As a dealer or manager, there's never been more things to follow in a dealership than in today's market. Your sales team and their performance is critical to your continued success. If you're in a growth pattern right now and you need to hire, here's a few items to stay aware of and a few to steer clear of. The goal of this article is to help dealerships make smart decisions for hiring in order to reduce turnover and costs associated with re-hiring and re-training.
As any NFL team owner knows all too well, a high number in the draft does not guarantee a Superbowl win. While the new pick may be best in class according to his stats, they can also come with a lot of inexperience, or, in the case of a trade, some pretty big baggage.
Most dealerships aim to hire "first rounders" with strong credentials, but few look honestly at the big picture. While a top performer at one dealership is a good indicator of production, the costs for hiring the wrong person, experienced or not, can cost you more money than if you'd never hired them in the first place.
Character first, credentials second
I've had the great opportunity in my career to watch dealerships make knee jerk reactions to their hiring practices just because a dealer found a stray customer on a Saturday, and ends up hiring just to get "the body count up". Hiring for the sake of math is only one ingredient in the recipe.
These "body count" sales reps often fall into two categories—green-peas with a whopping 0-90 days experience under their belt, or newly hired veterans who may have the credentials, but not the character. In either case, you've now got your work cut out for you to get your new crew acclimated to your culture, and your systems.
The main thing to consider is how your new hire will work with your customers. The selling process has evolved from a less educated buyer to a much more savvy buyer. With more than 80% of all consumers researching their purchases online, they've also got more ammunition about pricing, trades, rates, and payments. Is your top performer used to working with this type of customer?
Salespeople, particularly young and less experienced salespeople, often get mowed over by these customers, who force them into becoming order-takers, and paperwork and delivery specialists.
According to NADA, the turnover rate in the average dealership is nearly 100% turnover year after year.
Continual hiring, or rehiring, besides being time-consuming, destroys teams, mucks up morale, ruins efficiency and hurts your dealership's reputation. In short, a dealership should function like a well-oiled machine. With this type of turnover, the engine will barely turn over.
To get out of this vicious cycle, dealers and managers must be prepared to coach, train, consistently mentor salespeople. To best accomplish this, hire for character instead credentials.
Six Keys to lowering Salesperson Turnover
Get clear on your vision…and theirs
Communicate comprehensively. Write out a detailed job description for the exact job you arere hiring for. Then lay out the commission structure and exactly how it works. Set parameters and keep rules of engagement very clear (including no over-promising).
What is the candidate ultimately seeking? Are they applying for a salesperson job? Or as a springboard to something else they ultimately want?
Make hiring an “all-in” experience
At our dealership, which was a top 100 nationally ranked new and pre-owned group, we would have every sales and finance manager interview the same applicant in separate interviews. Our thinking was that if everyone had a chance to meet them, the more likely we could get a better perspective of who they really were, and what they really want. We looked who had experience, who didn't, and who might be high maintenance. Then, we'd weigh the good with the bad, and among the biggest priorities, we made sure we circled our wagons and compared notes.
When all was said and done, everyone had to give a "thumbs up" or we didn’t hire. Besides providing a balanced, well-rounded perspective, it helped weed out salespeople who were blowing smoke or trying to work both ends against the middle.
Carefully define your what job you wish to fill
Hire the right person for the right job. A talented used car salesperson may not fit in the new car department. Are you looking for a new car specialist? A pre-owned only salesperson? Whatever you do, don’t try to fit a square peg into a round hole.
Train for consistency among all salespeople
Remember that your dealership training should focus on equal parts of product knowledge combined with selling techniques and steps to the sale, according to your dealership.
The emphasis on both product and process is critical to ensuring a consistent customer experience, so that no matter what salesperson your customers talk to, they get a thorough and top shelf experience.
Don’t play games with the pay plan
Adjusting, or as your salespeople properly call it, "playing with the payplan", is the best guarantee of turning over your sales team. If your team feels that you are looking out for them, and not just playing them, they'll reward you with loyalty and production. If they start making "too much money", you probably are doing just fine yourself.
There are many ways to help your bottom line, but this, in my opinion,—this isn’t one of them. Loyalty will suffer, turnover will increase, and ultimately the gains made by squeezing sales teams will pale in comparison to the brain damage caused and cost of rehiring/retraining.
Understand the mindset of individual sales reps
While baby boomers may want big bucks, millennials will gravitate toward a pleasurable and flexible work environment. Millennials tend to value time off to balance their lives with other pursuits. They’re far less likely to go great guns for a spiff.
Tuning into these realities, in addition to individual likes and dislikes, can help focus interviews and offers in a meaningful way.
And help get people who will drive the dealership forward for years to come.