A dealership’s salespeople humanize your brand and make you more responsive to customers: 97 percent of car buyers would like to select a salesperson before they visit a dealer.[i] A recently published Wall Street Journal article, “Dearth of a Salesman,” underscores why dealerships need to invest into their salespeople.
Citing data from talent management firm Hireology, the article says that nearly 60 percent of dealership hires are millennial workers — and more than 50 percent of those new hires turn over annually. Dealerships face a multitude of challenges attracting and keeping salespeople from the millennial generation, including outmoded selling and compensation practices. For instance, too many dealerships, paying salespeople on commission, expect salespeople to haggle with customers over a vehicle’s price, which puts salespeople at a disadvantage at a time when customers are armed with detailed data about car features and prices before they visit a dealership. According to the article,
“With more buyers walking into dealerships armed with pricing information pulled from the internet, salespeople are finding it more difficult to retain the upper hand in negotiating a car’s final price. That has caused profits on new-car sales to shrink in recent years, and along with it, the potential commission a sales staffer can earn upon closing a deal.”
In addition, the position of salesperson continues to suffer from an image problem. The article cites a 32-year-old dealership salesperson who says, “When his friends hear the term “car salesman,” they think “plaid coat and gold pinkie ring, 30 trips up to the office to talk to the manager . . . and the salesperson pretending to be your friend.”
“Dearth of a Salesman” should be a wake-up call to dealerships: investing in your salesforce is a must-do. And some dealerships are responding, for example by re-examining their fundamental approach to compensation. For instance, earlier this year, Evelyn Chatel, general manager and part-owner of Freedom Auto Group in Pennsylvania, told Cars.com that she recently revamped Freedom Auto Group’s compensation model from commission-based to salary-based.
“Our people are not paid commission,” she told us. “They are paid salary. I don’t want them to push what they need to sell to hit a number. I want them to worry about taking care of people, not their pocketbook.”
Uplift Your Sales Team
Dealerships can and should build up their salesforce in other ways, such as treating salespeople as consultants. Salespeople remain the most important element of the car-purchase decision. They are in a position to navigate car shoppers through the entire process of researching, buying, and servicing a vehicle. They should be armed with the right training and tools to help them stay abreast of the many ways cars are evolving, such as the growth of voice-based infotainment systems. They should be immersed in the same research tools that shoppers use.
On our blogs, Cars.com and our DealerRater brand are publishing ongoing insight into how to empower salespeople. In addition, for more insight into how to uplift your sales team, read The Cars.com Guide to the 4 Ps of Automotive Marketing and The DealerRater Guide to Online Reviews.
[i] DealerRater, “Car Shoppers Are Judging You,” January 2017.