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How Employee Retention Impacts Owner Retention

You don’t tolerate underachievers in sales, but do you maintain a safe haven for them in your fixed operations?

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Don Reed is the CEO of DealerPRO Training

You do not tolerate “underachievers” in your sales operations, but do you maintain a safe haven for them in your fixed operations? Let’s explore the reasons why your goal for 2020 should be to recruit and train your entire dealership team to become “top performers.”

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The Biggest Room in the World is the Room for Improvement

Salespeople become top performers by selling to repeat customers (owner retention). They are able to do so because top performers tend to stay at a dealership for a longer period of time (employee retention), thereby giving themselves the opportunity to continue to sell more vehicles to the same customers, as well as their families and friends over a period of years.

They also maintain an ongoing relationship with their customers to ensure owner retention. They do this because they want to. They enjoy working with their customers to provide the highest level of service that they possibly can. They prospect with their customers and enjoy doing it. These are most likely your highest paid sales people and they have strong roots in your dealership (employee retention).

Underachievers perform at below-average levels because they are not selling to repeat customers. Chances are they have not worked in your dealership for very long (turnover). They don’t like to prospect. Following up with their customers is too time consuming so they won’t bother to do that either, which simply means their customers — actually your customers — will find a top performer at another competing dealership and take all of their business there.

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Of course, the underachievers will complain about the number of “ups” they’re getting and possibly wait for the grass to get greener at another dealership and then they’ll leave (turnover). Sound familiar?

Over and Under in Fixed Ops

Now, let’s move to the “backbone” of the dealership — fixed operations. Most dealers have the same scenario that I just outlined, taking place in their fixed operations, i.e. advisors selling at 1.5 HPRO or less, technicians producing less than 120 percent flat rate hours to clock hours, service managers losing money, parts managers losing money, poor CSI, etc. So, what can be done to reverse this cancerous condition called underachievers?

It all begins with the recruiting and hiring process. Spend the money necessary to recruit as many applicants as possible. Complete a thorough screening. Administer a psychological personality profile test. Make sure you have more than one person participate in the interview process. Look for the best of the best and make your choice. If they have not been a top performer in any previous position they’ve held, what makes you believe they are going to start doing so now at your dealership?

Next, evaluate your existing staff by asking yourself one question: “If I were interviewing this person today for the first time, for the position they are currently in, would I hire them?” No “buts” here, just “yes” or “no.” If the answer is “no” then start the recruiting process now.

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Maximizing Employee Retention

For maximum employee retention, you should not only make sure you hire the right person for the right job but also ensure that they are properly trained to proficiently handle the responsibilities of the job. Remember what I said last month: “There are only two reasons why any employee is not a top performer: 1) They don’t know how to, 2) They don’t want to.” If they don’t know how to, you can correct that with training. If they don’t want to, you must start the recruiting process and get ready for the exit interview.

Once you have the right person, you must make certain that they clearly understand (written job descriptions) what is expected of them on a daily basis. So, if they are properly trained and they know what is expected of them, you must then hold them accountable for their performance both good and bad. This must be done on a regular basis and should be a consistent process. Correct poor performance now.

Employees want to feel like they are “in” on things. Let them know their contributions are important to your overall success or failure. You are doing them and yourself a disservice if you are not straightforward and truthful with them. Performance-based pay plans are an essential part of the accountability process and provide incentives for the employees to focus on their individual performance as well as those working with them.

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How to Give Employees a Say

If you really want to make an impact on employee retention in a positive way, you might consider what I call an “employee council.” Once a month, ask each department to elect one person from that department to attend a council luncheon with the dealer principle. This luncheon should last no more than an hour to an hour and a half. No managers are allowed to attend. Each council member must bring an idea for improving any department in the dealership.

They can also bring up any concerns that they may have regarding any department. The council must provide the solution for any concern presented. You must listen and not dominate the conversation. This is not meant to be a complaint session but a concern resolution session.

Believe me, you will be amazed at how many good ideas are presented and how well the employees will work together to solve the concern by themselves. Most concerns are caused by “bad processes” not “bad people,” which means it rarely requires any monetary investment by the dealer to follow their solution.

Remember, once a month with no managers. Of course, it would be nice if the dealer picked up the check.

Something exciting is about to happen to your employee retention, which will result in ongoing owner retention.

Click here to view more solutions from Don Reed and DealerPRO Training.

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