Seeking innovative pay plan ideas for internet sales managers

[Dan Opthof]

I have always kept track of internet traffic, and get the numbers down to a science.

I keep track of how many leads come into the dealership. I then keep track of the number of appointments that are set from those leads, I track the show ratio, and then of course how many shows turn into sales.

What a goal for many dealerships should be is this:

100 leads, 50 appointments set, 25 of those appointments show, 12 sales from the shows.

If you can acheive these numbers, you will have a VERY GOOD Internet department.

That would put you at a 12% close ratio, which is well above the national average. The national average is 8% of the leads should result in a sale for a good BDC.

I always tracked every lead, and was accountable for my results. When I started the last dealership, in my first month, I had sold 43 cars, and the GM was extremely pleased, because the most that they had ever sold from that department prior was 24.

I then gave him the numbers, to which I was at a close ratio of 16%. He thought that number was extremely low, and then began to criticize the production. I had to then go and search online, get the averages from numerous websites, as well, I found many sites that gave goals of what dealerships should be at.

I brought the information to him, and he left me alone from that point on. When I arrived at the dealership, I went back several months to see what the department was doing prior to my arrival, and they were between 4 and 6% close ratio from opportunity.

Since I've left, they have not sold more than 16 cars, and 2 of the girls that worked in my department have moved on to other dealerships, both are internet managers at their respective dealerships.

I had trained them, implemented new policies, and they were very efficient.

 

[ddavis]

Dan, I have never looked at national averages as a guide to how well the internet department performed. Actually, I think the close rate is actually more like 6%. I believe the goal should be 20%+.

I pushed the phone call. I would much rather get a call than an email. We set far more appointments from calls than emails. Even when we generated more calls, the 50% appointment rate, for us, would be overly optimistic. I have to admit I have never achieved it. I did not ask my ISMs to tell a customer anything to get them in. I didn't tell customers that a car was available when it wasn't. We didn't send out low ball quotes that we have no intention of honoring. I know that it would improve the number of appointments but it isn't my way of doing business.

I have worked at stores that seemed to have a major focus on appointments. I have always paid more attention to sales as a percentage of leads. If that isn't up to par, I'm going to go back through the process to see where it is breaking down. Every area is important.

Now, if my guys sold only 12 out of 25 shown appointments, you would need to call in Marlin Perkins from Wild Kingdom along with Jim Fowler and his dart gun to sedate me. Out of 25 shown internet appointments, I would expect 20.

 

[Kelly Wilson]

What a goal for many dealerships should be is this:

100 leads, 50 appointments set, 25 of those appointments show, 12 sales from the shows.

If you can acheive these numbers, you will have a VERY GOOD Internet department.

What type of leads are you talking about to get them to set appointments at 50% and 50% of those to show?

Also, when it comes to what an ISM's pay should be, I agree it really comes down to understanding what you want our of your employee and what duties you ask of them.

Personally, my dealer has tried a number of ways of handling leads (calls/sales side) with meh results. As an "ISM," I handle all incoming leads; send emails and manage the follow up. I don't have a TON of product knowledge thus I don't do phone calls-that's what the sales guy(s) do. I also "DO" our live chat, website, digital marketing, some special trad graphics/ads, social outlets, reputation containment, and anything else that revolves around a computer. -But my stated job is to "get 'em in and Sell 'em- I'm now to keep my clocked in hours (yeah punch clock) at 40. I was at like 55/wk and I still work from home-nothing ever gets caught up or really done fully/properly. All incoming calls go to the floor; we average 175 leads a month (OEM, DDCsite, AT, Cars, chat). I have an hourly rate with appt/sales bonus (only on email leads).

My DP noted after saying I had to stay AT 40hrs that we need to talk about moving to a Salary w/bonuses. I've read this thread, but I keep asking myself..."What all do they DO for that pay?" I know everyone have a different way do doing things and using the same term can be a bit misleading...Soooo... ...IDEAS?

 

[ddavis]

Kelly, he knows that you can't get the same amount accomplished in 40 hours. He wants to pay you roughly the same but put you back on the 55 hours plus. You are the first person, that I know, that is being paid by the hour. What ever that is, it is surely not enough. Most of the people, that demand a lot of money, have sales and sales management experience. Is that something that you would consider?

 

[Kelly Wilson]

Thanks Doug! I'm not sure what you mean by "Is that something that you would consider?" I don't have a sales background. I'm trying to educate myself in the ways of the dealership internet world (thank you all here in DR land for the help) and my dealership has never had someone in this position. The fact I'm a woman under 30 who know the DP before working here means I have no real authority, even if they give me a dedicated salesman every now and again. As there are no metrics from before my time, I have nothing to show what I've achieved beyond where I started. As I work the digital lot and not the pavement, building relationships not sealing the deal, I'm not sure where that leaves me. I'm not willing to take less pay, but who is?

