Situation
Prior to the economic downturn and resulting crisis in the U.S. automotive market, Chrysler Academy, the training organization for Chrysler dealerships, had undertaken a training program for 33,000 sales consultants representing 3,000 independent and company dealers of varying sizes.
In 2007, in an effort to establish the value of the training, Chrysler corporate created a measurement task force. According to the task force, initial results were encouraging: fully trained consultants outsold untrained consultants by 35 units per year. However, the task force was unable to isolate the impact of the training from other factors, including marketing, financing and product development.
Exactly how much of the increased sales could be attributed to the training?
Approach
Together with Chrysler Academy leadership, Capital Analytics proposed the following hypothesis. Sales consultant training positively impacts the key performance indicators (KPIs) of:
- New Vehicle Sales Volume
- Customer Satisfaction Score
- Sales Consultant Retention
In addition to analyzing the impact of the training curriculum on unit sales, Capital Analytics evaluated the impact of a number of other factors:
Individual (Sales Consultant) Demographics:
- training history/status
- tenure
- prior sales performance
- presence of a trained manager
Dealer Demographics
- geographic location of dealership
- age of dealership
- size of dealership
- brands carried by the dealership
- dealer exclusivity (carrying only Chrysler brands)
- dealership Sales Satisfaction Index (SSI)
- sales manager to sales consultant ratio.
Conclusions
Capital Analytics reviewed two years of data and over 40 independent variables. Of the 35 units that made up the sales difference between untrained and fully trained consultants, 15 were directly a result of the training.
In addition, the analysis found that:
- Retention rates were dramatically higher for trained consultants. Fully trained consultants had a retention rate of 98.9% compared to 47.8% for those with no training at all.
- Turnover among new hires was dramatically lower among those who received training early in their tenure
Capital Analytics’ work also revealed that training had significantly more impact at large dealerships. Supported by this data, Chrysler Academy was able to optimize expenditures by focusing their instructors (a scarce and expensive resource) on the dealerships where they would have the largest possible impact.
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