One thing is true of every automotive dealership: Sales staff is the core of its business. Salespeople alone can ensure that customers have the best possible experience when they walk into your dealership.
In this industry, making the sale often requires dealership sales staff to be willing to go the extra mile, diligently following up with customers, sensitively handling negotiations, and displaying next-level product knowledge.
In contrast, when salespeople do only the bare minimum required, it is usually due to disengagement at work.
Disengagement is one of the biggest factors affecting performance in the automotive industry. According to Gallup, approximately 85% of employees are disengaged at work.
In the absence of a clear explanation for why sales are down in your dealership, disengagement is often the hidden cause.
Counterintuitively, disengagement can be more challenging to address than clear-cut performance issues because it generally manifests itself in terms of acceptable, but unremarkable, performance.
Disengaged sales staff still tend to turn up on time, put in the required hours, be pleasant with customers, follow procedure, and meet baseline sales targets.
And yet, customers rarely rave about these salespeople, their performance will not exceed your expectations, and they may miss opportunities to close the sales that require that extra 10% effort.
Another side effect of disengagement is high turnover, with disengaged staff the most likely to leave your dealership.
Research by McKinsey & Co. found that the highest-performing dealerships had employee turnover rates 17 percentage points lower than dealerships in the bottom quartile.
In short, the top-performing dealerships have a higher percentage of engaged employees. Though many organizations accept disengagement as inevitable, this is a myth that causes performance to suffer.
Disengagement can be addressed—and overcome—in your dealership.
Tap into what attracted your staff to automotive sales in the first place
If one thing is true of almost all automotive salespeople, it’s that they like to win, and they enjoy friendly competition.
Although most dealerships track monthly sales per staff member as well as performance against sales targets, many dealerships don’t go beyond this.
You can introduce an element of fun and friendly competition into the workday by mixing up the targets—and the rewards—given to sales staff:
- Instead of tracking sales individually, form teams that combine sales, then have them compete against each other for fun or silly prizes.
- Change the time frame for sales goals. Instead of monthly targets, track and reward sales over a specific day or week, or during a promotion.
- Instead of sales volume, track a different metric, like awarding a special prize to the first person to sell three premium models.
- Track and reward not just sales, but positive behaviors that boost sales and service visits, such as callbacks, follow-ups, tours of service facilities, and running free clinics and workshops in the dealership.
Leverage intrinsic rewards
Most dealership salespeople are accustomed to extrinsic rewards like commissions, bonuses, and prizes. Extrinsic rewards are tangible goods or money.
Somewhat surprisingly, evidence from behavioral research suggests that extrinsic rewards are generally less effective than intrinsic rewards. Intrinsic rewards are rewards that have emotional, symbolic, and intellectual value, such as being given a sought-after opportunity, increased flexibility, or achieving a long-time personal goal.
For example, for a father with a new baby at home, an extra vacation day given as a reward for high performance may mean more than any voucher or shiny gadget.
The top-performing dealerships will incentivize sales staff with a mixture of both extrinsic and intrinsic rewards.
Build a culture of recognition
You may be rewarding your employees, but are you recognizing them?
Employee recognition is giving public or private kudos for good work, and it can be given at the manager or peer level. For some salespeople, this kind of recognition and appreciation is more valuable than tangible rewards.
In general, there is no one-size-fits-all strategy for employee rewards and recognition. The best-performing dealerships will offer a mixture of intrinsic rewards, extrinsic rewards, and recognition at both the manager and peer level, giving each individual employee the chance to pursue the types of rewards and recognition that are most meaningful for them.
Make smart use of technology
Today’s modern dealerships often incorporate technology at multiple levels of the business, from search engine optimization to CRM systems to pay-per-click advertising and social media campaigns.
Although basic efforts to engage staff can be tracked on a whiteboard, dealerships often find that they quickly outgrow manual systems, particularly when reporting and auditing requirements are taken into consideration.
Consider evaluating an affordable software solution designed to support your engagement efforts. The best vendors will offer built-in sales contests, KPI-based games, rewards management, a recognition platform, and communication tools, as well as ongoing support and comprehensive reporting.
Many solutions are built to be one-size-fits-all, so make sure whichever vendor you choose has worked with other customers in auto retail, and understands the needs of the industry.
Collaborate with sales staff
Every dealership is unique, and the right approach to engagement will depend on your location, your culture, and the personnel you employ.
The best way to design an effective approach to engagement is to consult with your employees. Get them together in a room and ask them what engages them at work.
The answers will help you design an approach to engagement that gives the best results for the amount of time and effort invested. Getting staff involved in these discussions is generally easy because deep down, everyone wants to be engaged at work.
Natasha Postolovski is the content manager at Arcade, a sales solution that helps dealership staff feel connected and engaged at work.