Do you think the packs are to high and percentages paid to sales reps to low to get and keep good sales people?
Some dealers say that they are not making enough money. So by rasing the pack or lowering the percentages paid to sales reps make them more money. Does that really work in the long run?
Replies to This Discussion
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Permalink Reply by Fran Taylor on
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Couldn't agree with you more Mr Washam.Usually the better pay plans attract the better sales people. With this comes better attitude and results. Thank you sir.
Jim Washam said:Good question Fran. It's what is called a de-motivator. Add all the de-motivators up. Lower percentage + higher pack + Long hours + Hard to get products + "Perceived" wrong mix of the right kind of cars +Sales meetings that are not helping you get better + yada yada yada. This is what causes the lower 25% of salespeople to turn over every 6 months. I was top salesman at a certain dealership; the other salesmen came to me and said "if too many salespeople are making too much money, they will lower the percentages"
It’s a short term solution that creates long term issues.
Help the salespeople get better, have a proven process that works. They will retain more gross by not dealing on price but handling the real objectives.
You will never have the right colors, the right models, the right low mileage trade ins, but you can have the right attitude and the right sales coaching.
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Permalink Reply by Bill Goodfriend on -
I think both of you nailed right on the head. Plus, when you consider the financials, it doesn't make sense in the long term. Think about it; raise the packs and it immediately deters the net to gross profit margin. Instead, like Jim said...invest in your sales staff by any means necessary that is of course tried and proven. Too many times I have seen dealerships let good people go, but they never ask themselves...was it something WE did not do i.e. proper training etc...Good pay plans do not deter your net to gross profit margins like packs. Pragmatic...absolutely but instead actually increases the bottom line. Equasion...happy well paid sales professionals stay around = continued growth = want to be there = reputation mangement = stronger clientelle base and referrals. Good topic Fran; thanks for posting. Do I get a doggy blanket? ; -)
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Mr Goodfriend your comment about good people wanting to work with dealers with a good pay plan is right on. A few dealers I know actually have a waiting list. They send sales people on small trips each month. This is given to the most improved person. Every body has a chance to win. One of the best things is you don't have to tell them to do things every day compared to a non agressive person. Oh yea you get the doggie blanket and a bone. Thank you sir.
Bill Goodfriend said:I think both of you nailed right on the head. Plus, when you consider the financials, it doesn't make sense in the long term. Think about it; raise the packs and it immediately deters the net to gross profit margin. Instead, like Jim said...invest in your sales staff by any means necessary that is of course tried and proven. Too many times I have seen dealerships let good people go, but they never ask themselves...was it something WE did not do i.e. proper training etc...Good pay plans do not deter your net to gross profit margins like packs. Pragmatic...absolutely but instead actually increases the bottom line. Equasion...happy well paid sales professionals stay around = continued growth = want to be there = reputation mangement = stronger clientelle base and referrals. Good topic Fran; thanks for posting. Do I get a doggy blanket? ; -)
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I agree with you Mr Harrell. A salesman sells 20 cars a month and makes $2500 bucks. I hope they have a bonus plan or some kind of plan that the more you sell the more a sales person makes. If not they will never get and keep quality people. Thank you sir.
Bill Harrell said:Absolutely the packs are too high to keep good qualified salespeople. I am working a sale right now where the packs are 1700 for used 250 for new. This is before service and doc fees kicks in, the blood of the dealership is the sales force, whether the managers and owners believe that or not. Penciling a deal is not what sales the car. To pay a mini on a 2000.00 deal is going to get that dealer nothing but order takers. As an advertiser dealers pay alot of money to get them to the store, take some of that money and pay your salespeople to keep them loyal and positive. Invest in your stores future.
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