How to Create an Effective Internet Sales Pay Plan
When setting up an internet department, one of the major questions you’ll have to answer is how to compensate your new team. You simply can’t apply the same pay plan that’s used on the showroom floor. The internet’s longer sales cycle combined with a traditional showroom pay plan that rewards a quick close could leave your salespeople discouraged and looking for other opportunities. Whatever route you take, though, the most important point is to ensure the pay plan aligns with the store’s overall business goals, according to Cory Mosley, president of Mosley Automotive Group, a dealership consulting firm.

“Everyone needs to be on the same page, particularly regarding the reality of what it takes to develop the business,” Mosley says. “Part of that is driven by how the department is set up. If the department’s mission is to move a high volume of cars and the salespeople are being compensated based on achieving profitability goals with each deal, it’s not going to work. Your people will become unhappy very quickly.”

In the business development center (BDC) model, where a call center is used to bring shoppers in and turn them over to floor salespeople, Mosley says key metrics in determining a salary structure should include: salary, the number of appointments set, the number of appointments kept and, perhaps, an additional payment if a vehicle is sold. You can also introduce an additional bonus if a certain volume of sales is achieved.

For the beginning-to-end sales model, in which salespeople answer internet queries and take customers all the way through the sale, Mosley says considerations should include: salary, which is higher than floor sales due to the longer sales cycle, percentage of profit, bonus structure for gross sales and an incentive for high customer satisfaction index ratings.

Mosley also offers a few other suggestions:

  • Focus on the core makeup of the store first, the core dos and don’ts. You can get creative later, especially in a larger store or group. But you first have to make sure staff members understand their roles, as well as what they’re supposed to do and how they’re supposed to do it.
  • Keep tabs on what’s happening throughout the store and make as-needed adjustments. “Suppose you’re in the BDC, and you’re being compensated based on the number of vehicles sold,” Mosley says. “You do your part by getting a high-interest prospect in the store. But when you turn the lead over to a particular salesperson, he keeps blowing the sale. Now, you’re frustrated. A good manager will adjust the compensation to front-load it based on securing appointments and making sure people keep them.”
  • Consider creating more of a team environment. Floor sales tend to emphasize individual achievements but an internet department can reward team accomplishments through group awards, such as pooling incentives. Encouraging teamwork often creates a better customer experience by allowing one person’s strengths to compensate for another’s weaknesses and vice versa.
  • Review pay plans on a regular basis. “It’s important, especially if the goals of the department change,” says Mosley. “Don’t do it with the intention of chopping everyone’s pay but rather to make sure goals and compensation are still in alignment. For example, if the dealership has a manufacturer incentive for a group of vehicles, management is going to want to secure every possible sale no matter what. But if your pay plan is based on gross profit, you’re fighting yourself. A quick review will make sure everyone is on the same page, and working toward the same goals.”

While the name of the department carries the word “internet” in it, there is more to building a successful internet sales operation than finding people with great computer skills, a well-read personal blog and a killer Facebook profile. A lot more, in fact, goes into the job, according to the people who have successfully set up shop.

“The mistake many dealers made early on was hiring people who were good on computers without regard as to whether they were good with people,” says Ralph Ebersole, director of automotive consulting and dealer training at Cars.com. “What they didn’t remember is, it’s still a people business and a sales business. You have to be good at building a relationship from a distance. Without the people skills, it doesn’t matter how good your computer skills are.”

With that advice in mind, here are some other considerations when hiring for a successful internet department.

Identifying Start-to-Finish Salespeople

“Someone handling internet leads from start to finish has to have a lot of empathy for the customer,” says Joe Webb, business development sales manager at Arlington Toyota/Scion, near Chicago. “You have to know what the expectations of an online shopper are and be willing to follow the customer’s lead. They’ve probably had a bad experience with car salespeople in the past, so they’re using the computer as a shield. Internet salespeople need to be sensitive to that and adjust their process and presentation accordingly.”

Bill Phillips, founder of Automotive Internet Management Inc., a dealership consulting firm, agrees. “Sure, you need certain computer skills, especially for the start of the process, but a good internet salesperson has to understand the consumer’s point of view and know why the consumer is coming online instead of coming into the store. Great communication skills are a must. Customers can recognize the same old floor techniques masked in an email or a call. You need to look for someone who understands why a customer is asking certain questions and who will sell that customer in a different way.”

