Craddle to Grave ISM Pay Plans?

[ddavis]

Before I was drafted into the Army, I was in school, selling cars part-time. After coming back to the states, my last 4 months, in the service, I was a Drill Sergeant at Fort Benning. Salespeople take the direction of least resistance and doing things the right way has to be that direction. Training has to be like Chinese water torture ...constant drip, drip, drip.

I don't talk to people like a Drill Sergeant but all of our jobs require discipline.

 

[ddavis]

I'm not a proponent for "Cradle to Grave,"

John, we might need to try prescription medication but not rule our shock therapy.

 

[john.quinn]

John, we might need to try prescription medication but not rule our shock therapy.

I agree. Let me know if it hurts, and good luck!!

 

[Jeff Kershner]

My questions:
-Are my cradle to grave ISM's in over their heads with lead volume to convert the numbers I am looking for?

Are they simply just cherry picking the easy ones hense the low conversion ratios?

Is it possible that based on my lead sources, the lead quality might not be there?

I suggest 70-80 leads for a cradle to grave ISM. With the overflow of leads month over month, your ISM's are getting more than enough leads to work each month.

With too many leads - of course they are going to cherry pick, wouldn't you? We always go after the low hanging fruit.

The job of the Marketing Manager is to get your team the BEST qualified leads and traffic month after month. If your leads are not closing at the national average for the average goals you have in place then you have a few options (which you could follow in order before removing from the mix)

1. Resell and review lead sources with your ISM's. Is your team SOLD on the lead source or are they dismissing the lead source for perceived reasons? If you have a, what you know to be, solid lead source but the closing percentage is low, you may need to get your ISM's more involved. Take the time to step each ISM through the lead source from beginning to end.

I would recommend interviewing each ISM to get their feelings of each lead source. You might be surprised with their perceptions.

Case in point: ISM A closes Trade-In leads at a consistent 15%+ but ISM B consistently never breaks into the double digits. I've found ISM B is not bought into the leads and therefore doesn't give them the deserved effort - prematurely marking the opportunity "Inactive" in the CRM.

2. Review and tweek the process for each lead source. While reselling and reviewing the leads source as mentioned above, take this time to really review the process. Too often we treat each lead the same. Would you treat each customer the same? No. Again, a trade-in lead needs to be approached differently than a Price Quote lead from your dealers website.

REMEMBER: Your closing ratio shouldn't be your only decision for keep or leaving a particular lead source. You want to measure your SHOW RATE. Lead to Show - Show to Sold. A particular lead source might be producing shows but no sales...with that could be another set of issues.

After you have given the lead source a fair opportunity to perform then you can make the decision - keep or drop. OR sometimes you may not have the time to resell, review and tweek. In stead you run the sprint rather the marathon and at that point you make the rash move and formulate your lead mix around your people and their perceptions. This is how it usually happens

 

[tomfohr]

Tom Fohr,

I very much admire your process. That Ford store is very lucky to have you shoveling coal into the sales engine. You're asking the right questions, there's a mountain of experience in this forum. Keep it up!

Lol, thanks but don't admire it too much because I'm convinced it is still a bit broken.

So after a lot of thought, I am leaning towards trying to structure it more as a dedicated department... therefore the ISMs paid based on the departments production. My reasoning for this is to enourage cooperation between to 2 ISMs as they will both be getting paid on the same pot and also so they will motivate each other and be equally vested in each others leads/appointments, ect. We have a VERY sucessful finance department (2 finance managers) and I believe a lot of it because they cooperate as a team and motivate each other as a team since they are both paid on the pot of what their department produces.

Currently my ISMs are on the same pay plan as all my other sales people (Ex. 25-30% commision front end depending on what unit tier they sell, plus unit bonus' at 10,12,15 units). I feel this payplan isn't adventageous to the internet department because it is my belief that the ISMs pay has to be based upon their conversion ratio (total sales/total leads) just like Finance Managers are paid off of product penetration. Like anything, when it is tracked and your staff is paid based on the results... it naturally goes up.

My idea to start with is to have our ISMs on a payplan similar to the following... I'm sure their will be tweaks if I get buy-in from the higher ups.... but this is my idea:

Weekly Salary:
$275/wk

Commision:
12% of department gross payable (holdback being payable on new)

Conversion Bonus:
+1% for 10% conversion ratio
+2% for 12% conversion ratio
+3% for 15% conversion ratio
+5% for 20+% conversion ratio

I figure with a department goal of 12-15% and based on what they are currently averaging for leads (aprox 230-250 email leads (after removing duplicates) and 50-60 phone ups) that would equal about 42-50 sales per month and at aprox $1500-$1800 avg payable front gross these guys should be able to make a good living and should produce the results I am looking for also.

