How Many Salespeople Does A Dealership Need?

I asked this question on Facebook with the hopes of starting a good debate... boy did it ever! Here is the full, unedited responses from that question.

AutoMax RecruitingHow many salespeople does a dealership need???

• AutoMax Recruiting: Loaded indeed...I have some thoughts,let see what others may think,I get back to you with our "formula"

• Ray Sciarappa: Almost "any" dealership 'needs more than they have and most need more then they do - but if they are the "right ones" there's never enough or too many...how's that for SPIN!?

• AutoMax Recruiting: lol...That's a good "spin" Ray!

• Chris Costner: My thought would be to look at the true effectiveness of your current sales staff and compare to sales forecast. That will let you know how much more staff needed to reach goal.

• AutoMax Recruiting: Internal forecast or factory?

• Karen Powell: I think traffic should be a consideration 😉

• Dan Perez: Traffic does not matter, quality people create their own traffic, I would have to say depends on training, internal processes and follow up as well as dealership goals...

• Chris Costner: Internal as it would include preowned department as well.

• Wendell Hardy: Great question. Every market has a different amount of units that will be sold each month. How much of that "pie" are we trying to get. Forecasting is the key(realistic internal forecasting). How many units does the store have on the lot, are they maxed at the floorplan line/limit, and how many customers come on to the lot monthly. I will say that I have NEVER seen a dealership that doesn't have room for a TRUE professional. Keep in mind that the "bottom 20%" of any sales staff should always be evaluated until everyone is averaging a minimum of 10 units each. Facility size also plays a part. A TON of variables regardless.

• Karen Powell: Traffic matters you can't run 200 ups with 2 people...traffic would play a part if you're not looking at your traffic you are missing basics...closing ratios ect ect

• Daryl Calhoun Jr.: I think most need 5 peope who want to listen and do as instructed and maybe 2 to 3 real deal closers.

• Theodore B Nolan: Owners want a thousand, salesmen want one.

• Craig Darling: The best answer I have seen yet is Wendell. I would use a rough number of 1 for every 5000 population count in your market area.... but I really don't know.

• Bob Gaber: The correct question is easy: How many well trained, committed salespeople does a dealership need? The answer is more.

• Nancy Castonguay Simmons: Should never be factored on "Actual Sales"...This formula promotes complacency and an Automotive DisneyLand for underachievers! Population, Market Share, #Internet Leads, FloorPlan potential can all play a part and then add a % more for days off, training time, calling in sick, turnover, promotions, etc...

• Wendell Hardy: I disagree Bob. More isn't always better. There comes a point of saturation. If you use a normal or even above closing ratio, then you do hit a max #. At that point, you would have talented people leave, due to a constant flooding of the floor. Again, how many $ is the dealer spending, and how many "ups" are on the lot monthly? I'm sure your response would be, "prospect for more customers" and I would agree...but there IS a point of saturation. On a different level, how many people will your showroom hold? The answer "more" is the right answer for most stores, but if your dealership is in a market of 25k rooftops, should you have 50 salespeople? If the dealer only can carry 75 new units, and 30 used, is MORE really the answer? Just my 2c....

• AutoMax Recruiting: ‎"The Law of Diminishing Return"............Folks my thoughts on this may torque a few people up and may be a bit self serving based on recruiting and training salespeople for dealers is what my company does...However, I find far to often we do make our decisions based on some of the variables mentioned,traffic,ave sales, forecast, inventory, population etc...Today is a far different day,with the Internet,a good BDC Dept and inside and outside sales reps the location of the store doesn't matter as much,stores in very rural areas are having great success. Makes no sense to hire based on "That's what we typically run with"...or we only have 3 empty desks....or we want to do 100 this month,AVE guy does 8 or we need 12+...Traffic count is X and AVE salesperson can effectively wait on 2.5 per day...Who is counting the traffic?..what's an up?....Why not just use a very basic well known economic Law to guide our decisions?...Google the Law to much to write here but basically states all other things being equal we add until that addition had adverse effect on total productivity....Let's not limit ourselves by our sometime ancient limiting beliefs about such things. How big can your store be?

