Pay Plans for Internet Sales Managers

[loaf]

I am concerned and frustrated trying to compensate ISMs for the huge amount of time spent and small returns associated with Internet Auto Sales.

Recently, I read an article in "Auto Retailing on the Web" that gave a few ideas for ISM payplans. Are there any other ideas out there? What seems to work or not work for you? Are there any other articles floating around?

Thank you for your attention.

[mbowers]

Here's a more recent thought on Internet pay plans:

Look to the closing ratios. Quality leads have value to the dealership. Skew your incentives so that Internet sales reps have to have a 20% to 25% closing ratio on quality leads before making any significant money.

[harvey]

Do not let a dealer principle give you a pay plan that does not pay you well until your closing ratio on the net is 20 to 25%. That kind of closing ratio just isn't happening on the net-if someone says it is-they're lying!

[jimw]

A recomnmendation I have seen is the following-

"Since selling price is pre-determined on the Internet, ISM's have little or no effect on gross profit".

Recommendation:

Base Salary+Delivery Bonus+Bonus on Response Time/Complete Information

[Patti Schnecke]

Great Question!
I will share with all of you the pay-plan I received as an Internet Sales Manager.
I was paid the same as the showroom sales staff with the exception of a base salary and a minimum per sale.
If a spiff or additional bonus was offered, I was included.
If a showroom sales person delivered a vehicle for me, I split the deal with them 50/50.
I have been given several pay plans by other Internet Sales Mangers from all over the country, and they were close to mine.
I was happy with the deal!

[B Zimmer]

All good points, but let's not forget one excellent point made at the Orlando conference....you're not a manager until you have people working under you! Obviously, a true Internet Manager would be paid on the success of his or her department. That having been said, since the Internet sales process and the conventional sales process are as different as night and day, the pay for an Internet Sales person should reflect those differences too. No one would argue with a base salary but it should be in the form of a "guarantee" until the number of sales can support the sales person. Perhaps even setting a period of time. This encourages the sales person to "build" on the leads month by month instead of just tree topping them. Something no one has mentioned either is CSI, CRI, IBS or whatever your manufacturer calls it. The Internet client, dissatisfied with the showroom sales process, if handled properly in the Internet process, should be a prime candidate for excellent customer satisfaction surveys. An Internet sales person should be bonused on client satisfaction!

[mbowers]

Question for Harvey:

If an Internet closing ratio of 20% is unrealistic, what would you consider a better target?

I picked the number because a sales rep handling the standard 60 - 70 quality leads a month with a closing ratio of 20% to 25% would deliver 12 - 15 units and still let 48 - 50 quality leads get away.

[dodge1]

Good comments all! However A few points to consider.

#1. Not all Internet Leads are quality, or realistic might be a better word. I have noted a large increase in inquiries from onlline shoppers that cannot get financing, or have discovered thru other dealers that they cannot get out of their present vehicle. when asked these shoppers felt that the dealer would be able to reverse the problem over the internet. WHy they felt we have a magic internet wand, well strange thinking there.

#2. Internet Sales Manager Definition. I dont really think that a Manager of the Internet can be defined only if someone works under them. The work that we perform is not traditional, and very time consuming. We generally do have increased access to Dealership resources and information, Indeed most "Internet Sales Managers" I have talked with seem to be on the verge, or have great capacity to be promoted to the traditional desk. However on the flip side, I do not call myself a Internet Sales Manager, or anything relating to the internet. I sign all my communications as simply Pat Evans.

#3. Pay Plans, I got Patti's Plan!
Great way to do it.

Good Luck All

[g-man]

Would anyone like to discuss the drawbacks of having a flat-rate commission structure?

Management here feels that a $100 per car flat commission is the best way to go.

Being an Internet Sales person, I find this extremely unfair...considering the amount of work involved on making $100.

On the converse, I am able to get lower prices than any sales person on the floor.

Should that be a factor while weighing out a pay plan? I can sell more cars, they figure, so I should make decent money.

[Patti Schnecke]

Man (or Woman) can NOT live on "mini" deals alone.
If you were the only person involved in the Internet Department delivering 60 vehicles a month, $100 per deal would be an "OK" pay plan.
I only know of one person who alone sells 60 or more vehicles a month, and he makes a heck of alot more than $72,000 a year.