It’s no secret that the rate for car salesman turnover is high and everyone from the mortgage lender to the average car buyer is aware of this fact. The car salesman turnover rate ranges anywhere from 30% to 100% depending upon the dealership. When a particular profession consistently has a high rate of turnover you would think that there was a way to change this trend because it’s expensive for car dealerships to continually recruit, train and mentor people to become top-notch salespeople. Yet it continues to happen all over the world year in and year out, but why?
Lets explore these reasons for car salesman turnover from inside the ranks of the soldiers (car salesmen) on the front row. The real car salesmen that do the dirty work, that build rapport, that sell the dealership, that close the sales and deliver the cars on a daily basis. The salespeople that get up and go to work for free until they get a customer and then they roll the dice hoping for a buyer that can buy.
The 5 Reasons for Car Salesman Turnover
- Bad Hiring Practices
What goes on when it’s time to add some staff at the average car dealership often goes something like this. Its time to add some salespeople and we need three people so lets hire six and hope that 3 will make the cut. Sound familiar, that’s usually the attitude because of the high turnover rate. This might not be true at all dealerships, but it’s very common in the industry. So now we have six people to train and mentor of which three are good and three that are worth trying, but the end result is that only two of them are really worth the effort that last any length of time. I am not saying this is standard practice, but its quite common.The lack of an orientation about selling cars, commissions, salary, bonuses, hours, holidays and benefits before they accept the job car drive the turnover rate. I have seen many a dealership hire a new car salesman before they really know how the car business works. Most newbies will just go with the flow because they want or need a job. If they knew more about the job they may think twice or reveal their feelings about the profession in the interview. When you work in the car business you don’t realize how much the newcomer actually knows about selling cars and what they think they know because it’s usually wrong.Better hiring practices can greatly reduce the car salesman turnover rate. It all starts with hiring practices that includes interviewing, checking references, drug tests and orientation. With a little extra time and effort to find the right candidate for the job will go a long way to reducing turnover.
- What’s Really Expected
Does the car salesman really know what is expected of them on a daily, weekly and monthly basis. Do they read and receive a copy of a well written and thorough job description and employee handbook? Does a manager take the time to thoroughly explain each and every task that they will be performing as part of the their employment. Is there training provided by the dealership or do they get told to go out on the lot and sell a car? Sales turnover can be greatly reduced when the car salesman knows what is expected.Selling cars for a living is not like any other occupation. If a car salesman is not clear about what is expected of them how can they do what they are supposed to do? Either by training and/or mentoring each and every salesperson needs to know the conditions of their employment rather than learning on the fly by being verbally abused by a sales manager. Most sales managers are very weak when it comes to training and explaining the ins and outs of being a great car salesman. It’s what they do on a daily basis and they are numb to the profession because they do it everyday, but the new car salesman doesn’t have a clue. Proper training of both newbies and sales managers will do wonders for car salesman turnover.
- Reality of Being a Car Salesman
Let’s hit the floor, day after day and week after week. The newness is wearing off and it’s time to move some metal and make some money. Work a few long days without a sale, take five fresh ups and none of them could buy a car even if their life depended on it. Finally you sell a car and make a “mini deal” that pays a lousy hundred bucks. That’s enough to make anyone to think twice about being a car salesman, but on the other hand you could have a great Saturday and sell 3 cars that pay you a commission to the tune of $1,800. Selling cars is sometimes like a roller coaster ride, full of ups and downs.Calling be-backs, sending emails, trying to get referrals, doing follow up and prospecting new customers. It’s all part of the job, but none of it will pay the bills today unless you can get somebody through the door. Can you see the big picture? Do the above scenarios stress you out? You need to see the big picture because that’s the car business. It takes work to be a successful car salesman. Nobody told them that it would be like this or they did and they weren’t listening. If the car salesman is not starting to see the money roll in they either they decide to make the commitment to be a great car salesman and get to work or they start looking around for another job which adds to the high car salesman turnover.
- Pay Plans and Bonuses
Practically every independent car dealership that I have ever seen has a slightly different pay plan than the next and one and a common reason for high turnover. They are often similar, but rarely identical. There are two extremes, one extreme favors the top car salesmen and rewards them accordingly and the other extreme will favor the masses. In other words even the car salesmen that don’t sell a respectable number of cars every month receive more compensation.Even though the top car salesmen sell the most of the cars for the dealership the pay plan is designed for the bulk of the sales staff. This is the type of pay plan than can cause the best car salesmen to look for another dealership and the other extreme can cause the middle and lower producing car salesmen to move on to another dealership, starve or leave the car business. Like everything you can’t please everyone and this can create higher car salesman turnover, but at what cost.Is it fair to reward the car salespeople for their efforts or should the profits be spread across a larger portion of the staff, which can foster salespeople that don’t need to strive to be the best car salesman that they can be and make a six-figure income? This is a competitive business that is full of opportunities to make a respectable income, but it requires work.
This reason for a high car salesman turnover rate is probably the most popular reason if you discover the real truth. Management can be responsible for this entire list of reasons for salesman turnover if you look at the big picture, but lets be a little more specific.Sales managers are often the real reason car salesman leave the business or a particular dealership. These sales managers have usually worked their way up the food chain because they can sell cars, but that doesn’t mean that they know how to manage people. From poor people skills to lack of direction can alienate sales people in no time at all. A good sales manager helps their sales staff learn and improve their skills not to close deals and brag about their prowess.The only time a sales manager should go into a deal is when there are no other options and nine times out ten they will loose gross in order to close the sale. When the original salesperson can stay in and close the sale there is almost always more gross profit generated. The sales manager should train their salespeople to do that and not brag about having to close a deal. When a manager fails to respect their staff and favor a special few the sales process is compromised. Sales managers that allow salesmen to be skated by others or unfairly splitting deals is the quickest way turn a car salesman sour and rightfully so.You can stand back a few steps and say that the General Manager is supporting the behavior of a weak sales manager, but in most cases they don’t know how the daily tasks are being handled. A general manager is typically much better at management and have great people skills, but once again that’s not always the case. Creating a great team is a lot of work and it’s often an ongoing process, but you should never forget that this is a business not a charity so it still comes down to making a profit.
If you talk to former car salesmen they will often say the quit the business because of the hours, but after further investigation you will discover that they were really mediocre sales people. Complaining about the car salesman hours is very common excuse because nobody wants to tell you that they sucked at being a car salesman. I couldn’t blame anyone for quitting the car sales business because of the hours if they were only selling 7 or 8 cars a month. But how many people walk away from a six figure a year job for working a few extra hours each month? Very few if any so it all comes down to making a commitment and being the best car salesman that you can be or moving on.
If you like having fun, selling cars and making money, but you have a reason to impact the car salesman turnover rate go ahead and find another dealership. Don’t walk around with a negative attitude, bitching and moaning just find another dealership because they are plenty of great dealerships out there that treat their people fairly. A high car salesman turnover rate is in part from great car salesmen trying to find a great dealership where they fit. Sometimes it takes selling for a couple different dealers before you find the right one, but when you do it you will be glad you did.
Later, Fresh Up on the Lot