You can give yourself a raise any day by increasing your effort or building your sales skills. Work harder and/or get better at what you do. It’s just math. If you plan to be in the business the next 3-5-12+ years, you can also give yourself a raise in pay by causing your client base to shorten their trade cycle.
We have all heard the disappointing news about the age of the typical vehicle on the road. Here's more: A recent study by Ipsos for Canadian Black Book showed that the majority of Canadians have a poor understanding of the real costs of car ownership. Depreciation is the single largest cost of ownership yet many persist in financing purchases over far too long terms and keeping their car well past its optimum trade time. These ultra-long finance terms mean that many customers are past the basic warranty period and into a second accelerated depreciation phase BEFORE they attain equity in the vehicle.
We have all known customers who miss the ideal time to trade. They should trade when their used vehicle is at its highest desirability and worth the most. If they owe more than the car is worth, they don’t have much choice - they enter the second phase of accelerated depreciation. The first phase of accelerated depreciation was when it was new and they drove it off the lot. Suddenly it became a used car. The second phase of accelerated depreciation is at the juncture of the end of basic warranties, the start of higher maintenance costs, and reaching less desirable odometer readings. By the time they get to equity, the car is older than you want as used stock. The trade value makes them fall off their chair!
If they can trade in that 3-4 year old period they get the highest used vehicle valuation and lowest difference to switch to a new one. Left on their own, some customers you originally sold will naturally come back to you when their car gets too old. Your pay raise from this kind of "passive retention" is 7-9 years away. So if you get the same volume of new customers that year plus the additional repeat customers you get a higher sales volume and "ta-da!" - your pay raise.
So what if we don't take the "passive retention" approach? What if we educate our customers on how a shorter trade cycle actually reduces their cost of ownership? What if we council against the dangers of low payments for too long. What if we keep this message in our periodic follow-up calls - especially when their vehicle is nearing the 3 year old mark?
Shorten the average trade cycle from 9 to 5 years and give yourself 2 raises within 10 years. Shorten from 9 to 3 years and give yourself those two raises within 7 years.
Hey, one of the great things about a career in automotive sales is your ability to personally decide "how high is high?" Most salespeople understand how increasing effort or increasing sales skills positively impacts personal income but have never given trade cycles much thought.
Take an active approach to shortening the average trade cycle within your client base. It becomes a force multiplier when combined with more effort and better skill.