Professional Community for Car Dealers, Automotive Marketers and Sales Managers
Did You Hire Them Dead
or Kill Them After You Got
By Craig Lockerd
The way dealerships make the decision to bring on more salespeople and how they replace underperforming salespeople has always baffled me. I’ve seen countless formulas, statistical data and seasonal hiring decisions, but very few of these models make any sense. I’ve even had managers tell me they need four salespeople, and when I asked why four, they respond by saying, “That’s how many desks we have open!”
LAW OF DIMINISHING RETURN
The Law of Diminishing Returns in terms of hiring employees at a dealership can be simplified into three stages:
•Stage one is the addition of more salespeople, which allows for specialization of job responsibilities and increased production efficiency. The result is a larger output return for each additional unit of input.
•Stage two is where inputs equal outputs. Each new salesperson added will continue to increase production but only at the same rate as the increased input of labor.
•Stage three is when additional salespeople will start to decrease production efficiency because the work environment is fixed in the short-run. This results in returns that are much less than the labor input.
Do dealers have any idea where that third stage is for their dealership?
The ideal outcome at the dealership should be to have as many people as possible buy the dealer’s products and services at the highest possible profit margins and deliver 100 percent customer satisfaction. Dealers can’t achieve that outcome unless they’ve maximized the quantity of quality, properly recruited, screened, interviewed and trained salespeople.
I can hear a dealer or general manager object and say, “I don’t want to flood my floor.” That’s admiral, and I applaud their moral judgment in trying to make sure their salespeople all make a good living. However, how many times has a dealer invested in having a special sale, and they look around on the day of the event and notice that several of their salespeople decided to come in late. How many dealers have invested millions into their store and sales staff just to see them leave for a hot, new store that opened up down the road?
Take a minute to write down how many hours a salesperson is currently scheduled to be at the dealership. Would an additional shift or shifts allow them to work fewer hours and be more effective? Would working fewer hours allow sales professionals to have a better quality of life, if that is what would make them more loyal to the store?
Would a more robust staff scheduling model also help dealers deal with talented sales professionals at the dealership who have occasional “manageritis”; employees who have threatened to leave if they don’t receive a promotion?
IS MORE BETTER?
How much time do salespeople have to create more business when they’re at the dealership bell to bell? Did the dealership sell more cars when it had more sales staff?
Some rural dealers are selling 5 to 10 times more cars than dealers in major metro areas. While there are several factors involved in this, the definitive answer is this: Dealers need better recruited and trained salespeople. I want to share my insights on how dealers can achieve world-class results through better recruiting and training.
Judy B. Margolis, writes: “Employees who grow too comfortable and complacent lose their edge. The more they know, or think they know, about how their particular slice of the business world works, the less likely they are to challenge their old tried-and-true methodologies and to innovate. The same holds true for companies that fail to embrace change, and instead have it foisted upon them, often when it is too late.
HOW TO RECRUIT
When a GM/GSM decides it’s time to hire salespeople, they may post a job opening in the newspaper, Craigslist, or CareerBuilder, or post something on an industry job board and expect candidates to start rolling in immediately. It’s also likely that they may even suggest that their existing salespeople go to the mall and look for good candidates. This rarely, if ever, yields a promising candidate.
So the classified ad is placed and what happens?
• Candidates will call but when transferred, they go to a manager’s voice mail. These calls may or may not get returned.
• Candidates walk in, but the manager is busy, so they are told to wait……and wait……and wait….and then….the candidate leaves.
• Candidates walk in and leave a resume. They never get called back because the resume was buried or there was no procedure where resumes should be placed.
Does this recruiting process sound familiar? Dealers are missing great candidates. This practice paints a very poor picture of the automotive retail industry.
