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Car Dealers, Fire All Your Salespeople Today!

Can the argument be made that today’s car dealership would increase earnings if they fired all salespeople and implemented a new process from scratch?

Let’s start with creating a BDC. We would hire women between 35-50, pay them $20 an hour to set appointments. Most of these women would be moms with kids in school so getting to the dealership by 8:00am would be no problem.


After the BDC confirms the appointment and the customer shows up, they are welcomed with signs “putting the fun back into buying a car!” The signs also explain that no one is on commission.

We will also recruit women between 21-28 years of age to be “Ambassadors” of the dealership which consist of an attractive personal appearance, strong verbal skills for product presentation, enthusiasm, and interpersonal skills. These Ambassadors would take the customer through a detailed list of to do's including the vehicle selection, walk around, test drive, etc.


After the test drive, the “Ambassador” ask the customer if they would like to buy the vehicle. If they say yes, we just escort them over to the F&I manager.

I can see the happy faces now of the customers. No longer do they feel intimidated or controlled. They can finally relate!


If all this sounds familiar, that means you have read Kurt Baumberger’s book “Adapt or Die”. Not only does he suggest this formula, dealers are already doing it! Is it the right thing to do? Oh, by the way, it is suggested that the salespeople could all be moved to selling only used cars since there is more profit in used cars and “there is inherently less trust between buyer and seller anyway”. (Again, in the book)

The argument is that we automate to eliminate. With all the technology today, has the salespersons duties been eliminated?


Another book, Cars and People by Anthony Douglas Ziegler, the automotive salesperson is to perform the following duties:

• Meet and greet
• Qualify and conduct fact-finding
• Build rapport
• Vehicle selection
• Inventory walk
• Present product
• Demonstration drive
• Dealership tour
• Unmask and handle objections
• Write up
• Negotiate price
• Overcome price resistance
• Conduct trade-in appraisal
• Justify trade in value
• Present finance options
• Explain financing terms and conditions
• Up sell accessories
• Cross sell finance and insurance products
• Close deal
• Resell benefits
• And more>>>

The car business is so important to America. To push the automotive salesperson out is just a big mistake. The automotive salesperson is a professional who earns every dime they make. To fire them is like throwing the baby out with the bath water. Why not train them better or better yet, hire better in the first place? Look at professional salespeople like Robert Wiesman “Your Hyundai Guy”!  . You going to fire that guy? Does he not make buying a car fun again? 

What is wrong with Commission?  Put everyone in America on commission. You work at McDonald's? Commission... You want fries with that?  The "meal deal" gets you a nice, big, cold, refreshing soda with ice on this hot 105' day? Or, Senator? Commission... You cut the deficit, you get paid. City worker? The more roads you fix, the more you get paid.

Will technology eventually replace the F&I Manager? How about the Sales Manager? If you don’t have any salespeople, do you need a salesmanger? What about the GM? Just saying! Are we going to automate all ourselves out of a job?

Let’s say you?

Views: 4280

Tags: automotive direct mail, digital marketing, direct mail advertising, direct mail printers, mailers, todd, vowell

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Comment by Todd Vowell on March 15, 2013 at 10:06am

Criss, your professor story reminds me of that movie "Flash of Genius" about Robert Kearns (RIP) who invented the intermittent windshield wiper. While reading from a book, he made the argument that the author didn't invent the words but he did put them together in a certain way and that is what the author of the book owned.

With that said, I just cant agree with you more and could never explain it that way (wish I could). There are several social media and digital "gurus" on this site who believe a car can be thrown in the shopping cart just like a head of lettuce, a DVD, and some saltine crackers. Lets see if they "show themselves"... :)

Lastly, Scott Painter hates automotive salespeople and he will continue to use dealers data against them. Yes he turned it around and I salute. But, just wait...

Thanks again Criss, great post.

Comment by Tom Gorham on March 15, 2013 at 8:02am

Criss, you are awesome! Your fantasy dealership sounds like my dealership. LOL! Just kidding. Best comment I've seen yet! Thank you friend!

Comment by Todd Vowell on March 15, 2013 at 7:29am

Chriss Castle! 36 year old gay males, roll in the mud, butch lesbians, fantasies! WELCOME TO FRIDAY! Where to begin? Criss, great great great post, thank you so much, that is just awesome! I agree with you on everything down to the Rolex. But, there are dealerships who practice this or the author of the book is not being truthful.

When you have some time, maybe you could expand on the commission part? I would really like to hear more about what you mean by "There are no commissions paid to sales people there. Sales managers have a different pay structure". 

