Mike Whitty is president of Salesperson, Inc. and is a regular provider of training for the Greater New York Automobile Dealers Association. A former middle school teacher, Whitty began his career in automotive retail in 1979 as a salesperson. He also is a past winner of the Mazda National Walkaround Championship. In 1988 he wrote his first book, “The Complete Guide to Selling New Cars,” and has been a frequent contributor of products and training for the auto industry ever since. He is also the author of “The Ultimate Automotive Manager.” We spoke to him recently about leadership skills for new- and used-car managers.

In our talks with dealers, many cite lack of leadership skills in their general sales managers. Isn’t that the key role of management?
Yes, that’s accurate, but I feel we’re seeing the demise of the general sales manager (GSM) due to monetary reasons in today’s market. The title is being eliminated at many dealerships leaving the new- and used-car managers to coordinate with the general manager.

The concept of the GSM was intended to oversee both of those departments. That individual was responsible for hiring and monitoring the performance of the department, for holding weekly sales meetings and conducting sales training, and for determining objectives related to gross sales and profits. In addition, the traditional GSM was responsible for handling the store’s advertising and sales promotions as well as for forecasting and auditing trade-in values to make sure that they were in line with current market conditions.

Thus, with these responsibilities handled by the GSM, the new-car and used-car managers could concentrate on writing and closing deals. But in dealerships where that management title is eliminated, the new-car and used-car managers have to be responsible for all GSM responsibilities as well as their own. In truth, they’re so busy every single day writing deals and handling inventory that they don’t have time for those other responsibilities. As a result, developing and motivating their staff is not always a priority.

And that creates what hole?
The big detriment is that many managers do not concentrate on developing their leadership skills. The manager’s job, traditionally, was to take ordinary people and develop them into outstanding employees.

But that concept has been pushed to the wayside in order to write deals, especially in dealerships that use a desking platform where the manager is responsible for writing all deals. I’ve been in dealerships where just trying to talk to the sales manager is virtually impossible and even getting him to go to lunch is unlikely.

OK, so at the speed dealerships run today, who’s developing their talent?
I just don’t know. In such an environment it is very hard for managers to focus on training and leadership development, which they may not have the skill set for to begin with. So they hire salespeople into their departments and virtually wait to see if they sink or swim.

Where does that leave an operator/owner who has a staff development need?
Once a salesperson has been in the business for three months, he or she pretty much should know the format from A to Z on how to be able to sell a vehicle. Now, a salesperson who wants to excel but isn’t getting that training on the job can certainly find many self-paced training products on the Internet. But you don’t see this happening often. Plus, many sales managers were once salespeople and what they know about being a sales manager they learned from their boss before them, good or bad. It’s a rare sales manager who asks for skills training or if he or she does and can’t get it through the dealership will go to a library or online for resources to expand his or her knowledge and skill set. And thus, they don’t aspire to learning more leadership skills, like learning how to be able to hire and fire properly; like learning how to praise and criticize their employees; and like how to perform performance reviews. Many dealerships don’t even do a performance review, so what really happens is that salespeople don’t know how they’re doing until a manager comes up to them and says they’re doing poorly or they’re doing well.

Has there ever been a time when it was not that way?
I don’t think so. But let’s compare our industry to the real estate industry, for example. Real estate agents pay for their own training. They go to seminars and buy “how-to” books on their own nickel as well as listen to audiotapes to gain more knowledge. Now I’ve only been in this industry since 1979 so I can’t comment about training prior to then. But in my time, I’ve seen dealerships that refuse to invest in training for their salespeople; refuse to purchase materials; and refuse to develop a library of training. Many dealers do this very, very well, but too many don’t. I’ve had dealers say, “Why should I invest in training when I’m not even sure they’ll be here tomorrow?” My only response is, “If you don’t invest in training, you know they won’t be here tomorrow!”

What’s the difference between dealerships that do and those that don’t?
It comes down to a dealer or GM who truly believes in training. The idea behind training is that it keeps the juices flowing in peoples’ heads. It helps them stay stimulated so they want to and can sell more vehicles. In this industry just about any salesperson can step into a dealership with only a high school diploma and make $40,000 to $50,000 a year; at least they should be able to. But how do you develop salespeople who can go further than that? It’s through education, repetition, practice, training; all the things a typical professional athlete would do.

Pro athletes study their craft and practice hours and hours a day; they look at game films to learn about their competitors and to develop better competitive tactics and strategies. They work on their skills in order to become more proficient. I wish we would see this thirst in our industry more than we do.

