Sales Performance - Sharpening the Saw

J.D. Power and Associates and the National Automotive Dealers Association estimate that almost 10% of all dealerships have converted to one-price selling over the past three years.

It is apparent that our industry is under a major restructuring phase and serious consideration needs to be applied in the area of training our automotive salespeople.

It is estimated that there are some 125,000 car salespeople working in the U.S. The study found that employees are “an under-managed asset” because well-managed employees – those in whom the dealership has invested time and energy – stay at the dealership and return the investment by contributing to the dealership’s improvement. Good management is distinguished by a dealership’s attention to attracting, developing, and retaining employees.

Top quartile dealers have roughly 54% turnover of their sales force, whereas the bottom quartile dealers have 71% turnover. Top quartile dealers have a higher level of employee involvement in improvement activities – of the top 10% of dealers surveyed, 70% agreed that employees proactively engage in process improvement activities within the dealership.

The theory is that some of the realities of the business drive dealers and their employees in a vicious cycle.

The hours are long and the pay is relatively small. Although a talented salesperson can make out well, the average annual income is about $30,000. Since 50-hour work weeks are the norm, the average salesperson makes about $11.00 per hour.
Stress is common, and not just the stress of rejection. Sure, a retail salesperson is about ten times more likely to hear no than yes, but that’s standard for most high ticket items. From the stress comes confrontation. The guest doesn’t like or trust salespeople, and sometimes neither do the manager.
Income is cyclical. Unpredictable compensation discourages stable, family-oriented people.
The pressure to perform creates tension which in turn creates high pressure sales tactics that most managers want their people to avoid. Since the salesperson receives mixed messages it creates uncertainty. Uncertainty results in the salesperson’s inconsistency. The result is a vicious circle.

Individual performance is the responsibility of everyone associated with the sales department. Salespeople and their managers need to take action to improve skills, reduce turnover and proactively engage in process improvement. Responsibility to sharpen skills and strengthen knowledge resides with anyone associated with selling automobiles.

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Comment by Michael Brown on April 18, 2012 at 5:31pm: It may be that this discussion is a bit of preaching to the choir, as our comments have been in general agreement. One of my concerns has been the idea of "utilizing tools" for training instead of interpersonal and group training. Online training tools, such as Verde and others, provide substantive content and give the dealership a great leg-up on training. But even those modules, in their leader's guides, recommend "hands on" training after viewing of content.

Think of a pro football player: they don't go from reading a playbook Tuesday to playing on Sunday. They do chalk talks and film study with position coaches, They do rote, repetitive position drills. Then the coordinator pulls it all together for playbook dry runs and contact "snaps" as a unit. The Head Coach watches what is happening and tweaks and inspires.

We can adopt this same approach using Verde-type tools, but still have to have a position coach (Sales Manager), an Offensive Coordinator (GSM), and the Head Coach (GM). Sales people need to do the online training, review the training with the SM, then have team-based training with the GSM. The overarching goals are developing muscle memory and "synaptic" reaction under pressure. When that client comes in the door, you want to have your people all respond in the same, effective way without thinking about it.

Comment by Joe Clementi on April 18, 2012 at 5:07pm: @Robert. Thank your for taking the time to respond and making the topic more of a discussion point. While I understand your point, I think that sales training does indeed bridge the gap and the disconnect. Well trained salespeople have the understanding of "how" to create value. They properly build trust through a process designed with the customer in mind. The separation of that "McDonald's" perspective is that the knowledge needed to sell a potential customer at a fair profit - far exceeds "taking orders". The branding then becomes an the reinforcement of why a customer would purchase at the dealership. It may be the same point said a little differently?

Thanks for the perspective. It's an interesting point on this very touchy subject.

Comment by Joe Clementi on April 18, 2012 at 5:00pm: @Bobby, Thanks for your insight. I expected nothing better than exceptional results from a great leader like yourself! Results are achieved by managing activities. Manage the activities, and the results will follow. Managers must measure what they intend to manage, inspect what is expected, and let everyone know the score.”

Comment by Joe Clementi on April 18, 2012 at 4:54pm: @Kurtis. Thank you for the addition and your perspective. Points all well-stated.

@ Craig. Thank you for your comments. Initiative starts with the individual.

@Michael. I agree with your points but as I've stated before, the investment for improvement lies with the individual. It is the managments' responsibility to ensure that progress is being made. There is either growth or there is decline! The choice is up to the individual. The leader of each organization must ensure that their people are training to improvement. While I agree not all managers make great trainers, I contend they don't need to be. If they can utilize the tools already available and enhance skills..they are ahead of the game.

Comment by Joe Clementi on April 18, 2012 at 4:47pm: @Mike. Thank you for making this topic more of a discussion point. I agree to the extent that our most valuable asset is our team members. Development is crucial as is the investment required. Your points are well-thought and as I mentioned in my blog "responsibility to sharpen skills and strenghten knowledge resides with anyone associated with selling automobiles".

