As originally appeared in Autosphere on April 17, 2024.
Author: Jake Stacey, Executive Vice President, Sales and Training at LGM
Reimagining dealership profitability for now and the future.
Now more than ever, customers are making it known that they’re willing to boycott businesses that aren’t meeting their expectations. In fact, recent studies show that up to 78% of customers have walked out on a transaction due to a negative experience. In a competitive industry like automotive sales, customer experience is crucial to maintain the reputation and financial health of a dealership. So, what is the common denominator that’s creating poor experiences, pushing customers away, and tanking sales? The answer is poorly trained and unmotivated employees.
To grapple with heightened customer expectations, dealers are in dire need of a highly engaged workforce, which 92% of employees say is achievable through comprehensive and routine workplace training. This is especially true for departments with notoriously high employee turnover rates, like F&I.
Empowering employees through training
Effective training is the cornerstone of positive employee experiences as it motivates teams with growth and career development and ensures everyone is aligned with a common goal. In an ever-evolving industry like automotive sales, the required skillsets for jobs have changed expeditiously, meaning there is even more appetite for learning and development. It is imperative then that dealership staff are equipped with the knowledge, tools, and skills to excel in their roles, making them more confident and fulfilled.
Ongoing learning and development are also the solutions to a ramped-up and expensive issue for many dealers: employee turnover. Lack of development continues to be the most common reason given by employees for leaving their job, but many employers are still not proactively investing enough in this area. Instead, they’re forced to cover huge expenses to regularly fill positions. In fact, it can cost a dealer approximately 400% of an employee’s annual salary to find their replacement, especially in today’s scarce labour market. Recognizing this trend, it’s clear that investment in developing skillsets is not merely a discretionary expense but a strategic imperative for talent retention.
Satisfied employees, satisfied customers
Notably, companies that excel in customer experience have 150% more engaged employees, a connection Forbes calls the unignorable link between employee experience and customer experience. Well-trained employees are enthusiastic about translating their learnings into action and dedicating time to the needs of their customers.
Dealers that are masters of the customer experience are also 93% more likely to have those customers return to their dealership, a pivotal driver for retention and sustained business success in automotive sales.
F&I training for dealership profitability
A key area for dealers to start implementing training is in the F&I department, an area that is too often plagued by employee turnover and is historically considered an unfavored part of the car buying process for customers. However, with investment in F&I training, not only would F&I staff become more engaged, and customers leave more satisfied, but the dealership would be up to 21% more profitable.
The best F&I training programs on the market regularly train Financial Services Managers to not only be product knowledge experts, but to also be emotionally intelligent, stay up to date with industry trends, and understand compliance. This training sets Financial Services Managers up to win over apprehensive customers by supplying them with products to enhance and protect the ownership of their second biggest investment while also drive retention and profitability for the dealership.
Although the F&I department is the ideal starting place for implementing a comprehensive learning and development program, this strategy must cascade to the rest of the dealership. At the end of the day, all dealership departments must be aligned on one strategy, so they can feel engaged and deliver successful and replicable customer experiences.
