Thanks Blake. Point well taken. It does not hurt either of us to have a plan in place that is performance based.
Seeking innovative pay plan ideas for internet sales managers
- Thread starter tbullard
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- Aug 31, 2011
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- First Name
- Dan
I know this is an old thread, and after reading it, I ended up leaving the Internet Sales Manager position after I tried to negotiate a new pay plan.
I had left a dealership that I had been at for over 6 years with various different job titles from Desk Manager to Internet Sales Manager, to Floor Manager. Things were good there until new management came in.
I was begged by a former manager of mine to go to his dealership to where he recently became the new GM. After not negotiating a pay plan, I went to his dealership and thought that I would be paid on results... that's where I went wrong.
I took their Internet department that had only cracked 20 units once since it was created, to 43 in my first month, to 51 the next, and continued to grow. I felt my salary did not cover the results, and asked for a "Bonus Structure"
I could make more on the floor as a salesman, and he said that was my decision... needless to say, I left.
I went back to selling cars, and it's actually been fun again. I am slaughtering the other sales people, however, it's too easy. I miss the Management that I used to do, and the responsibility that I had. Pounding the pavement isn't all that much fun anymore.
To sum this up, Internet is the new lifeline of dealerships, pay the person for results, it makes them strive harder. Salary doesn't work, unless you pay them well. I made the dealership almost $400,000 in 3 months with the deals that I brought in, and got paid a total of $10,000.
I took the dealership that had a 4-5% closing ratio to an 15-18% close ratio, and wasn't rewarded. It breeds negativity.
I had left a dealership that I had been at for over 6 years with various different job titles from Desk Manager to Internet Sales Manager, to Floor Manager. Things were good there until new management came in.
I was begged by a former manager of mine to go to his dealership to where he recently became the new GM. After not negotiating a pay plan, I went to his dealership and thought that I would be paid on results... that's where I went wrong.
I took their Internet department that had only cracked 20 units once since it was created, to 43 in my first month, to 51 the next, and continued to grow. I felt my salary did not cover the results, and asked for a "Bonus Structure"
I could make more on the floor as a salesman, and he said that was my decision... needless to say, I left.
I went back to selling cars, and it's actually been fun again. I am slaughtering the other sales people, however, it's too easy. I miss the Management that I used to do, and the responsibility that I had. Pounding the pavement isn't all that much fun anymore.
To sum this up, Internet is the new lifeline of dealerships, pay the person for results, it makes them strive harder. Salary doesn't work, unless you pay them well. I made the dealership almost $400,000 in 3 months with the deals that I brought in, and got paid a total of $10,000.
I took the dealership that had a 4-5% closing ratio to an 15-18% close ratio, and wasn't rewarded. It breeds negativity.
From the old TV show Dragnet, "only the names have been changed to protect the innocent". I'm sure that I speak for a lot of old timers. We have heard that tune over and over. It goes along with "you can never underestimate a Dealer's greed" or "No good dead goes unpunished". The common thread is that they don't care. Honestly, if he cared, you would still be in that position.
The only criticism that I have is "I made the dealership almost $400,000 in 3 months with the deals that I brought in, and got paid a total of $10,000." I am pretty sure that you had some help with this.
You obviously have some talent and a vision. If you have a passion for this internet thing, it is time to start looking for another store.
DealerRefresh is a great resource. If I can be of any help or answer any questions, shoot me a text.
The only criticism that I have is "I made the dealership almost $400,000 in 3 months with the deals that I brought in, and got paid a total of $10,000." I am pretty sure that you had some help with this.
You obviously have some talent and a vision. If you have a passion for this internet thing, it is time to start looking for another store.
DealerRefresh is a great resource. If I can be of any help or answer any questions, shoot me a text.
