Wayne - thanks!

What is the secret to a successful, sales producing Internet Department?

Delivering the online shopper from behind the computer to the dealerships doorsteps, in my opinion.

Sure there are many ingredients inbetween that assist; websites, SEO/SEM, CRM/ILM, and online advertisers. None of the above have I yet been able to fully maximize at a dealership I worked at because of the time consumption involved. For example...

I only get paid on the vehicles I sell via commission, taking the consumer from lead to delivery. Not for taking photos, writing the descriptions, or troubleshooting vehicle feeds for accurate information that benefits the entire dealer group, not just my "Internet Sales". We carry 10 manufacturers across 5 rooftops; 400 new and over 130 used cars in stock at all times.

If at any one time, the above ingredients lack, it directly affects my sales. But all that matters is 'What were my internet sales/gross' at the end of month, not taking into consideration other variables. I have offerred assistance/coached those between myself and owner that there are better proccess's to sell more cars from the Internet Department, but only get the deer in headlights look.

Adding to Alex's article on this subject: Are there many or just a few other's in the same position as myself; sales, IT, website maintenance that only get paid on performance?

Side note Joe Pistell, there is a company now that reveals shoppers true identity and/or corrects false lead information before arriving to the dealership ILM/CRM tool. Contact me through Mr. Kershner and I will get back to you.

I have returned to my position as an ISM due to my families health insurance premiums tripling and the dealership I was working for having a profitable department turning into an shell. Two very different situations able to meet to fill mutual voids.

Of course the first thing we discussed was a pay plan and expectations and there was a lot of mutual give and take and a good compromise resulted, both parties were happy with the outcome.

Of course the biggest pitfalls to a "transactional payplan" when marketing the dealership online is that not every sale can be measured, but this can also be said about any other traditional advertising platform.

I believe your marketing efforts should be tied directly to how you are paid. If you are paid transactional you need to give your customers a reason to do business with you via the web and your marketing efforts should be to brand you and your service give them a substantially unique reason to contact the internet department head on.

I cringe when I see things like this:
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Basically the idea is that a happy Internet buyer, while good for the dealership, is bad for Internet Sales, because it's likely that customer will just come back to the SP as a previous, and send referrals directly to the store, when all those people could otherwise be potential Internet sales, submitting third party leads or searching Google for local Nissan dealers.
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That may possibly where dealerships, salespeople and managers will never have a true meeting of the mind, but that is where an internet department can shine and separate themselves and provide easily trackable results.

Remember the road to the sale the last step is follow-up. That is where technology can outshine traditional methods. Make the web part of the follow up process and give people reasons to to initiate a new transaction and send referrals via the net. You have these customers on your list make the best use of it. Create a unique web delivered proposition or promotion. There is money in the list, but the fortune is in the follow up!!

While there may not a perfect answer to this problem keep in mind internet marketing is wholly transactional based. A good example are the books in left side bar here. Jeff will earn a commission if you purchase directly from amazon by clicking on one of them and looses it all if you buy it a local Barnes and Noble because you saw it on his blog. You win some and you lose some. Amazon wants you to buy from Jeff's link at amazon.com or even better buy from amazon because you typed in amazon.com in your browser and searched for it then bought it. They will make 4-8% more that way.

Seth Godin on the other hand could care less where you buy the book and is glad that Jeff is merchandising it for him. He will make money no matter where you buy your "Meatball Sundae" from.

The end result is a transaction....

Excellent book by the way and a must read if you are serious about selling anything online.

Alex,

I love your "Make a Deal". That's the right path.

Wayne

Jason,

Awesome setup! I like how you've separated yourself from the traditional "Internet-guy" model. Of course, retail is retail, but every market is different - meaning, your exact setup probably wouldn't have the same success around the nation, but there is something to learn from it. I'm glad to hear there is a business model like yours thriving. I've felt for a long time the Internet department should be more of a creative marketing department than a one to one sales generating department. Thanks for sharing! Mind giving Joe and me a site to check out?

I apologize for being so quiet over the last few days - I've been out of town.

Chris,

That is an excellent short-term solution if you have other areas making the profit. Profit is king, and I'd rather be a part of the profit center. There is a myth in this business that selling cars for invoice or less will keep a dealership healthy. Sell it for less than cost and volume you're way into a profit - isn't that how it works? What happens when your competition wakes up? What happens when the economy dips and volume isn't happening? Yes, there is a healthy balance between volume and gross, but how are you finding it? That's a whole other subject.

