Smaller teams can benefit dealerships

The COVID-19 pandemic forced dealerships to tear up traditional organization charts and learn, in many cases, that they could do more with fewer people, and even make more money while doing it. And now is no time for dealerships to quit restructuring, according to a workshop at the NADA Show.

"It's time to reset, not restart," said Candice Crane, who describes herself as a people strategist for consulting firm Crane Automotive Resources.

"Now is the time to kind of blow things up and put them back together in way that makes sense to customers and employees."

Crane teamed up with Shamel Leonard, operations strategist for the Atlanta-based Auto Dealer Business School, to present the workshop "Redesign Your People Strategy to Improve CX and Drive Profitability" on Tuesday.

"Managers are doing too much. Manager roles are overburdened" with too many direct reports and too many responsibilities, such as sales training, ordering and pricing inventory, dealer trades, overcoming customer objections, desking deals, sales team performance and more, Leonard said.

Instead, Crane and Leonard recommend breaking up the dealership organizational chart into smaller teams, with "tactical" and "strategic" responsibilities. Individuals are assigned specific targets they're accountable for and rewarded for, as well as team goals.

The tactical side is customer-facing. Responsibilities include training salespeople, sales team performance, overcoming customer objections and making sure everyone adheres to the sales process.

The separate, strategic side is non-customer-facing, with individuals responsible for things such as ordering and pricing inventory, and dealer trades, Leonard said.

New job descriptions also create new career paths for employees, she said.

The traditional dealership career path is linear, "sales to finance to desk," Leonard said.

"It's very difficult. Those positions often don't move," she said. "Where am I going to go? There's nowhere for me to go," and that encourages turnover.

The workshop also went into great detail on pay plans.

An unintended consequence of the coronavirus pandemic was that many dealerships found themselves paying more for personnel as a percentage of gross profit — even though there were fewer employees — because volume was down, and dealerships had retained the highest-paid employees.

In a case study the workshop reviewed, the individual employees made more, but it cost the dealership more, as a percent of gross profit.

"We had to reduce expenses," Leonard said.

"Who are we going to reduce? The newer people."

Crane said dealerships now have an opportunity to set new goals, such as bonuses based on total gross profit per vehicle, instead of commission.

But it's critical to explain to employees how they benefit.

"You have to provide the 'what's in it for me,' " she said.