One of the main reasons I got out of retail automotive was the hours. They were brutal. I probably work just as many hours now as I did when I was in retail, but it’s very different when I am doing it at home or even in a hotel room at night. So why is it that I decided to leave retail, take a lower paycheck, and start over again? Quality of life and benefits. It’s that simple. Most automotive dealerships still want to run their dealerships like a dealership and not a business. That is why we have the revolving door of sales people in the automotive industry. A sales person that makes it over a year is called a “Lifer.”
I personally know two auto groups that run their groups like a business and not like a car dealership. They are both two of the most successful groups in the entire country. Coincidentally, they are both based in the same state. They treat their employees with dignity and respect, just as they do their customers. And here’s the part that throws most dealers through a loop. These two groups I’m referring to also do something that is crazy. They offer real benefits to their employees.
So I titled this article, It’s So Simple. Let me explain. I have 3 rules that are unbreakable in my book to run a successful business (more coming later on my 3 unbreakable rules of life). And here’s the best part. They don’t just apply to an automobile dealership. I always say this isn’t rocket science, but maybe it is. Here are my 3 rules:
- Take care of your employees.
- Take care of your customers.
- Once you have your process dialed in, stick to it and do not deviate.
There you go. I know, really hard to come up with, right? Well, I only know of a few dealers doing this right now. I’m sure there are more, but I also know that they are few and far between. Most times when I bring up the first of these 3 rules to a dealer they look at me like I’m an alien. “I can’t afford to do what you’re proposing.” “They are new and they have to prove their loyalty.” That’s about when I start looking at them like they’re an alien. Then I remember to keep my ego in check.
To those dealers that think they can’t afford to do what I’m proposing. I don’t believe you can afford not to. You are getting passed up and your market share is shrinking. You want the employee to prove their loyalty to you? How about this, why don’t you prove your loyalty to your employee? Do you know the number one reason employees stay at their jobs? It’s not money. It’s job satisfaction.
Let’s talk about what I mean when I say benefits. At 99% of dealerships it goes like this. The new hire gets one week of vacation once they’re here for a year. Two weeks once they’ve been here two years and so on (don’t worry, they’ll never take a day without us guilt-jerking them for it). What would happen if you started acting like almost every other business does and offer 14 days of vacation the first day the new hire starts their employment? I always love, “you are eligible for health insurance after you’ve been here 90 days.” So what happens if the employee gets sick during those first 90 days? Guess that would be a bad idea. What would happen if the new hire’s medical, dental, and vision could all kick in the first day of their employment? 401k’s are a little bit trickier right now. I know most companies are not matching anymore. However, you could at least take the time to offer it to your employees. It really does amaze me how little most car dealers do for their employees. Yet they act surprised when the employee leaves.
So what does it cost you every time you lose an employee? The answer is different for every business, but there are some commonalities that they all share. However, most dealerships don’t really look at what it is costing them to turnover their employees. I heard a quote a long time ago and I adapted it to the dealership world. It goes something like this, The Comptroller goes into the General Manager’s office and says, “I’m concerned with all of the money we’re spending to send our sales staff to training. What happens if we spend all this money training them and they leave?” The General Manager looks at the Comptroller and responds, “What happens if we don’t train them and they stay?” That has always haunted me when I think about any company cutting costs.
So what is the cost? Well, the first thing you have to do is find a replacement for the sales person that left. That can take time. Then you need to teach them your systems and how you like to do business. At that point, the new sales person gets to start an entirely new pipeline, which takes a minimum of 90 days to produce (the good news is at least their health insurance will kick in). After the 90 days your new sales person is finally getting up on their feet and hopefully adapting to your dealership. All the while this is happening, you have probably run off a couple more sales people so you’re just continuing your revolving door of sales people. And here is one last thing to think about. You hear me say it in every article. Once you’ve had a sales person over a year, and especially one that is good, they have started a customer base. And guess what? PEOPLE BUY PEOPLE. So when that sales person leaves and goes somewhere else, there’s a good chance that the customer is either going to go with them, or at least not return to your dealership.
Obviously I have my opinion about how to run a business, and that is all that it is, an opinion. However, I look at facts like most dealerships are turning their sales staff at over 50% annually. That is just not healthy. I can also say that over 75% of dealerships I walk into you can cut the tension with a knife. If I can feel it, so can the customer when they come in. Life is about what if’s. So what if you ran your dealership closer to a corporate business model? What if you put more focus on your employees? What if indeed…….
I would love to hear thoughts or feedback to this, as I am sure there are some readers out there that believe the old model is still successful, while others may not feel that. Please feel free to comment and let me know what your thoughts are. As always, people buy people, not products. Thank you!