Q: I own an auto dealership, and one of my greatest challenges is reducing salesperson turnover. My managers are constantly interviewing, hiring, and training new salespeople, and I’m confident this takes a toll on the bottom line. What strategies would you suggest for increasing sales employee retention?
A: First of all you should know that you are not alone. In most organizations sales people tend to come and go, especially in industries where competition is fierce. However, there are several strategies you can implement:
1. Evaluate your hiring process. During the interview process is your staff doing enough to determine a new salesperson’s commitment? Take a look at an applicant’s employment history – is there a pattern of job change? Also, find out from the applicant why they are applying. Make sure your managers follow up on this information by contacting previous employers and the applicant’s references. Obviously, you want to avoid hiring someone that you suspect will leave quickly.
2. Evaluate your work environment. It is hard to know if your employees are unhappy – simply asking them rarely results in the truth. However, exit interviews are an excellent way to learn more about your work environment. Employees that are leaving on their own accord are surprisingly frank – just make sure your managers are willing to hear what they have to say. If you want to get good results from exit interviews, get personally involved in this process.
3. Build a long-term bonus into your pay plan. Some automotive dealers base part of their sales compensation on customer satisfaction scores or volume bonuses. Consider implementing a quarterly sales bonus, where a salesperson’s average sales volume or average satisfaction score (by quarter) determines some percentage of their pay. Doing so will make it much more difficult for a salesperson to leave because they will be walking away from part of their paycheck. This is especially effective if the quarterly payment comes at the end of the first month following the end of the quarter.
Like most things, discussing strategies for mitigating employee turnover is much simpler than actually implementing these strategies. Sometimes an outsider – who is not encumbered by organizational momentum – is most effective at helping a business correct a problem. QCEP Consulting can help your business deal with this problem (and many others).
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