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Many dealerships today are struggling recruiting salespeople, especially Gen Y and women. Gen Y has their own unique characteristics (more on that in another post), but both are affected by the culture in the typical showroom, as well as long hours and confusing pay plans. In her book, Ladies on the Lot: Women, Car Sales, and the Pursuit of the American Dream, Helene Lawson writes to succeed salespeople “need to have a healthy distrust for….management and co-workers who want to take away their commissions any way they can.” Not exactly an environment which you would like your wife or daughter working in every day.
A closed floor, where the salespeople are put into a rotation (usually in the order they show up) and notified when it’s their turn on the floor goes a long way to creating a better showroom culture. In my last post (Forget Transparency, Be Transaction-Ready) I talked about the benefits of having a closed floor:
A closed floor creates a level playing field for salespeople that would be appealing to Gen Y and females with natural selling skills who would not normally consider selling cars. But what about the hours and pay plans?
Hours should be based on traffic flow, not the showroom hours. Another benefit to a closed floor is the ability to accurately track showroom traffic, not just what salespeople choose to enter into the CRM. A dealer in California, whose showroom is open 7 days (and 84 hours) a week, tracked their traffic by day and hour for an entire month. What they discovered is very typical for stores that are open on Sunday. Although your store may be more of a night-time store, this store typically sees:
What can a dealer do with this information? Create three person teams that will attract Gen Y and women salespeople, who are more comfortable working in groups to achieve goals. Consider this team:
Each person works Saturday but gets two consecutive days off each week:
On the days they work, one person of the team opens and the other person closes. They are both working in the middle hours of the day (when the dealership is busiest) so they can coordinate any activities to help the TEAM sell more cars.
However, they are only scheduled for 37 hours each week. Why? Because they are paid hourly with team bonuses:
Note: The 37 hour schedule allows for instances when a salesperson stays late without the dealership having to pay overtime.
If the team is given a goal of 7 cars a week, and hits their accessory and F&I goals 75% of the time, they will achieve:
Of course, critical to the success of this plan is proper recruiting, training, and managing of the team. In addition, goal setting is very important. Since the team is paid hourly, if a team does not consistently hit their weekly goal, the compensation per car rises. At 5 cars per week, for example, the average compensation per car goes up to $415 per car. If you would like a spreadsheet with the showroom schedule, pay plan and compensation calculations, please email me at email@example.com.
With a closed floor and teams of salespeople working together, you are well on your way to being Transaction-Ready!
Next step: The Transaction-Ready Process