Internet Sales Pay Plans: Back to the Drawing Board?

[William Bryant]

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?

 

[Alex Snyder (blog)]

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?

 

[Joe Pistell]

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!

 

[Brad K]

"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.

 

[Joe Pistell]

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

 

[Chris (blog)]

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.

 

[jason (blog)]

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

 

[Joe Pistell]

Jason,
What's your URL ?

 

[jason (blog)]

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

 

[Alex Snyder (blog)]

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).