Another year of churn and burn?

Here is a not new statistic. Average employee churn rate in our industry hovers around 40% with an even higher rate for dealership salespeople with some estimates pegging that number as high as 70%.

It’s interesting because our customer defection is about the same number…most brands and dealerships lose 40% of their customers at the end of the warranty period and by the time the vehicle hits 70ish thousand miles…it’s better than 60%.

This leads to a reasonable correlation between employee churn rate and customer burn rate.

Since our business has become all about retention, employee and customer, (which by the way is the new word for “profitability”), how do we decrease these “in your face and we have not paid attention” numbers?

I believe there are 3 things we can do right now to start changing this business and stop burning so many employees, many of which leave the industry never to return while trashing the dealership business model. 

Action. Ever notice how a bunch of people standing around start complaining…yeah me too…but in a dealership that is focused on purposeful improvement, there is no standing around. There is no time. Everybody is doing something. And you know what? People who work there are more productive, and they are happier.

It’s easier to make a course correction while underway than it is to make a course correction standing around. A team in motion tends to stay in motion which means momentum. And nothing kills momentum and motivation like standing around waiting for someone to do something.

The word you are looking for is Leadership. And there is no better time than right now to start being a Leader in your store.

Accountability. Who knows what that word even means anymore? It’s thrown around like a nerf football at a college dorm these days. Try this definition. The art of correcting individual (team) behavior when that behavior hinders the achievement of stated goals. That means taking action (that word again) when it’s required.

You can tell instantly when a team believes and practices accountability and when a team that does not. Where there is accountability there is performance. There is teamwork. There is camaraderie.

No accountability…everyone is on their own island on which they have built a fort and bomb everything that comes within range with statements about how much they are doing and how everyone else is not doing anything.

Performance Pay. If you kick ass, you should be paid like you kick ass. If you suck…well…you figure it out. These days everybody talks about “Security Based Pay” which is ok if you want performance like the “Tilt a Whirl” operator at the carnival.

People want to feel secure that you are going to take care of them when they need it but they want to earn their pay. I’ve never heard anyone tell me either as a manager or as a trainer “I just want to get paid for doing nothing.” Not once.

What they want is to feel valued. Like someone cares about what they do and how they do it. And they want performance-based pay for that effort. I think we make it too complicated and forget that the other person is…well…a person with hopes, dreams and goals like us. And I think we miss the chance to help someone see how this whole “work for pay” thing is supposed to work.

I know I’ve failed a time or two trying to get someone to see the light. It happens. But I don’t let that small percentage of people affect the team and what I am trying to accomplish, and neither should you.

We must reduce the employee churn rate if we are going to change our industry and increase customer retention. It’s impossible to expect that things will be different if we just wish it so.

Maybe this will be the year we can start reversing this trend. 

#leadership #employeeretention #customerretention #changemanagement #CX #nozombietraining #fixedops #communications