Dealership Sales Training & Consulting

When it comes down to it, life itself is a learning experience, but we quickly come to realize that if we want to get ahead, we need to seek out specialized training and advanced learning. Auto dealerships seeking an edge are likewise realizing that, while knowledge gleaned from day-to-day operations has value, additional training and education for all employees can positively impact everything from employee retention and morale to CSI scores, increased sales, and ultimately, higher profitability.

Every operational profit center in a dealership—from front end sales and Internet sales to F&I and parts and service—will find value in a commitment to ongoing dealership-wide training; fortunately the forward-thinking dealership (both franchise and independent) seeking best practices or even fundamental sales training concepts will find plenty of industry trainers and consultants willing to help out. In this article, we’ll take a look at some of these trainers who can help every dealership’s profit centers be all they can be.

It makes sense to start with the front-end sales team, as that’s whom customers meet, greet, and interact with first. Everyone knows the old adage about first impressions—and yes, that old adage is true. Unfortunately, this is the place where budding relationships can be ruined almost before they begin, due to a combination of customers’ longtime preconceptions of car salespeople as amoral predators, and salespeople who perhaps have allowed their standards of sales presentation quality to languish. It is essential that your front-end sales team, from greeters to the business manager, be sufficiently trained to deliver the best possible initial impression of your dealership. Fortunately, there’s always time for a tune-up.

Front end: Is a tune-up necessary?

According to Darren VanCleave, president of Result Technology Group, an automotive training and consulting company providing full-service, customized dealership training, many dealerships suffer from a lack of best processes implementation, lack of execution, and lack of accountability. Dealerships may have established processes identified, explains VanCleave, but that doesn’t mean people in the dealership are following them. RTG, founded by Darren VanCleave in November 2000, says his company’s training has helped over 300 dealer clients achieve increased sales with more gross profit, lower employee turnover, and loyal, happy customers—every dealership’s perfect scenario. VanCleave is a true believer in helping dealerships establish processes to ensure implementation, execution, and accountability become part of everyday operations. To help achieve peak sales performance RTG educates and motivates the sales team—and then teaches management how to keep motivation high and education ongoing long after the RTG team has departed the lot. Getting sales management’s buy-in to these processes is crucial, according to VanCleave. If management doesn’t support the process, then the process will never work. VanCleave says his team also spends a week with each dealership’s sales teams, going over the fundamentals of sales—everything from the initial greeting and the demo to moving a customer into the F&I department. “We go over and reinforce every step of the sales process; we’ll lay a strong foundation that they can continue to build on,” VanCleave says. To help ensure adherence to the established best practices, RTG maintains a strong mentorship role with dealer clients. While other trainers may swoop in, train, and vanish, VanCleave says his training teams provide ongoing support, by analyzing daily reports from its dealer clients, allowing RTG to provide immediate feedback, and that a hands-on presence can ensure that all best practices are implemented and adhered to. “Culture change doesn’t happen within 30 days, and we’re there to push,” VanCleave says. “At other places, I’ve seen dealers who wasted money on training that wasn’t implemented.” VanCleave says that the bottom line about ongoing training is its undeniably affirmative impact on a dealership’s bottom line in any market condition. “Dealerships will have processes and skills in place that will allow them, no matter how the economy is, to succeed,” VanCleave asserts.

Finance and insurance: Pivotal to the bottom line

Moving deeper into the dealership, the F&I department has a significant role to play. In addition to ensuring that the dealership’s sales remain in full compliance with federal regulations, F&I managers are also tasked with continuing the sales process by selling added-value products, overcoming any lingering objections from a customer, and finding the best financing deal while competing with outside lenders. With so many balls in the air, particularly on a busy day, it’s no wonder a few processes might fall by the wayside. But some specialized sales training might be the key to maximizing an F&I department’s efficiency and profitability. “It takes a well-educated F&I manager to be able to see the deal and package the deal,” says Jan Kelly, founder of Kelly Enterprises, a full service F&I and sales training/consulting company for the auto, marine, motorsports, and recreational vehicle industries. “We create F&I managers who can do exactly that.” As with VanCleave on the sales floor, Kelly sees a similar lack of control, accountability, and understanding in the F&I department. Kelly Enterprises brings those elements back into the department by teaching a college semester’s worth of information in a five-day seminar, covering everything from sales techniques to how to evaluate credit scores and compete against outside lenders. At the same time, Kelly says, her training illustrates to upper management what a pivotal role the F&I department plays in the dealership.

In dealerships, senior management is often unclear on just how F&I departments generate money, Kelly says, and that can lead to fuzzy accountability practices and unclear goals for F&I departments. She says a training program that establishes best practices and standards of accountability—perhaps tying compensation to sales goals—can bring everybody in both the F&I department and upper management into agreement on what’s expected.

