It’s often characterized as a chicken-or-egg dilemma: Training employees can make them more productive. However, training costs money. This is a hard sell, especially for smaller dealerships where staff wear many hats.
While everyone knows that training is an essential component in running a dealership that is successful, profitable, efficient, and ethical, commitments to it vary widely among dealers. As an agent, what are the benefits of selling training to your dealerships, and how do you go about it?
Below are some objections to training agents commonly hear from dealers, followed by some tips to help overcome the wrong mindset and maximize your ROI.
According to the National Automobile Dealers Association, three-year employee retention stands at 45%. That means nearly half the employees at any given dealership leave within three years.
Many dealers question why they should invest time and money to train people who may leave. But in reality, this idea is just not valid. Studies show the two biggest reasons for employee turnover are limited advancement opportunities and lack of training for a specific role.
According to ZipRecruiter, lack of development and advancement opportunities is the No. 1 reason employees leave. Through training, dealerships have the potential to increase job satisfaction by empowering team members to expand their roles and grow their careers.
Sending employees through developmental, performance-based training courses is also a good way to recognize them for accomplishments. They will appreciate the investment the dealership is making, giving the dealership a value-based method to help reduce turnover and retain top performers.
2. Time Away From the Job
Another question some dealers ask is how they can justify taking income-producing employees away from the sales floor, F&I desk, or service drive for training. If this is a dealership concern, consider this story about a woodcutter:
A woodcutter was hired. He was given an ax and direction. The woodcutter started out strong. His boss was quite pleased with his work and shared that feedback with the new woodcutter. This motivated the woodcutter to work even harder in the days to follow. But even though he swung the ax as hard as ever, the number of trees he cut declined each day. He then went to his boss and apologized, saying he must be losing his strength.
The boss asked the woodcutter a simple question: “When was the last time you sharpened your ax?” The woodcutter replied, “Sharpen my ax? I had no time to sharpen my ax. I have to spend all day cutting trees.”
The lesson here is that investing time in training should pay off in improved and sustained production results. Time off the floor is simply part of that investment.
Even dealers who invest in training can fall into the trap of employees not taking the time they need to sharpen their skills. This happens when the dealership culture is not aligned with the goal of increasing employee retention and providing career development to enhance the dealership’s value proposition with its customers.
3. No Results
Every dealership has experienced training that produced no results. Consider the format. Was the trainer a talking head, or was the course interactive and participatory, tailored to address current challenges?
The training methodology must be truly conducive to learning to be successful. Encourage dealers to choose training that is structured to produce results by assessing the individual needs of each participant, measuring acceptance and understanding of the behaviors being taught, and measures success by having participants demonstrate competence of the trained behaviors.
Benchmarking is a necessity to determine return on investment. Take note of each team member’s numbers, such as units sold, profit per unit, and product penetration. Then set a benchmark for improvement. Lastly, track team member improvement after training, against the benchmark. Benchmarking and tracking results are key elements to ensure positive training outcomes. Benchmarks also motivate team members when they can see and track their own results.
Now let’s discuss a few proven strategies for meeting the goals you set forth for your clients.
1. Management Buy-In
In addition to training methodology, lack of management buy-in can generate a lack of post-training results. Consider the buy-in for your last training investment. Did dealership management support the training provided, or did they have employees revert to the old way of doing things, completely negating the training?
Encourage dealership managers to review curriculum before sending employees through training. Even better, encourage the managers to take the course first. There is no point in recommending training without the endorsement of management. If you don’t secure management buy-in up front, then don’t expect a strong return on your training investment.
Also, identify the specific training recommended for the dealership. The type and delivery method should be carefully considered. Understand that not every organization operates the same way. Do not present a canned approach. Take time to understand the specific training goal and identify each dealership’s unique challenges.
2. Select the Right Training Partner
Not all dealerships are staffed to effectively train their teams across all disciplines, and there is support for training available from many sources. The key is identifying a partner that meets the dealership’s needs. The right training partner should:
- Have proven industry expertise:Understand the company’s background, reputation, culture, certifications, and the experience of their employees.
- Use effective training methodologies: Ensure the training company can articulate and substantiate a clear methodology.
- Provide methods to demonstrate success: Ask the company how they prove their training effectiveness and success with sustainable training relationships.
- Be a trusted industry partner: Research the training company to understand their corporate values, history, current business accomplishments, and other companies with whom they do business.
Finding an effective training program and cultivating an environment where training will be beneficial will deliver countless benefits to the dealership’s operations and bottom line. By capitalizing on effective training, your dealership clients will be poised to reduce turnover, improve sales and F&I penetration, and cultivate a team of top performers.
3. Optimize Training for Today’s Challenges
Industry analysts predict that the retail automotive industry will experience a flat year in 2019. Agents need to help dealers prepare for reduced vehicle sales.
It’s important to remember that this flat-sales year will still produce record highs when compared to historical unit sales. We’ve reached the peak of just how far sales can climb. Going forward, the emphasis needs to be on maximizing profit potential on each sale and increasing customer retention:
- Placing a heavier emphasis on service retention through F&I product sales: Help your dealers evaluate their product menu and F&I pay plans based on those products that encourage customers to return for service.
- Training across departments: Provide training solutions to ensure all departments, not just F&I, are aligned on the benefits of buying and servicing a vehicle with the dealership, including traffic-driving F&I products.
- Think outside the box: While sales and F&I training is important, training on the service drive can be a game-changer in increasing customer retention. Evaluate solutions for training service advisors to better recognize opportunities for maintenance, enhance dealership communication, and sell less expensive consumer protection products from the service drive.
4. Insulate Your Agency
Agents should also evaluate ways to insulate their business from shrinking profit margins. Look at dealership production levels more closely. Be more engaged with dealership operations overall to keep production levels high. Offer more innovative products to implement into customer retention strategies and F&I solutions that better match customer expectations and dealer needs.
Delivering training solutions that improve the dealership’s bottom line will not only make the dealer more profitable, it will strengthen the bond between agent and client.
As dealerships place higher demands on their agent partners, agents must become more efficient with their dealership clients. For agents that are looking for a deep and long-term relationship, providing a training solution that keeps dealers thinking about increasing market share and profitability is a good place to start.
Utilizing F&I products and training to align dealership operations toward the common goal of customer retention is one step forward on the road to boosting customer service and dealership revenue. Once those rumble strips have been cleared, winning dealerships can then tackle increased transparency in the F&I office, online tools for customers to educate themselves on the benefits of consumer protection products, and delivering a more consultative approach to sales. And the relationship built between agent and dealership, based on training guidance, will be even stronger.