Maintaining a Motivated Sales Force
The old revolving door for sales personnel must stop. The price goes far beyond the expense of an advertisement for sales department openings. The actual cost is calculated in both hard dollars and customer retention.
First, let’s review the loss in actual dollars. Research conducted by The American Society for Training & Development (ASTD) shows the cost of replacing an employee to be at least one year’s salary for that same employee. The cost derives from the loss in productivity when the employee decides that the current place of employment is no longer satisfactory. The employee discusses their views with other employees, thereby affecting their productivity.
Productivity “dips” that occur while staffing the sales department are only part of the lost potential. Customers feel the tension in the air and often choose to buy elsewhere. The sales representative may very well have a loyal customer base and alert them to the upcoming employment change, giving the customer a reason to defer the buying decision. The result is that the dealership loses not only the current sale, but also future business from that customer as well.
In exit interviews, sales personnel reveal that they value training and an opportunity for growth. They value leadership and a pay plan that does not change. They do not want to deal with commission discrepancies when receiving their paycheck.
As an employer, the challenge is to create an equitable pay plan that encourages positive behavior at work and that promotes training and growth.
Let’s review the value of training the new hire. In the past, a new salesperson was hired and shown the inventory with the following words of encouragement,” Show us what you can do!”
Today’s professional sales representative expects training in product knowledge and the basics of selling. Knowing what your product is, although vital, does not increase the salesperson’s communication skills with the customer. Nor does it take the place of a sales procedure.
Introduce new hires to every member of the dealership’s team. New personnel should be able to spend some time in each department to learn what goes on in each area. This will build confidence in their ability to sell the dealership to customers. It will also help them to learn their roles in this “live production” we refer to as a dealership. It will give them first-hand knowledge of how current employees communicate the company’s vision to customers.
Since every dealership has slightly different paperwork, new personnel also need to understand paperwork flow. How do your procedures work? Where does the new employee fit in?
New hires must be taught how to conduct a professional customer interview and a Feature – Advantage – Benefit product presentation. Almost without exception, we can track every lost sale to a poor customer interview and a short-cut product presentation.
For every training dollar invested in an employee, the company receives thirty dollars in profit. We already know the losses if we choose not to invest in our employees. Simply put, business is too hard to come by to rely on untrained, frustrated personnel.
Create a winning pay plan. Sales positions are commission driven. Review your current plan. What is it saying to your staff? Is it focused on gross profit? If so, your customer satisfaction may be suffering.
New hires want an environment where they earn while they learn. So, for the first 90 days during the learning curve period, you may want to think about a salary with bonuses based upon test scores.
Training should be quantified with tests and rewarded for great performance. As the floor time increases, team up the sales representative with an experienced salesperson for another 90-day period. In this mentoring stage, sales commissions should be split between the two. As the new salesperson’s ability grows, they will be able to gain more of the commission as their ability to control the sales process grows. When the commissions grow, decrease the salary.
We must help new personnel understand that how they sell today affects customer retention. Review customer satisfaction scores monthly with each employee. Point out what they are doing right and what they could be doing better. Set performance standards in this area and reward exceptional performance with a bonus, just as the manufacturer rewards the dealership for outstanding performance.
Monitor what you expect. Review performance levels with your personnel. Use constructive criticism to build and improve productivity. A new-hire training program with consistent standards and tangible rewards for extraordinary service can help you resolve the door that revolves.