Too much risk and effort for too little pay and time?

[Jeff Kershner]

As everyone knows, I sometimes like to share some of the emails we get here at DealerRefresh. This is an email from Pete out in Chicago, Illinois...

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Hi Jeff,

Great to have found your site and your common sense approach to selling.

I started in the retail automotive business over 20 years ago and the one thing I know to always be true is that people sell vehicles and web product services promote and market.

I can't stop wondering in amazement when people in the auto industry and dealer principles believe that this process can be fully automated using CRM or lead generators and quick pricing quotes alone.

There is the law of diminishing returns can apply to the level of customer satisfaction with regard to how well internet salespeople are paid and treated.

Why would anybody want to follow up on a bunch of maybes when the customer calling and walking through the door is the most likely to buy?

When I started we all had salaries and demos. I felt a sense of obligation and consideration of the well being of the dealership I worked for because I would not starve...never did and always made a living till it became too much risk and effort for too little pay and time.

I would bet that half the internet managers where so so salespeople that are willing to work for less than what the top 20% make.

People say the profits aren't as high. Not true. Pay plans are lower and the front margin has been put into the "do not talk about" holdback.

I still remember dealer principles laughing at Carmax not so long ago, or was that a billion dollars ago?

A person won't get rich but at least they can earn a living and be treated well. (So I heard)

Too much said and all the best.

Pete, Chicago Illinois

 

[Lao Shi]

The number of U.S. dealerships dropped from about 45,000 in the late 40's to some 22,000 in 2000.The last 8 years have shown even more change and yet more vehicles are being sold…..

Back in the "Good ole Days" many car sales professionals had perks, salaries and demos. It was a happy feeling then, times were good and people were fat and happy and the living was easy. OEM's splurged and courted the dealers, gave bonuses and gifts, free trips and other "goodies" so everyone could feel good and sell, sell, sell. There were mostly US Brands with a few European Brands that catered to a small niche market.

Then the cursed foreign OEM's moved in and began upsetting the happiness and the car rental agencies decided to crash the party, then the Internet came into a reality that the dealers had to face, more cars being sold how come I am making less and suddenly many people wanted to know hey, "someone moved my cheese"

In free market economies change happens and the professionals that acknowledge and embrace the change are the likely survivors and succeed.

I remember meeting a professional in Japan a couple of years ago at the Tokyo Car Show. I have not seen him for 6-7 years. He had become a "Ronin" or a " Samurai with out a Master"

He was well connected, his "smart world phone/PDA", a laptop with wireless connection and he was active. I was a bit surprised as I always thought he was behind the times with regard to technology and he admitted he was until one day he saw the light.

Years of working in various west coast dealerships he had built up quite a list of clients in his little black data book which he always kept up and current. Many people laughed and joked he should have been a CPA or something. Management did not seem to care that he kept his data book as long as he sold cars.

Eventually this list was quite extensive and one day his high school daughter said Dad let me put this information in an Excel program for you and show you how to work with it. Well he did and the rest was history as he could see the benefits right away.

He left the dealership day-to-day business and became a successful broker. His clients trust and respect his advice. He stays connected with his clients. He sends newsy email updates on his travels and what he and the family are doing. He knows where and who to contact to get the best price for his clients, he knows the rebates and incentive programs that are available. He services his clients, they trust him.

I met this lady from Texas, Dallas area, who went from dealer to dealer and took their cars on consignment; she placed them on ebay and Craig's List. She was selling 6-10 cars a week, a one-person operation.

They say that a window closes and another opens. There have been many changes in the industry over the years and there will be many more to come.

 

[Alex Snyder (blog)]

Pete,

Maybe I'm optimistic, but I believe the industry isn't as ignorant to the new marketing endeavors as it used to be. There are still many cases to back what you're thinking, but they weaken daily. CRM systems do not replace people - they are another technology to help manage process. Unfortunately, most businesses let their CRM systems dictate the process, and I think this is where you are coming from. It is just a matter of understanding what your CRM is for and tasking the right person to make it happen.....not that so-so guy who will work for less.

Lao -

Absolutely! However, when one window shuts, I think 500 open today! It is such an amazing time to be in the positions we're in - this is the Wild West of Internet/technology.....enjoy every minute of it!