Oh come on Doug, that is really old school thought and you said it with the "old timer" comment. You would have been better off saying "some dealers", its too broad of a statement to say dealers are greedy or don't care! I know a lot of great dealers that operate their stores on the simple principal that their employees come first. If you don't take care of your team, how do you expect them to represent the dealership and take care of your customers? I am 3rd gen and its been engraved in my DNA that we take care of the people we work with. If you have a happy staff, people will want to deal with them, customers will be happy, and want to return to do business with you. If all dealers were greedy or didn't care there would be a hell of a lot less dealerships. Sure, there are those that are greedy and don't care but I feel they are fewer and fewer these days because of those reasons.
Dan, I think Doug would have been better off saying that maybe the dealer isn't aware or that they don't understand! There are too many "if's" to just say "they don't care" so broadly. With respect to older dealers, we are in a major generational gap in our industry with technology and how it is shaping the auto business. Take today's average dealer who is lets say 60+. They don't understand everything you do, or get it, that is your job and your managers job. Its not that they don't care what you do, its that they are focused on the big picture and rely on you, your manger and the people that work with you to do your part to contribute to that big picture. How many dealer principals are actually members of Dealer Refresh or another online community, or attend digital conferences compared to ISM's, eCommerce directors, GM's etc? I've been to conference's, the dealers that are there are younger and more involved and are trying to learn. If I asked you what your dealership's fixed absorption is, how many OBSO parts do you have, how many hours is service turning, what's your floor plan expense to credits, what's your PVR in new and used, how do your receivables look, and most important, what's your cash in bank and contracts in transit, could you answer all that? If you can you are a step ahead of any ISM i know. My point is your dealer might not know how valuable you are because what i just mentioned only scratches the surface that any good dealer or GM has to know. Maybe its a manager or two between you and the dealer wanting the credit and not giving it where its do to protect their own job. Younger GM's and dealers today are having to learn so much more than our older dealers when they came up in much simpler times when they worried about selling cars, not is our Google+ page correct or are we spending too much in PPC. I am 39, and it all makes my head spin on top of what we already have to know to operate a dealership. You need to find a dealer with an open mind, that doesn't necessarily understand everything you can do, but understands how valuable your contributions are.
I agree with this Dan, there is no one man show.
- Aug 31, 2011
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- First Name
- Dan
I agree with the "I" part.... you both are right on that. I had taken the crew that was not producing, and trained them properly, to which it came around pretty quickly. I was not only asked to come to work at that dealership, rather I was begged to go there to revamp that department.
The GM did know the importance of the Internet Department, however, I felt that I was not paid for the efforts that I was doing. It's a lonely place when you know you are doing an above average job, and not being paid for it.
I implemented new policies, as well as changed all the templates that not only that store used, as well as the entire franchise. (they had 3 other stores)
After I came into the dealership, and tripled the production out of the department, I actually trained 2 of the other Internet Managers from 2 other stores in a different state and they upped their production.
I felt "valued" at the dealership without a doubt, however, with it being a cooperate store, the GM couldn't get the pay any higher.
I have moved on from that dealership, and went to selling again. It's a change after being in Management for so long, and it's actually nice to brush up on the skills. I'm over doubling the pay I was making as a manager without the stress and constant training.
The reason I added to this thread, it I just wanted to mention, if you have what you feel is a good Internet BDC Manager, pay him. Pay him as you would a normal sales manager. Pay him on the production of his/her sales. If the Internet department sells 50 cars, pay them 6% on total gross. That will get the person more productive, and your internet sales will blow up.
The GM did know the importance of the Internet Department, however, I felt that I was not paid for the efforts that I was doing. It's a lonely place when you know you are doing an above average job, and not being paid for it.
I implemented new policies, as well as changed all the templates that not only that store used, as well as the entire franchise. (they had 3 other stores)
After I came into the dealership, and tripled the production out of the department, I actually trained 2 of the other Internet Managers from 2 other stores in a different state and they upped their production.
I felt "valued" at the dealership without a doubt, however, with it being a cooperate store, the GM couldn't get the pay any higher.