Too often, salespeople run their business by potluck – which basically means whatever happens, happens; there is always tomorrow. Too many managers operate under this same philosophy. They know that if they don’t make their quota they won’t be fired. Hiring new managers can be even more stressful and time-consuming than keeping nonprodcutive managers. So some managers will take their jobs for granted.

This is a dismal-sounding situation, Mike.
Salespeople want and need someone to look up to and to inspire them. Many managers believe that just because they give their salespeople a free desk and phone, a free advertising budget and a million dollars’ worth of inventory that they should be successful on their own. Chances are that the people we’re hiring into this industry have never been successful at anything in their lives. So why do we expect them to be successful with us just because we give them a job? Yet most want to be part of a successful sales department and successful dealership but need someone to show them how. That’s the leadership aspect of management that, in many dealerships, is missing.

Now, as I said earlier, I know of some great dealers and managers, the type of people who you really want to work for. These stores have little turnover because they take care of their employees. I’ve always been a proponent that the customer does not come first; the employee always comes first. Because if you make the employee feel like they’re number one, the customer will automatically become number one. But if you make employees feel like they’re second rate, that’s going to trickle down right to the customer.

We forget that the management’s job is a coaching job. Managers are in a position to develop their people, which can be truly satisfying.

In your GNYADA seminars, what do you tell attendees about being a leader?
As any good trainer, our job really isn’t to tell as much as it is to bring out information from people, to get them to start thinking on their own. They know how to write deals, so I don’t touch on those skills. I teach them how to figure out what employees look for in a leader and what type of leadership skills they have currently and how they compare with other styles. As a class, we then work on changes the individuals may want to consider when they return to the dealership. We work on helping them train their sales staff on some vital basics: handling phone-ups more proficiently and how to negotiate more successfully. But the core of what I can help them realize, to basically begin thinking about, is their own management style and some other management styles that might work better for them and their situations. Sometimes managers simply need a reminder of the importance of their management responsibilities.

Most managers have never been to a management training class. Being task-oriented, managers tend to forget or understand how valuable people are to their success. They don’t always consider themselves as special people, as leaders and developers of other people.

Look, the manager should be on a pedestal and not in an egocentric way. Managers need to be reminded that their staff looks to them for direction. From the moment the manager walks into the dealership the sales staff checks the manager’s mood, which sets the atmosphere for the showroom all day; managers forget the power they have to motivate, as well as de-motivate their staff, and their responsibility to establish a winning atmosphere in the dealership.

For example, if the first thing out of the manager’s mouth that morning is a negative comment to a salesperson, like “Did you sleep in that suit last night?” it affects that individual in monumental ways. Is that salesperson going to be positive and motivated throughout the day to carry on with what he or she is supposed to be doing? Managers have tremendous power to de-motivate or invigorate a salesperson’s mind.

That’s the manager’s job. The manager is responsible to set the atmosphere within the dealership; that’s not the salespeople’s’ responsibility.

It may be through a training program that a manager hears that message for the first time. And being primarily task-oriented individuals, managers today aren’t particularly concerned about such things. But they should be.

I tell managers that you can never be angry when you come into the dealership; they can’t bring their problems to work with them because other people are taking cues from them all the time. Managers should be consistently uplifting and praising and motivating people to get them to want to perform, especially when times are slow. That’s the time that they really need to lift themselves up to a whole other level as far as motivating and stimulating their people. Instead, they take the other approach a lot of times whereby they put more pressure on their staff, telling them they’re not doing their job. They criticize and critique their staffs to no end, and so they take a whole different approach as to how they view themselves as leaders.

Where’s the weak link that is causing this breakdown?
It’s in the hiring process. First, we tend to hire people who are like us. Few dealers, not to mention managers, are not trained on how to effectively hire people and how to ask the right questions. Most managers will not even write down a list of questions that they want to ask a person interviewing for a position. So what happens is we hire the person with the right job skills but not the right mix of characteristics like ethics and discipline and enthusiasm. And when it comes to firing someone, most managers don’t prepare for that occasion either, nor do they know the laws regarding firing. These are leadership responsibilities that so many managers don’t feel is important for them to study and know.

Any commonality among dealerships that do this right?
I’ve seen large and small dealerships do it absolutely wonderfully. Large automotive groups, many times, because of the size of the corporation, have more policies in place regarding hiring, firing and training. But to the prior question, sales managers often ask questions around the candidate’s sales history, profit added to the last dealership, their income at their last dealership, etc. They never ask them to conduct a five-minute presentation on a vehicle of their choice, or how they might handle a particular type of objection or customer problem, or how they develop repeat referral business, or how they handle phone- ups. They don’t ask those types of questions because they don’t know enough to do it since they’ve never been to a leadership program that teaches knowledge like this.

