Best PracticesDealership Operations & Processes

Pay for the Performance You Want and Stop Overthinking “Internet Sales”

The perception of internet sales for many dealers and traditional sales managers is that it’s still a confusing area best left to those who are more technologically proficient. Moreover, industry vendors, other so-called experts and even some trainers continue to profit in keeping internet sales a befuddling mystery for the average dealer’s management team.

The truth is internet sales are not just relatively easy to master; internet sales are so easy to master that some may consider them boring.

In this series of 7 Simple Strategies, my hope is to detail in plain language how you can stop over thinking much of what goes into making a sale to an internet prospect, and how to use these seven simple strategies to start setting more appointments that show up and buy:

Simple Strategy #1: Pay for the Performance You Want

The Problem: Many dealers have developed convoluted BDC Pay Plans that pay a good base wage and merely spiff on appointments and sales; all while paying the floor team a full commission for doing less than half the work. It’s not your fault: some misguided industry trainer told you to pay them this way.

Consider the shortened Road-to-the-Sale we see as today; the process from Lead to Close for Internet Appointments often goes something like this:

  1. The Connection/Reconnection
  2. The Appointment Show
  3. The Demo/Presentation
  4. The Close

The Reality: When you pay a guaranteed base salary to the BDC they learn to live off this salary and spiffs become meaningless. When you pay the floor a full commission on BDC appointments that show and buy, you allow the BDC to set soft or phony appointments and encourage the BDC manager to steal from you in a process called reconciliation.

Here’s how reconciliation works: Someone named Bob Smith submitted a lead two weeks ago. Someone named Bob Smith bought a car today. Ergo, this is the same Bob Smith and therefore a “BDC Deal.” A fake appointment is created in the CRM, marked shown by the BDC manager or agent, and double commissions are often paid for this sale.

You see, when you pay a full commission to the floor, your appointments often aren’t real and no one cares that the BDC is stealing. Why should they? The floor gets paid the same either way.

Repeat this out loud until it sinks in: “If the floor team did their job we wouldn’t need a BDC.” 

Now, review the shortened Road-to-the-Sale above. When we’re honest about these steps we see that the BDC’s job is actually more difficult than that of the floor salesperson who handles their appointment… and here’s my proof (assuming these appointments are real):

  1. A great Connection rate is 80%; a good rate is 60%
  2. A great Appointment Show rate to total Connections is 60%; a good rate is 50%
  3. A great Demo rate for Appointment Shows is 100%; a good rate is above 90%
  4. A great Close rate for Appointment Shows is 80%; a good rate is 60%

Based on the success rate, the hardest step in this abbreviated Road-to-the-Sale is gaining an Appointment Show, followed by a tie between the Close and the Connection.

Hint: Your salespeople aren’t doing all the work – they’re barely doing half the work.

If you want your BDC to grow and provide you with incremental sales today and in the future – all while maintaining the integrity of your overall sales comp, then you need to create a sustainable pay plan. Simply put, this is a pay plan that (1) allows you to grow the BDC without killing your net profit (2) keeps everyone honest and (3) pays for the performance you want.

The Solution: First, you need to implement a 100% at risk Pay Plan for the BDC. This means you are no longer giving them a guaranteed base wage that ends up making the appointment spiffs meaningless. It also means that you are only going to pay on Real Appointment Shows. Real Appointment Shows are appointments that arrive within 45 minutes of the scheduled appointment time.

However, to get the checks and balances you need to keep the BDC from reconciling and to pay fairly for the job the floor salespeople do when they close a Real BDC Appointment; you need to pay the floor teams as if this was a split deal. Because, it is a split deal: one team member set the appointment and another one closed it.

Here’s what that sustainable pay plan for a Sales BDC looks like:

  1. Pay the BDC on APPOINTMENTS THAT SHOW; not on sold units and not hourly (though there is generally an hourly component to the BASE that a BDC agent will make.) For most markets, a solid pay plan for an Appointment Coordinator (BDC agent) looks like this:
    a. $10-$12 to even $15/hour in base pay that is a DRAW AGAINST COMMISSIONS.
    b. $50 commission for every VALID appointment that shows.
    c. $100 volume bonus for every 10 VALID appointments that show.
  2. Pay the floor salesperson that CLOSES a BDC appointment a REDUCED COMMISSION. Generally, this is a half commission with a full or half mark toward their volume bonus.

This second point is hard for most sales managers to swallow. They like to argue something nonsensical like “My salesperson closed the deal; he did ALL THE WORK; so he deserves a full commission!”

Remember: “If the floor team did their job we wouldn’t need a BDC.”

This is part 1 of 7 Simple Strategies for Closing More Internet Deals Today!
by Steve Stauning.

Don’t miss out on the complete series:

Part 1: You’re reading it

Part 2Simple Strategy #2: Internet & BDC Teams Must be Managed Like Call Centers

Part 3: Simple Strategy #3: Stricter Rules Drive Higher Sales

Part 4: Simple Strategy #4: Treat EVERY Lead and Call Like an Order

Part 5Simple Strategy #5: Yes, You Should Always Use an Auto Response

Part 6Simple Strategy #6: Email Templates can be Personal AND Automated

Part 7Simple Strategy #7: The First Call Should Be the ONLY Call