WHAT HASN’T CHANGED IN 50 YEARS
Everything changes constantly and rapidly except one thing—what people want. This survey came out in 1946 in “Foreman Facts,” from the Labor Relations Institute of New York, and was produced again in 1949 by Lawrence Lindahl in Personnel magazine. Here’s what employees say they want, starting with what’s most important to them:
1. Full appreciation for work done
2. Feeling “in” on things
3. Sympathetic help on personal problems
4. Job security
5. Good wages
6. Interesting work
7. Promotion/growth opportunities
8. Personal loyalty to workers
9. Good working conditions
10. Tactful discipline
Now take a look at what managers think employees want, starting with what they think is most important:
1. Good wages
2. Job security
3. Promotion/growth opportunities
4. Good working conditions
5. Interesting work
6. Personal loyalty to workers
7. Tactful discipline
8. Full appreciation for work done
9. Sympathetic help with personal problems
10. Feeling “in” on things
Dealers need to structure their help wanted ads based on what the employee wants to achieve. There are so many success stories at car dealerships, like the former forklift operator I knew who was able to buy his family a beautiful new home because of the training and mentoring the dealership provided.
Top commissions don’t necessarily translate into something positive to the candidate reading a job posting. Candidates don’t understand what “tons of inventory to sell” means; they might think that the dealership is having trouble selling cars! Employment ads must have strong “hooks,” and I will share some winning templates with readers.
When the candidate arrives at the dealership, what does the interview process look like?
• “So what makes you think you can sell cars?”
• “Why did you leave your last job?”
• “Can you handle 60-hour workweeks?”
• “How do you feel about working with a bunch of men hitting
on you everyday?”
• “Sell me this pen.”
Do these questions sound familiar? Have they ever worked? My guess is, not often. Dealers need to rethink their interview process.
Visit www.UnfairAdvantageBooks.com for a list of proven ad templates and interview questions that will give you an Unfair Advantage.
Use a predictive index or screening tool in addition to your interview process: Wunderlick, D.I.S.C, AVA, or The Car Sales Simulator by Hire the Winners.
The dealership screening processes, personal investigations, drug testing, DMV and background checks must be done fast! Top talent may not wait two weeks for the results; dealers need to tailor their process to the job seeker, not the other way around.
Dealers must invest in a strong training program, yet many have reduced training investments from their budget while others make excuses:
What if I train my salespeople, and they leave?
What if you don’t and they stay?
Dealers will train new candidates either in-house or in conjunction with an outside training program. The outsourced training can be online courses or live workshops. Once the training is completed, dealers must consider the processes they have in place to retain and inspect their training investment.
After a limited training period, it’s common for a new employee to be placed on the floor to take “ups.” The first customer arrives and the new salesperson greets them just the way he/she was trained to do. The customer grabs a brochure and leaves without ever speaking with a manager.
The manager calls the new salesperson over for a recap, and the employee responds with an excuse, which can be:
• Oh, they were just looking.
• Kicking tires on their lunch hour,
• His wife was next door shopping and he was killing time.
• They were asking for directions.
• Their car was getting an oil change.
Since this was the 15th customer who visited the showroom today without one sale, the manager informs the new salesperson (in your best Alex Baldwin voice from “Glengarry Glen Ross”) “Coffee is for Closers, Kid.” The new employee cowers back into his office.
At the end of the day, the manager remembers yelling at the “Green Pea.” The manager sits down with the new hire and informs them that he/she will be trailing “Five Car Fred” the rest of the week.
Fast-forward three weeks, and one of two things have happened:
• The new hire has settled in nicely due to the training of Five Car Fred and has quickly become Four Car Frank.
• You look around and the new hire has blown out and gone on to become the CEO of Burger Doodle down the street.
DID YOU HIRE THEM DEAD OR KILL THEM
AFTER YOU GOT THEM?
This type of typical outcome can stop if a dealer is willing to step back and rethink their training program at the dealership. Failed recruitment and training processes can be easily fixed. Dealers must take an honest look at their processes and ask if they are really working to produce the desired outcome they want.
WHAT ARE WE SELLING?
