Dealership Sales Staffing Dips but Sales Don’t Have To

The heady days of low inventory and high profit margins have eased into a more normal buyer’s market. As the market comes back down to earth, so have dealership sales and revenue. That’s making dealerships rethink Sales staffing levels.

In the CDK Friction Points 2024 Study, Sales Representative headcount is much closer to pre-pandemic levels, with dealerships shedding an average of two Sales employees from the previous year. That’s a full headcount less than before the pandemic.

In a more competitive buyer’s market, you may expect to see dealerships staffing up, not down. After all, more Sales staff should, in theory, be able to work more deals and close more sales.

Yet, evidence points to dealerships managing headcount more aggressively in part due to the economy, but also because process improvements and new technologies help with efficiency and productivity so fewer staff can do more in less time. CDK found that last year, three out of 10, 30%, of dealerships planned to reduce staffing due to efficiency gains. That number dropped to 15% in this year’s study.

It’s also worth noting that reductions may be driven by employee turnover. Drastically low turnover rates were a hallmark of the past couple of years as Sales staff pay soared due to high demand resulting in pricing power and a seller’s market for dealerships. Now that the market has shifted, pay has come back down to earth and Sales professionals are tasked with actually selling again, it’s likely some will opt to look for a job elsewhere.

Dealership Technology Enables Efficient Sales Staff

Slimmed-down Sales staff armed with the right technology and training can achieve robust sales, even in a more competitive market. CDK found that far more dealers are jump-starting efforts by bringing their digital retailing tools directly into the showroom and not just relegating them to their website only.

More than a third, 36%, now say they’re using these tools for deal presentations, up from 30% last year. This strategy enables Sales to incorporate shopper preferences once they’re in the showroom, which is key to moving customers more quickly to a sale. Customers reward dealers with higher satisfaction and NPS scores the faster a deal is completed. And more satisfied customers become repeat customers who are also more likely to refer a dealership to family and friends.

The shift in perception of digital retail tools as lead generators to deal generators also enables Sales to better engage with customers online and work multiple deals at once to dramatically improve efficiency. Data from CDK’s Digital Retailing tool indicates this approach makes Sales 70% more efficient and able to sell 17 cars per person per month on average — compared to the industry average of 10.

Sales Training Refresh

There are also big benefits to focusing on Sales training. Especially in light of the fact that sales skills may have atrophied over the past couple of years when staff were essentially only taking orders from eager buyers. Another swath of employees may have never sold in a more difficult market.

Now that inventory has rebounded, Sales can spend less time trying to find vehicles to sell and more time following up on leads. Renewed training on lead response times, equity mining and ways to optimize the customer experience, both online and onsite, are areas of focus that can pay big dividends.

No matter how you look at it, every part of the car-buying process relies on people. Technology can certainly make slimmed-down Sales staff more efficient, but they need the right training and support to succeed in today’s buyer’s market.