Dealer Insights - May/June 2013 - 7 Tips for Boosting Sales Staff Retention

Sales force turnover has long been a stickler for dealerships, and it continues to be so in our postrecession environment. Survey results recently released by NADA University, the education and training arm of the National Automobile Dealers Association (NADA), reveal that about four out of every 10 dealership salespeople leave their jobs each year.

What’s more, the annualized average national turnover rate for sales consultants in 2011 was 39.6%, per results of the 2012 Dealership Workforce Study. The study was based on 350,000 payroll records submitted by nearly 2,400 dealerships nationwide. 

Here are seven ways to boost the retention rate of your sales staff:

  1. Check references carefully. Past behavior is the single most effective predictor of future actions. So make sure that you know how past supervisors view your candidate’s performance. Even if your applicant is coming from a field other than sales, get a grip on whether the person has those transferable qualities of intelligence, problem-solving, resiliency, reliability and persuasiveness. And don’t be afraid to ask about counterproductive work habits.
  2. Consider aptitude testing. Auto industry publications often carry ads for companies offering sales aptitude tests, and you also can find providers of this service online. Aptitude tests aren’t the end-all to finding the right employees for your showroom floor. However, they are a tool that you can use along with references and background checks to find out whether the candidate is suited to the job. While it won’t reduce your turnover to zero, prehire testing can help slow the revolving door.
  3. Compensate competitively and fairly. Consider the whole package — base pay and commissions, health insurance, retirement plans, vacation time and other benefits — and how it stacks up against your competitors. You can often find industry compensation study data, as well as 20 Group information, through your local dealership association — or your business advisor can help you track it down.

    Find a commission structure that works for your dealership, making sure that the monthly goals and related bonuses are attainable. And keep the “carrots” in line with selling a high-end product. Also, if your salespeople miss the minimum one month, don’t charge them back on next month’s paycheck. Set a positive tone at the beginning of each month.
  4. Give them time and support. “Born salesmen” are few and far between. So you’ll need to show patience as new salespeople get up to speed. Monitor your rookies carefully and make sure they get all of the tools they need to succeed. Remember, no one likes a bucket full of criticism without at least a spoonful of praise — encourage each sales staffer’s strengths as you develop them.
  5. Don’t overwork them. Give your sales staff a reasonable schedule with adequate time off. If your dealership is open every evening as well as Saturdays and Sundays, make sure that you rotate hours to give everyone a schedule they can live with over the long haul.

    Don’t make eight-hour days the exception, and don’t call in staff for sales meetings on their days off. This may be a challenge for dealers because, according to the NADA study, “There appears to be a strong correlation between dealership sales hours and new-unit sales.”
  6. Insist on equitable treatment. Do your managers give each salesperson a “fair shake” and the chance to succeed? Do they justly hand out perks and privileges, such as customer leads, weekend days off and pay raises? Does each member of the sales team feel appreciated for what he or she accomplishes? Hold your sales managers accountable for the attrition rate in their department.
  7. Analyze attrition. Every time a salesperson leaves, you gain the opportunity to find out why.  Exit interviews can be invaluable information providers. Or, for a less confrontational method, ask departing sales workers to fill out a written survey.

In addition, keep a scorecard to measure your attrition rate. As you review the scorecard along with data gathered from exit interviews or surveys, ask yourself what part of attrition is controllable and what part isn’t.

Dealer Insights - May/June 2013 Issue 

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