Chris - I'm probably being a little hard on you. I'm sure you're doing other things and it isn't all about who can sell the car the cheapest.

As for pay plans, I don't think there are a whole bunch of dealerships with never-ending pockets out there, so let's hop back on finding that fair balance for you (paycheck) and the dealer (profit).

Chris:

My competitors are all buying leads and doing the 'under invoice' thing for thier internet sales, yet we're selling more then they are and keeping full grosse. Plus - they are WELL KNOWN and heavily marketed dealerships, where as we were relative nobodies a year ago and are located out in the country (we still do hardly any traditional advertising and the bulk of our customers never even heard of us prior to shopping for their new car).

In other words, hardly anybody outisde our rural area is predisposed to buying from us - yet we are pulling a lot of new customers away from the very well known and well entrenched metro dealers - even though they almost all use invoice-related fixed-price quotes well under our average gross.

Here's a quote from a friend of mine who now works as an ISM at one of those dealerships:
"We lost 6 deals to you guys last week!" - and they quoted $500 under invoice! He used to work for us so he knows we weren't undercutting them - even though his boss is convinced we are.

I would say we are not spinning our wheels by not getting into price wars. We just go after a different part of the market. I concentrate on getting people to my website, and then selling them on our dealership. That's what I consider the other 98% of the internet traffic - the ones who are not shopping for price quotes since they don't even know exactly what it is they want yet

Jason,
What's your URL ?

I've been ranting about just this topic for ever Jeff nailed everything.

1) Dealers will get what they reward.
2) It's not internet sales - it's internet marketing.

The sales staff needs to get with the program. If they can't work an internet lead (whether phone or email), then they are going to become extinct. This reluctance to get with the times is why we ended up with a seperate 'internet guy' - everyone including management simply wanted to keep doing what they always did for the past 20 years and not accept the fundemental shift in their industry. So they sent someone off to a corner to 'do the internet thing', and it's grown from there.

I get a flat salary (since i do everything in house - web development, computer programming, sem, seo, etc), and a bonus at the end of the month. I also ended up doing a lot of our display ads in trader pubs, etc, using insight from what worked for us on the web. Heck - when a simple change of a single word in a PPC add can double it's click through, thats usefull to know!

I don't set appointments, I don't sell cars. I generate phone-ups, drive-ups, and 'email-ups' from people on the internet. And yes, have most employees wonder "what exactly does he do?"

My bonus is based on how many customers put a check mark next to "internet" when asked "what brought you in today?" when filling out our survey while in F&I.. I have an entirely seperate question that asks if they visited our site first before coming in - this identifies those who would have come in anyways (well, sort of). IE, they will checkmark 'referral' for what brought them in instead of 'internet', and checkmark 'yes' when asked if they visited or website before coming in. I don't usually lay claim to generating this sale. Now that we have a crm tool in place, I'm going to try and lay claim to repeat and referrals..

This approach seems to work for us - after a year of doing this, our total sales have doubled because of the internet. Unfortunately, I left the actual computation of that bonus discretionary, and once sales took off it quickly plummeted from the original agreement

Hi everyone! I think it's fair to say the more you sell, the better your pay plan gets. Here's how I am crushing numbers and making more sales than my competition who get the same leads: QUOTING AND COMMITTING TO SELLING ALL INVENTORY FOR $100 UNDER INVOICE. Even if your savviest prospect shops your price (which you should give them - even if you never talk), they will see that $100 under REAL invoice is usually as good as it gets. If your dealer is not behind you 100% on this, then you are spinning your wheels and need to find a dealer that will be 100% behind the internet. Bottom line: Quote less than everyone else - see more people come in - make more sales - make more money - dealer notices - then everything falls into place.

Brad knows:

Rule #1).
"what dosen't get measured, dosen't get paid".

Rule #2).
Brad also knows:
"...sales reps always check "walk in" grrr...

Rule #3).
Brad ALSO knows:
Shoppers will play every game in the book to remain anonymous (to improve their opportunities). It's important to not offend the already defensive shopper. Heck, I hate it when Home Depot asks me my zip code at check out!

Brad's p*ssed at the lack of value the BDC/ISM shows because he's caught in a vise. To make matters WORSE, most CRM's use a single choice as the cause for the shoppers purchase. How idiotic is that?

