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.
Comment
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Comment by Joe Clementi on April 20, 2012 at 7:20pm
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@Michael.
The path is littered with those that started on the journey...then quit. David Lewis said - “achievers embrace training, fresh concepts and new idea’s in a manner of excitement and enthusiasm”. I think that just about sums up the means necessary for performance improvements. Our success rule is "every customer, every deal, every day...without exception."
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Comment by Michael Brown on April 20, 2012 at 7:06pm
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The old axiom is, "How you do one thing is how you do everything." We need to teach that and exemplify it. Once we say, "we will have a such-and-such daily," and then don't do it, it says a lot to the sales force about how we are, and how they can be. It's dang hard, but worth the effort. And I'm sure the most successful stores and groups out there measure themselves, in part, by how they "do the one thing."
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@Jim. Thanks for adding your perspective on this issue as well.
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@Ralph.
Thank you for your input as well. It is imparative that we enhance the sales process through quality training. It is the repsonsibility of the sales managers as well as; the sales people to improve skills!
I'll say again "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.”
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@Marsh. You are sooooo right my brother. All your points are dead on. We can enhance the sales process by developing salespeople that understand the sales roll. Value is a proposition that can only be presented by quality professionals.
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Comment by Jim Hughes on April 20, 2012 at 11:40am -
Agreed - the proper tools , on-going/consistent training, role-modeling and positive encouragement make a HUGE impact. Plus, help your sales teams evolve to meet/exceed the needs of today's changing customer. For example: Gen Y's (40% of customers) want a different sales experience. Since mobile is in their DNA, use that to engage with them and provide the transparent experience they seek. I've seen a lot of very positive impact that's a win/win for the customer AND the sales consultant!
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Comment by Pat Kirley on April 19, 2012 at 7:44pm
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Very good and thank you for sharing
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Comment by Ralph Rasmuson on April 19, 2012 at 1:12pm
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Good stuff, Joe. Based on your information it is imperative that managers understand that they have an obligation to each sales person to give them all the tools to enable them to be successful. That is the most important duty of all managers, in my opinion.
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Comment by Marsh Buice on April 19, 2012 at 9:57am
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Joe, excellent post brother!! There is a difference in selling and waiting to be bought; a hamburger, wings, or Redbox video is waiting to be bought. Good marketing pokes a customer's curiosity; selling is what you do once the opportunity shows up. It takes a tremendous amount of energy to know your product, understand a client's needs, find and present a vehicle that best fits their needs-and if you do it all right, you'll still fail 70% of the time. Weeks ago you told me, "Manage the actions, the results will follow." As leaders, what are we managing? We police our sp yet we jump on ESPN.com while waiting for another deal. What we do everyday is what they will do all the time. Your kids emulate you-your sp do the same. This is a great biz, but you are so right, we have to love them up, encourage them, coach them, and manage the actions...when we do, yes there will be bad days, yes we will fall short on a goal, but we must "play the round, not the h***" Manage the activities all 25 days and the outstanding results will follow.
I can still tell you the name of my 1rst grade teacher, my contractor who built my first home, my insurance agent, and my coach who loaned me $20 so I could get something to eat bc I was broke. Those people impacted my life in one way or another and that's why what we do matters too. We are impact players. Anyone who reduces and relates what we do day in and day out to a #6 value meal is way off base.Thanks for the spirited post--alot of people on here share the same passion...
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@Michael. Agreed! The correlation between the Head Coach and the O.C. is as important as the individual position coach. Each coach has a responsibility to make sure their respective team is prepared for the game. Each player, is responsible to study their playbook so that they are prepared for the individual role in the game-plan.
Excellent points.
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