Jan 1, 2013

A Smarter Way to Invest in Your Salespeople

Smarter Way to Invest in Your Salesperson
Recruitment and retention of sales associates can have a dramatic impact on the profitability of a dealership. Long-term employees become the face of the dealership to customers who appreciate doing business with the same group of people each time they come to the store. Yet auto retailers consistently face difficulty with hiring and retaining good sales associates.

Traditionally, dealerships have relied on financial incentives — commissions — to drive production. The system depends on sales associates being motivated solely by money and a competitive nature. But many of the top dealerships go beyond financial incentives to retain and motivate their employees. They’re offering flexible work hours that allow employees to have a richer, more satisfying personal life, helping them stay healthier and even providing college scholarships to employees’ children. Some dealerships offer their employees free use of vacation houses or all-expense-paid trips for them and their families. One dealer even encourages his staff to bring their dogs to work.

A National Automobile Dealers Association (NADA) work force study on managing and retaining dealership staff cited recently in Automotive News found that the most successful dealerships provide flexibility in employees’ work schedules. This entails the matching of staffing levels to times of peak store traffic and a team mentality that fosters collaboration as opposed to competitions that pit individuals and departments against each other. A dealer in Texas allows his top salespeople and department heads to make their own schedules. As a result, total vehicle sales have more than doubled, the article reported.

The study also noted that pay plans work best when they provide opportunities for the majority of the team to do well as opposed to having one or two sales stars who leave everyone else in the dust. Plus, employees respond well to small rewards that show their contributions are appreciated – in addition to the productivity bonuses and sales spiffs that are standard at most stores.

Making employee retention a core philosophy

Prime Toyota and Prime Volkswagen in Saco, Maine, are ranked among the top 100 dealers to work for in the nation by Automotive News. They’re both owned by Prime Motor Group in Westwood, Mass., which grew out of the Ira Motor Group started by Ira Rosenberg. Employee satisfaction is one of the company’s three core philosophies, along with customer satisfaction and profitability, says Matt McGovern, vice president of Prime Motor Group.

“We have a reputation in the market where people gravitate toward us naturally instead of having to go to newspaper and online ads and headhunter agencies to attract new talent,” McGovern says.

One of the reasons that top, career-oriented salespeople are attracted to working at Prime Motor Group is that they know they won’t be micromanaged. Store and department managers have the authority to make decisions “on the fly” with employees and customers. “We don’t hold them back with what they can and can’t do as long as the decisions are consistent with our core philosophies,” McGovern says.

When hiring new sales associates, Prime Motor Group conducts “a fairly rigorous evaluation. We look for an enthusiasm for the business. They don’t necessarily need experience in the car business. Sometimes, we prefer that. We look for someone who is outgoing and has that spark in their eye.”

New sales associates attend a weeklong training program to introduce them to  the car business and explain the company’s entire sales process. “We embrace a newer approach to automotive sales,” McGovern says. “We like to have a set process that happens every time, so every customer is treated in that fashion.”

The training explains “the theories behind the questions we ask and the answers we’re trying to solicit, so we can address the customer’s needs in a timely fashion and limit the back and forth of price haggling,” he says.

But the education doesn’t stop there. Store managers are designated as the resident expert on the sales process and are charged with coaching their sales associates one on one on an ongoing basis.

“Some people pick things up more quickly than others,” McGovern says. “We make training a part of every day. The salesperson will call customers live with the manager listening in to provide critique. It’s a one-on-one learning experience. … All the employees know that if they have an issue or get themselves in a pickle, they can go to management and they’ll get help. They won’t get cut.”

Sales managers track each sales associate for closing ratios and whether the sales process was administered properly. Was the needs assessment filled out? Were shortcuts taken? Did they leave a clearly written roadmap so the sales manager can inspect it? CSI scores are watched very closely, as well as the number of surveys that are completed.  

One of the most frequent areas in which sales associates need coaching is in follow-up.

“It’s the grunt work that people don’t want to do,” McGovern says. “It’s not as exciting as the sale. But we close about 75 percent of the people we get back in the showroom, so we need to do it. We’re relentless about that.”

Sales associates also know that no matter which manager is working the sales desk on a given day, the process will be the same.

“Other dealerships don’t have a good, set sales process that is embraced all the way up to top management,” McGovern notes. “Whether it’s Mike, Joe or Mark on the desk, the deal will get closed the same way.”

Creating a clear path to success

Obviously, there’s more to retaining sales associates than training. Pay plan and the opportunity for career advancement are critical. McGovern says that the sales associates’ pay plans pay for production, with commissions based on profit, with bonuses for volume and CSI. Everyone knows exactly where they are at all times.

“We never play with anybody’s pay plan. We don’t move the goal post,” McGovern says. “There’s nothing more demotivating than to finally exceed someone’s expectations and then have them move the numbers.”  

Sales associates who are interested in moving up in the company are provided with “clearly laid-out goals and objectives” that will lead to promotion. “If you don’t have those laid out in advance, you can upset people and create people who want to leave,” McGovern says. “Give them what they need to do to get to the next level – it’s extremely important. If there’s not a position for them at their store, we’ll find them a spot at another store.”

Prime Motor Group also has worked hard on its scheduling to attract and retain outstanding sales associates. While some associates choose to work long hours, Prime Motor Group has complemented that core workforce with another group of sales associates who want a career in auto retailing but who need or want more flexibility.

“Maybe it’s a woman whose kids are grown and wants to work afternoons and evenings or a retired gentleman who is an early riser,” McGovern says.

Then there are the perks that make everyone look forward to coming to work. Prime Motor Group has been known to book a skybox for a Boston Red Sox game, rent limos and take the entire staff to a baseball game.

“We try to foster a great place with competitive pay, fair benefits and a culture where it’s an exciting place to work,” McGovern says. “We really don’t have any secret caveats. We just create the right environment and hopefully, people will stay.”