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Death of a Salesman, has the day arrived?

Let me share with you my experience, as a customer, intent to purchase a new 2012 vehicle. My name is Ernie Kasprowicz, General Manager and Partner of AutoMax Recruiting and Training, LLC. We are a company focused on staffing auto dealers with quality people within all departments and provide enhanced job skills training programs. We have conducted over 11,000 salesperson recruiting programs over the course of 13 years. My background is from retail auto, starting as a green pea salesperson through F&I, sales, general sales and general management responsibility. I have now worked for AutoMax for the better part of 13 years. I have seen a lot. What I have experienced recently in my pursuit to purchase a new vehicle for my personal use is both shocking and disturbing to me.

I am a person who purchases a new vehicle, maintains it and holds on to it for as long as reasonably possible. I shop thoroughly before making a final decision. I am not locked into one particular brand or model and take the time to investigate my options. For my most recent purchase I visited more than 7 dealerships test driving 10 vehicles. The good to great news is that anyone involved with representing a new vehicle has a great product to sell. They are ALL really good, offering features and benefits that are very close in comparison.

What is the bad news? I didn’t meet a salesperson in the bunch. Not one. Oh, to be sure, a “salesperson” approached me, “showed” me the car, took test drives and even “worked” numbers. But, not one had a real clue of how a professional salesperson should interact with a customer. What I experienced was the laziest attitude towards customer service and desire to separate their product or dealership from the pack. My 14 year old daughter knew more about the vehicles we went to see from reviewing the factory websites than from anything we gained while at a dealership. Sure, we got to see how the seats folded, how doors opened or closed and all the in-cabin technical gadgetry. What I didn’t get was a why I would benefit from owning any one particular vehicle. I understand things have changed since I last sold a car. But, really? Can anyone explain why there were not comprehensive feature benefit presentations, no understanding of what other makes and models I may be considering and how the vehicle I am looking at compares. No walk and introduction to the service department as a means to build value for long term satisfaction. No real enthusiasm or effort during or after my visit to earn my business and become a customer of that dealership.

And then there is the price. All started at basically invoice and in some instances went down from there. What the heck is going on here? It’s not as if they knew what I do for a living…they never asked! So, I guess from a customer point of view I did get a great price. And that is my question. Is it all about price anymore? Has it really become lowest price wins and nothing else really matters? Well, nothing else matters because nothing else is sold. I was given no other reason to do business with any one particular dealership or to purchase their product rather than another. Whatever I knew about the vehicle going into the process was the same going out. So yeah, you better offer the lowest price. I got the impression each salesperson figured they would make a mini at best, and gave me mini in return.

Why is everyone so reluctant to spend a dime on professional sales training? What can possibly be the harm in having a thoroughly prepared sales team? A team of people who, on an individual level, know more about every vehicle they sell and know more about every competitive model than any customer could possibly know? How can it be a bad thing for salespeople to follow a sales process that includes a warm, sincere, professional greeting to the dealership? Since when is it wrong for a salesperson to express real joy and enthusiasm for the products they sell and the dealership they work for? As a consumer, I want to know why xyz stomps the competition! And I want it to be factual. The amount of inaccurate information I was given was appalling. It’s ok to say I don’t know. I already know you don’t care enough about your profession to actually prepare yourself.

So it comes to management. Who is running the store today? Why do you deny yourself the opportunity for real success? From what I’ve seen your stores are selling cars. But those are to people who made the decision to buy your product and from you, despite yourselves. I am quite certain few were swayed by anything presented to them other than low price. Are these harsh words? I don’t think so. They are straight observations. And, before it’s said the sample size was very small and in a small geographic location, let me share this: AutoMax conducts shopping reports throughout the country on more than 20 dealerships weekly, and the level of sales skills is dismal.

Do we really need salespeople anymore? It would appear as if not. Has the day arrived where the online pricing models such as TruCar have won the day? If I am to be told otherwise, then management and ownership better invest in their human assets. Otherwise, being a salesperson will be reduced to menial labor wages. Why pay more?

Views: 1003

Tags: AutoMax Recruiting and Training, Death of a Salesman, customer service, sales, selling, training

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Comment by Ernie Kasprowicz on March 8, 2012 at 3:51pm

@ Stanley.  Certainly there are many big issues for ownership and manufacturers to figure out and plan for in an effort to move the industry forward.  Salesperson compensation is one that needs to be addressed.  It may seem as if the industry is getting away with the status quo, but I think dealerships are going to get hit really hard when there a fewer people of exceptional talent and skill representing them.  

Comment by Ernie Kasprowicz on March 8, 2012 at 3:38pm

@ Abe.  The example you cite of upper management leading the team, actively engaged, dramatically changes the culture within the dealership.  It may be a novel approach, but these are different times.  Your example is of people willing to commit to what is important to them.

Comment by Ernie Kasprowicz on March 8, 2012 at 3:35pm

@ Ashley.  I appreciate your comments.  You are so right.  It is not unreasonable for a customer to expect a top flight professional interaction.  Auto salespeople are fully capable of being that type of professional.  There is much they can do on their own to develop.  There is also much the dealership management can do to provide a thoroughly prepared sales team.  As you said, the cost of a new vehicle is definitely a major purchase.  It is one that is not taken lightly by the consumer and shouldn't be by the sales team.