 

[Joe Pistell]

oooo.. well done Lao! 2 thumbs up!~!

 

[Mike@Carfeine]

Lao,
Spot on and well said. Opportunity knocks on the door of those who are willing to listen.

Pete,
Alex is right. Technology does not replace the people and too often us technologists build something that doesn't mesh with how it's really done. It's our job to listen and be guided by the practitioners so that we not only service or customers to the best of our ability but we learn from the aggregate insight of the front-line.

Worst thing that can happen that way is we have happy customers and an ever-evolving service.

 

[Jeff Larsen (blog)]

Based on my experience just outside the Chicago market-

Dealerships in general don't take the time to properly train an ISM/BDC rep on product knowledge or CRM usage, and have little or no internet process in place for an internet/bdc dept to take hold. Why? Because most management/owners have never taken a customer from lead to sale via internet themselves. That is not what made them successful.

For an ISM/BDC to be successful there must a clear, concise process (aka Road to the Sale in the showroom) starting with buy-in from management top to bottom so the dept can be streamlined to handle the constant bombardment of incoming leads and phone calls properly, per dealership protocol.

I still see the classified ads for ISM's as if they were hiring showroom sales reps, with the qualification of computer usage, advertising absurd, "possible" yearly incomes.

Dealerships know where consumers are finding their vehicles, understand the importance of a quality ISM/BDC dept, hear the stories of other dealerships selling 30, 40, 60 a month from the internet dept, but dont have a clue on how to get there.

As others wrote above... This a great day in the automotive market to be inventive! Great story Lao!

 

[Rick]

"...Pay plans are lower and the front margin has been put into the "do not talk about" holdback"

Nobody has addressed this and it's really the truth. I often wonder if being a "floor" sales person would be just as financially rewarding with a well advertisied popular brand considering the "maybe" internet lead voumes worked vs the "serious" walk in.

 

[Brian in Etown]

@Rick
What if showroom and internet leads are one in the same?
Seems to be the trend lately and I sure have more salespeople hanging out in my office these days waiting for those hybrid customers..... Just sayin

 

[Pete]

Hello to all.

Great comments and insight.

Thanks for not having the knee jerk reaction that usually follows when talking about pay plans and money of "go sell some more cars if you want to make more money".

Dealers I feel would like to maintain a stable and familiar faced sales force but again is it not asking much if you give nothing but the immediate $$$ for someone to stick around for what 2-3 years for a repeat sale?

Ya sure networking I know but be real if you will. When is the last time a customer gave you their friends and neighbors info to see if the "want to buy a car"? Who are you! Click...

The person that took their book of contacts and got into another industry that pays an residual for managing customers portfolios with an opportunity for growth and are no minis in that business.

Selling vehicles is a point of sale business so every time I see ads for recent grads welcome with an opportunity to earn up to a 100k automatically know that most likely that is a high turn over dealership with a crappy pay plan.

I remember as a GSM the GM telling me to implement a new sales initiative for sales people to cold called previous owners that might be interested in trading their cars for a new one.

Not without paying them was my response. After the first 30 days I was fired and blamed that I wasn't managing correctly and that was why truly nothing was sold except for the ones that where "fresh up/marked sold" to be shown as such. Funny enough in 90 days 12 of 16 salespeople quit.

I have seen this same archaic plan used with business development centers with the same result...turnover.

Lao, I agree it is about the right person but differ a bit on the who. Tasking to an under link in which the position has no authority is what I feel is what needs to change.

If I owned a dealership(never wanted to or pursued) the ISM would be second in command just under the owner or GM. Otherwise the ISM is for the most part a babysitter with the UC or NC manger the angry parent.

So all the analytics and pie charts that the ISM produces are worthless and a waste of time and just keep the UC and NC a tool to defend their positions and bus drive to cast blame of the powerless to change...the ISM.

Anybody ever seen that one?

(Apologize for any bad grammar in advance because I do not review when I post)

The best to all,

Pete-Chicago

 

[Steve Branders]

Alot of honesty in Pete's remarks. I'm convinced the automotive sales business has driven away many quality people, the turnover is substantial for a reason. I'll venture a guess that most ISM's leave the business for too much effort & hours and not enough compensation. I know of more veteran people in the business looking to get out of it now than ever before and I've been involved w/it for 12 years.