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Pay PlansThe best way to start is by creating a job description for the Internet sales manager.Internet salespeople may need to get a salary until the department is fully developed. If adealer pays straight commission on sales that start at around 10 units a month, the moneywon’t be enough to attract qualified candidates. After the Department is set up mostdealers shift the pay plan to a performance based model that includes part salary and partcommission. 1st Month 2nd Month 3rd MonthLeads 100 100 100Lost 0 10 10Carry over 0 81 146Working 100 171 246Sales 9 15 22Back to the BasicsIn order to create an effective pay plan you may want to know the answers to thefollowing questions: 1. What is the value of this position relative to other jobs in the dealership? 2. Based on the value of the position, what should be the annual earnings of a person who meets or exceeds our expectations for the job? 3. How should that income be earned?Pay Plans for Internet managers are likely to be all over the board. Dealers who stick tothe basics, create pay plans commensurate with the value of the job, and establishachievable, measurable goals will be solidly on the right track.Some ideas… • Salary plus flat fee for each unit sold • Appointment bonuses • Customer satisfaction bonus • Gross average bonuses • Trade in bonuses • F&I bonuses
Sample Pay Plans #1 Straight salary – Target income: $35,000 - $40,000For a dealer who is new to Internet sales, a straight salarymight be the best approach. Without a prior Internet saleshistory, it is difficult, if not impossible, to establishincentive targets. You can tie some performance-basedbonuses to incentives the initial steps to setting up adepartment. (i.e. $500. to set up site)
Sample #2 Salary plus “matrix” bonus – Target income $35,000 - $40,000For dealers who aren’t comfortable with a straight salary but whodon’t have enough data to develop workable incentives, a moresubjective approach can be used. A base salary equal to 60 percentof the target should be paid. Three or four achievable goals shouldalso be agreed to. Note that the goals under this scenario may notalways be measurable. The goals listed here are presented asexamples only.Base salary: $400 to $500 per weekIncentives:Goal #1 – Get Web site up and running in accordance withapproved dealership strategy.Goal #2 – Achieve 100 percent “response within two hours ofinquiry” performance.Goal #3 – Average 10 “Internet” deliveries per month during theyear.Each goal carries a bonus of up to $5000. So full achievement ofall goals earns bonuses of $15,000 for the year. Some prorating ofthe bonus payments or a draw against the bonuses will benecessary to ensure an adequate income for the employee.
Sample #3 Salary plus unit bonuses – Target income $35,000 - $40,000A dealer with some Internet sales history can set up a moretraditional sales plan. Since Internet sales tend to be on a “bestprice” basis with little or no negotiation, a percentage-of-the-grosscommission may not make sense. Here is the Saturn approach of asmall base salary and a sliding bonus scale based on the number ofunits delivered. For this example, the Internet performancestandard is 12 deliveries per month. Base salary: $300 to $500 per week Unit bonus: 0-7 $0 8.9 $800 10.11$1,500 12.13$2,000 14.15$2,300 16.17 $2,800In this example, a consistent 12-13 car-per-month producer, onewho is meeting our expectations for the job, would earn $16,000 to$17,500 in salary and another $2,000 per month in incentives fortotal annual income of just over $40,000.