On the technology, we are moving so fast, the argument is, (technology has given the car buyer the ability to fact find, educate, and learn everything about new vehicles including even what the dealer paid so what use is the salesperson?)  I don't subscribe to that but its out there and its a shame...

Comment by Todd Vowell on March 11, 2013 at 2:17pm

Wow Jason, what a great pay plan. Hey if the salespeople are happy, making money, no telling what numbers they can put up!

Comment by Jason Mickelson on March 11, 2013 at 11:35am

Oops, I should mention that this dealership, which probably overpays it salespeople, has been one of the fastest growing dealerships in the country.  It has also been the #1 certified dealership in America for the past 6 years.  Is it a coincidence?

Comment by Jason Mickelson on March 11, 2013 at 11:32am

Schedule are probably an issue for many.  Do you think the schedules are the problem or is it the requirement of the profession.  This is retail and retail requires you be there when the customer is ready to come through your door.  I am not sure the schedule has ever changed.  The hours never bothered me personally as long as I was making six figures, but I know this is an issue for many. 

 

Also, to echo some of the things that Ralph mentioned.  My last sales plan was one of the best in the business.  It included:

Commission % that increased depending on unit volume (helpful if you sell new and used)

Big mini commissions on new if you were below invoice (great if you sell mostly new)

small bonus for service contract and auto armor (if you were above the curve you made bank)

Increasing percent on total dollar of accessories sold (usually  $800 to $1,000) 

CSI Bonus up to $1000 per month ($0, $500, $750 and $1,000 based on your individual score)

Units bonus starting at 15

 

Great pay plan that helped sales people focus on the individual sale and their month.  I never stopped pushing for another deal. 

Comment by Chip Dorman on March 11, 2013 at 8:18am

These are all great posts, but they are entirely focused on compensation.

What about work schedules?

Our work schedule is insane. To be successful, a car salesman must be:

1. Single

2. Have a very understanding wife

3. Have no kids, unless they have a very understanding wife and make enough to support his family on his paycheck alone.

Notice I referenced men in the exapmple above. The demands of the job almost completely eliminate women with children. Nothing sexist, just the facts of life.

If we want true professionals and happy employees, how do we structure their work hours so that we don't kill them and destroy their personal lives?

Comment by Tom Gorham on March 10, 2013 at 11:47pm

Todd, no.  I haven't experienced some of the things that we are talking about. I've been at our store for 13 years and many of the sales staff have me beat for longevity.  We operate on performance based pay... commission, bonuses, etc.  Nothing that Ralph said nor what I said goes against that.  For example, our BDC people do not make commission; they make bonuses.  That is still performance based.

Comment by Todd Vowell on March 10, 2013 at 8:15pm

Mr Tom Gorham, was reading your post again (thank you for taking the time to comment) and I was wondering, in the past five years, have you seen the pay plan at your store cause any top talent to leave?  Has your store changed the pay plan away from comm? Don't answer if that's to personal. You just said some things that made me wonder if you have experienced first hand, some of the things we are talking about? Thanks.

Comment by Todd Vowell on March 10, 2013 at 2:48pm

Ralph, thank you for the post and detail. There is so much to say. But no matter how you look at it, what your beliefs are, commission or salary, If I'm a dealer and there are 10 new car franchise dealerships around me, I'm going to make sure that when salespeople talk to each other (and they do, make no mistake about it), I'm going to be the dealer that pays the most (If you are good). I'm going to have that "reputation" as the dealer who takes care of his TALENTED salespeople. I WANT THE BEST TALENT IN TOWN at my store. If your a tight ass, (again, it is also well known!) 

If you have the attitude that your going to have success and take as many people with you as you can, the money will always be there.

Getting back to your plan Ralph, the "TEAM CONCEPT" is great as long as there is enough people to create the most important factor ever and that's "COMPETITION from within".

With one of my companies I started, we set up four regions with four regional managers. (There is your competition with teams.) Then we had freshman, sophomore, Jr, Seniors. You started out as a Freshman with a small work station, desk, and computer. The Seniors had their own office, big leather chairs, nice computers, Desk, storage, etc. The Freshman had something to shoot for. It was an environment that screamed competition and success. EVERYONE that made it two years, earned six figure. Oh and yes it was commission!

I realize Car Dealers have many elements to deal with though. They have companies that post what they pay for cars online and so on. But dealers that are creative, competitive, and are driven to succeed, still earn great money. Focusing on talented people and creating an "EXPERIENCE" for customers still counts!

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