Service Sales vs. Product Sales: What happens when they collide!

Insurance Sales vs. Auto Sales:

In case you haven’t heard, insurance companies are placing their agencies inside dealerships across the country and within the nucleus of those dealerships an awesome collision of industries is occurring! This incredible idea, having been pioneered by Allstate, one of the insurance industry’s largest and most respected companies is loaded with a ton of quick wins for both the dealership and the agency. BUT, as with any explosively popular and synergistic idea it also comes with some challenges. The conundrum for the dealer and agency managers lies in bringing those two industries together while simultaneously orchestrating a seamless recruiting integration of people from contrasting universes; Product sales vs. Service sales.


As recruiting companies staffs these dealership agencies with insurance agents, the new hire’s success will depend mainly on two things: One, whether or not they possess or are capable of acquiring the necessary licensing, and two, are they capable of functioning in a “dealership environment.” There is a very clear delineation between working in an insurance agency selling intangibles, or working at a dealership selling see-able, touchable, drive-able, fall-in-love-with-able automobiles! Most everybody WANTS a new car, and contrastly most everybody NEEDS insurance. We all hate to have to pay for something we either want or need, but a nice ride can sure help to take the sting out of that check you have to write each month and it certainly makes the customer’s motivation to buy that much stronger. On the other hand paying for something you NEED but can’t see, simply put it’s a tougher sell. I could easily replace the word “tougher” with the word “different.” Because they both require a certain and specific skill set.


So the bottom line here is that the two sales industries are markedly different. In the marriage between the dealership and the insurance agency, the dealership (locally) is the top dog, already established in both culture and paradigm. Product sales are already established on the sales rep’s level and the sale of any intangibles is hoisted up to the F&I Manager. OK, so some stores will pay the salespeople for some back end sales of intangibles for stuff like roadside assistance, or extended warrantee. But, for the most part the coveted F&I Manager who has been gifted and trained with the skills necessary to deliver the value proposition and close the customers on the purchase of the company’s intangibles is held in the highest regard. You can see a clear separation between those who sell tangibles, and those who sell intangibles.


So why then would a hiring manager logically conclude that he or she could take a PRODUCT salesperson who sells tangibles and hire them for the position of a SERVICE salesperson who sells intangibles, AKA, the insurance? That’s not to say that there aren’t people out there who can successfully do both, and we’ve certainly come across our fair share. But it’s important to recognize that there is a difference between the two. Not knowing this can cause the hiring managers to make some costly errors. Undervaluing the service (intangible) salesperson’s position by clumping them together in the same category with a product (automotive) salesperson can prevent a hiring manager from availing the dealership of an opportunity to acquire the right talent. Hiring decisions directly affect profitability.


The good news is that the best person for the job of agency manager or LSP (Licensed Sales Professional) might be right under your nose at your dealership already. It’s quite possible that the dealership managers may not have to spend one penny on recruitment advertising if they can find the perfect person who already works at the dealership. That being said, if they don’t already have that perfect candidate it’s important that they understand the difference between product sales and service sales and what they need to know to make the best hire possible for these positions.


As with any business there are varying opinions about how the value of sales staff is viewed. Some business owners feel that salespeople are their greatest liability, while others feel that salespeople are their greatest asset. Within those two schools of thought comes varying opinions about what tactics, processes, revenues, and priorities this business will place regarding their recruiting efforts for these positions. Ultimately, it comes down to this. If profitability and sales success comes down to the abilities of the person you hire for the position, keep in mind that the pendulum swings wide both ways. That is to say that hiring the wrong person for the job can COST your business an unthinkable amount of revenue, while hiring the right person can MAKE you an extraordinary amount of profit.


So, it comes down to PRICE versus COST of ownership. When it comes to hiring the right people to work for your organization and the RIGHT people are the key to any company’s success, it’s always better to pay a little bit more than you planned, than less than you should. Don’t try to take shortcuts. Don’t undervalue the position, and by all means, don’t try to hire a product salesperson to do the job of a service salesperson. That’s like me calling a carpet repairman to fix my plumbing! It just doesn’t flush!


For recruiting services of the highest magnitude, feel free to reach out to me personally. Our programs are all performance based and your satisfaction is guaranteed.

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