Sales Managers and Dealer Principals typically measure a sales executive’s performance by sales results. But is this really what we need in the changing automotive retail environment?
The pay structure of sales staff hasn’t changed substantially for years. In the late 90’s I was paid a base salary (7,000 GBP springs vaguely to mind) and 8-12% of GP retained (depending whether I was on target or at my stretch target), plus some other ‘good practice’ bonuses. Today a new car sales executive structure is pretty similar, with most of the wage made up of commission and it remains one of the best paid roles for non-graduates.
While the core of a sales executive role is the same as it was 25 years ago (many dealers will see the road to the sale as the training blueprint), the customer journey has changed dramatically, even though a showroom visit is still part of the process. This last part is also under threat.
There are four significant changes to the role;
Brand experience is key. There is an increased focus on quality of customer service, typically driven by the manufacturer / distributor.
Customers are much more likely to be pre-qualified (because customers having done their research online prior to a visit, are likely to know what they want, by the time they come into the showroom).
There are more fixed margin cars, where the sales executive’s focus is to guide a customer to the car that is the right one for them (not the best ‘deal’).
The role requires increased IT competence.
However, few dealers have a remuneration package that reflect these changing dynamics.
Given that pay is high (significantly better than staff in other non-graduate or retail roles, see Table 1) why does the industry face challenges in recruiting and retaining vehicle sales staff? And why are most vehicle sales staff male? In retail hours are often more punishing in automotive than other retail environments. Perhaps it is time to think about what we really want from our sales staff and how we pay and retain them.
Boost Auto believes sales executives should be guided and rewarded to do these things:
Deliver excellent customer service at every touchpoint.
Answer online enquiries and online chat promptly and effectively.
Encourage test drives.
Ensure vehicle appraisal process is followed correctly.
Use DMS / CRM with high levels of accuracy (use the three touchpoint rule).
Prospect from the DMS.
Ensure existing customers are valued, and feel valued.
Encourage online reviews from customers and prospects.
Represent your dealership and brand at a high standard and with integrity.
Assist with finalising vehicle selection, accessories and finance.
Understand competitor specifications and price points.
TABLE 1: Comparable pay
There is a clear quality of service requirement for the role, coupled to a high level of computer literacy required. So why do we insist on paying per unit?
Sales remains a measure of success, but given that customers are pre-qualified to a degree and tools like AutoPlay make tracking lead status simple, what are we asking our sales staff to do, that any customer facing staff member couldn’t do?
Our high pay rates for retail sales executives often create a tension in the dealership because there is a substantial disparity between pay for service reception and a sales executive for example. Yet both have complex and demanding jobs.
In dealerships, sales staff are usually highly competitive, and sometimes their competitive edge gets in the way of a harmonious work-place. At Boost Auto we are firm believers in role rotation. It helps staff understand the other’s perspective, and enables them to understand pain points such as the downstream importance of good data, good customer handovers, and good customer care. It also helps A-Type sales people realise that a sale and a delivery is not just down to their skills. If we moved from a sales focussed role to a customer care role, could we rotate staff between sales and service?
If we paid staff a higher basic but a lower overall remuneration, could we have more staff to deliver a better level of customer car? Would our sales rate suffer?
If we gave our staff 40 hour contracts would our staff retention rates increase? We ask sales staff to work 50 hours a week, 6 or 7 days, sometimes 10 days at a stretch to cover holidays, weekends and staff absences. Is this necessary? With lower wages, but higher basics, we could probably employ more staff.
I often wonder about the best performing dealer I have visited. They do not pay commission. Instead staff are paid a higher basic and a profit share. The team are a tight high performing team, with a great customer first attitude. Is it coincidence?
Here are the Boost Auto Top 9 recommendations for increased dealership role satisfaction, staff retention, career development and more sales.
Refine all sales Job Descriptions to make excellence in customer service at the core of the role.
Introduce staffing and rosters to support a 40 hours week and work life balance (with overtime options for those that want it).
Develop regular structured feedback sessions and training programme.
Develop a strong team culture – and regularly measure it.
Ensure the recruitment process reflects the changing demands of the role – culture, attitude and fit should be more important than how many units a sales person sold in their last role.
Have a clear career pathway for staff across functions, as well as vertically.
Encourage and promote role rotation for all staff within the business, from service reception to techs and sales managers.
Work with industry bodies, NZQA, MIA and MTA to raise the profile and career prospects of automotive retail.
Develop rounded staff to assist with your business’s growth and development.
We realise that some of these suggestions are controversial; they shouldn't be. They are designed to stimulate thought and debate. Perhaps they are what is needed for your business.
Reach out to Boost Auto for more assistance in making your sales team stronger for tomorrow.