Selling Cars in a Tough Market: The Effect on Sales Teams and What to Do
The Australian automotive market has had better days. June 2019 saw a decrease in almost 10% compared with the same month the year before. The market is a little bit tough, and we’ve been affected by regulatory changes to F&I. The incoming consumer generations are proving to be less loyal and more open to not buying a car at all.
All signs seem to indicate that it very well may get a little bit worse before it gets better.
When we see the market decline like this, as it tends to do every decade or so, it’s always fascinating to see what approaches different dealers and manufacturers take. Some of them seem to go into hiding, cutting everything they possibly can to hermit their way through the cold winter months. Others start making new moves in marketing or increasing their expenses in an attempt to reach more customers, stand out and whether the storm.
Most people become far more aware of numbers than they are when the market is bullish. Even the most big-picture-oriented manager or dealer might find themselves hyper-conscious of the little things now. Everything from the business standpoint needs to be as tight as possible.
These points are all observational on my part. It’s fascinating to watch, and I love to get new ideas on how to approach different areas of the business in harsher market conditions.
My area of work, though, is around people and processes. And when the market gets difficult, in the vast majority of sales teams, we start to see some of the following things:
Salespeople get lazy.
The reality is, humans are habitual. When we are busy, we are generally more motivated, and we do a better job.
Think about a major sale event day with customers everywhere, great vibes and loads of appointments. Most salespeople are going to be particularly switched on that weekend. They’ll make those extra follow up calls; they’ll bounce from one customer interaction to the next and usually perform at a higher level generally.
It’s a natural by-product of having busyness and positivity around you – you act more, so you’re more motivated, so you do even more, and the cycle continues.
The more you do this, the more it becomes a baseline behavioural pattern. “When I get to work, I make all these calls and speak to all these people. I feel positive, and I know it’s going to be a great day.”
Now compare this to when things are slow. A customer hasn’t walked on the yard all day. The sales team has been hanging around chatting, making the odd prospecting call but for the most part, sitting around. The idea of talking to a customer, now, when it’s just after lunch and practically home time, seems like a lot more effort. And that’s because I haven’t done as much of it lately. I’m not as practised in jumping into a high energy, positive sales interaction. It’s no longer a baseline habit when I’m at work.
I haven’t been focused on cars, so I may not as instinctively rattle off the product information accurately. Ironically, even though I have more time to spend with a customer, I might even skip steps and perform at a lower level - because I’m not quite as immersed in the business of selling cars as I was when the market was kinder to me.
It’s almost the equivalent of when you go on a holiday for a week or two and then come back to the sales floor. For most people, it takes a while to get back into the swing of things. In tough times, especially when salespeople feed the low-effort energy off each other, it can feel like this more often, and ultimately you end up losing opportunities. The other alternative is that a portion of the sales team takes on this low effort attitude. Consequently, managers and customers end up relying on one or two salespeople who haven’t lost their mojo.
Note here that it’s not a good idea to blame the sale team for being less efficient and lazier – most of the time it’s a natural human response to the environment. (That’s not to say we shouldn’t work on it, of course.)
Salespeople get negative.
I tend to find this is more common with more experienced salespeople (who may have been lucky enough to live through a spike in a brand they’ve worked with before, where they turned up to work and took product orders almost like a cashier at Woollies). But it applies to less experienced salespeople too.
When things are tough, self-doubt can creep in. When you’re suddenly finding it more challenging to secure sales, it’s much easier to blame everyone and everything else rather than take accountability for your results.
The market sucks. All the customers are timewasters. My manager is the worst. I’m not going to achieve my targets this month, or next month, or ever again. Because everything sucks.
Negativity is a dangerous, contagious disease. We’ve all seen how one negative person can feed that state to everyone else around them. Sometimes, it’s the sales manager who can’t control their emotions, leading this negativity cycle. Mindset is the number one differentiating factor between salespeople who endure tough times and succeed, and those who float along waiting for their results to get better on their own.
Salespeople perform to a lower standard.
This one is also counterintuitive. It’s different from putting in less effort (the first point) because here I’m talking about skills and potential.
One of the critical issues I see time and time again is when things aren’t good; we stop doing what we used to do before (when it was good). The things we did that helped things stay good go out the window. Often, managers who once used to have a weekly internal training session will now be feeling the strain on the business and end up putting that in the ‘not urgent enough to do’ basket. Equally as often, we see dealerships that used to pride themselves on training and development reduce the investment and time in hopes of protecting other parts of the business.
In other dealerships, people stop selling as well simply because they’re not doing very much of it. Ironically, we know that most people seek out personal development and growth from an employer, so reducing this kind of attention on the sales team can feed into salespeople’s negativity or even apathy.
Even though we need to be attentive to the numbers in the business, only focusing on overheads can cloud up our mind and stop us paying attention to what gets us business in the first place: our people.
What to do?
When we accept that with a tough market comes additional impacts on our team, we’re able to move forward. Understanding that it’s normal for motivation, energy and efficiency levels to drop; negativity to be on the rise; and performance skillsets to be underused (and often stop developing), gives us a new framework to approach a challenging market.
As a starting point, I’d suggest thinking about the following:
Get people doing things. Action breeds motivation, so the more opportunities you can give your people (cold call lists, warm call lists, service lists, ideas around prospecting), the less likely they’ll wither into a slump in the corner.
Role play role play role play. Spend more time on training and development than you have before. Training can lift motivation, make people feel more productive, keep people on their toes when it comes to skillset, create more positive energy, and get people excited to see a customer.
Lead from the front. I mentioned earlier that sometimes it is the sales manager who kicks off the negativity spiral with the team. It’s a tricky balance for business leaders to strike: You want to be transparent and empathetic to your team, but you also want to be a figure of reassurance and stability for them. Working with customers, ensuring you display positivity and demonstrating the skills and mindset you want from your staff is integral to moving through a tough moment in the market.
Master the processes, and the outcomes will come. If you focus on tightening your processes and keeping your people uplifted, then every prospect will be given the best possible chance of actually buying. Processes are everything, and they’re even more important when there are fewer opportunities in the first place.
What do you think?
Sonia
This blog post was originally posted on my training website, Statusone.com.au, on Oct 11, 2019. I have since been moving some of my favourite blog posts from there over to here, as this is now my ‘content hub’ and I want you to have access to some of the cool stuff I’ve written about before. You can still check out the Status One site if you’re interested in corporate training if you want. Also, don’t forget to sign up for the newsletter below for updates and weekly exclusive content.