Given the workday pressures cited here, what is the message to dealers about their bench leadership strengths?
First of all, money and time are real issues. And we can’t lump all dealers into the same bucket. Some dealers are absentee operators and others are in their stores working every day. That situation alone will impact the policies that a dealership will have. A dealer will often say when I broach this subject, “I’ve been in business 30 years. What can you teach me that I don’t already know” and my only response is, “Well, it’s because you’ve been in business for 30 years that you need me to teach you things that you don’t know.”

Obviously, as a trainer, I think that developing people is the single most important thing that we can do for our industry. That means the dealership either has a consistent in-house training program for its salespeople or it acquires training from an outside resource. And that holds true for training managers also. There’s no sense training your salespeople if you’re not going to also train your managers. And so often, when a manager is trained, they still don’t implement what they’ve learned in training. The basic reason is we tend to continuously do the things that are most comfortable for us, whether they work or not.

We need to make sure that our managers truly do train their people and then the dealer needs to monitor that. Why isn’t this happening? Because managers are responsible for their departments and as long as the results come in somewhere close to the figures they need; everybody is satisfied and complacency takes over.

These dealerships have no processes in place to assure proper training is done. For example, a process that requires a manager to conduct a 10-minute training session in every sales meeting. This isn’t happening because, one, most managers are not trainers, and two, they don’t have time to develop the training, and third, they may not even like training. If a manager doesn’t believe in or know his or her job is to develop people, but rather to fill a desk and let people develop themselves, no training is going to convince that individual of the need for proper education. Managers who want to develop their people love people and they love learning themselves.

You notice the dealerships that value training the minute you walk into the showroom. It’s a feeling you get from everyone you encounter. The staff makes it a point to say hello to every visitor…to want to make that visitor feel welcome. You get that same sense at a restaurant. I use this example: is the server’s job to serve food or make big tips? If the server sees his or her job as just serving food, they’ll serve food anyway. But if they see their job as making big tips, he or she will do everything necessary to take care of the customer so they want to tip big. I pose the same question to salespeople: “Is your job to sell cars or is your job to make high commissions?” If your job is to sell cars, you’ll sell cars anyway and at any price. But if your job is to make high commissions, now you must be responsible to develop a process whereby the ultimate result is that customer’s going to want to pay you more money.

Your final assessment?
As long as managers fail to develop their staffs, dealerships will have salespeople who continue to under-perform. Taking that concept a step further, how can we expect our salespeople to want to learn more when our managers won’t?

Now, having said that we all know that volume is often dictated by market conditions and manufacturers’ programs. But without training managers to become better leaders, dealers will continue to struggle with turnover and poor performance. And often, salespeople leave a dealership not necessarily because of money issues, but because they don’t feel like they’re being taken care of, and just don’t enjoy working there anymore.

I’ve always felt that a sales manager had three responsibilities: gross sales, gross profit, and training. Somebody else can develop the ads. Somebody else can handle inventory. But dealerships put so much responsibility on one individual that they end up getting overwhelmed, and ultimately end up doing a lot of things poorly.

So to summarize, managers need to look at themselves as special people and hold themselves to a higher standard. Management isn’t easy. If it were, everyone would be doing it. Developing strong leaders in our industry will be the first step to taking dealerships to the next level of sales and financial success.

Thanks Mike.
 

I've been in a lot of dealerships and seen a lot of Internet processes, and some of the things I've realized are:

- Most Internet departments are failing
- Many dealerships are afraid of computers and the Internet
- Many dealerships simply print leads and pass them out to the salespeople
- Most dealerships do not monitor the leads they pass out
- Most dealerships put a showroom salesperson in place to handle leads
- Most salespeople cherry-pick leads and won't follow-up after second call
- Most leads are thrown away

Wow, that tired me out just thinking about it. Now granted, there are some dealerships that have really jumped on the Internet bandwagon and do things right, but when I use the words "most" and "many", I'm sure it's not an exaggeration. Most dealerships are happy selling their 7-10 sales per month from manufacturer leads, if they even know what the true number is. But those of us who are passionate about the Internet, which are usually the Internet trainers and consultants, know that there truly is a lot of business to be developed from the Internet, and at a profit!

