Take a good look at your sales team. Most of them won’t be there next year. According to the latest NADA Workforce Study, salesperson turnover rates are out of control at 74%.1 That means if your dealership has 25 salespeople, 19 of them are leaving by year end. Considering that the average cost of replacing a single salesperson is $45,000, many dealers are looking closely at how turnover rates are impacting the bottom line.2 Dealers cannot afford to watch talent and money walk out the door. Many are saying it’s time to do something about it.
Finding the root cause
Two of the biggest causes for turnover are poor training and hiring practices. In fact, 7 in 10 dealers say their salespeople have told them they don’t have enough training or information.3 That’s a problem. Especially when dealers are hiring salespeople without experience. Why is that?
Today’s workforce is filled with millennials looking for jobs, however, they’re not looking to be salespeople.
In fact, car dealerships are one of the top three employers that millennials want to avoid at all costs (right next to politicians and tax collectors).4 This makes replacing salespeople slightly impossible. Not surprisingly, 62 percent of dealers are pressured to hire salespeople without sales experience of any kind.3
One more thing…
There’s something else contributing to high salespeople turnover. Customers aren’t thrilled about the existing experience they receive during the sales process. It’s one of the reasons 41 percent of dealers are rethinking their sales strategy.3 Here’s why: The traditional road to the sale doesn’t deliver the type of experience that customers have come to expect. Today’s customers are savvier, more informed and expect car buying to be faster and more convenient. The result? Frustrated customers and salespeople who can’t make their numbers.
Silver bullet solution
What’s the one thing that can improve the customer experience and reduce your salesperson turnover? Technology. Arming your sales team with technology can transform your sales process and make training and hiring a lot easier. In fact, 72 percent of dealers believe that adding technology will enable salespeople to build more trust with customers and be more successful.3 It will.
Integrating tech-based tools like iPads and other mobile devices into the sales process gives salespeople the information they need at their fingertips. They’ll know more, so they’ll sell more and be more successful — and be likely to stick around.
Technology also gives managers a turnkey way to train new salespeople, and a dashboard to see who needs extra support and when. This is essential for dealers hiring novice salespeople. What’s more, investing in technology will make you more attractive to millennials, as more than 90 percent of them said having access to technology is an important part of an ideal job.4
The power of technology
Above all, the right software can help you create a more streamlined, hassle-free customer experience. This sets up your salespeople for success from the get go. They’ll be better equipped to meet customers’ needs and expectations. That also means more sales with a lot less haggling. Summing it up, technology can solve a lot more than turnover. Embrace it today and see how it transforms your close rates, customer satisfaction scores, and the bottom line.
In January 2018, MaxDigital in conjunction with Erickson Research, surveyed automotive dealers across the United States leading up to the 2018 National Automobile Dealers Association (NADA) Convention. Click here to see the full report.
1 2017 NADA Dealership Workforce Study
2 Driving Sales Human Capital Management Whitepaper, 2016. Study: The Impact of Turnover on Dealer Operations
3 2018 MAXDigital Dealership Process and Salesperson Turnover Survey
4 2017 Roadster Study
Author: Patrick McMullen
Patrick McMullen is Senior Vice President of Strategy and Innovation at MAXDigital, which provides end-to-end technology solutions that enable dealerships to acquire, price, merchandise, and sell inventory with greater efficiency and profitability.