I have moved on from that dealership, and went to selling again. It's a change after being in Management for so long, and it's actually nice to brush up on the skills. I'm over doubling the pay I was making as a manager without the stress and constant training.
The reason I added to this thread, it I just wanted to mention, if you have what you feel is a good Internet BDC Manager, pay him. Pay him as you would a normal sales manager. Pay him on the production of his/her sales. If the Internet department sells 50 cars, pay them 6% on total gross. That will get the person more productive, and your internet sales will blow up.
When I say "dealer" I use that term interchangeably with GM and Partner. With the groups, there really isn't a dealer.
"You can never underestimate a dealer's greed" isn't my phrase. I didn't coin it. "No good dead goes unpunished" isn't mine, either.
Someone at the top in one of the groups that I worked for said, "People are like tools". "Work the hell out of them". "When they get dull or break, fetch another one".
Eley, I would be willing to bet that you have employees that are loyal to Duke Automotive because of the way they were treated elsewhere. I have worked for stores where you never quit before you received your washout check. You would either be disappointed or not paid at all. I am absolutely convinced this sentiment is totally foreign to you. In Dallas, you would never hear it at a Sewell, Classic or Huffines store. These are great stores being run by fine people.
I have heard that tune over and over. Dan may not have talked to the dealer or GM. It would have to be a very large store for him to be back on the floor and they didn't notice.
"You can never underestimate a dealer's greed" isn't my phrase. I didn't coin it. "No good dead goes unpunished" isn't mine, either.
Someone at the top in one of the groups that I worked for said, "People are like tools". "Work the hell out of them". "When they get dull or break, fetch another one".
Eley, I would be willing to bet that you have employees that are loyal to Duke Automotive because of the way they were treated elsewhere. I have worked for stores where you never quit before you received your washout check. You would either be disappointed or not paid at all. I am absolutely convinced this sentiment is totally foreign to you. In Dallas, you would never hear it at a Sewell, Classic or Huffines store. These are great stores being run by fine people.
I have heard that tune over and over. Dan may not have talked to the dealer or GM. It would have to be a very large store for him to be back on the floor and they didn't notice.
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You would be right, more so that they were treated wrong other places, and eventually ended up with us. But its also the way we treat our team that keeps them here. We have people that drive over an hour to be part of our team!
And while its not foreign to me because I am aware that is how "some" stores operate, it is unthinkable to me to ever treat anyone that way. I like the old saying "be careful of the ass you're kicking today, it might be attached to the foot kicking yours tomorrow!"
I've read Mr. Sewell's books several times, its a must read for anyone work in a dealership.
I have never understood how people think that they can build a team out of a bunch of abused individuals who are being continually threatened with their jobs. Instead of cursing salespeople they need to teach them.
- Aug 31, 2011
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- 0
- First Name
- Dan
This thread has been quite informative to me, as well, I am sure it's been the same for many others.
The problem with many dealerships, is that they take salesman's skill for granted. For us old timers that have been in this business for many years, you see a completely different landscape. I've done all aspects of the sales, except GM or GSM, and what I've seen many dealers go to is hiring inexperienced, replaceable sales people. They don't value the Sales Aspect of it, and assume that if you hire an eager young guy, he'll know what to do.
They will have 1 or 2 great sales people that close the deals or whatever, but, the majority of the sales team are what I call order takers. Many will blow through ups, and find the one person that wants to buy. When I see a Green Pea blow through ups, I see money walk through the door. Training is poor, or just plain non-existant.
For the "old school" dealerships that do not embrace the internet, and what it has to offer, they are shooting themselves in the foot. A good ISM is very hard to find. One that knows how to sell, and knows when to give up the gross is hard to find.