• AutoMax Recruiting: You might say "well Craig that will destroy the best salespeople,cost them money" etc...I say baloney...REAL salespeople like Theodore B Nolan will always find a way to beat a pay plan and end up at the top of the board every month...as will any top producer.

• AutoMax Recruiting: Now at some point as the "Law" states the return will in FACT diminish...but when was the last time we really pushed that Law to the Wall?

• Dan Perez: NEVER
• Dan Perez: Too many sales people expect the store to do it for them, too many owners don't want to take risks because they were burned once, too many desk managers are reveling in the 80's and 90's, too many blah, blah, blah, blah... with the Internet, Brokers, Bid Business, etc, any store can do way more than the actual store can hold in inventory, just depends on the thinking of the individuals working there... I will google the law...
• AutoMax Recruiting: That's right Dan ,any store can do more....keep in mind everyone I am NOT talking about the good old "flooding the floor"..I am suggesting we push that number to its max...let's see what that store is truly capable of...
• Joe Sorenson: As many as it takes to reach their monthly goals and need taking into account: vacations, illness, accidents and weather events. You never need to flood a competant crew that is properly scheduled and managed(supported).

• Wendell Hardy: Again Craig, a VERY loaded question that doesn't apply to all. Your answer, and most responses are designed for stores that are ran by "knuckle heads". I don't condone a "country club" atmosphere, as I have NEVER worked in one...to address the original question, on a "across the board/blanket type response", ALL stores that are stuck in a rut need to add fresh blood and well trained people. Your company is great at that! My point would be, ask Glenn how many new hires could we have brought into Peach County? I would bet, he wouldn't say "more" after a certain point. GREAT TOPIC, as always. Best....

• Bob Gaber: Wendell, I wrote more quality, well trained salespeople and not just more... Volume never equates with quality. Sorry about the confusion.

• Wendell Hardy: I agree 100% Bob!!

• AutoMax Recruiting: All the other variables are the same....If proper recruiting/screening /training has taken place and we get the store to say 200 with lets say 18 people...and we think ,well heck add 4 more and that will take us to 250?...and you add those 4 more and your numbers go backwards or it cause an adverse effect to your net...you have reached "Diminishing Return" 

• Rick McLey: A better question would be how much front end gross should a salesperson generate, now before you go off and state"the desk controls the gross" a great salesperson will make the gross through rapport and a great presentation/demonstration.

• AutoMax Recruiting:‎ @Rick,are you saying my question sucks?....lol

• Jae Chang: I've always judged my team's production on % of market penetration on registrations. The numbers are a true share of market as volume changes month over month. Thru-put then is a direct comparison to your market.

• Gene Diehm: There is saftey in numbers. towns always quiet afte a hangin.

• Jae Chang:‎ 10 / consultant obviously has been used but with E-Commerce department, that number may go up to 13-15 / consultant.

• Wendell Hardy: How's that knee Rick? Been thinking about you, as I am not far from having to do the same. And Rick, we worked side by side in the #2 chevy retailer in the country. We did control the gross! I watched you tell HUNDREDS of salespeople that you were gonna "pass" on that deal...knowing damn well that they would come back with a better offer! We knew, that one of us would catch that customer at the door, if they didn't bump. Just saying...call me about your knee bro! Hope all is well..

• Rick McLey: lol...Craig, now I have not been around much in this industry but I do know that I paid my monthly expenses in gross profit and I have always taught my department managers to first figure what their department needs to generate in gross to return a fair net. Then factor in what is the average controllable gross per revenue generating employee and the divide by people...that will tell you if you have enough people...

• Rick McLey: doing well Wendell I start PT tomorrow and I am putting the final touches on my Interactive Marketing Software to be tested 2nd week in Nov.

The Law Of Diminishing Returns On WikiPedia

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P.S. I will update this post as more answers are given on the Facebook thread.