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We’ve heard the complaints for years—for decades, really—about salespeople mishandling the phone, the floor ups, the follow-up, the sale, the close, etc.  And about how, nowadays, they also mishandle the Internet leads, the emails, and so forth.  Even though we “train, train, train!”  Right?  No!  The truth:  The “Elephant in the Showroom” is that, for salespeople, we get exactly what we pay for.  Especially now, we’re losing sales because of this.

Today, we place our salespeople across the phone, the Internet, and the desk from the most educated car shoppers in history:  We know that over ninety percent—we may as well say “all”!—of these shoppers have been to the Internet for product knowledge, inventory, and even (as much as they can) negotiation.  The buyer has been modernized, but the salesperson . . . has not.  And, frankly whether the “old school” managers agree with it or not, it is not the salespeople’s fault that they fail so much.  It’s ours.

We wouldn’t put a cave man (sorry GEICO!) into the Space Shuttle to land it, which is what the typical current car sales pay plan can provide for.  And we wouldn’t put a modern pilot into the shuttle but pay him/her only on the landing, which is the typical current Internet pay plan, too.

The fact is that no other large sales force is paid commission-only.  And we pay thinner and thinner commissions, and we know we do.  And, by the way, if finance mishandles and loses a finance-able customer that’s been landed on a car, the dealership loses a sale . . . but the salesperson loses the entire commission after working hard and closing the sale!  Not a new situation?  True. 

Except that not only are our shoppers more educated than ever in history, young people considering car sales careers are also the most educated on car sales realities in history, as well.  Just like our shoppers read about cars and car buying strategies online, your potential staff is reading online about how car salespeople can get financially “screwed” and work ridiculously long hours.  All that's out there on the Internet whether you agree or not that can happen to them at your own dealership.  And that type of negative information works to cut the quality of the candidates we all get nowadays—and I bet you’ve noticed that, too. 

We all know that our “Internet staff” are our most modern and adept sellers, or they should be.  Except that what we actually need aren’t “Internet Departments”, but instead ALL the sales staff to be equally adept on the phone, email, Internet leads, floor-ups, etc.  And, say, about that Internet Pay Plan that you know your Internet sales staff really likes:  I bet it’s getting expensive.  And maybe you want to cut it.  Maybe you think if you can make the floor folks smarter, or get smarter folks to come to the business, you can take it all back to the old floor sales pay plan.  Yeah!  That’ll work!

No, it will not.  We will spend much money and time training, only to compensate sales staff to a point where the sales folks we can hire, motivate, and retain are still far behind the current shoppers in knowledge and motivation! 

If you don’t think all this is true, take a good, long look at your Internet Department.  I bet it’s full of people who can show us all that the way to raise sales is to improve compensation and treatment of staff, not to go backward.  And, after reading this and considering it, if you still want to allow yourself to “get what you pay for” in your sales staff, then get your sales staff out of the phone & Internet business!  Staff an appointment-setting BDC that can turn customers over to the sales staff that you're willing to pay to have the average “sell-dresses-from-the-rack” level of ability.

Regardless, this Elephant in the Showroom isn’t going away until we fix it and attract salespeople who are a match for the Internet-educated shoppers we get today.  And, until then, sales ARE going away, right out of that same showroom!

The Elephant in the Showroom

By Keith Shetterly

Copyright 2009, 2011, All Rights Reserved.

Views: 85


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Comment by Anthony (Tony) J. Gauntner on February 26, 2011 at 8:34pm

I've found that in most stores today the consultants compensation plan is based on the  "what have you done for me today mentality" and their motivation to produce comes from a combination of management intimidation and fear of starvation. I'm sure all the GM's & DP's reading this are saying, wait we pay our producers great, their monthly bonuses can top 5 figures. Yeah, for a very,very select few veterans. How about the rookie? The only constant factor that today's consultant can rely on is the knowledge that they will be terminated if they fail to achieve their assigned quota.

Somewhere along the line most of todays upper management must have failed their Management & Human Psychology classes in college where we were taught that for one to achieve excellence & superior performance from an individual you should nuture and develop the human asset by motivating them with positive reinforcements, basic respect for the individual and a sense of  security. Today's enviroment seems to accept the mantra that the "burn & turn" of sales consultants is a good business model because that is the one that's in practice in most stores. That's how they control their variable expenses...short term thinking.  I've been in hundreds of them and worked for a half dozen and it's the prevalent practice...hire a new consultant, they sell their friends, neighbors & relatives, have a bad month then they're gone and the hiring / sell-a -few / firing cycle resumes.      

We,(the dealer body) need to return to the business model of the 1970's where sales consultants developed life long relationships with multi-generations of customers , were given demmos to take home to show their family & friends & sales was a respected career. Also during that era, all consultants were trained by the dealer & the factory and were RESPECTED. Today, not so much.  Today, the sales department is one big revolving door. Long term relationships with customers &

Comment by Keith Shetterly on February 25, 2011 at 9:29am
Right on, Jim!  :)

Comment by Jim Simon on February 25, 2011 at 8:51am

Consider the T-Ball game. Even the inexperienced players get a turn to hit the ball and while everybody may wince at the unfortunate strikeout, nobody beyond the batter really cares as long as we have more batters to follow. Sound familiar?


Comment by Keith Shetterly on February 25, 2011 at 5:52am
Oooooo.  Bryan, I really like "if you recognize the need for change, and don't, then you are in fact actively choosing extinction."  Great comment!  Thank you.
Comment by Bryan Armstrong on February 25, 2011 at 5:50am

I love it! Well said and great timing. I was in a very successful local Dealer last week doing some consulting and when we went over my review and recommendations almost every one elicited the comment "yeah, we know we need to do that. We've been talking about it for a while now."

I guess the opinion on my part is, if you recognize the need for change, and don't, then you are in fact actively choosing extinction.

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