"I Don't Want to Deal With That Element"
I remember when Special Financing was getting started, and dealerships would say, "I don't want to deal with that element!" Well obviously their perception of "that element" has changed since over 50% of all Americans are now eligible for Special Finance. It's not as scary for them any more. That's the same thing that's happening with Internet sales. The Internet customer is an "element" that dealerships don't know how to handle. And because change is hard for most dealerships, since they've been doing things the same way for years, they're not comfortable with the Internet business and they shy away from it. They know that's it's not going away and will only get bigger, but still they're more comfortable handling showroom traffic and running their business by "pot-luck."

The Leads are Already Coming In
Every dealership is already getting leads, even in small amounts. Most dealerships will get at least 20-30 leads per month directly from the manufacturer and possibly their website if they have it setup for leads. Since most manufacturers have some sort of tracking process to see when they're handled, they know they need to assign someone to work them, typically showroom salespeople. Even if they only get 20 leads per month, that's 240 leads per year. If handled properly, that would account for additional sales, F&I, service and parts, and repeat and referral business.

Buying Leads
I'm a big fan of buying leads. It's the easiest and quickest way to increase sales if handled properly. But most dealerships who buy leads take a short-term approach to the Internet. Just like a showroom mentality, if they don't get the sale right now, they forget about them. So these leads, and the money it took to purchase them are wasted, and sales stay low. What if these dealerships took a long-term approach to the leads? What if they realized that they have something just as important as a sale, they have information from a captive audience who wants to do business at their dealership, that they can market to every single month until they decide to opt-out? Wow, over the years that could conceivably be more productive than the $30,000, $50,000, or even $100,000 per month they spend putting advertising in the newspaper. They don't even know who's reading it, or if anyone's reading it. But a lead they purchase for $22 that they can market to forever, hmmmm.

Enter, the Appointment Coordinator
So, I think we can all agree that dealerships waste leads, waste money, and waste manpower handling leads the way they do. There is a productive way to handle these leads, and that's by placing an excellent Appointment Coordinator in place. I know there's still a big debate on handling leads by email if they request, or handling them by phone. My philosophy is if they include a phone number, they're getting a call. And since most of the leads purchased include a phone number, this is a no-brainer. Those of you who wish to debate this single issue, and tell me about customer respect, etc., please don't. I know for a fact that salespeople who do business by email lose gross profit, and it takes a lot longer to get them into the dealership. The Appointment Coordinator's main job is to set an appointment. It's a great process and here's why.

Let's take the dealership who passes leads out to the salespeople. I know that most salespeople hate the phone. They feel more comfortable face-to-face with the customer which is where they do their best work. I also know that phone-ups are the biggest profit loser in the dealerships because most salespeople only give information on the phone and seldom strive to set an appointment. So, when a lead is passed out to the salespeople, they make the first call and leave a message, make the second call and leave a message, and then the lead is forgotten about. And since most Sales Managers who pass out the leads don't monitor them, well, you know where I'm going from here.

The Appointment Coordinator has one main responsibility - persistent and relentless follow-up by phone and email. This persons job is to set an appointment for the salespeople to close. Now, this is where you don't have to have a full-fledged internet staff. You can use the current staff, especially the good closers, because they don't have to use the phone. All they have to do is be there when the appointment shows up. Now they're in their comfort zone and have to do nothing but close sales.

The Long-Term Approach
Many leads may take 3 weeks to 3 months or more to get them into the dealership. And since most salespeople do not follow-up very well, most leads are lost to neglect. The Appointment Coordinator makes sure these leads are not forgotten through consistent follow-up. But let's say this lead buys a vehicle from another dealership. Most dealerships would just throw that lead away. My philosophy is that lead is still my customer, that dealership is just using them for the next several years. I still have the opportunity to get that customer back by keeping in touch with him/her every single month with at least a digital newsletter. Since most dealerships don't do a real good job of following-up with their customers, The Appointment Coordinator will at least have an opportunity to retrieve that lost business.

I developed the Appointment Coordinator in a local dealership that was doing between 7-10 Internet sales per month. They are now doing 50 with one person. But what's even more important is that they are getting sales this month from leads they received in April 2007. Now that doesn't happen by accident. It takes a process of relentless follow-up and keeping the dealership's name in from of them every single month. This is the greatest asset of having an Appointment Coordinator.

The Final Point
Dealerships don't have to grow quickly and start big. They also don't have to have dedicated salespeople who only sell Internet leads. By having a strong Appointment Coordinator, they can get maximum results with very little investment.