People: Your Only Sustainable Competitive Advantage
Adam Robinson, the CEO of Hireology, hosted one of the best sessions of this year's Digital Dealer conference. #DD20 @adrobins @hireology He spoke about the impact of sales turnover on the bottom line. One way to quantify it is for every sales associate that leaves, it costs you approximately 50% of their annual income in lost sales and replacement costs. At my old company, a small group called AutoNation, we calculated it at a minimum of 18 lost sales that will never be recovered per sales associate that left. Do the net pretax math on that!
Adam mentioned that half of what makes someone successful in their role has nothing to do with what's on their resume. The 4 key predictors of success are:
- Attitude: Their disposition toward work
- Accountability: Do they take personal ownership of their actions and results
- Achievement: Documented track record of success
- Culture Fit:
Think of the selection process similar to how insurance companies assess the risk of their customers. They know based on tons of data, the predictors of the likelihood this customer will make a claim. Similarly, we can use data to help predict the likelihood of an individual to be successful in the role.
There are lots of tools in the marketplace like Hireology that can, with amazing accuracy, give you a read on #1, 2 & 4 above. Based on the success profile of the role, a pre-employment assessment can be developed that will take the guess work and "gut feeling" out of the hiring equation. Think of it like a risk assessment. What is my risk level on the potential 18 lost sales and corresponding pretax net profit if this individual doesn't make it?
Adam wrapped it up with an authoritative discussion on the impact 2008/9 had on the perceptions and desire of Gen-X workers related to 100% commissioned jobs. While everyone else is talking about Gen-Y, he discussed how you can get some of the most talented high potential high performing Gen-X as well as Gen-Y by providing more stable pay plans and work hours.
For more information you can contact Adam directly at firstname.lastname@example.org
Creating a Career Path: Why You Should Re-Think F&I
- Reduced Turnover
- Improved The Customer Experience
- Improved their Overall Profitability
She started out with what we all already know:
- Customers don't' like our current experience
- They want to buy a car in under 90 minutes
- Customer satisfaction is the highest within the first 90 minutes of coming to the dealership and often drops in direct proportion to how much longer it takes
- The current F&I process is 45-60 minutes not counting the "wait" time
Combine the above with what we know about the Gen-Y workforce
- They want stable, fair pay
- They want decent, flexible work hours that enable life balance
- They want clear growth potential
There are very talented high potential, high performing Gen-Y out there; we're just not getting them interested in working in our industry because mostly we offer the opposite of what they are looking for. Jason Dorsey says Gen-Ys are split in two groups as far as their work ethic is concerned.
- The stereotypical lazy entitled
- The high energy, hard working, ambitious
We mostly get Group 1. Most of Group 2 does not want to work on 100% commission or 60 hours per week.
So what was Walser's solution?
Eliminate the F&I silo and go to One-Person Selling. Now before you dismiss this CRAZY idea take a look at their results:
- Sales productivity increased from 10 unites per person per month to 15.5
- Compensation expenses reduced from 25-30% of gross to 15-20%
- F&I PVR over $1000 with HALF the commission payout
- Volume growth in double digits
- Sales turnover cut in HALF - think about the 18 lost deals we spoke about above, that now you are NOT going to lose
- CSI through the roof
- 45 minutes from the YES to out the door - NO WAIT to get into F&I
Here's how they did it. Their new career path:
- Customer Specialist Trainee - new salesperson hired at $15 per hour. 13-week training program utilizing blended learning and spaced repetition while getting on-the-job training and helping customers buy cars.
- Customer Specialist - all existing salespeople and new hires once they complete 13-weeks of training. $17.36 per hour ($36K) plus monthly bonuses based on TEAM goals of volume, F&I PVR and CSI - 40 hours per week schedule
- Account Executive - high volume/F&I PVR/CSI salespeople who have no desire to grow into managers. MUST maintain >20 sales per month and $1250 F&I PVR with CSI to stay an Account Executive - regular 100% commission pay plan
- Team Leaders - Base salary plus monthly bonus based on TEAM performance in Volume , F& I PVR and CSI - supervises about 5 Customer Specialist and interacts with ALL of their customers
- New or Used Vehicle Manager - regular net-profit or VSG based 100% commission pay plan - they structure the deals
Customer Specialist get all the F&I menu selling and overcoming objections training, in addition to comprehensive sales process and customer service skills training; hence the 13 weeks. 78% of their 125 Customer Specialists are college graduates. Is your current structure getting you that kind of quality?
F&I Funding Specialist - maintain one F&I funding expert to get the deals bought and have the relationships with the lenders. Grow that "centralized" funding department as needed based on volume. Walser trained and paid new Funding Specialists $14 per hour and they each handled an average of 147 deals per month.
For more information you can contact Candice directly at ccrane@craneAutoHR.com