IT's Not Going to Change!
It is my opinion that WE'VE ARRIVED to that magical place where total dealership sales and the internet are 99.9% interconnected AND because Shoppers NEED to remain incognigto, shoppers won't stand up and be counted.

The onus is on the shoulders of the GM to recognize the current payplan is like a Web1.0 application. The web is moving and this communication/comission method is falling out of favor (and maybe costing them opportunities).

THE ISM BRINGS VALUE TO THE DEALERS INTERNET MARKETING PLATFORM THAT CANNOT BE MEASURED.

Does the Hilton Hotel count the number of ups the Concierge gets? No. Does the Concierge bring value to the HIGH PROFIT clientele? YES. The value is measured in client retention. Return visits. When are we going to realize that we're not selling to a up, but to a FAMILY that has 2.7 cars per household.

I say if someone were daring, they may find more ROI by out efforting his competition with personalized content and services.

For the sake of argument...
If you sell 200 units per month and you have 2,000 unique visitors per month, that means 1,800 BOUGHT somewhere else.

Mr. General Manager, can you tell me where the dry gun powder lies?

Sorry aboout the rant, I am in one of those moods!
Joe

"Customers are finding little value (read: leverage) from the Email RFQ model. 2nd, 3rd & 4th generation Internet buyers are hitting the web sites like they're brochures rather than places to initiate a purchase" Hence the vital importance of accurately tracking floor traffic and the source from it. This sounds easier than it is since so many sales people take the "source" check box as "Walk In" on most tracking systems. Walking In because of what? The balloons on the front lot? I highly doubt it. Owners/GM's don't take this as seriously as they need to which in turn devalues the impact of the ISM/BDC's role in effective marketing of the vehicles in the first place. It seems a vicious circle.

Alex,
I can tell by your probing questions, you're a General, you see the battle seen from 60,000 feet. You see a disturbing trend that threatens "the business model as we all know it". IMO you wont find any solutions from soldiers on the ground (unless he's been taking baloon rides on his time off).

Here's my the way I see it.
ISM model exists because the OE sites wanted the buyer and seller to meet (factory has the model info, dealer has the price). Without this marketing sponsorship from the OE, there is no ISM email model. Proof is in the used marketplace, email quotes don't exist in the used car market.

Problem:
Customers are finding little value (read: leverage) from the Email RFQ model. 2nd, 3rd & 4th generation Internet buyers are hitting the web sites like they're brochures rather than places to initiate a purchase.

Example:
Our post sale survey says, 90-95% of customers who buy a used car, visit our web site. Yet only 1% willingly reveal themselves before they buy. ISM's must battle for the 1% while 95% of customers remain incognito and stick to old school and become walk-ins or phone ups.

Question: The ISM's audience is 1% of the sites overall traffic, wouldn't the dealer find more ROI working the audience rather than the 1%? Is the dedicated Internet employee at the dealership needed in sales or marketing?

I say marketing.

Joe
p.s. I do have a used car view of the world, so I could be all washed up... but I don't think so!

We can all talk about how owners/managers want us to sell more cars and pay less for it, and I think those stories are going to be more prevalent over the next year or so, but we're trying to answer the question:

What is a fair pay plan to the dealer and you?

Maybe the question cannot be easily answered. Maybe the question spins off into other areas that must be defined first:

What is an "Internet" deal? What is an "Internet" department?

Maybe recent economic changes are going to force us to answer questions we haven't had to answer before. Here are some simple questions to, maybe, get us thinking in the spirit of this thread:

1. What is your sales/service/parts (the whole dealership) direction? Where do you want to be 5 years from now, 3 years from now, next year? Be honest and realistic.

2. How does your current Internet department function? Does it actually bring in bonus business, or is it just stopping your same old customers from going to your competition?

3. In order to make #2 work better, you need a good answer to #1 and a way to include your eCommerce efforts in that same vision.

4. Is your CRM reliable enough to pay people based on its output (reports). Or are you still using Excel Spreadsheets and Outlook? If the latter, is your Internet department trustworthy enough?

5. How do you make your CRM work with your vision (#1)?

6. Does it make more sense to look at your Internet department as a marketing department? If not, what is an "Internet Deal" - is it just any lead that buys, is it an appointment, is it an email reply from the customer....what is it?