When training an F&I department, Kelly introduces menu training, which presents every step of the sales process in a list that F&I managers can use to ensure they are leveraging every customer interaction. This includes greeting the customer, reviewing pricing, and even the proper way to invite the customer into the F&I office to complete the transaction. When this is done properly, and completely, it instills a level of confidence in the customer. “People won’t buy unless they are confident that the salesperson understands their wants and needs,” Kelly says. “Our training shows F&I managers how to present the deal to show that they do understand the customer’s needs.”

Kelly likens an F&I department’s movement of a customer through the transaction to putting on a short play, noting that customers give salespeople “20 minutes of attention and, after that, the lights are on but nobody’s home!” She notes that the sales process has different physical stages, props, and actors—and a good training program can make sure all of the actors are supporting each other. As in theater, the better the show, the pricier the ticket, is Kelly’s adage, and if F&I managers are trained and motivated properly, the high-quality show they put on for the customer will result in higher customer confidence and a higher ticket price—in the form of the purchase of added value items and down the road for parts and service. “F&I is a key department because what they do affects every other department,” Kelly says. “Sales sells the first unit, but it’s the positive financial experience that will bring the customer back.”

Internet sales: Are you prepared?

The Internet has come into its own over the past half-decade, and much like The Gold Rush of 1849, increasing numbers of consumers are rushing online—with the same mixed results. As of 2004, over 94 percent of car dealers had a Web presence, while the vast majority of car buyers are now conducting research and/or purchasing vehicles online. Without a carefully conceived online marketing plan, or even a basic comprehension of the Internet and its possibilities and limitations, dealers who venture online without a plan can end up wasting money or even damaging their image and identity. To get the most out of the Internet, many dealers are turning to Internet trainers to help them establish best practices for leveraging the Web. To achieve that, according to Corey Mosley, president of the Mosley Automotive Group, requires affecting a cultural shift within the dealership, raising the Internet sales and marketing department up on a par with other departments. Establishing processes, and adhering to them, is key. “Dealerships seem to think they can add an Internet aspect to their dealership, but not focus on it,” Mosley says. “Dealerships need to embrace the Internet.” He notes that often Internet sales and marketing departments are unable to realize their potential because they lack both support and understanding from upper management.

When training a dealership’s Internet department, Mosley and his trainers help the dealership hammer out realistic goals, and then create an ongoing coaching and training program. Next he begins in-store training, demonstrating to Internet department managers the best ways to convert online inquiries to sales, create effective and compelling email marketing strategies, and maximize the impact of the dealership’s Website.

The benefit, according to Mosley, is that it adds another strong sales element to the dealership, noting that car buyers are increasingly better educated and more sophisticated, and an Internet sales manager—or any sales manager for that matter—who is similarly better educated will be able to meet that customer’s demands, gain their confidence, and create a customer for life. And since increasing numbers of car buyers are researching online, Mosley says, dealerships need to focus their attention there. “Dealerships worry about ‘ups,’ ignoring how many people made a zero decision based on whether your Website makes it look like you know what you’re doing,” Mosley says.

David Kain, president of Kain Automotive, agrees that a dealership’s Internet sales department is often overlooked and underutilized. He says this is because managers aren’t sure whom to hire for the department—technology wizards or experienced salespeople. When he’s setting up or training an Internet sales department, he says it’s easier to train a salesperson on the technology than impart sales skills to a tech head. “The Internet department is typically an orphaned department, unattended by managers, and that can be difficult to overcome,” Kain says. “I train dealers to recognize the value of the Internet and be aware that many of their customers are migrating there.”

Consequently, Kain says, his training focuses on determining each dealer client’s goals and then training personnel in the procedures necessary to reach those goals. Training also addresses the particular challenges of Internet sales, moving a customer from an email inquiry to a telephone conversation, to a dealership visit, and to closing the deal. “We like to build a customized process that enhances the existing sales skills and shows how they can be successfully applied to Internet sales,” Kain says.

Nancy Stracione oversees the Internet sales departments for the Fred Beans dealership group, and has worked with Kaine Automotive for about six months. After working with Kain, she says that Internet sales are steadily increasing, and his training has helped Internet sales employees turn their performance around. “This (Internet) sales training has helped our people come a long way,” Stracione says. “We have better accountability, and we are ready to explode!”

Fixed operations: Realizing your potential

Traveling even deeper into the dealership, we enter the parts and service department, where employees have a great opportunity to step up their customer service and enhance the dealership’s bottom line at the same time. Trainers who specialize in these departments say it’s critical for employees in these departments to realize that they are so much more than order-takers.

 “Sales begin associations, but service sustains relationships,” says David Brown, president of David Brown and Associates. The two departments need to work together like never before, says Brown, and that includes attending each other’s department meetings. “Service consultants must adopt the mindset of the sales department,” Brown says. “It’s an opportunity to build a relationship that will last.”

