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Jared Hamilton
From: Jared Hamilton
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Bryant Gibby

Bryant Gibby Used car manager

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Salespeople

We recently hired 4 salespeople within a week because us managers felt like we were short staffed and didn't have enough coverage on the sales floor. Like always, the entire sales force complained about how we were flooding the floor and they weren't going to be able to get in front of enough people to make a living. I get where they are coming from having been a sales consultant before. Nobody welcomes more salespeople and additional competition.

 

All this sparked what I thought would be a good topic to throw out there. What is the proper amount of salespeople with regard to how many cars a dealership sales?

 

I know some people think that the more sales people that you staff, the more cars you will sell. Although there is some truth to that, I think there eventually has to be a cut off. I don't agree with flooding the floor because I think it will kill moral on the sales floor and will lead to high turnover in the long run.

 

On the other hand, you could argue that if you can get a core group of a minimal amount of guys that know what they are doing, then that would work as well. I think the 2 drawbacks to that approach are coverage and finding that core group of guys. I think you would regret this approach when it comes to vacations, days off, and excessively busy days. Also, it is really hard to staff a team where everyone knows what they are doing. I also think this approach will promote laziness because the guys wouldn't have to work hard and fight for every deal in order to make a living.

 

Anyway, what is the right number? Is there a magic formula based on how many deals your dealership does? Maybe I shouldn't worry about it and just ignore my sales guys:)

Philip Zelinger
Sorry Ron, TYPO! One consultant for every ten units. That, but again, there really is no need to set the goals for a professional sales consultant since the right ones will set their own.
Tom White Jr.
Well, I'm about to make a bunch of people mad... Let's get this straight... The days of backing in to the number of sales people as a ratio of sales is over. Seriously! There is ZERO direct correlation between the number of cars sold and the number of sales people on staff... "Hi, I'm 1980 and want my pointy toe heels back!" Craig is closest to bringing this conversation into reality, but really? We are going to choose staffing levels based on how many cars we sell? Really? With apologies to certain people, there is NO WAY you staff your sales departments on the number of cars you sell. First of all, the days of backing in to the average sales person sells a total over 10 cars a month are over. The national average depending on what data you use is between 11.5 and 13 cars per sales salesperson. That's reality and I'm happy to email anyone the actual numbers. My stores run closer to the 13... Interesting that there is no mention of closing ratios. "1980" says I want my 20% of closed to upps represented. Industry average? Well, I don't want to be average. I'm helping manage stores with solid processes that close near 30%. Bottom line... Traffic counts... Period! Your sales people can effectively work on average 75 upps/opps a month. So you staff based on traffic... Some salespeople will be higher, and some will be lower. But you staff based on traffic and then work on your processes to get you closing rates in the 23% to 30% range. With all due respect to everyone posting, my goal is to get you to think about your business differently. Phil quotes average numbers (which I disagree with), but I'm hoping the people that read this are not satisfied with average. You staff your stores based on the number of people that walk in/call in/email in/send leads in - and NOT how many cars you sell. Anyone that tells you differently isn't really engaged on the "new" car business. It's 2013... Let's build and run our businesses with this in mind... just sayin'
Mark Easter
Back in the 80 or 90's, I asked my dealer (and friend) why we were putting on so many more salespeople (5 I think) to our staff. He told me, that Chrysler says that every salesperson will produce 10 sales, and this move would help the store sell more cars. I asked if he really believed that crap? If that was true, why isn't every dealer in the country hiring 1,000 to 2,000 salespeople and backing up a Brinks truck three times a day to make the deposits ??? He looked at me...and walked away....Myth Busters ....#1...I worked for him for 15 years, too. You have to be "certified" to get the bonus money from Chrysler. (Craig has met me, he knows that I am certifiable...lol) Dealers are spending a lot of money for these programs for each individual. That doesn't include any other training investments, vacation and benefits, to add to the cost of each person. Would you rather have eight well trained and loyal salespeople or have 15 that half of them spin on a revolving door? We have only one person with less than ten years on our floor. Our customers walks in and sees familiar faces in our dealership. This makes a great reputation for us. Perhaps the number of salespeople isn't the issue, perhaps it could be the sales process, too. Does your process drag the salesperson off the floor for hours? Could some of the process be handled by another person? Do you train your salespeople to "sell" or be masters of bureaucracy??? Be sure to check your processes from appraisals, pencils, wait times from sales to F&I to delivery. Keep it easy and quick for both the customer and the salesperson....hope this helps...
Greg Churchill
I agree with Tom. The notion of one salesperson for every 10 sales is archaic. Traffic is the real issue. How many customers can one salesperson handle per day. At my store, I feel 2/day is the right number. One of the big changes over the past 5 years is that traffic is declining while closing ratios are increasing. Basically, customers are doing most of their work at home on the internet before they every come into your dealership. They used to shop 4 -5 stores before deciding. This translated into low closing ratios and took a lot more time to close a deal. There is no such thing as a "tire kicker" any more as the average customer now physically shops less than 2 dealers before purchasing. The good news for both salespeople and dealers is that we can sell more cars with less salespeople. Potentially allowing the dealer to have more efficient, higher quality staff, and allowing the salespeople greater earning potential.
David Ruggles
You start with an accurate "Up Count." Without that you are shooting in the dark. A sales person can professionally handle about 60 - 75 OTDBs (Opportunities To Do Busness) per month. If you aren't running a proper rotation system you really don't know what your true traffic count is. You are relying on your sales people and managers to tel it like is, which they are NOT going to do. Why? The more prospects logged, the lower the closing percentage looks. Yes, when hiring sales people most dealers will probably hire more than the expect to end up with. AND you can count on your "experienced" sales people to run off as many as they can.

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