7. How do you pay based off your direction/vision?

The other end is, my owner wants to see me sell more cars and make more money, yet he's tying my hands to sign up for Cars.com over $300 a month on the monthly bill! Please, an extra probably 6-8 trackable sales and $300 a month is a problem?

My counterpart at our Chrysler store is salary-paid not commision paid, and he doesn't plan on ever leaving. He does a good job, too. Anyone else gone to salary? What kind of salary can an ISM/director make salary?

"Most dealers and GMs always seem to want to find a way to NOT pay their employees..." Agreed. I've just left the retail side of the biz also as an ISM for a luxury brand dealership for the same reasoning. It's enough to properly "market" vehicles with excellent photos, great copy, competitive pricing, etc. making goals & objectives, only to experience the end of the month "shell game" as to your income for all the effort. IMHO a fundemental shift is going to have to occur in this industry before ISM/BDC Managers, etc. are fairly compensated for the contributions they bring to the dealerships bottom line, otherwise the turnover is just going to continue at 200%. "we would have sold them anyway" not if your competitor is doing a significantly better job of marketing the vehicles online in the first place and manages to generate a call or better yet a showroom visit on the vehicle. Too much antiquated stupid logic is still prevelant with owners/GM's at the dealership level these days. If your competitor is doing it better the customer will beat a path to the phone or their showroom first, that much is a given.

You know, this topic is very closely related to the reason I got out of the retail side of the business. Most dealers and GMs always seem to want to find a way to NOT pay their employees, like the problem Gerald is having. Then they wonder why they have 200% turnover and can't keep good people in their stores. Hmm...what could it be???

Great topic- always near and dear!

My experience has been pretty varied. Initially, my first dealer wanted to pay me ONLY on emails (what he called "true" Internet customers) and not phone pops. I asked what the difference between and email and a phone call from Autotrader, and he said by emailing, that makes it an Internet customer. "What if I remove the phone number from our websites? They would HAVE to email us, right?" "Yeah, but I would fire you" he says. "Exactly! When the customer emails us, you LOSE money because all I can do is give them a drop-dead quote. I would rather compel them to see a car on the web and call me or better yet, drive in and say 'I must have that car'. The only way to do that is on the phone." He agreed and all Internet-generated calls were counted as Internet sales, though ISMs weren't always the sales person of record.

The one thing I ran into, and continue to is the "we would have sold them any way." At my current store, small town, family owned for 75 years, they are looking to me for incremental sales. Last month, we sold 53 new vehicles, 12 of which I substantiated an Internet history. New car director guy says, "well, our baseline is 40-50, but what we need are incremental sales." I'm sorry, being a History major, I'm not up on math, but 53 seems to have incremented past 40 somehow.

Just out of curiosity, if ISMs are not paid on their return customers or the stores' existing customers who research online and come in to buy, why would the new/used directors get paid on be-back business? Wouldn't we have sold them anyway?

Hey Brian,

Good point, re: ROI, competition, etc. But I will take a stab at it. Here goes: Because the particular service I cited actually takes steps to ensure that the shopper has a level of control over the experience, she might feel more comfortable sharing some additional information that will help the savvy ISM help to differentiate him/herself from the (up to) 9 other sellers on more than simply a better price. I know it sounds funny, but I still believe that a high percentage of shoppers will pay a higher price to someone who they feel they can trust. That is where the anonymous nature of this type of service comes in...because a relationship is being built on more than the standard "give me your best price" price quote lead (which, by nature sets the tone for an adversarial relationship about price alone), the shopper is actually looking for someone they feel comfortable dealing with. Otherwise they would not use that service, they would submit a lead through any of the other traditional lead providers.

Beyond that, relationship selling aside, several industries find a way to operate profitably even though "compete for your business" websites have popped up: SelectQuote for insurance, LendingTree for mortgages (maybe not such a good example!!! LOL) and other loan products, etc.

I definitely see your point...but I would jump at anything has the potential to get me out of the daily grind of sending my "best price" and hoping that its better than everyone else's.

Joe,

I've used an instant chat tool through three different vendors. I've actually had good experiences with all three! As long as the instant chat is not on when there isn't a person there to respond, and your dealership representative is trained appropriately, it can work very well!

I'd rather not take this thread into a conversation about instant chat services and stay on the topic of pay plans, so shoot me an email if you have questions: axsnyder at checkeredflag dot com.

Thanks to those of you who have posted so far. Mitch - thanks for sharing the link to the iMagiclab community. I hadn't seen your post on there yet.

