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How Outdated is Your Pay Plan?

Discussion in 'CRM, ILM, Chat, Desking, Emails, Phone, SMS' started by joe.webb, Apr 19, 2016.

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  1. joe.webb

    joe.webb
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    First Name:
    Joe
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    DealerKnows Consulting
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    Dealership Pay plan scenarios continue to vex everyone from dealer owners to salespeople.

    I come across killer BDC’s with dedicated agents going above and beyond their daily task lists. I meet BDC Managers controlling far more than how phones and leads should be handled, while overseeing entire technological deployment and marketing spends. Some of these professional are paid peanuts. We witness BDC and Internet departments yielding 40% of a store’s business, while influencing far more. Yet being paid half that of an average salesperson.

    It is time we close our eyes, forget about what positions have been paid ($$) in the past, and start structuring pay plans based on what profitability and value that position brings to the bottom line of the store?

    I’m not advocating that all BDC agents are paid more than sales professionals - yet (some, though, certainly deserve to be.) But I have found countless BDC reps who outperform most salespeople in value to the organization (quintupling outbound calls and task completions), and even more top performing Internet Directors paid under half of what the “chairborne” sales manager is.

    With pricing being posted transparently online, paying on commission is a disconnected strategy at best. Take a close look at who is truly generating the traffic and sales for the store. You may recognize that some positions are worth more than others to the bottom line.

    Is it time to pay accordingly?
     
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  3. Steve Stauning

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    Great post, Joe!

    "Outdated" is a funny concept, when you consider that the current pay plan was introduced last month and it replaced one that was written four months ago!

    Most pay plans are indeed outdated in their conception and their universal inability to drive goals.
     
  4. joe.webb

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    Yes - outdated in the fact that they aren't based on performance success, but you're correct. They've all be freshly printed from the copier and redistributed with groans within the last two weeks.
     
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  5. Chris Leslie

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    If you were to open a dealership today with a similar structure to dealerships today (sales force, sales managers etc) what could an updated pay plan look like?
     
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  6. joe.webb

    joe.webb
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    Great question, Chris. So much would depend upon the region, the amount of inbound opportunities, the floor structure... even the brand.
    However, I just was on-site training a successful dealership last week that has fully salaried, non-commission sales members. That is a big start, in my opinion. Not only would I go salaried, but I would make escalators based on volume of units and volume of task completions. I'd also give pay flat rates on referral units, as well as retained units (after task completions have been met). That would then allow the benefit of growth within the company and reward longevity and build a book of business.
     
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