Customer experience imperative drives changes in hiring

When Eric Savage worked for his family's dealership, he was always on the hunt for a tenacious salesperson, someone motivated by profit. Now, in his own dealership group, he still values profit, but he wants the best customer experience to drive his sales associates' tenacity.

Savage, president of Freedom Auto Group in Pennsylvania, said he trains his sales associates to ask each custo- mer questions that would lead to a sale, but serving the customer comes first. He describes his ideal candidates this way: "It kills them not to be able to solve the customer's problem," even if that means sending the customer to another dealership.

Job descriptions in dealerships are changing dramatically. So are pay plans. Much of that change is fueled by the mission to make customer experience a top priority.

For the past year or so, the industry has buzzed with advice for achieving a positive customer experience, said Chris May, manager of sales process development at JM&A Group, an F&I product provider and training company in Deerfield Beach, Fla. Dealers are looking to hire employees from the hospitality industry, high-end retail companies and technology retailers.

"Historically, dealerships were very process-driven," May said. "In this marketplace, it's much more important to be customer-focused because customers are coming into the dealership with their own experiences and preconceived notions."

To provide a positive customer experience, dealers are altering employees' job descriptions with flexible hours, reliable pay plans and an atmosphere of teamwork.

Job descriptions were fairly loose in the past, May said. Dealers hired "warm bodies" and churned through a "subset of them until you found the right one."

Now dealers have a more thoughtful approach to hiring. Many say they want someone with emotional intelligence, accountability and time-management skills, for example.

Candice Crane, vice president of dealer solutions at Hireology, a Chicago consulting firm that helps dealerships recruit and hire, said the most successful candidates are concerned "less about making a whole bunch of money and more about meeting the customers' needs."

"It's more altruistic, looking for people who are passionate about the customer experience versus money," she said.

Pay plans are still important to employees, but in a way that differs from in the past. Many employees value reliability in compensation and quality of life over a huge paycheck and an 80-hour week. To satisfy employees looking for a change, some dealers have adopted a salary-based structure, plus commission, which reduces negotiation with the customer and relieves some of the pressure to produce.

"The focus is the customer experience, not necessarily the vehicle sale," May said. "If we want to make sure we're more of a hospitality environment, we need to pay people for all that effort, whether it results in a car sale or not."

Changes in pay plans are starting to improve turnover rates in the industry, said Ted Kraybill, president of ESI Trends in Largo, Fla. Kraybill is a consultant on dealership employment issues and conducts the National Automobile Dealers Association's annual workforce studies. According to the most recent study, which uses 2015 numbers, the sales consultant turnover at mass-market-brand stores dropped 7 percentage points to 72 percent. Kraybill anticipates that trend continuing with the 2016 numbers.

"There are a lot of stores that are abandoning 100 percent commission," Kraybill said. "There's two of the public groups that I know of that are going off 100 percent commission."

Those are Sonic Automotive Inc., of Charlotte, N.C., which changed pay plans several years ago as part of its One Sonic-One Experience program, and AutoNation Inc., of Fort Lauderdale, Fla., which announced in October that it would move to new pay plans that include a base wage plus bonuses for volume, customer satisfaction and other criteria, such as longevity.

"This is more anecdotal, but the stores that we work with who have gone away from the traditional sales consultant pay plan, turnover has gone down dramatically," Kraybill said. "So I think we'll see that trend continue."

A base salary tends to be more stable, but coupling it with commission adds incentive. Adam Fitzpatrick, COO of Ballweg Automotive Family, of Middleton, Wis., said his stores previously paid employees on what the industry calls a "draw" -- essentially, an advance on their commissions. Ballweg paid them a $2,000 draw at the start of the month. If the employee earned $10,000 in commissions that month, the dealership would subtract the $2,000, leaving the employee with an end-of-month paycheck of $8,000, Fitzpatrick said.

Now most of Ballweg's stores pay their employees a salary plus a flat dollar amount per vehicle sold at most of the dealership group's stores.

"We are trying to decrease the amount of time the guest spends in the dealership," Fitzpatrick said. "We are trying to eliminate the back and forth negotiating."

Crane suggests that dealers who pay a draw should convert it to a guaranteed payment that does not have to be paid back. Some dealerships are even experimenting with a 90-day guarantee before switching to commission.

The change to a guarantee is an improvement, Crane said, but it's not a big enough shift.

"It's more of an awareness to change the compensation plan," she said. It's not "evolving to a place that will attract a different candidate."

Dealers are working to offer more flexible schedules to improve their employees' work-life balance, but hours are still dictated by the consumer, said Bill Jarrett, owner of Jarrett Ford in Avon Park, Fla. The staff can't leave until the customer is finished. But in the tug of war between professional and personal time, one can't dominate the other, he said.

Kraybill said working bell to bell is no longer the expectation at the majority of dealerships, as it was in the not-too-distant past.

The percentage of dealerships that say they expect sales consultants to work 50 hours a week or more has been steadily declining. In 2015, a quarter of dealerships had that expectation for sales consultants, and 30 percent had it for service advisers, he said.

The average number of hours required has leveled off at around 45 hours a week, Kraybill said.

Younger employees especially are looking for a flexible schedule, said Scott Gunnell, vice president of sales strategy and development at JM&A Group.

He has seen dealers start "scheduling around when more business demands exist," he said.

For example, Gunnell said, some dealerships decrease F&I managers' hours in the morning when the dealership is typically slow. Other dealerships have given F&I managers two consecutive days off so they don't have to use vacation days to have two back-to-back days off.

Still, dealers should be clear about long hours when they hire employees, said Erika Olson, finance director at Lexus of Bellevue in Bellevue, Wash. "The car business is not for everybody," she said. Dealers should tell potential hires that there could be nights that they have to work until 11 p.m.

Olson said a dealership needs happy employees to have happy customers, but the store shouldn't try to meet employees' needs if it hurts the business.

"If people are spending money, we're going to keep staying open," she said.

Ron Reahard, president of F&I training group Reahard & Associates in Soddy Daisy, Tenn., predicts the dealership business is heading toward a 24/7 schedule.

"Some people inquire at 2 a.m. and are impressed when they get a response right away," he said.

"We've got to do business the way customers want to do business."

Amy Wilson contributed to this report.