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Industry's image damaged by its low salary culture

Motor retail in the UK will continue to suffer from a poor image as long as sales staff are paid low salaries and high commission.

John Schultz, a former Ford US executive in charge of digital and direct marketing, has analysed the US and UK markets and believes they follow similar models, in that sales drives the revenue while aftersales makes the profit.

Nevertheless, he warned, customers were shopping around more. On average, it was now taking 18 leads to convert to one sale, compared to 10 leads 15 years ago.
It means that carmakers and dealers must hone their service. But the low salaries and high commission linked to the sale promote a poor customer experience, he said.
Schultz believes motor retail could learn from the hoteliers’ philosophy: ‘the employees are the brand’.

“Motivate staff to treat customers better and business will grow. Manufacturers are starting to get the message,” he said. “Customer-driven pay plans create less pressure and encourage better service.”

Dermot Halpin, chief executive of online used car retailer Autoquake, said the perception among many motor retail customers was that they would get “screwed”. That perception is wrong – but the industry had to do something about it.

Paul Williams, chairman of the RMI, said 30 years ago salespeople did not receive a basic salary, and were paid only commission, so the industry had made progress. 

However, industry observers point out that workers at high street retailers are generally salaried.


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