Internet Sales Pay Plans: Back to the Drawing Board?

[Alex Snyder]

Are you an Internet Manager, an Internet Sales Director, an eCommerce
Director, an Internet Sales Consultant, a Vice President of Marketing?  I think this speaks to all of us, but let's forget about our positions and corporate structures for a moment.  Some of you may already have your 2008 pay plan and some might not, but that doesn't matter right now. Let's talk about what we think is right and fair. What is fair to you and the person paying you.

I was reading the "Myth of the Dealer Web Site Conversion Ratio" article, by Mitch Turck, and started thinking deeper about Mitch and Joe Pistell 's rebuttals to cross-comparing site conversion ratios between industries. When Mitch posted some actions a customer might take after visiting a dealer website (call an untrackable local phone number, visit the store, etc.) it made me think: he's right and how silly is that! We don't give credit to some online ventures that are doing exactly what they're supposed to do - mainly our own website. We do this because it isn't easily track-able. Of course, we did this to the traditional medias as well, but keep reading....

If your paycheck is directly tied to what can be proved as a clear and concise contact history inside a CRM, is this fair to you? Did you send your customer an email, or a series of emails, with value proposals? Did you leave a voice-mail saying something about the latest deal on the lot? Did that customer ask for you when he or she walked in the door, but an old "Earl" salesperson gave the customer a reason why he or she should deal with him instead? Did Earl say the customer was a "drive by"?  These scenarios are also untackable. I wonder if we're paying our Internet personnel on the wrong principles?

In that same "Myth" article, T.J. posted some advice for Joe on three methods that have helped him boost Internet sales (Instant Chat, Online Coupons, and a trade appraisal). T.J. - please don't take offense to this, I could be on the totally wrong track here, and we've all done it ourselves. This got me thinking about how we are putting our customers through hoops because our pay plans are structured toward "Internet sales". It has been my experience that customers can't stand trade appraisals - it creates a confrontational environment before they even show up. Online Coupons are an annoying pop-up and most intelligent customers know they could have negotiated that amount off anyway, so all it does is knock another couple hundred dollars off every deal. However, I am a fan of instant chats! Anyway, our pay plans are driven to create more conversion so we have more customers to talk to. They drive us to take advantage of ventures that may upset the customer or not be in the dealer's best interest because we're working a pay plan.

Working a pay plan is good if you're in a traditional position, and can be if you're in an eCommerce position as well, but I'm not sure we've structured these things in everyone's best interest yet. My point is, we are in positions to influence online advertising ventures for the dealer. The dealer has based our pay plans on track-able "Internet sales". What advertising ventures are we influencing? Are these ventures fair to the dealer? Is your pay plan structure fair to you?

 

[Mitch]

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:

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community.imagiclab.com

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.

 

[Joe Pistell]

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.

 

[Tim Morris]

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.

 

[bhoecht]

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.

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www.grokdotcom.com

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?

 

[Alex Snyder (blog)]

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.

 

[Tim Morris]

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.

 

[Gerald]

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?

 

[Tim Morris]

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???

 

[Sharon (blog)]

"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.