The average car salesperson sells fewer than 10 units per month, according to the National Automobile Dealers Assn.
The Rikess Group works with two of the largest-volume dealerships in the country, and they need a minimum of 80 salespeople on staff to hit their volume targets.
With today’s Internet-empowered customers on average physically shopping fewer than two dealerships, it would make sense that productivity per salesperson should be rising. But it isn’t. Why? It’s because of a vicious circle anchored by high turnover and low productivity.
It looks like this:
This sequence of events doesn’t have a specific starting or end point. Each element contributes to the others. But we must start our description somewhere:
Unappealing Work Environment
The negotiating culture in many dealerships blocks hiring empathetic, “customer-centered” salespeople. Why would people who like people want a job where they potentially manipulate others?
Furthermore, an entire generation of Millennials raised on Amazon.com don’t understand why a dealership would employ a negotiating sales model when consumers have all the information they could possibly need.
Wrong People
The industry needs to attract quality salespeople who have the right interpersonal skill sets.
Who is attracted to dealerships with traditional selling environments? Often, old warhorses who enjoy battling with customers and people desperate for any position until they can find a “real job.”
The first group makes sales difficult and time-consuming. Consumers give repeat business to salespeople they like and trust. The “sales gunslingers” aren’t that kind of people.
The second group are not committed to a career in auto sales, so they don’t invest the time and energy to learn the product or nuances of the sales process. This group elongates the time it takes to sell a vehicle, because they lack the proper knowledge or skills and therefore over-rely on management support.
Inadequate Training and Development
When salespeople are put in front of customers before they have been thoroughly trained and immersed in the dealership’s culture, they lack the opportunity to succeed in volume selling. This frustrates them in various ways, including not earning enough to meet their financial needs.
They often quit before they can reach their full potential.
Managers Desire for Control
In dealerships with high salesperson turnover, management tries to control as much of the sales process as possible due to the inexperienced staff.
This calls for mandatory “desk trips” and some form of a “liner-closer” model. This model hurts productivity as there aren’t enough managers to effectively try to close deals for an inadequate sales force.
It takes management too long to start deals over while trying to develop some form of a relationship with the prospect. When it takes easily three hours or more to sell a car in this kind of environment, salespeople have less opportunities to make sales as time is wasted in the process.
The process can exhaust all parties, lessening the likelihood that salespeople want to start the process over with a new prospect near the end of a shift.
Disincentive for Managers to Empower and Train
An empowered culture where salespeople own the responsibility for true customer satisfaction and needn’t rely heavily on managers to desk or close their deals is what both customers and people-focused salespeople want.
But empowering salespeople works against sales managers wanting to maintain status and incomes. There is a built-in disincentive for managers to empower and train their sales staff. The more empowered the sales force, the fewer managers needed.
Because they are required – and incentivized – to be deal managers, most sales managers ignore staff development.
Then there are the less-than-stellar customer reviews due to the lack of value added by the dealership in the sales process, the overhead expenses related to under-performing salespeople and the time, energy and money required to constantly recruit new salespeople. (Mark Rikess, WardsAuto Industry Voices contributor and writer of this column, below, left)
The good news is there are fairly straightforward ways to boost salesperson productivity. Here are 10 of them.
1. Offer a minimum salary – not draw – of $2,500 per month.
2. Schedule 40-hour work weeks.
3. Provide at least a month of on-boarding/training before letting new salespeople greet prospects on their own.
4. Eliminate negotiations from the sales process and empower your sales staff.
5. Utilize tablet technology to further empower your sales staff.
6. Have a significant portion of sales managers’ compensation tied to salesperson productivity. This spurs them to develop their sales staff.
7. Change the definition of the sales manager’s role from “deal manager” to “people developer.” This means they need training to become better at coaching, leadership and training.
8. Put in a minimum sales-performance standard. After the first 60 days of employment put in a monthly minimum of 12 units per salesperson on a 60-day rolling average. If they can’t meet that, terminate them.
9. Dedicate resources to accurately measure closing ratios from lead sources.
10. Never recruit salespeople out of need; always be recruiting!
Former dealer Mark Rikess is founder of The Rikess Group, a consulting and training firm. He is a pioneer of 1-price, no-negotiating selling. He is at markrikess@gmailcom and 916-715-8129.
