2013
Autospeak-Straight Talk contains articles covering digital and social media marketing social communities and events marketing
There have been a lot of postings and discussions over how best to improve a Sales Organizations performance. I personally have written many of them.One thing that they all have in common is the need to have the right people in the right positions and the need for Leadership.
It all starts with Leadership because a true leader will posses all the qualities needed to do the things necessary to make a business successful. Because a true leader is always striving to hit that next level of success and surrounds himself with other leaders who have the same goals.
True leaders are the people who can leave the emotion out of the equation. All emotion stems from insecurity and has no place in running a business or in life in general for that matter. Insecurity gets in the way of truly clear thinking and objectiveness that is the benchmark of a true Leader.
And this is where we hit the first wall to climb because in my career I have not met many totally secure people who fit the true definition of a leader.
You can have all the systems in place that are designed for success but if you don’t have true leaders it won’t matter how well the system is designed it will not function properly.
One big reason that Businesses today lack the leadership needed to build a truly successful business is the lack of compensation. This for some reason lately has become a dirty word in some circles.
All this touchy feely talk about remembering someone’s birthday, giving extra time of and pats on the back in lieu of compensation is just placating the powers that be. Anyone who talks like this is either doing it so as not to upset clients or have never been in the trenches in commission sales trying to make a living-or both.
All this is good stuff but if it isn’t backed up with proper pay for performance you will never attracted the true Leaders that can get the job done.
And other members of these circles are comprised Darryl, Darryl and Darryl (For those of you who remember) who are quarterly driven publicly owned companies that will do anything for a buck for Top Line and Bottom line growth. Doing more with less for the Bottom line and ethically questionable things to grow the Top Line. We have all seen it.
Unfortunately a lot of private companies have adopted the same kind of practices to their own peril which brings me to to “WHERE’S THE BEEFâ€
You can have all the proven systems in place that you want if you don’t pay for performance the true Leaders will find another home in the same or different Industry. Because the real talent in sales can perform anywhere.
If you think about it and have studied or have been in the Automotive Industry long enough the forerunner of the 4 square, the track system, came along in the late seventies, early eighties.
This system owners thought, would give them the ability to hire any sales clerk off the street at lower compensation and get the same results as the real talent.
This didn’t last very long and I know because I was one of the salespeople who left when they lowered commissions. On top of that, in the early eighties, I was making much more money as a Manager “then†than is being offered today. Add the rise cost of living into that and it gets ridiculous.
Before I went back on my own in 2010 I was making much more as a salesperson than most managers without all the responsibility.
The Commission Sales Industry is a unique Industry in the fact that commissioned sales is one rung below being self-employed. There are a very limited number of truly talented professionals in management or sales who can make it happen consistently.
You give me a group of talented professionals with a pay plan that is going to draw them and I’ll take any system out there and make it seem like the best thing since sliced bread.
I recently wrote an article where I talked about compensation and even offered anyone interested in a "pay for performance" pay plan to e-mail me and I would gladly sent it to them.
I even gave an example of a Dealership who had this pay plan who had the highest front and back end grosses in their region and district and were growing sales.
I received “0†requests.
You can argue all you want about systems and team work but in the end if you don’t get off that diet your on and put the “BEEF†on the menu to attract the real heavyweights you are doomed to high turnover and mediocrity.
Written By Bill Cosgrove
DealerNet Services
I recently read that today the reality is that, whether prospective buyers are in your virtual showroom or your physical showroom, they’re a buyer. Maybe not today, but statistically the Internet customer is highly likely to buy within 90 days.
94% of car buyers begin the process online, according to recent estimates, yet most dealerships attribute less than 30% of actual sales to Internet leads. Why the discrepancy? Most consumers do research online but instead of submitting a lead, they decide to call or walk into a dealership when they’re ready to buy. Because of all the research they can do on their own, though, customers today visit only 1.4 dealerships before purchasing a car, down from 4.5 in 2005, according to J.D. Power.
And, according to a recent study by CAR-Research XRM, only 25% of people leave showrooms because they are “still shopping.†The rest leave because of inventory, financing or some other issue. These customers are ready to buy, the only question is, are they buying from you?
Statistically speaking this means that you have a better than a 50/50 chance of selling 75% of customers that walk through your door. You now have the best odds for conversions than ever before.
