Absolute Results looks at the Second Big Challenge: Sales leadership development.
(If you haven’t already, you can read the first article in the series here: Plugging Digital Leakage)
WHEN business is consistent and predictable, a good sales manager can manage the sales team, maintain basic selling processes and deliver a profitable return for the dealer.
But in times of change, a higher level of sales leadership at all sales management levels is needed to navigate the changes, to equip the sales team to thrive and to deliver an acceptable return to the dealer.
And the retail auto business has changed drastically in the last 25 years.
The marketplace has changed. The consumer has changed. The relationship with the OEM has changed. The product has changed. The business model has changed. And dealership sales staff and team dynamics have changed.
The most challenging of these changes to navigate is new sales staffing and team dynamics. A dealer with a competent and engaged sales team can adapt and overcome just about any challenge. But when the sales team struggles with low motivation, turnover or lack of skills and basic competencies, a dealer’s life in the retail car business gets painfully hard.
Part of the new sales staffing and team dynamics is caused by a demographic shift. Sales teams today are comprised of a mix of Baby Boomers, Generation X, Millennials and Generation Z.
Baby boomers and Generation X, who used to make up the majority of the workforce and who are primarily motivated by the predictable pride of performance and financial gain, are becoming the minority.
Recruiting, motivating and retaining Millennials and Generation Z has been a frustrating leadership puzzle for many dealers, especially in an industry where the pressure is high and the compensation model is largely commissioned-based.
Another key component of the new sales staffing and team dynamics shift is the current sales manager and sales professional’s perceived job description, which is largely focused on maximizing showroom traffic.
Good sales managers intuitively know that there are only two ways to grow new and used vehicle sales – increase the daily conversion ratio (that is, close a higher per cent of showroom guests) and/or increase the daily opportunity count (increase showroom leads and traffic).
However, the vast majority of industry sales management “cut their teeth” in an era where high conversion ratio and high gross profit per transaction were the badges of honour and two of the keys to sales department profitability.
OEM volume pressure on dealers globally and the shift to consumer shopping and research online is exposing the inadequacy of the high gross profit and high conversion success model.
The good news is that while the challenges facing sales managers today are complex, there are sales leadership solutions. These solutions, however, often require different sets of skills and aptitudes.
Sales leaders need to develop the ability to see past today’s pressure to find a solution and then rally their team towards the solution with a willingness to figure the “how to’s” out as they go.
Effective sales leadership means developing three key leadership characteristics – vision, courage and clarity. They need to see further than others, they need to put at risk the safety of the old and predictable and they need to communicate to their team “what to do next”.
One key sales leadership solution to the industry-wide sales team demographic challenges and the showroom opportunity challenge is an ‘Appointment Culture’. When a dealer has developed an appointment culture, the sales team has meaningful work to do every day – making appointments every day. This in turn creates consistent showroom opportunities.
Sales managers who can create and sustain an appointment culture with their sales teams are becoming a highly prized asset to dealers.
Dealer groups, specifically in Europe, are understanding that their succession and growth plans need to be underpinned with a bench of sales leadership talent who can create and sustain an appointment culture day after day, no matter which showroom, brand or market their dealer deploys them to lead.
To be even more blunt about the power and value of an appointment culture, let me share this thought. In 25 years in the auto industry, I have never heard of a sales manager who was fired because his team booked too many appointments, had too much traffic, engaged too many customers on test drives or wrote too many deals.
But many have been fired due to the decline and lack of these showroom activities. Sales leaders today must become masters at Inspiring Retail Activity and creating daily appointments is the primary activity that leads to showroom traffic, test drives and deals.
In our work with premium brand OEMs and dealers globally, Absolute Results has developed six Best Practices of the Appointment Culture:
- Daily one-on-ones
- Weekly motivational sales rallies
- The weekly boiler room
- A customer-centric sales process
- Service department prospecting
- Daily opportunity meetings
Absolute Results facilitates world class events in over 2,000 dealers and 19 countries every year and has coached more than 6,000 sales managers, and 15,000 sales professionals.