Implementing significant changes in your sales process will go far in attracting young, well-educated salespeople and increase your employee retention rate. BY MARK RIKESS
Easily the biggest challenge I hear from dealers is they can’t find and retain young, well-educated salespeople. I believe that is because they are doing what they have always done and are expecting different results – seems pretty insane to me! The bottom line is that most dealers are shooting themselves in their own foot by not making significant changes to the position of auto sales. Some necessary changes include:
- Training Salary – Don’t expect to attract an educated, younger and gender-balanced sales force if you aren’t offering a training salary of at least $2,500 per month for a minimum of two months. $3,000 will even draw better candidates.
- Initial Training Plan – If you don’t have a 30-day new employee development plan, you’re just creating turnover in your sales force. One of the key questions today’s younger generation wants to know is, “How are you going to train me?” After the initial training you should have a mentoring strategy in place for further new-hire development
- Reward Sale Volume – By paying primarily on gross you’re rewarding this younger generation for trying to make as much money as they can off of everyone they meet. The problem is that’s not how they are wired. They also need a reasonable salary or guarantee along with volume and possibly some gross rewards. If you’re still pretty much a “straight commission” store, go ahead and shoot one of your toes off.
- Limit or Eliminate Negotiations – Do you know any 25 year olds who are practiced in the art of negotiations? Or, even enjoy the aspects of negotiations? There aren’t many. That sound you hear is your recruitment window “shutting down.” By employing a traditional sales model – reliant on desk managers and multiple pencils – you’re going to continue to have a sales staff older than your customer base and experience turnover north of 100 percent.
- 40-45 Hour Work Week – Millennials expect to have work-life balance. They are not going to put in the 50-plus-hour workweeks of yore. Your “work-till-they-drop” sales managers will need to get over it and create a reasonable and flexible schedule.
- Always Be Recruiting – When you recruit primarily out of need, by definition you’re lowering your standards of whom you’ll hire. Again, you’re exacerbating turnover by hiring “Mr. Right Now.”
- Management Compensation – At least half of your sales managers’ compensation should be tied to salesperson productivity, with 10 units being the minimum standard. This type of compensation plan forces managers to move from “deal managers” to “people developers.” Tell me how you reward me and I’ll tell you how I’ll behave.
Adopting a more modern way of selling vehicles will attract and retain a younger sales force. Some ways to do that include:
- Internet and phone leads – The younger generation is very technologically savvy and they love their smartphones. So dump your costly and ineffective BDC and hire sales people with the right skill sets to optimize where your greatest opportunities are – phone and Internet.
- Information Sharing – Today’s buyer is very wary of any form of “hard sell” or a “pushy” salesperson or manager. The guts of today’s sales presentation should be about supplying prospects information they don’t already know. This means you need “geniuses” on your sales staff – people who can not only confirm what the prospect knows about their vehicle of interest but also “elevate” their knowledge and appreciation of the intended product.
- Affordability Consulting – Today’s modern sales force needs to be able to provide prospects with payment estimates for both financing and leasing. The basic idea is that if you get prospects in cars that are more affordable more quickly, you sell more cars! Most dealers are under the old mindset that they need to protect their back-end gross by not granting salespeople the training and ability to provide payment estimates. The reality is customers are not focused as much on price as they are on “does it fit my family’s budget?” Not allowing salespeople to discuss payment options may slightly improve your F&I PRU but it will come at the cost of sales volume. Which would you rather have?
- Empowerment – Prospects hate watching your sales staff get up and abandon them when they don’t “bite” on the first pencil. You know who hates this process as much? Younger, well-educated salespeople. Step into the new era of auto retailing by transitioning your management team from being desk managers to becoming a great support system by engaging, observing and coaching your sales team while they are making actual presentations.
- Transparency – Start by defining what you mean by transparency. If you can’t define it you can’t achieve it. There should be a “pricing rationale” for your first quote. Before serving up a number have your sales staff explain how you determine your vehicle pricing. I strongly recommend that you use a third-party pricing guide, such as Edmunds, KBB, etc., as your first quote, then either eliminate or limit negotiations.
So take that gun away from your foot and change many aspects of your traditional business sales model. If you don’t, you’re going to keep getting what you got – and losing more toes in the process.