So if you don’t have the right sales management, finance management and sales team you are losing sales. Patting people on the back is great and there isn’t anyone that doesn’t appreciate praise but if you want to have the managers and salespeople who are true leaders; that will have the right inventory; Mangers that want to get involved with every customer that drives on your lot and salespeople that know how to deal with customers to get the sale- you need to compensate them. This is the only way you are going to recruit the real talent. In other words you need seasoned people that have a solid track record of consistently exceeding goals and objectives.
Marketing:
As I stated in my blog "Take Back Your Marketing†The technology exists today for dealers to get much better results from their own website. Technology is constantly changing the marketing landscape and dealers today can use smaller more efficient marketing companies that will work for them and cut back on the1000s of dollars they are paying the big classified sites and big marketers (they don’t need anymore) in much more productive ways with much better results.
Once you have built the right sales and marketing team you should have an outside consulting company come in quarterly to audit the performance of the sales and marketing departments who can provide fresh out of the box ideas of new industry developments, potential problem areas that are not being noticed and possible solutions to ongoing problems.
This means that by putting your precious resources to work efficiently in the right areas your ROI will be higher and give you results that will drive more to the bottom line.
Posted By Bill Cosgrove
DealerNet Services
The traditional business model of the Automotive Dealership works against itself practically at every     turn and is just plain bad for business and it is time to think about change.
With all the advances in technology over the years from Marketing to DMS, CRM and diagnostics for repairs the changes have been exponential. But yet the business model which has been flaw from the beginning has been overlooked and ignanother discussion)
2. Managements commission structure at most Dealership is based on the monthly numbers which is a big mistake but a necessary one at least for the new car Department. This propagates the undesired effect of pushes at the end of the month by management to put even more into trades and often sell vehicles way below their value and often times at losses to hit those numbers. Additionally, often times deals are back dated for days into the following month in order to hit those benchmarks set by the Dealership for the payment of bonuses.ored.
There are two main points that I will touch on for this discussion but there are many other areas of concern which are fodder for other discussions to come.
1. Every department in a Dealership is a business upon itself with a budget and income expectations. This in itself causes a great deal of friction within the Dealership and most notably between the Pre-owned Department, the Service Department, the New Car Department and the BDC Departments.
A. At most Small and Medium size Dealerships any properly managed Pre-owned Department is  the Service Department´s largest customer. Â
B. The Pre-owned Department pays close to the same labor rates as the average customer who has their vehicle serviced at the Dealership.
This causes constant in-fighting over costs of repairs, turnaround times and repairs that are not necessary. Also, repairs that were needed that were not performed before they were passed on to reconditioning and end up on the lot in disrepair.
C. The New Car management is constantly putting higher than called for numbers into trades (a subject for another discussion) to hit the benchmarks set by the Manufacturer to get that back end money and hit their bonus. (And yes I understand why this is done)
D. Then it is the responsibility of the pre-owned manager to sell at a loss or a small profit or eventually take it to auction to sell at a loss. This is the cause of being mandated by the Manufacturer to move vehicles by the numbers which is where this contradiction surfaces. (Inventory control - subject for another discussion).
E. The BDC department in a lot of cases thinks of the sales Department as a bunch of narrow minded Neanderthals and in turn the sales department thinks of the BDC staff as a bunch of Computer geeks that should not be engaging the leads.
 All of these points in a lot of cases may be true caused, not by the lack of training, but by the lack of structure and proper management. Bottom line all of these things affect income potential resulting in loss of substantial amounts of profit. (a subject for
A. You can see where this can lead to management looking out more for themselves to hit their bonuses than for the Dealership they are working for. You can also see where here again is another potential loss of profit for the Dealership.
There is a better way to structure the business model easily without having to reinvent the wheel. Dealerships simply need to take the profit from all Departments and combine them and the entire management team at the Dealership is compensated with their respective percentage.
 But Dealerships also need to base the amount of managements  bonuses on the combined CSI of all Departments which will hold all accountable. This will foster more cooperation and force management to pay more attention to customer service at all levels and customer follow up.
This just covers the basic structure of the business model. There are other areas within this overall model that can be done to improve efficiencies and foster more cooperation and accountability. (Which is another subject for discussion)
Author Bill Cosgrove
DealerNet Services