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Employee Retention Impacts Owner Retention

In many of my workshops, I ask the dealers and general managers attending the following question: “What do you do with a salesperson who sells an average of five units a month?” I’m guessing you know the answer to that question yourself — it probably sounds something like: “You’re out the door,” or “I don’t tolerate anyone selling just five cars a month!” Right?

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Don Reed is the CEO of DealerPRO Training

In many of my workshops, I ask the dealers and general managers attending the following question: “What do you do with a salesperson who sells an average of five units a month?” I’m guessing you know the answer to that question yourself — it probably sounds something like: “You’re out the door,” or “I don’t tolerate anyone selling just five cars a month!” Right? You don’t want underachievers burning your ups on the showroom floor and you strive to develop top performers to produce strong closing ratios and generate above-average gross profits while providing your customers with a high level of service.

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That question seems to always light a fire in some of my attendees, who, for some inexplicable reason, do not tolerate “underachievers” in their sales operations while at the same time they maintain a safe haven for “underachievers” in their fixed operations. For example, a salesperson selling five cars a month would be out the door but an advisor selling 1.0 HPRO has a job for life. That advisor is selling at half of his or her potential, just like the salesperson selling five cars a month. Why is accountability for one’s performance different in the service department than it is in the sales department?

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In the sales department, salespeople become a top performer by selling to repeat customers as well as prospecting for new ones. They are able to do so because top performers tend to stay at a dealership longer, 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. This is a huge benefit of high employee retention. They also maintain an ongoing relationship with their customers, in order 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 salespeople and they have strong roots in your dealership.

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Conversely, underachievers, of course, are performing at below-average levels because they are not selling to repeat customers. Chances are they have not worked in your dealership for very long. They don’t want 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 — who are actually your customers — will find a top performer at a competing dealership and take their business there. 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, at which point they’ll leave.

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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: advisors selling at 1.2 HPRO or less, technicians producing less than 120 percent flat rate hours to clock hours, service managers allowing 60 percent one-item RO’s, parts managers stocking $50,000 in obsolete parts, below-average CSI, and so on. So, what can be done to reverse this cancerous condition called underachievers in fixed operations?

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, such as the DISC. 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? Think about it. If the advisor averaged 1.2 HPRO at their last store, why would you think they will do better at your store?

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Next, evaluate your existing staff by asking yourself one question: “If I were interviewing this person today for the first time for their current position, would I hire them?” No “buts” here — just “yes” or “no.” If the answer is “no,” start the recruiting process now because there is no reason to keep an underachieving employee.

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. There are only two reasons why any employee is not a top performer: They don’t know how to, or they don’t want to. If they don’t know how to, you can correct that with training. Training can solve any performance problem in any dealership if the employee wants to learn. Otherwise, start the recruiting process and get ready for the exit interview.

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Once you have the right person, you must make certain that they clearly understand what is expected of them through written job descriptions and how they will be compensated. 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 also 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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Next as a dealer, GM or department manager, get in the habit of asking your employees the following question: “As your leader, if there was just one thing I could do for you to make your job more enjoyable and more productive, what would it be?” You are going to be surprised at what you hear. I’ve been asking that question to my trainees over the past 17 years and I can tell you the No. 1 response was equipment. (“I need a new chair,” “Our equipment is outdated,” “Our Internet is too slow,” etc.) Coming in a close second was training.

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If you really want to make a positive impact on employee retention, you might consider what I call an employee council. I did this for years in my dealerships and found the results to be absolutely amazing.

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 90 minutes. 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 have regarding any department. The council must provide the solution for any concern presented. The dealer must listen and not dominate the conversation.

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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.” This means it rarely requires any monetary investment from the dealer to follow their solution. Remember, once a month with no managers allowed. 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 growing owner retention. Start training your team to become top performers — because your customers expect and deserve nothing less.

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The biggest room in the world is the room for improvement.


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

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