The value in-house training can bring to your car dealership

A car salesperson typically costs around $10,000 to train up, according to a Hireology report on the cost of employee onboarding. Training a service advisor has less cost associated with it, usually under a thousand dollars for a comprehensive day-long course. However, these roles position the employee to work with customers quickly to become profitable, and seldom is it considered how much it costs in lost revenue when sales-focused positions aren’t fully equipped.

Don Reed, CEO at DealerPRO Training, estimates that one underperforming service advisor costs a dealership an average of $144,000 per year in unrealized gross profits. The cost of an improperly trained car salesperson can be as much or higher, fluctuating based on the store’s volume and other factors. While it’s virtually impossible for one of these employees to cost the store more than they earn for it, leaving money on the table isn’t a good business model, nor does it help to secure the dealership’s future with customer loyalty. 

There’s immense value in sending your team for training from some of the industry elites like Joe Verde and Don Reed, and there’s a wealth of knowledge that gets passed on. However, these refreshers tend to motivate momentarily, and the effects wane after weeks and months. In-house training, coaching, and mentoring can be the solution to keep your team members sharp, boosting customer loyalty and increasing sales profits at the same time. What does it look like? 

‘Next man up’ approach

Military hierarchy works in part due to the type of training they do. Sergeants train corporals to learn the sergeant’s role, and sergeants learn the staff sergeant rank’s responsibilities. It goes up through the ranks this way. Similarly in the dealership, there should be a responsibility assigned to the team to teach and guide new staff while learning what’s involved in the next rung up the ladder. 

For commission-based pay plans especially, this proves to be a challenging method since they’re ‘training the competition’ as well as sacrificing their own time where they could be earning for themselves. This only works with people showing a high level of maturity and a stipend to do so.

Committed management oversight

Managers are called on for a wide range of tasks and roles, and there’s often little time left to spend with employees after a day of meetings and spreadsheets. However, management participation in training can yield incredible results when it’s not an act of correction or discipline. When employees see their leaders in the trenches with them, watching how they work and showing them ways to be even better, it can improve morale and profitability. 

Again, there’s often little time to do this type of hands-on training. If at all possible, set aside weekly time to spread between team members, defining it as training. Schedule how it’s going to be divided for even more intentionality.

In-house training professional

Perhaps one of the best solutions is to have a trainer hired in-house. Their position is solely one of onboarding and skill upkeep, spreading their time among those you’ve hired. For single dealerships, the golden goose would be one individual who can train and coach salespeople and service advisors alike. For a dealer group, the role could be separated into two. It’s one more salary to add to the store, but the additional sales and revenue will more than make up for it. 

Not only will the store be more profitable with ongoing training in-house, but you aren’t taking people away from making a living while they learn, which is arguably the most frustrating part for a sales-focused role. 

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