I appreciate all the input that people have put into this thread, and it shows me there are still the good dealers to work for, but, I'm not the only one that has worked for the "bad ones". Many try to adjust the gross on deals to pad the dealer's profit, and I've seen it more than once. The sales floor is the most important part of your Sales Managers and F&I guys, and many dealerships don't take care of them. I've seen it many times. I've worked for some good dealerships, as well as some bad ones. Currently I am at a good one, that does like to pay the sales people, however, with me taking a step backwards, going from Management to sales, it makes it difficult. You get to miss it.
The problem with many dealerships, is that they take salesman's skill for granted. For us old timers that have been in this business for many years, you see a completely different landscape. I've done all aspects of the sales, except GM or GSM, and what I've seen many dealers go to is hiring inexperienced, replaceable sales people. They don't value the Sales Aspect of it, and assume that if you hire an eager young guy, he'll know what to do.
They will have 1 or 2 great sales people that close the deals or whatever, but, the majority of the sales team are what I call order takers. Many will blow through ups, and find the one person that wants to buy. When I see a Green Pea blow through ups, I see money walk through the door. Training is poor, or just plain non-existant.
For the "old school" dealerships that do not embrace the internet, and what it has to offer, they are shooting themselves in the foot. A good ISM is very hard to find. One that knows how to sell, and knows when to give up the gross is hard to find.
I appreciate all the input that people have put into this thread, and it shows me there are still the good dealers to work for, but, I'm not the only one that has worked for the "bad ones". Many try to adjust the gross on deals to pad the dealer's profit, and I've seen it more than once. The sales floor is the most important part of your Sales Managers and F&I guys, and many dealerships don't take care of them. I've seen it many times. I've worked for some good dealerships, as well as some bad ones. Currently I am at a good one, that does like to pay the sales people, however, with me taking a step backwards, going from Management to sales, it makes it difficult. You get to miss it.
Dan, what you are saying has been a point of contention for me for some time. A well run internet department will see that majority of their sales being generated by a small portion of their sales force. It has happened at every dealership that I worked for. Once that happens, your ability to attract and retain the highest possible salespeople is relatively easy.
One of a dealerships three largest variable expenses is salesperson compensation. Salesperson Compensation as a percentage to total gross will always be lower in organizations where the the average salesperson sells more cars (provided that their pay plans are not ridiculous). If you have a bunch of salespeople (especially on guarantees) selling 5 or 6 cars, your salesperson compensation tends to be out of line. Not only is this true, but those new salespeople usually don't make any money and help create a revolving door. I am totally convinced that most managers have no idea how much high turnover costs the dealership (maybe a subject of another thread).
For at least 30 years, NADA has told dealers that they should expect to close 20% of their traffic. Most dealerships find this an acceptable ratio, today. Honestly, I don't know exactly what that ratio should be but 20% is absurd. I have yet to see a dealership that logs their internet sales separately. Everywhere, that I have been, the internet sales are put on the same log as the floor sales. With internet sales closing at a much higher percentage than floor ups, at the end of the day, if you are at 20% you are going backwards.
Thirty years ago, consumers would routinely shop 5 or 6 stores. Since the advent of the internet, that number has dropped to and average of 1.8. If you are a product of the "new math", that is slightly less than two stores. Traffic is down. We no longer have nearly as many "shoppers" but "buyers". Consumers have done their research and have eliminated dealerships, down to the final three. Please understand that 92% of customers do their research online but 65% never call or email a dealership. While ISMs do not interact with the majority of online customers, the internet marketing influences them. Considering this, does anybody believe that using a closing ratio of 20% makes sense?
I don't think that closing ratio is nearly the focus that it should be. Any manager that doesn't know the closing ratio, for each of his/her salespeople, isn't up to the task. When my ISMs walked in to our common area, the first thing that they saw was a chart (updated daily) that had their number of leads, sales, sales as a percentage of leads, appointments, closing ratio and so on. Every ISM looked at it to see how they measured up. My chart was also a priority for my GM.
Once the focus is on closing ratio, you will start to understand what "green pea" salespeople are costing you. It should make training a priority. The only idiots that a store can afford are those that are there to purchase a car.
