People by Anthony Douglas Ziegler, the automotive salesperson is to perform the following duties:

• Meet and greet
• Qualify and conduct fact-finding
• Build rapport
• Vehicle selection
• Inventory walk
• Present product
• Demonstration drive
• Dealership tour
• Unmask and handle objections
• Write up
• Negotiate price
• Overcome price resistance
• Conduct trade-in appraisal
• Justify trade in value
• Present finance options
• Explain financing terms and conditions
• Upsell accessories
• Cross sell finance and insurance products
• Close deal
• Resell benefits
• And more>>>

The car business is so important to America. To push the automotive salesperson out is just a big mistake. The automotive salesperson is a professional who earns every dime they make. To fire them is like throwing the baby out with the bath water. Why not train them better or better yet, hire better in the first place? Look at professional salespeople like Robert Wiesman “Your Hyundai Guy”! . You going to fire that guy? Does he not make buying a car fun again?

What is wrong with Commission? Put everyone in America on commission. You work at McDonald's? Commission... You want fries with that? The "meal deal" gets you a nice, big, cold, refreshing soda with ice on this hot 105' day? Or, Senator? Commission... You cut the deficit, you get paid. City worker? The more road you fix, the more you get paid.

Will technology eventually replace the F&I Manager? How about the Sales Manager? If you don’t have any salespeople, do you need a salesmanger? What about the GM? Just saying! Are we going to automate all ourselves out of a job?

Let’s say you?

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Comment by Todd Vowell on March 9, 2013 at 12:19am: Thank you Pat for the comment! You are right, commissions are not for everyone. That's why we like them so much I think. It takes some Chutzpah's to be on commission in this market last couple years!

Comment by Pat Kirley on March 8, 2013 at 7:28pm: Todd
Great article, I think it will remain people selling to people, male/female commission/unit price, they are the variables. Personally I love commission, it give you limitless potential, I know in the current market margins are tight but when the market moves, your earnings and the dealerships profit can increase dramatically. Sales is not for everybody and commission is the same, I could never work for $X a year, for me there would be no motivation.

Comment by Todd Vowell on March 8, 2013 at 2:34pm: Thank you Stan. Yes, commissions are so important. To give in and just pay a wage is like giving up. I had 52 salespeople at one of my past companies and my top dog earned over 300k (took him 4 years to get there). He went from delivering and picking up dry cleaning at $8 an hour from office parks, to 100% commission. BIG risk, HUGE reward!

Comment by Stan Sher on March 8, 2013 at 2:21pm: Great write up. There are different schools of thought. However, you outline the importance of having sales people and the importance of being on commission. I get disappointed when I mention to people about getting into car sales and they respond, "Oh that is commission, I can't do that". I usually respond with, "Really? So you want to be a lazy hourly employee who does not produce and sponges off the hard work of another commissioned sales person that produced the revenue that now pays your salary?". This is something that Grant Cardone made me realize in one of his messages. It is true. Commissions build success and drive results.

Comment by Todd Vowell on March 8, 2013 at 1:29pm: Bobby, I'm with you about the future, who knows! No matter what, it will be interesting to say the least, say five years from now!

Comment by Todd Vowell on March 8, 2013 at 1:28pm: Daryl, what a great way to put it, absolutely right. 19 cars, $2,600? Where do I sign up?!! :) Glad you high tailed out of there, wow!

Comment by Todd Vowell on March 8, 2013 at 1:25pm: Tom, "man" the phones? Good one my friend. Illegal is my thoughts as well. I thought we couldn't discriminate? The book does have some decent ideas. In fact, why not just hire a hot 25 year old lady and pay her commission? His argument just doesn't make sense to me but dealers are buying it. Some are... Like your pic btw! You a model now? Geeeeez, handsom fella! :)

Comment by Daryl Fawler on March 7, 2013 at 5:11pm: Todd, sounds to me like the "hot chicks" and the "middle aged ladies" are just doing a professional, organized sale of automobiles. Isn't that twice as many people to do our job. I think the best thing to do is to hire, train, encourage and support quality people in the roles we're already in. I worked at a fixed price, no commision used car store. The salespeople were bonused on "volume", which we always seemed to magically miss every month. I sold 19 cars with average gross over $2000 and made $2600 June 1999, the same as pay that some woman received for 4 cars. I left quickly along with any other quality employees. That place went bust 3 times and now is just a bad memory. I love commission sales, you get paid what you're worth. Everybody should try it for one year and they will appreciate the value of working hard and doing the right things consistently.

Comment by Tom Gorham on March 7, 2013 at 4:19pm: Great article Todd. It's interesting that women 35-50 get to "man" the phones and that attractive 21-28 year old women get to be "Ambassadors". I assume men get to be managers or porters? It sounds extremely sexist and probably illegal. What a concept! What a genius!

That said, it may be in our future that new cars are sold in volume and pay plans may be based on numbers rather than gross profit. But that doesn't take away the need to be a great salesperson. It just alters the dynamics.

Comment by Todd Vowell on March 7, 2013 at 1:38pm: Hey Dixon, Compliance office- LOL! Good one! Thanks for the story, sad one that it is. A kiosk wont fix anything either, you are right, they are in big trouble. I am also hoping to hear from some other dealerships. Have a good one, thanks again.