Staffing a BDC

A BDC staff needs some different skill sets. One essential difference is a director who is focused on search engine marketing and pure lead generation, along with someone who is a general sales-manager type – a person who can manage leads and the selling process. While they might be the same person in a small store, usually the jobs are divided in larger stores or multiple-store groups.

“It’s very rare that one person has the skill sets to perform both jobs,” Phillips says. “Even when they do, often they don’t have the time to do both well. Remember that it doesn’t matter how many internet leads you get if no one is following up on them. Both functions are too critical to take a chance on things not being done correctly.”

From there, it’s important to have people working the phones and email, responding promptly to each inquiry with at least an acknowledgement that it has been received. Webb looks for certain criteria for this function.

“Computer skills and a good education are essential,” he says. “I often hire younger people for these positions and have had a lot of luck hiring people straight out of college. Floor salespeople tend to write their responses the way they would say them in person, and that is often the wrong approach. We’ll take new hires right out of college, put them on the floor for a month and then teach them how to translate those sales tactics to online. They’re usually very comfortable with it because they’re used to it.”

Phillips also recommends having an assistant for every three to four salespeople – someone who will help with things such as dealer trades, locator requests, documentation and paperwork, and final delivery. Having assistants available to handle these tasks keeps the rest of the team available for other, higher-value work.

Of course, Phillips notes, these are only recommendations. “The internet department requires job descriptions for jobs no one has seen before; it’s constantly changing.”

Know Your Hires

While resumes don’t necessarily tell the whole story about a candidate, each expert looks for something different. For example, Ebersole believes stability in employees’ careers is a good indicator that they have what it takes.

“I want someone who is reliable, as opposed to a job-hopper,” he says. “You need perseverance in this job. The internet is not a two-day sales cycle.”

Phillips also places a high priority on prior sales experience. “It doesn’t have to be with cars,” he says. “But I look for people who have experience closing high-ticket items that required paperwork and documentation.”

For Webb, a customer service background is essential for the BDC. It doesn’t have to be in automotive sales, though.

“You need a good voice and good relationship-building skills,” he says. “You have to be able to calmly and politely answer questions without getting frustrated. We don’t use a script because we’d rather have the personality of the individual come through. The idea is to ask questions and build a relationship so  customers know we’re trying to help them find the right vehicle.”

Look at the Intangibles

Where the rubber literally hits the road is in the personal characteristics of the candidate – the intangibles that don’t show up on a resume but can lead to success or failure.

“I like a person with a sense of humor,” says Webb, an accomplished standup comic in his own right. “It’s a long day full of trying to win people over without the benefit of face-to-face contact, and that can really wear you down. A sense of humor will help you overcome it. It also puts the customers at ease by relieving the stress of shopping for a car. That’s immeasurable.”

Know What to Avoid

While there are a number of characteristics that can contribute to a successful internet department, there are a few red flags as well.

“One big mistake I’ve seen is that dealers will take someone who is failing on the floor and put him in the internet department because he has good computer skills and writes a nice email,” Phillips says. “The problem is that it’s still a sales job. If they were failing on the floor, they’ll probably fail selling to internet leads, too. Keep in mind that your internet customers are probably your best-educated, most-informed customers. You should have your best salespeople working with them, not your weakest.”

Ebersole agrees, but looks for more specific behavior. “A salesperson who’s not working the phones and following up is going to struggle in internet sales,” he says. “In this area, you can’t wait for good things to happen. You have to make them happen.”

At the same time, Webb says a hyperactive personality is unlikely to perform well in the internet department.

“There are just some people who appear to be very wired,” he says. “They just can’t sit still. Being jittery like that can cause tensions, both with the customers and others in the department. You really need someone who is more relaxed. Most of the time it’s a marathon, not a sprint.”

Putting It All Together

Whether you’re creating a BDC or going with the start-to-finish model, remember that it’s easier to teach a smart salesperson to use a computer than it is to teach a computer expert how to sell vehicles. Look for people who understand the importance of building a relationship with the customer, even if it takes some time, and who understand the reasons customers shop on the internet rather than in the dealership. With the right personalities and mindset in place, you’ll be ready for both short- and long-term success.