Pub. 15 2016-2017 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 2 , 2 0 1 6 30 new jersey auto retailer Building the Perfect Sales Team BY JARED HAMILTON T he entire automotive industry rests on the shoulders of the individual salespeople inside of the dealerships we run. However, showrooms across the country are showing signs of acute failures that will damage dealerships and our entire industry. The National Automobile Dealers Association (NADA) reports that salespeople are turning over at an astonishing rate of 72%per year, and half of those are leaving within 90 days. Turnover is costing dealers approximately $40,000 per lost employee.With pressures fromhiring and trainingmillennials and rising salaries fromcompeting industries, dealers have to find solutions to attract, train, and retain top talent. Turnover is the Silent Killer for the Sales Floor The real scary thing about the facts fromNADA is how little attention it is paid by us in the industry. However, the true impact of the sales person churn is staggering. We estimate turnover cost to be around $40,000 per employee lost and, on average, it costs dealers $150 in margin per vehicle sold (you can calculate your own “Turnover Tax” at turnovertax.com) . The costs are the results of hiring, training, and lost opportunity, but it doesn’t include time taken away from sales managers, the impact on the customer experience or the effect on employee morale. These additional factors could cost your organizationmore than themeasur- able financial impact. The fact is thatwe have just come to accept one of themost detrimental undertones of our industry: our sales teams are not hiring, training, and retaining the key talent they need to be successful. This trend can only last so long before the fractures in our sales floors completely disrupt our ability to sell at all. It is also the problemwe have to fix if we want to build the perfect sales team. The Results of the Perfect Sales Team Framing the perfect sales teamstartswith attracting the right people to our sales floor, onboarding them properly, investing in their ongoing training, and helping them grow within the organization. The sales teamis not being simplymotivated bymoney, but by providing a better experience to their customers and improving the dealershipas awhole. The perfect sales team is being built with individuals who understand they are not working in the “car business,” but the “people business.” A few dealers have figured out the formula to build the perfect sales team. They have built sales teams that are extremely efficient and, when a position opens, they have people lined up to take the spot. Not only do salespeople thrive in these environments, the dealership reaps outstanding financial benefits. A dealer in Michigan has cracked the sales team building code. His average sales person tenure is 12 years, earning 50%more than their peers and are so productive that sales cost as a percentage of gross is 1/3 less thandealer averages.His sales teamis living proof of innovative workforce strategies that have allowedhimto escape the sales turnover treadmill. To be able to get these same results on our own sales floors we need to: 1. Rethink the way we hire 2. Develop new compensation plans 3. Invest in our people from onboard to long-term.