In the book The One Minute Salesperson, author Spencer Johnson, M.D. says: “People don’t buy our products, services or ideas; they buy how they imagine using them will make them feel!”
What logical sense does it make for any consumer to buy a vehicle that will be worth thousands less than they paid as soon as they drive off the dealership lot? Their purchase has an emotional aspect that cannot be ignored.
Dealership training must focus on the emotions and feelings of in-market car shoppers. Two basics things motivate humans: avoiding pain and seeking pleasure. Dealers should train their staff to direct conversations with their clients toward those feelings that will give them the pleasure they are seeking.
RETHINKING TRAINING FREQUENCY
Car dealers need to train their sales staff every day! They may think that they don’t have the material for daily training, but they are wrong. A dealer’s sales staff can easily conduct their own training meetings daily. The GM/GSM should be the training facilitator and the person who holds their team accountable, not the content provider.
The sales meeting facilitator can walk into a meeting with a portable white board in hand. The facilitator starts by asking the sales team what is a situation that someone is having trouble overcoming. They write it on the board. Then they go around the room and ask if anyone else is having the same problem; heads will nod affirmatively.
The facilitator then asks who has a solution that they would like to share. Veteran salespeople love to give green peas and those that are struggling their opinion.
In this scenario, someone else will chime in and the salespeople are engaged. The sales team actually starts training each other, and the facilitator keeps the discussion going. There is never a lack of material and conversation when this strategy is used.
KEEPING THE TEAM MOTIVATED
I don’t care how much dealers train their sales team, spiff them, yell at them, threaten them or beg them. Salespeople will not be motivated until dealers understand what their real “why” is. Their “why” that is a “must,” instead of a “should.”
Sales managers need to take five minutes at the start of each month to sit with each salesperson and see what it is they absolutely “must” have this month or quarter or year. I’m not talking about number of units sold or money made. I’m talking about their “why.”
Managers should encourage sales professionals to express what it is they really want, which will become their “why.” The manager should write down their “why.” Let’s say one employee’s “why” is to get a new home. The manager then investigates why is the new home a “must,” rather than a “should.” In this case, the salesperson just had another child and needs more room.
Too often, we all say, “I should do this” or “I should do that,” and pretty soon we end up should-ing all over ourselves. Have you ever found yourself under a big pile of should? I know I have.
Once the manager has the salesperson’s “why” and “must,” they need to obtain the “feeling.”
Remember this quote from earlier: “People don’t buy our products, services or ideas; they buy how they imagine using them will make them feel?” The salesperson’s “why” is a feeling. The sales manager must ask the salesperson how it will make them “feel” to get their family moved into a bigger home.
The salesperson will answer, and the sales manager should write down how they’ll measure the employee’s progress, because you can’t manage that which you can’t measure. Their answer might be to create a separate “new home account.” Finally, the sales manager should ask the salesperson to write down what results they’re not getting that they need in order to accomplish their “why.” Managers who follow this recommended process should give a copy of the discussion to the employee and keep a copy at their desk. The next time a salesperson says their clients won’t follow the dealership’s proven processes, the sales manager can pull out that folder and open it to their “why.”
The manager will remind the salesperson of the commitments they made to themselves and will see to it that the salesperson follows the processes correctly every time. After a while, all the manger will need to do is reach toward the drawer that file is in, and the employee will get back on track.
TAPPING INTO THE MARKETPLACE
I often hear dealers proclaim that it’s very difficult to find good salespeople for their dealership. I want to challenge that thinking, especially at a time when we have record unemployment.
Could it be that the benefits of working at a dealership are cloudy at best? Dealers cannot afford to ignore the tried-and-true wisdom of Fortune 500 companies and other dealers that publish best practices for attracting, training and retaining employees.
Talented superstars are in every local market looking for a new start a fresh career. Dealerships offer an outstanding career opportunity compared to other businesses in the local market. Dealers who want an Unfair Advantage must revise their HR practices and invest in training and retention.