Comment by Robert Camp on April 18, 2012 at 4:37pm: The OEM's create an emotional bond between the customer and the products they sell. They do this through their advertising and marketing. Dealerships, for the most part, do not create a bond with the customer. The customer is at your dealership because of the brand of product you sell, not because of the dealership marketing or the relationship your dealership marketing has created with the customer. Dealers then need the salesperson to pole vault across the chasm between the customer’s desire for the brand being sold and a complete lack of emotional bond to the dealership. Hence customers are willing to go from store to store, price to price, at the same brand of dealership, because the OEM created a bond with the customer and the dealership did not. Sales training can help a 10 car a month person become a 12 car a month person, but, sales training cannot help a salesperson close the huge gap left open by dealership marketing which does not connect customer emotionally to the dealership. Do I care who owns the McDonald's restaurant I ate at today? No, I'll go to a different store tomorrow. Dealerships can either stay with their generic marketing, making one store the same as the other, or attempt to create a unique and special buying experience which will bond the customer to the store. Do I know the name of the salesperson who sold me that hamburger today? No. Do you think McDonald’s trained them? Of course they did. If a dealership had a unique marketing message which bonded the customer to the store do you think sales people would be willing to commit to a career versus what we have today?

Comment by Michael Brown on April 18, 2012 at 4:03pm: Only one word to Michael Correra: "Amen."

Comment by Kurtis Smith on April 18, 2012 at 3:38pm: Hmmm.

Michael your conviction can be felt all the way here in Illinois. The passion in your writing and your personal experience as a leader, needs to be shared with the next group coming behind so they can make this industry better than we have found it. Please keep sharing your thoughts as I enjoyed the read.

Comment by Mike theCarGuy Correra on April 18, 2012 at 3:03pm:    If you were to ask the kids in any 3^rd grade class in American what they wanted to be when they grew up the last thing on the list would be a car salesperson… When I first found myself out on the line well over 25 years ago I received what was jokingly referred to as ‘go get ‘em tiger’ training, I was pointed at the lot and told to “go get ‘em tiger, if you screw it up we’ll let ya know in a hurry!” I was very lucky in those early days to be taken under the wing of one of the senior sales guys who lent me his Joe Verde books and cassette tapes, they were a launching point to finding and reading all the sales related information I could. When I bought Mark Tewarts book I no longer looked at car sales as a job, I became a career Automotive Sales Professional. I wish it hadnt taken so long to fing all the great information/training/leadership thats out there on my own. It would have been so great to have a sales manager tell me about a book I should pick up or a tape I should listen to...
One thing that continued to strike me as odd was the lack of any universal process to car sales, each dealer and many times each different sales managers had their own way of approaching the meet and greet, customer interviews, walk-a-rounds, write ups etc. As I read many books from many sales leaders there seemed to be a few common themes, sales is sales and what works IS universal. Buyers buy from those they like and trust, plain and simple, and yet as they say, “common sense isn’t very common”. If we gathered up Sales Managers from across the country we could probably get them all to agree that a daily, consistent process of ongoing training and motivation are essential to long tern success and yet if we followed them back to their stores we would be overwhelmed with reasons why its ok that THEY DON’T have such process’ in place. “I’m too busy to train, my guys are all pros and do fine, we have a unique schedule so its tough to have everyone here at the same time etc, etc. I have watched time and time again as new sales people are hired, sat down in front of a computer to get the product knowledge training completed and then shown the door to the lot where they learn and hone their skills most often from the bottom feeders only too willing to share their secrets to (or lack of) success. In the last few years it has even got worse as they attitude of the folks on the front line has dropped to an all-time low from customers beating them up with all their new found car buying expertise to the sales managers beating them up for not selling enough. Therefore, we reap what we have sown. Our own failures as the leaders of one of Americas largest and most crucial industries have produced a work force of drones with no ambition or desire to achieve professionalism, and we can’t complain. Sales people without focused and consistent training and upkeep will slip into a waiter mentality in no time and at that point its just about “if I got the manager to lower the payment would you buy today… please?”
   My team of six amazing sales people is my most valued and powerful asset, I work with them daily on the basics as well as role playing and actually LISTENING to them so I can stay in touch with what they are actually experiencing with customers. We are constantly challenged with new circumstances and experiences, and working together we learn from them and overcome them on our way toward our success. Three of my guys have followed me to three dealerships now, on has been with me at FIVE stores! Self-promotion? Am I that great of a sales manager? Perhaps not as much as I remember how badly I looked for and wished I had guidance and POSITIVE leadership when I was out there and do my very best to provide for my team. If I sat in the GSM chair it would be empty quite a bit as I would be doing the same for the entire staff, perhaps one day I will again have that chance and take a store to the peak of its potential…
   This business has a tough reputation as it is and the only way to improve it is out there on our front line, as managers we owe them our time, attention and leadership if we hope to take the car business to the place it can be and truly wash away the memories of what it used to be.

Comment by Michael Brown on April 18, 2012 at 1:53pm: And I do want to add that most cases it's not done due to a lack of desire from management to improve and grow revenue. Much has to do again with experience. It may be more important to train managers on training, then to send sales people off to a training! In a different industry I worked in it's call Training of Trainers. You learn the concepts, but focus on implementing training rather than mastery of the concept.