The persistent challenge of low productivity and high turnover within auto dealership sales teams often perplexes general managers. Contrary to the assumption that this is an unavoidable reality, research highlights the significant impact of emotional intelligence (EI) on sales performance and employee retention. The Pareto principle often applies, where 20% of salespeople generate 80% of sales, leaving the remaining 80% to compete for a fraction of the business. This imbalance contributes significantly to the high turnover rates. However, many dealerships continue to bear the costs of constant recruitment, selection, and training, instead of addressing the root cause: inadequate hiring practices.
Studies indicate that emotional intelligence constitutes 80% of the essential competencies for workplace success, surpassing the importance of IQ or personality traits. EI, defined as the ability to recognize and manage emotions in oneself and others, directly influences performance. Understanding how our emotions and the emotions of others impact actions is crucial, especially in sales.
Emotional intelligence finds its greatest application in sales. A study by Hay/McBer involving Fortune 500 companies like AT&T, IBM, and PepsiCo revealed that the top 10% of salespeople generated nearly $6.7 million in sales, compared to the average of $3 million. This represents a significant difference and underscores the value of EI. The top performers exhibited strong EI competencies, which were noticeably lacking in the average salesperson.
An objective study assessing EI competencies among over 2,000 auto dealership salespeople identified five critical areas predicting sales success and retention:
* **Intuition & Empathy:** Awareness of a prospect’s feelings, needs, and concerns, fostering positive interactions and understanding. This involves a customer service orientation, anticipating and meeting customer needs.
* **Results Orientation & Decisiveness:** The ability to elicit desired responses from customers through clear communication, persuasion, and gaining commitment.
* **Self View:** Courage and self-esteem, essential for persevering through rejections and obstacles. Higher self-esteem fuels passion and courage.
* **Self Awareness:** Understanding one’s strengths, limitations, and internal states. This competency boosts self-confidence, persuasiveness, and competitiveness.
* **Self Expectations:** Emotional tendencies that drive goal achievement and personal commitment. Qualities include a strong achievement drive, initiative, and optimism.
These competencies are vital for success in the auto dealership industry. A salesperson with extensive product knowledge but lacking these essential EI traits will struggle in the long run.
Regina Roat, HR Director of Sterling-McCall Auto Group, highlights the transformative impact of implementing an emotional intelligence pre-employment profile: “Since we implemented an emotional intelligence pre-employment profile to help in our sales selection process, our retention has jumped from 10 percent to 77 percent. And not only do the employees stay longer, but they are more productive, catch on more quickly, and require less time in training.”
Forward-thinking auto dealers recognize the competitive landscape for top talent and are integrating emotional intelligence into their selection processes. Additionally, they invest in EI management development programs to enhance leadership skills, strengthen manager-employee relationships, and ultimately improve employee retention.