Published in Automotive

One Great Challenge for Retail Auto in the Next Decade is…Behavior!

Implementing Cultural Change by Focusing on Impacts to Employee Behavior

Retail auto, with few exceptions, is addicted to “transactional” behavior, from front end (showroom) to back (service)…and that behavior will negatively impact virtually every innovative future endeavor.

Problem is, most dealer leaders don’t believe it or think they are already delivering a good experience with customers.

More specifically, that transactional behavior will cause continual problems with hiring and retaining tomorrow’s workforce as well as the retention of retail auto’s existing customers…dramatic keys to their success in the next decade.

“Human behavior change doesn’t happen through knowledge.  If mere knowledge could change behavior, there would be fewer smokers and overweight people. The bottom line is we need to experience behavior change. Small doses of incremental positive experiences change mindsets. You change the behavior to change the mindset.” — Keith Ferrazzi, founder and chairman of Ferrazzi Greenlight, a behavior, research-based consulting and training company

Experts in the field have stated that behavior will not be changed by training, new processes or technology. Instead, it will begin with the acceptance of a different level of belief from the top down (belief is an acceptance that a statement is true or that something exists).  The existing transactional model of retail auto measures success by transactions…sold units and ROs.  But that “transactional” mindset has caused vehicle owners to be distrustful and fearful of car dealers. Maximizing ROs and closing sales places the customer experience and acts of retention on the back burner.

So you may ask, how do I know? For the last several years, I’ve been steeped in dealer sales and service culture, or as GM CEO Mary Barra prefers to call it…the behavior of retail auto. My real education came from 3 years as Customer Experience Manager for a top 5 Buick GM mega-dealer.

Every day, for 30 months, I put on my lab coat to observe the subtleties and nuances of how transaction-based staffs deal with customers.  What I witnessed was behavior based on a pay play tied mostly to Ros and sales transactions.  It wasn’t the fault of the front line…an employee’s behavior is directly tied to how they are paid.

Below are some suggested thoughts for implementing cultural change in retail auto:

A Different Level of Help from Specialized Consultants

The present crop dealer trainers are fine for the transactional world of retail auto, but most of them are ill prepared to address the complex area of culture/behavior change.  But there are a handful of specialized consultants who will work with dealers and dealer groups to address customer experience, employee engagement, and business transformation.  Consultants steeped in dealer “human capital” expertise will be more and more in demand as dealers begin to address their existing culture.

Hiring from A Different Pool of Prospects

Once the culture is addressed, dealers can begin to set their sights on staffing from a different pool…a group more experienced in hospitality than in retail auto.  Those with long term experience in retail automotive should be carefully screened to ensure that they can integrate with the new crop of employees.  Most importantly, the current ratios of men to women customer facing staff must be brought into a better balance.  Research has shown that women can make up 60% or more of service center customers, yet they presently represent only 20% of service advisers.

A Different Compensation Structure and Work-Life Balance

Commission only pay structures support the present transactional nature of retail auto.  Dealers must realize that the new generation of front-line employees do not favor commission only jobs.  Those who are drawn to commission-based pay are usually those who are long on transaction skills and short on customer experience. And moves to a better work-life balance offering paid time off, 4-day work weeks, etc. will increase the likely hood of recruiting and retaining the workforce of the next decade.

Pretty overwhelming, huh? But remember that this is a process and not an event. Dealers come from a culture of events and a “just do it” mindset. Baby steps will be huge!