What are your guys thoughts?

 

[ddavis]

The next level to having teamwork, is developing the right culture. I expect people to do the right thing. I don't pay people extra to do what is expected of them. Pulling from a pot? Do you have a weak ISM that you are trying to protect? Brother-in-law?

I want a pay plan that will allow me to recruit the very best people. Once I get them, I will keep them.

I agree with several people, you don't have enough ISMs to handle the leads you are getting. Your conversion rate will suffer if you allow your ISMs to cherry pick. Your marketing strategy will also effect your conversion rate.

Looking at your pay plan, I don't think you are paying them on the back. I don't care how the deal makes money. On the front, mule them on the trade, switch to a lease or set up the backend, the deal needs to make money.

 

[tomfohr]

The next level to having teamwork, is developing the right culture. I expect people to do the right thing. I don't pay people extra to do what is expected of them. Pulling from a pot? Do you have a weak ISM that you are trying to protect? Brother-in-law?

I want a pay plan that will allow me to recruit the very best people. Once I get them, I will keep them.

I agree with several people, you don't have enough ISMs to handle the leads you are getting. Your conversion rate will suffer if you allow your ISMs to cherry pick. Your marketing strategy will also effect your conversion rate.

Looking at your pay plan, I don't think you are paying them on the back. I don't care how the deal makes money. On the front, mule them on the trade, switch to a lease or set up the backend, the deal needs to make money.

No, no one that I am trying to protect as both of my ISMs have pretty similar numbers but I hear all the time about how so-and-so has sent a customer 10 emails and then the customer shows up when they are off and the other upset that he has to help the customer for a half deal instead of setting appointments of his own or ect.

I guess my thought was that if I keep it craddle to grave with two ISMs and possibly a part time appointment setter everyone would be more motivated to just get the customer in whenever possible and someone will be there to sell them the car and everyone will get their piece of the pie.

I know one thing for sure.... the set up I currently have is not producing the results I would like but I don't want to get 100% away from craddle to grave. My goal is higher conversion ratio and more appointments.... therefore resulting in more sales so I can start working on mining more leads and add additional ISMs to grow my internet department. I believe making it a department and having the ISMs take a bit more ownership in the leads (by having them paid on conversion of the department) and having a solution to make them work as a team should result in getting a lot better results. In my mind, 2 ISMs working together on 240-260 leads should be a lot more effective than each ISM working individually on 100-120 leads hoping the customer is available while their are working.

 

[ddavis]

Tom, if I understand this correctly, to stop ISMs from whining, you feel that injecting a form of communism into the pay plan is the answer? Seriously, I have seen this before. What happens is one of the salespeople ends up selling more or has significantly more gross and it all starts over again.

That is too many leads for two people. Concentrate on marketing and everyone will want to be in the department.

 

[Jeff Kershner]

Let me ask this. If you could have the ultimate set up, what would it be?

Remove personalities, remove what ifs, remove what could happen or previous stats.

If you had all the perfect people, how would you set up your sales department??

 

[tomfohr]

Tom, if I understand this correctly, to stop ISMs from whining, you feel that injecting a form of communism into the pay plan is the answer? Seriously, I have seen this before. What happens is one of the salespeople ends up selling more or has significantly more gross and it all starts over again.

That is too many leads for two people. Concentrate on marketing and everyone will want to be in the department.

No not at all, the purpose and intentions of the pay plans are not to stop ISMs from whining. The purpose is to set more appointments... there for convert more leads. I feel I have my CRM dialed in (the best that ReyRey) can be, my internet follow up/sales process pretty well in place, and now need to have everyone who's involved prime focus be LEAD CONVERSION.

I'm pretty sure we will be going with a slightly modified version of the pay plan I mentioned above as well as part time (to start with) appointment setter. I will be sure to keep everyone posted with my results. My goal is to launch this February 1st as there are still some CRM tweaks I need to make to accommodate this structure as well as interview and hire an appointment setter.

Current month and total 2011 year stats will follow within the next few days to compare against...

Thanks everyone for the much input and if you have any other recommendations or suggestions feel free to let me know!