Those of us that sell cars for a living know that once we sell a car the work is not done; there is a lot to do after the sale. One of the keys to our success is fostering long-term relationships with our car-buying customers.We do this by taking good care of our current customer base. We follow up, we provide personal service, and sometimes just a sympathetic ear for any issues they may be having.
Sales Staff and Spending at the Dealership
As a dealership, we spend a great deal of money to keep our current customers happy; we send out emails with special offers, our BDC calls to follow up and set service appointments, and the manufacturer provides leads for us to call and sell additional vehicles. This money is spent to keep the wheel turning; after all, we don’t want to miss a deal, do we? Who wants to waste money being ineffective?
Every dealership hires sales staff to be their front-line soldiers and be the face of your dealership. These people are a very important part of the team. Dealerships tend to think that everything begins and ends in the sales department. If this is the approach, then why do we pay so little attention to retaining these important people?
Sales Staff from a Hiring Perspective
As the owners and CFO’s of dealerships, you keep a close eye on the bottom line. We know that you don’t like to waste money and always try to invest wisely in your dealership.
How much money flows out of your pocket yearly by turnover and poor retention and by constantly having to hire and train new salespeople? According to a NADA Workforce study conducted in 2016, the price tag for hiring is $500,000 dollars each year for the average dealership! This seems outrageous, but it’s true. Dealers try to save pennies but unknowingly throw their money away by the dollar. Why? Mostly because it is an invisible cost
- Recruiting and hiring/advertising costs
- Managers time wasted performing ineffective interviews
- Loss of qualified candidates to other dealerships or roles
- Certification and training costs (or lack thereof)
- Inexperienced sales staff wasting time trying to learn by observation or “shadowing” another salesperson (does this ever really work well?)
- Loss of customers and potential deals caused by being mishandled by inexperienced or unprofessional staff
- Lack of customer continuity and loyal repeat business; don’t lose out on this low-cost and high-return approach to sales
There are more, but I think you get the idea. What can we do about this? There are many things we can do to improve our hiring and training process, which is the purpose of this series. Today’s focus is new hires and how we bring them onboard at our dealership.
The Newly-Hired Car Salesperson of 2018
To start with, let’s look at who our new salesperson is. Millennials comprise 60% of our new hires. Millennials are known for their job-hopping tendencies, and that is certainly true at dealerships. According to a recent NADA report, millennial turnover is at 54%. This is costly to dealerships.
If we do not nurture and captivate this group, this figure will rise. With that being said, they are not the only demographic of people that we hire, and are certainly not the only new salesperson that mentally checks out within hours or days of joining the dealership. If new hires are unhappy or don’t fit in at your dealership, you are back to square one in the hiring process. That’s a waste.
Why We Lose New Dealership Sales Staff
Let’s suppose you find a great new candidate, eager to join your team, there is a lot that can go wrong (or right) between the time an offer is accepted and the time the candidate becomes a fully integrated contributor to your sales staff.
At best, most new hires attend an orientation meeting where a person from HR does the mundane task of explaining the paperwork needed to bring them aboard. They explain the benefits package and fill out the appropriate tax and insurance forms. Often at this time, there are questions in the candidate’s mind about the pay plan and work schedule, something that the hiring sales manager briefly and poorly explained to them. Is this the right person you want explaining your pay plan? Strike one.
Believe it or not, this is where we start killing our new hires and it continues from there. We can do better for ourselves and for our new people. We must not lose sight of the fact that these people’s lives and those of their families are in our hands.
Control and Reduce Dealership Turnover for New Hires by Avoiding These Mistakes
Once the HR process is done the newly minted salesperson is sent to the showroom where they are often told to have a seat, and when a manager is free, they will talk to them. The length of time this person waits will vary according to how busy the dealership is at the time, but I can assure you even 5 minutes is too long! No one wants to feel neglected, especially at their new place of employment.
Remember their state of mind: they may be scared, nervous, or unsure if this what they really want to do for a living. All this delay does is magnify those thoughts in their minds. This occurs because there is no onboarding process established. Most dealerships don’t even have a manager that has been assigned to handle this delicate process. In other words, this is not the priority it should be. We now have two strikes against the new hire and they are only a few minutes or hours into their new career.
Since we do not have a plan or a process in place the next steps can vary wildly from dealership to dealership, but it usually consists of something like this:
- We tell the new hire to sit and read some brochures
- When they get bored doing that, they’re told walk the lot to familiarize themselves with the inventory and where it is parked
- They then sit with another salesperson and watch what he does, while being quiet: don’t interrupt or ask questions. Joe J. loves this because he now his own free assistant to do all his dirty work.