Remember the three “D”s? Demos, day-offs, and draws. Years ago, dealers promised young salespeople they would teach them everything they need to know to succeed. And if they worked hard, they would make lots of money. Unfortunately, not much teaching took place — the three Ds were about it — and most salespeople never made a lot of money.
However, salespeople in those days entered the profession willing to work long days, weekends, and holidays. They missed out on many family events, but it was understood this was the sacrifice you needed to make. Building a successful sales team required a lot of churn. You hired people you thought were self-motivated and it was sink or swim. If they sunk, you found yourself another newbie.
“'Pet your racehorses, kick your ponies' refers to a management technique that focuses on getting a higher level of production out of a smaller team. This philosophy recommends spending 80% of your time managing your top-producing salespeople. This is the opposite of what many managers believe and practice, as they spend most of their time with the struggling salespeople."
Today, it’s difficult to find talented young people willing to work in that type of environment. It’s not because they don’t want to work; they’re just not as motivated by money. They simply have fundamentally different views of the world and what’s important.
Today, most workers — not just millennials — value their time, and they want to feel valued and part of something. They also want to be empowered to find a better way of doing things. At the same time, car shoppers are more educated and want control over the buying process. They demand more information, transparency, and honesty. It’s these dynamics that require a fundamental change in the way today’s sales teams are managed. Let’s take a look at four keys to building a high-performing sales team in today’s market.
1. Hire based on character.
What do you look for when you hire a new salesperson? If you’re like most dealers, you value experience above almost everything else. Hiring based on experience means immediate production without much teaching, right? Well, not necessarily.
Expecting a finished product right out of the gate means you place more emphasis on skills rather than character. Skills can be taught, character cannot. A better approach is to hire people who make good employees in general, and that share the following character traits:
- Positive attitude
- Purpose and passion
- High energy
- Team player
Hire someone with those traits and teach them sales skills and your process. They will likely deliver better results than an experienced salesperson looking to make his or her third or fourth career change.
2. Pet Racehorses, Kick the Ponies.
When building a sales team, “the more, the better” has been the traditional approach — as in the more salespeople you have, the more cars they will sell. Unfortunately, that’s just not true. A smaller team of high performers will always outdo a large team of mediocre performers, and they’ll be much happier because they’ll be making more money.
Managing a small team is also easier. It means getting fewer people to buy into your philosophy and processes. It also means avoiding that one problem child who doesn’t follow a process, doesn’t buy in, and causes morale problems.
“Pet your racehorses, kick your ponies” refers to a management technique that focuses on getting a higher level of production out of a smaller team. This philosophy recommends spending 80% of your time managing your top-producing salespeople. This is the opposite of what many managers believe and practice, as they spend most of their time with the struggling salespeople.
Think about it. If you spend time with a salesperson who sells 10 cars a month and you get a 10% increase, that’s one more car per month. If you spend that same amount of time with a salesperson selling 20 cars per month and you get a 10% increase, that’s two cars per month. That’s literally double the results.
I should make it clear that I am in no way advocating kicking the ponies, or salespeople. What I do recommend is building a smaller team with all racehorses.
3. Create a Culture of Accountability.
One of the most challenging aspects of a manager’s job is to hold the team accountable. Your salespeople know your process and what’s expected on a daily basis. Yet, for some reason, they always find new ways to skirt the process and look for shortcuts.
That’s why process trumps the outcome. If the goal is simply to sell a car, a salesperson will feel justified by the result regardless of which process he followed. If following the process is the goal, selling more cars will still be the result. However, your team will learn to be accountable.
The key is to keep it simple. Today, there are so many KPIs to measure and so many activities to track. Sometimes, with so many people involved, the process can become overcomplicated. The most successful dealerships have very simple sales processes, as they know the fewer steps and people involved, the better.
Choose five top KPIs or activities that are most critical to your sales process. Set a benchmark for each activity and start holding your team accountable for each one on a daily basis. And make sure your sales team is required to report their own individual KPIs to the manager. This is how they become more accountable.
Traditionally, managers will print a report and tell each salesperson the results and what they need to do to improve. This top-down approach is not very effective because salespeople never truly own the consequences of their actions. But if you have your sales team set their own goals, report their own KPIs and explain why they didn’t achieve a certain outcome, they will quickly see the correlation between their activities and results.
4. Coach the Team.
Every team has a manager, but only successful teams have a coach. Coaching and counseling are almost a lost art these days, but it’s worth learning how and doing it when you have.
Coaching requires you to lead, inspire, and walk the talk. Never ask a salesperson to do something you’re not willing to do yourself. Get to know your employees, learn how to relate to them, and find common ground so you can be relevant.
A great coaching technique is to create a feedback loop. Providing and receiving feedback needs to happen quickly. Don’t say things like, “You said this wrong” or “You shouldn’t have done that. Go back and do it this way.” A different approach would be saying, “We didn’t get the outcome we wanted. What would you do differently?” Involve the salesperson, make it interactive and support their solution — within reason, of course.
Building a high-performance sales team takes time and thought. It requires a hands-on approach. Traditional management models in dealerships are outdated and ineffective for today’s workforce. Hire based on character, produce more with less, hold your team accountable, and learn how to coach them to success.
Bill Wittenmyer serves as a partner and vice president of sales and operations of ELEAD1ONE, provider of automotive software solutions. Email him at [email protected].