As a manager, do you like seeing your salespeople standing around on the showroom floor? I’m thinking the overwhelming majority of you hate seeing this, yet you still have it. Wouldn’t you rather see your salespeople taking calls and generating business for you? How can you make this a reality and create a culture of business development at your dealership?
Who is most valuable?
The first step in creating a culture of business development is to figure out who are your most valuable salespeople. I previously worked with a dealership that had one salesperson consistently selling more units than anyone else. One day I noticed this his name was no longer at the top of the board and I found out that he had been fired. When I questioned management on the decision, I was told that he was let go because he took three times as many floor-ups as any other salesperson.
This surprising decision got me thinking that if a dealership loses a salesperson who sells 25 cars a month strictly off floor-ups, how many deals does the dealership really lose? I would say potentially none. Those customers were going to be coming into the dealership anyway, now they will just be distributed differently. On the other hand, if a dealership loses a salesperson who sells 18 cars a month, but those deals are personally cultivated by the salesperson through repeats and referrals, how many deals are lost? I would say that every one of those deals are lost.
So, which salesperson is more valuable to you? A salesperson that sells ups or one who cultivates their own business? The answer is obvious; the salesperson who cultivates their own business is more valuable to your dealership. However, at most dealerships, who would get the salesperson of the month plaque and bonus? Any dealership that pays a unit bonus would end up spiffing the salesperson who sold the 25, whom I would argue is significantly less valuable.
Quit sending mixed signals!
Clearly the problem is that managers need to quit sending their staff conflicting signals. You don’t want salespeople who stand outside and wait for you to bring them customers, you want salespeople who actively work to develop business for you. To do that, you need to implement processes that encourage the kind of activity you want.
One way to encourage this in your dealership is to create a pay plan that is more weighted towards repeats and referrals, rather than having one that encourages salespeople to wait for floor-ups. Use your spiff money to get your salespeople to do what you want them to do, instead of what they would have done anyways.
When salespeople start figuring out that they make more money from selling referral and repeat clients than standing around and waiting for ups, they will start to focus their efforts on where they get the best return on their time. Some of the spiffs I see dealerships giving are the equivalent of bribing your children to eat candy and ice cream. You don’t need to bribe them, because they’ll do it anyway. In the same way, you don’t have to pay spiffs to get your people to stand around outside and wait for floor-ups, since most of them were already planning on doing that. The bottom line is that you want a pay plan that will incentivize your people to do what you want them to do versus what they would’ve done anyway.
Get rid of your open floor!
The next step is to get rid of your open floor. In today’s automotive industry, there is not a single benefit to having an open floor, yet many dealerships still have it.
You may have a salesperson who is working hard to make and take phone calls like you want them to, while the rest of your staff is standing around on the showroom floor waiting for an up. Eventually, that salesperson who is working hard to make phone calls will realize that they don’t have the opportunity to take an up. He is actually being punished for doing what you want him to do! Soon, he will give up on phone calls and migrate back out to the front door so he does not miss an opportunity for an up. This is what an open floor will get you.
I often get told that dealerships have an open floor because they want their most aggressive salespeople to get the up. If your salespeople are lazy enough to stand around the lot for hours on end, they are certainly not your most aggressive people.
By implementing an up rotation, your best salespeople will be relieved that they can now work the phone and still have an opportunity to take a floor up. The only people who won’t see this as a win are the lazy “lot lizards.” These are the salespeople who only want to do the bare minimum and stand around and wait for you to provide them with customers.
Who do you think you should be structuring your dealership process around? If I were you, I would be structuring it around the person who is doing what I want them to do, not the person who is waiting for me to bring them business.
Achieving a culture of business development at your dealership starts with taking the steps necessary to get it done. It’s time for you to stop sending your sales staff conflicting signals. Figure out who your most valuable salespeople are, and instead of having a pay plan that discourages them from being on the phone and creating their own business, adjust it so that they get rewarded for doing what you want them to do. Get rid of your open floor and implement an up rotation to encourage the activity and behavior that you want to see at your store.