How Emotional Intelligence Impacts Sales Performance and Employee Retention in a Dealership
One of the mysteries from the auto dealership world is the reason why general managers and general sales managers think that low productivity and the resulting high turnover are inevitable with their sales teams. Research has shown it is appropriate to use the Pareto principle to salespeople whereby 20 % of all salespeople now make 80 percent of all sales. That means 80 percent of the sales team fights over the remaining 20 percent of the business not made by the top sales pros.
With a lot of salespeople competing for shares of these a small pie, the turnover rate in sales is obviously very high. But many auto dealer executives are willing to accept, as a price of doing business, the unending expenses of recruiting, selecting, and training the continued flow of newcomers into the sales rank. They should, instead, recognize that poor people sales productivity and high turnover rampant in the market are the result of faulty hiring practices.
Research has shown that 80 percent of the essential competencies required for success in the workplace are emotional intelligence, which is far greater than IQ or character traits. Emotional intelligence (EI) is a buzzword in the business world for the last several years. By definition, EI is definitely an individuals ability to recognize and regulate emotions by themselves and others. In practical application it is ones ability to understand how our emotions and the emotions of others impact action and performance.
EI has no greater application than in a sales position. A recent study by the Hay/McBer firm in Boston of Fortune 500 companies including AT&T, IBM, and PepsiCo found that the top 10 percent from the sales forces in the companies surveyed totaled nearly $6.7 million in sales as the norm was only $3 millionmore than 2 times the average or additional sales totaling 88 times the typical salary of $42,000. The very best 10 percent of those sales forces were quite strong in EI competencies as the average salesperson wasn’t.
In an objective study of more than 2,000 auto dealer salespeople designed to measure the EI competencies among those salespeople that were successful vs. the ones that were unsuccessful, the next five competencies were the most critical to predicting revenue achievement and retention in the market.
Intuition & Empathy. This is the salespersons awareness of the prospects feelings, needs, and concerns. This competency is essential in a sales role for the following reasons.
Attitude toward others: ones ability to look positively and objectively upon others
Understanding others: an intuitive feeling of a prospects and/or customers feelings and perspectives and showing an energetic interest in their needs
Customer service orientation: the ability to anticipate, recognize, and meet customers needs
Results Orientation & Decisiveness. This is the salespersons adeptness at inducing desirable responses from the customer or prospect. This competency is essential in a sales role for the following reasons.
Communication: sending clear and convincing messages that are understood by the customer or prospect
Influencing: using effective tactics and techniques for persuasion and desired results
Gaining commitment: ones capability to develop a motivation act
Self View. This is actually the salespersons level of courage and self-esteem providing you with thick enough skin to persevere through various obstacles they encounter throughout the sales cycle. This competency is important in a sales role for the following reasons.
Handling rejection: ones capability to handle a no or a nonsale and to not take it personally and be able to recover and restart quickly to try again
Self-esteem: the higher the self-esteem the more passion and courage the salesperson will have in the social arena
Self Awareness. This is knowing ones internal states, preferences, resources, strengths, and limitations. This competency is essential in a sales role for the following reasons.
Self-confidence: ones ability to believe in their own abilities and strengths to personally take control in achieving and exceeding their goals
Persuasiveness: ones capability to stand their ground in negotiations and in handling sales objections to exude towards the customer or prospect their product or service meets their needs
Competitiveness: ones need to win and be regarded as competent in the eyes of others, in addition to desire to be personally recognized for their accomplishments
Self Expectations. This is the salespersons emotional tendencies that guide or facilitate reaching goals and their sense of personal resolve for responsibilities. This competency is essential in a sales role for an additional reasons.
Achievement drive: striving to improve or meet a standard of excellence we impose on ourselves
Initiative: readiness to act on opportunities without having to be told
Optimism: persistence in pursuing goals despite obstacles and setbacks
These are essential competencies in selling within the auto dealership industry. The salesperson you never know the product or service inside out will not succeed in the long run without possessing these essential competencies.
Since we implemented an emotional intelligence pre-employment profile to aid in our sales selection process, our retention has jumped from 10 percent to 77 percent. And never only do the employees stay longer, but they are more productive, become popular more quickly, and require a shorter period in training, says Regina Roat, HR Director of Sterling-McCall Auto Group in Houston, Texas, which is part of Group 1 Automotive.
Auto dealers who’re forward thinking and realize they are competing for top talent along with other companies in their market are now implementing emotional intelligence into their selection process. Additionally, they’re also providing emotional intelligence management development programs to assist their managers in leadership development, which has a major impact on improving the manager/employee relationship and is a critical piece to improving employee retention.
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