 

[ddavis]

Kelly, would you be open to learn some additional product knowledge, set some appointments for yourself and close some deals?

Tell the DP that you want to grow in the business. Tell him that you want to sell some cars to supplement your income. Your in a unique position where you can cherry pick a few customers and get some selling experience. If you are willing to do that, I promise that when you tell him that, he will freak. He knows that with a sales record and the experience, that you already have, he will have to pay you or lose you.

 

[Kelly Wilson]

Ahhh, yes a slippery slope! In the last few months I have had to jump in to save a few deals and take a few overflow Internet appointments (all of which are now "killing bugs"). After doing this a few times, I then found the note about going to Vegas. I think that fear is as set as it will ever be The DP always tells me he thinks I'd kill on the floor; the GM would never stand for me having any contact or selling actually OK'd (but that's another story).

 

[ddavis]

I think that by saying that you would like to grow in the business, it puts that GM in a position that I would want to be in. There aren't any women on the sales floor, F&I or desk.

 

[NHHarleyguy]

This is my first post here after creeping for some time looking for free advice. This is by far the best resource and forum that I have found dealing with our ever-changing industry. Keep up the good work guys!
I have a successful back ground in Real Estate and after the market began to shift in 2005 and banging my head against the wall dealing with short sales and foreclosures etc I decided to come and work for my local Harley-Davidson shop. I have had plenty of "sales" training and I am a life-long motorcyclist so it was an easy transition. I started on the floor and quickly made my way into the newly formed (at that time) Internet Department. The ISM at that point was there solely because he was difficult to get along with and I don't think that the sales manager knew where else to put him! He had very little experience or internet knowledge and while he was a good sales person, there was lots of work to be done! We actually worked well together but he has subsequently left and I am now in charge of the Internet department. My pay plan has changed twice and currently I am paid hourly plus commission and I am operating at roughly an 11% closing ratio on all incoming internet leads (almost 50% of these incoming leads are non-responsive but that is a discussion for another thread!) and I handle the transaction from beginning to end.
I think that there are several contributing factors that add to the confusion over ISM compensation.
1. The fact that the Internet has completely changed the automotive (and power sports/motorcycle) biz completely and the shift is a total 180 degree change from the old get them in here and we'll handle the rest mentality! This exact change affected the real estate industry and the "more seasoned" agents could not adapt to the new way of doing business. Rather than the smarmy sales person having all of the information and doling it out to the customer in small doses (most profitable first of course) Today's consumer is very well informed and shopping for a great deal is encouraged through sites like auto trader, cars, cycle trader etc. Customers want information and I believe that not quoting price to these customers is a mistake. It's true that a percentage of these leads can be converted to appointments without playing the price card but with new vehicles in particular if a price quote isn't given, most customers will just click their mouse on the next dealers website (if they haven't already!)
2. Trust, the ISM has to be an individual that knows when to hold em and knows when to fold em so to speak. I am paid on a percentage of gross so it's in my best interest to hold as much money as possible. Unfortunately, some customers are not loyal to any one dealership and are simply shopping for the best deal or some ammunition to use at their local shop "If you guys can't do this price... dealer ABC will sell it for this..." These customers need to be quoted and if your ISM can successfully build rapport with a consumer who is looking to maintain their anonymity as long as possible, you have a shot at earning their business.
If you find someone who can handle the volume and successfully hold all of the profit when possible, make sure that they are compensated and happy. 15% gross is better than 100% of nothing!
3. Responsibilities... much of what I do with regards to website, crm, social media etc is technically the responsibility of the marketing department. It would be foolish to not take interest and help develop these facets of our marketing plan because my department as well as the dealership as a whole need our online marketing to be firing on all cylinders to stay ahead of the game and continue to be productive...
Now as far as the 46% of our incoming leads that are un-responsive... who can help me with that?

 

[ddavis]

John, I was really impressed with your post. You have a lot more insight than most of the car dealerships that I call on.

On the 46% un-responsive leads, I think that I know what the problem is. I was on your website looking at a Road King and there was no pricing. No MSRP. I think customers are getting sticker shock because they have no idea how expensive those scooters are. I was having issues on with my laptop dropping my wireless connection. I had to fix the problem and reload the page. I might have missed something.

A scooter is a want item and not a need item. I would think you are going to get more shoppers.

I liked the website. I really like the boats in the background. Your on Lafayette, right on the Atlantic with all of the lobster and crab but nobody that can cook a gumbo.