01 Feb Automotive industry expert, Alan Ram’s newest article “When Your Management Isn’t”
When Your Management Isn’t
By: Alan Ram
When you look at the picture above, what do you see? If you’re like many people, you might think this is a picture of salespeople simply being lazy and unproductive. You might very well be right on one or both of those counts but we need to look deeper to understand the true meaning of this photograph. Let me get started by saying this: Most of the issues that dealers face on the variable side at their stores are the result of managers that don’t really know how to manage and training that isn’t really training. Think about that for second. What are some of the challenges you currently face with your team? When I talk to dealers, I hear things like “our people are lazy”. Others say that as much as they would like them to, their people can’t or won’t use the phone the way they want them to. Many dealers today lament the fact that their turnover is through the roof. A recent study showed that only about 30% of salespeople that start working at a dealership will make it to the three-year point. How do many dealers respond to the aforementioned issues? If they feel their people are lazy, they might simply try a strategy of motivation and hollow pep talks. If they feel their people aren’t using the phone enough or in the right way, management will simply keep repeating the directive to “get on the phones. Let’s set some appointments!” That directive serves no purpose when management haven’t actually taught their people what to say and only results in frustration when effort doesn’t yield results. When turnover is high, we tend to look for how we can hire more people only to lose them as well. Unfortunately, all of these “solutions” represent nothing more than treating the symptoms instead of really finding a cure. As with anything else, I think we need to look at and understand the underlying issues.
Good management is the foundation of dealership productivity. Nothing really good will happen consistently at a dealership despite poor management. It’s like wanting to get in amazing shape despite having a weak foundation or core. It’s impossible. While most dealerships might have strong desk people and closers, they don’t necessarily have people with good management skills. Why is that? Look at how most people become managers in this industry. Don’t we tend to take the best salespeople and make them our managers? Let’s think about that. Wouldn’t that be the NFL equivalent of taking the best football player on the team and making them the coach? Let’s face it, the best coaches in NFL history have not been the best players. Why, it’s because being a good coach involves a completely different skill set than that of a player. Unfortunately, in the automotive industry, we tend to take our best players and make them our coaches while providing them with very little training on how to actually coach!
If you see five salespeople standing outside your dealership for hours on end talking about their fantasy football team and how traffic is off, the first thing I want you to understand is that your dealership is not being effectively managed. That is an indisputable fact. Multiple salespeople standing around and waiting for hours on end didn’t make sense in 1986 and it certainly doesn’t make sense today. In today’s automotive industry, a managers two most important functions are managing activity and training. By managing activity, I mean working with the salespeople on a daily basis to make sure they are doing the most productive thing they could be doing at any given time to drive traffic. Based on that, no one could possibly think the dealership pictured is being effectively managed. When I talk about training, I’m talking about really training and not some of this nonsense that is sold as training in the automotive industry. For something to really be considered training, it has to incorporate education, some manner of simulation, accountability and consequence. If it doesn’t incorporate all those elements, it’s not training and you’re most likely wasting your time and money.
So, back to that picture. Is the problem that these salespeople are lazy or that they are lacking direction and structure from management? While they’re standing around, what are their “managers” doing? I’m guessing they’re sitting inside and hoping someone brings them a deal today? Hope is not a strategy for success. How much real training have these salespeople actually received on how to get results on the phones on not only inbound calls, but outbound as well? The operating word in the previous question is “real”. Here’s something else to consider; most dealership management tends to focus mainly on what is happening on the lot and in the showroom. Chances are, if you have three managers on shift today, they are all going to be focused on a very limited pool of opportunities that are in front of them. The best managers understand that there are exponentially more opportunities outside the dealership that could easily be converted to showroom traffic with the right strategies in place. On that topic, when it comes to handling inbound sales calls properly, are your managers actually listening to call monitoring and not only using it as a training tool, but quickly resolving missed opportunities to do business? This needs to be a priority. Just like your managers tend to pay very close attention to what’s happening on your showroom floor and would not be okay with customers getting blown out left and right, they need to pay the same attention to phone traffic. Unfortunately, most don’t and an incredible number of opportunities are missed at dealerships on a daily basis when calls are mishandled. Customers are customers whether they be on the phone or in the showroom. If you’re a Dealer or General Manager, here’s what I would suggest; listen to a few of your calls from yesterday on call monitoring. Many of you might want to do this on an empty stomach. When you find calls that are mishandled, call your management team into your office and ask them what they know about those calls. If they don’t know anything or haven’t listened to them personally, you’ll know you have a huge opportunity for improvement. We all tend to know how many cars we sell on a monthly basis, but how many deals do we miss by not doing these things?
If your turnover is high examine the underlying issues. Why do people leave? Isn’t it typically because they’re not making any money? We tell them a bunch of great stories about how the skies the limit in the automotive industry, and that they can do anything they want but then we don’t teach them what they need to do in order to ultimately be successful. In other words, we do a lousy job of training! They don’t make any money, they lose confidence not only in themselves, but the dealership as well, they panic and quit. How many great people have we hired into this industry only to lose them because we dropped the ball when it came to actually teaching them everything they needed to know in order to be successful. And then, rather than recognizing our organizational deficiency, we have the unfortunate habit of repeating our mistakes or worse yet blaming it on the person that we didn’t train that didn’t make it. It’s our organizational obligation to train our employees. That is absolutely key to stopping a turnover problem. Referring back to the original picture, imagine the person you ideally want to hire. When they pull up to the dealership for their interview and they see a gaggle of apathetic looking salespeople standing around outside on their phones doing nothing, what will they think? Will they be excited that might be what their future holds? The good ones will want to get back in their car and explore different opportunities. Good people want to be in an environment where it looks like people are actually making money and being productive.
Whether they admit it or not, people want to be managed. People crave structure. Either you have good managers or you need to explore opportunities to make your existing managers good. Have you actually provided your managers with management training beyond simply desking and closing deals? When I put on one of my 2 ½ day Management By Fire events, one of the first questions I ask every attendee in my survey is “how much specific management training you had in the automotive industry”. The number of people that reply “none” or “very little” is staggering. Make sure you put your salespeople in the best position to succeed by equipping your managers with the knowledge and tools they need in order to be successful. In today’s automotive industry, what your managers are doing when there are no customers in the showroom is every bit as important as what they do when they have a showroom full of customers.