Brown’s company focuses on service management training and fixed operations in the service department. He says that the number one problem he sees whenever he goes into a client dealer’s service department is the order-taker’ mentality, so he trains each student to change their mindset from passive to proactive—instead of taking a customer’s request as the last word, being proactive and stepping out from behind the service desk. “Service consultants need to do a vehicle walk-around, as that really lets them determine what the customer truly needs,” says Brown. “After all, between the customer and the service consultant, who is likely to know far more about the car?”

Training service consultants to adapt to this way of thinking can drastically change the amount of work a service department books, Brown says. For example, he estimates that only 25 percent of service orders should be one-line orders, but in many dealerships he’s found as many as 74 percent of orders are single-line orders. That means that dollars are slipping out of dealerships while customers are potentially not getting the service they need and may go elsewhere, says Brown. “It’s not just about selling an oil change or a rotation, but starting and maintaining a relationship that benefits both customer and dealership,” Brown says. “A comprehensive, ongoing training program is going to help dealers find that.” Jeff Cowan’s Pro Talk is another training provider focusing on the service department. Founder Jeff Cowan says that training service professionals on how to simply talk to customers overcomes a huge obstacle and can build trust quickly. He teaches service professionals how to make a professional selling presentation in a non-threatening and reassuring way, which is very CSI-friendly. “Training your service department in communications means increased customer-paid labor sales, increased CSI, higher customer retention, and lower service advisor turnover,” Cowan says.

For example, when a customer approaches a Cowan-trained service advisor, the advisor uses scripts or word tracks that reassure the customer while making sure they are in the right place. The result, Cowan says, is a relaxed, stress-free customer who is listening to the advisor’s recommendations. Cowan says that after the initial training, his trainers remain in contact with the dealership, helping them to shape and refine their established processes and best practices. No matter what operational area of the dealership trainers and consultants focus on, they all have found common obstacles and challenges that must be overcome before a dealership can reach optimal sales performance. Trainers can not only help dealerships establish the nuts-and-bolts procedures that will improve day-to-day operations, but more importantly they will help dealerships overcome those obstacles by acquiring the necessary understanding of each department’s reach and responsibilities, implement ways to measure and assess performance, and find the personnel commitment to make these elements help dealerships reach their full potential.

Sidebar: A degree of improvement

Northwood University, with campuses around the country, is the only educational institution to offer a full four-year Bachelor of Business Administration Degree with majors in automotive marketing and management, according to Joe Lescota, chairman of the Automotive Marketing Department at Northwood University’s Michigan campus. The campus also offers continuing education programs, teaching courses on everything from parts and service management to financial statement analysis and corrective actions to successorship planning.

Since 1963, when the National Automobile Dealers Association selected Northwood University as the college to develop the only collegiate degree program in Automotive Marketing. In active cooperation with automobile firms, Northwood has prepared their students for interesting and challenging careers in all aspects of automobile distribution, sales, and service. In order to ensure broad compliance with automotive industry standards, all students in Northwood University’s automotive marketing degree program are required to pass certification tests from industry organizations like NADA and manufacturers including Toyota and others. “On our [Michigan] campus alone, we have 250 students enrolled in the program, and there are companies waiting to hire them upon graduation,” Lescota says, noting that 50 percent of his students are the sons and daughters of dealers looking to enter the family business. “And the teaching staff isn’t just theorists—the courses are taught by former dealers.”

Lescota says that since so many of the students have close connections to dealerships, they can quickly test out the knowledge imparted by their instructors—by simply calling their parents and having them try it out at their dealership. “What we teach is immediately real-world tested,” Lescota says. “Since the curriculum is selected based dealer feedback, we can quickly determine what we should keep teaching and what we can eliminate.” According to Lescota, dealerships whose employees receive enhanced training will always be up-to-date on the latest sales and operations knowledge; that knowledge can in turn impact how long they stay at a dealership, which has to bear the cost of employee turnover. Lescota identifies three reasons why employees fail in a dealership: They don’t understand exactly what the job entails; therefore they don’t know how to do the job, and they don’t have or don’t recognize the tools to get the job done. What can these ominous conditions be attributed to? Lescota says it’s the lack of comprehensive, on-going training to educate employees and keep them abreast of the most recent developments.

When an employee isn’t properly trained, they may be either fired or leave of their own volition; either way, the costs of employee turnover can have a profound impact on a dealership’s profitability. For example, Lescota estimates an average replacement cost of $35,000 for a salesperson, based on lost sales, time spent searching for a replacement and other factors. Couple that with a turnover rate of 49 percent to 52 percent based on the market, according to Lescota, and how many cars a dealership has to sell just to cover the cost of turnover?

A well-trained employee is a confident, productive and valued employee, says Lescota, and a dealership committed to ongoing training and education will find itself having more of these ideal employees.