Great topic Alex.

Awesome post Tim. Any thoughts on how 10 dealers competing for the consumer's business might result in a positive ROI for the dealer? To make the effort worth the pursuit? Just a question, but if I was a dealer I wouldn't be jumping up and down to sign up for that.

Back to Alex's original post... very insightful... dealer websites that speak in the voice of what the Internet Manager wants...

1) Email me
2) Call me
3) NOW!

Mull on what a dealership website might look + sound like if it was written in the language of conversation that consumers would prefer to hear.


I posted on a related entry yesterday about sites in other industries that convert at levels unheard of in auto. It is by studying disciplines such as Persuasion Architecture + consumer profiles and consumer language of conversation that they get there.

And of course having system capabilities which consumers actually value (being able to buy online - vehicles, parts/accessories, schedule service) + not just inquire is related... the destination has to be worth the journey or even site design won't convert / result in any incremental car sales... and isn't that what it is all about?

Hi Everyone! Happy New Year!

Joe, you commented that "Until someone comes along and invents a hot new method to have a shopper "reveal themselves" shoppers will continue to collect data and kick tires incognito. ISM's need SPECIAL weapons to bring forth that sneaky and smart shopper." I wholeheartedly agree...but, look at it from the shopper's point of view. They are online for a reason, and the reason is that the Internet affords us a measure of anonymity. Do you think that the shopper will be pleased to have some "sneaky" ISM with all the tools to track that person down and back them into a car-buying corner? No, that is exactly what the average Internet shopper is trying to avoid.

It reminds me of a new concept a I learned a little about the other day: cartango www.cartango.com. Basically the concept is exactly the reverse of what you are hoping for Joe. But it seems to me like this tool will allow ISMs to better engage the online shopper and begin to develop a positive, trust based relationship BEFORE the 2 parties "reveal themselves" to the other. In other words, if I understand the concept correctly, the service will allow shoppers to submit their information anonymously and have up to 10 sellers anonymously begin to "sell" that shopper. Obviously, the seller who does the best job of gaining that shopper's trust and meeting the customer's specific needs will earn the business. Only after the shopper determines to take the next step with one or some or all of the sellers are the parties introduced to each other. The other cool thing I remember is that as a seller you get to see who else is competing for the business. It seems like a great concept from the outside in, and while I understand why it is geared ONLY for women, I wonder why the same concept could not be applied to the car-buying public as a whole (or at least the ones who are hesitant to give their personal information to some lead-aggregator)???

We all know that the reason shoppers are on the web is because they want to avoid the stereotypical car buying experience. Any service which allows the customer to do just that is a great leap ahead. Think about it, what is the difference between submitting a lead with all of your contact information online to be bombarded by phone calls and emails, and just visiting each dealer in person? The only real difference is time...with the internet, a shopper can skip right to the annoying part.

The consumer has learned that the dealer's website is an extention the dealerships physical property (where all the old school "hore trading" rules apply). They were hoping for -and did not get- some new transaction machine that would shop for them and save them cash (i.e. Kayak.com, Ebay or HotWire.com, etc...).

Until someone comes along and invents a hot new method to have a shopper "reveal themselves" shoppers will contintue to collect data and kick tires incognito. ISM's need SPECIAL weapons to bring forth that sneaky and smart shopper.

I think the 'net shopper woud be more "chatty" if they were dealing with an consierge rather than a sales rep.

Speaking of chatty, Alex whats your talk on Instant Chat? I tried it 3 years ago and again 18 months ago and got no where.

Alex, you want to know what really throws me for a loop? It could be argued that people like us who only get paid to generate new business through Internet Sales should be doing everything possible NOT to get good sales surveys back from our buyers.

Wrote a bit about it on the iMagicLab community:


Basically the idea is that a happy Internet buyer, while good for the dealership, is bad for Internet Sales, because it's likely that customer will just come back to the SP as a previous, and send referrals directly to the store, when all those people could otherwise be potential Internet sales, submitting third party leads or searching Google for local Nissan dealers.

Every year this issue of ultra-specific pay plans for Internet Management gets more and more shaky, and as you said, the ironic thing is that the best way to maximize how much money you make in our position is to do things that hurt the dealer, like use a website to push emails rather than phone calls and walk-in traffic, or get back unsatisfied surveys to ensure the customer will still be in the "Internet buyer" pool the next time around.