MAXDigital Out to Stem 74% Turnover Rate Among Dealer Salespeople

The software provider surveyed 400 dealers and found 23% of them identify staff turnover as a major problem.

March 24, 2018

2 Min Read
quotHow can dealerships function this wayquot asks MAXDigital CEO Steve Fitzgerald
"How can dealerships function this way?" asks MAXDigital CEO Steve Fitzgerald.Tom Murphy

LAS VEGAS – More than 70% of U.S. automotive dealers say staffing turnover is an issue for their businesses, and they admit poor training and hiring processes contribute to the problem, according to a new study by MAXDigital, an end-to-end software provider for the retail space.

The Chicago-based company gathered the information by surveying nearly 400 dealers in January, and phone interviews also were conducted in February with general managers, dealer principals, used-car managers, owners and Internet managers.

The survey found dealers complaining about the difficulty in hiring good salespeople, and 76% said they’ve hired people without any automotive experience. Some 62% said they’ve hired people without sales experience of any kind.

The latest industry research indicates it’s not getting better, with dealerships losing an astounding 74% of their salespeople annually in 2017, up 7% from the prior year, based on the NADA Workforce Study. The impact is significant, causing decreased sales and profits, and diminished customer loyalty.

A little education could go a long way to correcting the situation. Seven in 10 dealers surveyed said their salespeople have told them they don’t have enough training or information to do their jobs.

 “When salespeople are trained and equipped with product information, they’re more confident and able to do their job well,” says MAXDigital CEO Steve Fitzgerald. “They’ll feel good and be more likely to stay long term.”

Most dealer salespeople continue working on a commission basis, as the survey finds 42% offering no fixed salary at all.

But the survey also finds dealers eager to make changes, and many are looking to adopt a low- or no-haggle pricing strategy. Four in 10 dealers say they’re considering changes to their sales process in the next 12 months.

Dealers are open to new technology that will lead to a more consultative sales process, and some 70% believe technology makes salespeople more successful and builds trust and confidence with customers.

Dealers are looking for sales processes that will lead to higher close rates and increase customer satisfaction index scores, in addition to helping retain staff.

“This study shows how dealers are re-examining their sales processes in order to align with the way customers want to buy,” says Fitzgerald, whose company, founded in 2011, helps car dealers acquire, price, merchandise and sell their new and used car inventory to satisfy the digital consumer.

“Adopting a process that provides a streamlined car shopping experience will help dealers increase sales and profits and improve employee satisfaction and retention.”

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