Comment by Ashley Poag on March 7, 2012 at 12:25pm

Ernie Kasprowicz you have excellent points! A car is the second most expensive thing most people will buy. Think about all the training and certifications a real estate agent has to go through. Not only are they knowledgeable about the house they are trying to sell you they know all about the market, structural information about the house, and any additional things you would purchase with the house like parking spaces, HOA fees, staging if your selling and special insurances.  Why should the person selling a car be any less knowledgeable, certified and trained? For the average American $30K (around the average cost of a new car) is a lot of money. When you invest in your sales people and training your return reaches all areas of your business.

Comment by Abe Hopper on March 6, 2012 at 6:24am

My observation is Dealerships that are paying a base salary plus bonuses are retaining a career oriented Sales Team for Life that is focused on creating Customers for Life.  In addition, when the Dealer and General Manager spend time on the desk, and are involved in making and closing deals the atmosphere is positive and the salepeople are alive !

Comment by Stanley Esposito on March 6, 2012 at 4:30am

The best of the best salesman are leaving the business every day. The Salesman is asked to do so much more today than a few years ago for the same or less pay. The bottom line is that you get what you pay for. Dealers would rather pay the likes of truecar $200 per deal.

I guess I am in the same position as the travel agent was a few years ago.

Comment by Ernie Kasprowicz on March 5, 2012 at 5:26pm

@ Ralph.  Thank you for engaging in this topic as income opportunity is an important aspect to obtaining and maintaining sales talent.  My question is at what point will pay plan reform become a serious industry initiative?  In other words, the current salesperson pay model does not seem to impact the manufacturer or dealer principal in a manner that has hit home; financially.  Sure, it obviously has, that's what the blog is about, but not enough to cause those who have the ability to change things with enough justification to do so.  This is as you say; a combined initiative between the manufacturer and dealer.  The money has to come from somewhere.  

Comment by Tom Gorham on March 4, 2012 at 10:10pm

@Ralph - Wow!  I attended your seminar about compensation last October at Digital Dealer.  I was very impressed. Today, you just compressed it into a nutshell.  Thank you!

Comment by Ralph Paglia on March 4, 2012 at 4:08pm

The furniture and carpet retail industry's pay commission only, BUT their salespeople get a percentage of the GROSS SALES REVENUE, in many cases 6% to 8% with an average being about 7%.  The key there is that the salesperson's percentage is based on transaction amount and NOT on gross profit.  When there is a slow moving line of furniture or carpeting, it is not uncommon to see a retailer put a 10% commission on that product line to get the salespeople fired up. 

There is nothing FUNDAMENTALLY wrong with automotive sales professionals being paid on a commission based system, but when the pay structure was established in 1972 and based on a gross profit margin that was, as a percent of the transaction price, 2 to 3 times what it is today, then there must be adjustments made in order to ensure that a sales professional position in the car business is still a high paid job.

When I started selling cars on Friday, February 13, 1981 my commission plan paid a similar commission as a percent of gross profit margin as many dealerships pay today.  This is ludicrous and counter intuitive! My first dealership felt compelled to put a CAP on sales commissions because we were selling diesel VW's for $2,000 to $5,000 over window sticker... My first year of selling cars, a 10 month years in 1981 I made over $84,000 as a car salesman.  Let's put that into perspective in today's 2012 dollars... Can a first year car salesperson make $175,000 today?  And, don't say I was anything special, because there were at least 4 or 5 people in my dealership that outsold me.

If you give an entire class of professionals a pay cut ever year for over 30 years, what do you suppose happens to the quality of who we have available to hire and the turnover in that professional category?  Yes... It is as obvious as it seems and a lot less complicated than people want to admit. Until the entire automotive distribution system in the USA allows for sales professionals to earn a living commensurate with the skills required for them to do a great job, we will be relegated to lousy salesperson performance as an industry average.  This is not just a dealer responsibility... Every time an OEM strips gross margin out of the MSRP on the window of a new car, and puts that money into dealer cash that is paid separately, they are in fact reducing every sales professionals income from selling those cars.  I personally believe that there needs to be more gross profit margin in the MSRP shown on the window of most new vehicles sold in this country.  And based on what most consumers seem to believe we have for profit margins in those Monroney sticker prices, they agree as well!

Comment by Tom Gorham on March 4, 2012 at 12:42pm

Keith, you wrote, "In retail, name one other vertical market of any real size that pays its salespeople commission-only?" You got it buddy!

THIS, in an industry where we pay our salespeople based on gross profit and gross profit is disappearing.  I don't care what the experts say about "getting gross profit", our salespeople are experiencing reduced paychecks, even for the best of them.

I sat through Ralph Paglia's class at last years Digital Dealer Conference about compensation for sales staff and was wowed.

Don't ask sales staff to accept the same pay plan that they had in the 90s when you're asking them to do things they never had to do in the 90s.

Wake up dealers.  You have to spend money to make money!

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