Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders
Million different ways you can do it. Questions that the owner will want to answer is: Who is bringing them in? My dollars or their skill?
$250 minis, 20% front end, appropriate bonuses for volume tiers that are hit (15 units, 20, 25, 30, 35 etc). 10% backend if there's proof in the communication that it was pitched and drew interest. This would be for an Internet Manager/Sales. A Director should be paid off Volume and Gross, like a Sales Manager.
Store reputation, volume, etc are other factors. I'd sit down with the Owner and hash it out.
Compensation packages can be a challenge since they must draw a fine line between motivating the employee and preserving an acceptable ROI for the dealer. In addition, in today's litigious world they must be written as comprehensively as possible to stay in compliance with a growing list of applicable regulations.
That said, your request is highly dependent on the areas of responsibility that are assigned to your manager, the size of the support team that must be factored into the total cost of sales and how you differentiate between your Internet Department/eCommerce and your BDC.
Rather than pose more questions than answers I copied an example of a compensation plan for a hybrid Internet Manager / Internet Specialist system to represent areas that must be addressed --- not necessarily the amounts that should be assigned to them since sales volume must be factored in!
I hope that it will spark some conversation on this post even if it doesn't apply directly to your situation.
After all, what are friends ... and ADM ... for!
PS: Remember to reschedule our IntellaCar presentation. You are obviously busy but it definitely deserves a spot on your To Do List!
INTERNET MANAGER AND SPECIALIST COMPENSATION PLAN
INTERNET MANAGER _________________________
EFFECTIVE DATE ___________
INTERNET SPECIALIST ______________
EARNED COMMISSION COMPENSATION PLAN:
• $1,500.00 BI- WEEK SALARY INTERNET MANAGER - $1000 BI-WEEKLY SPECIALIST
• On appointments generated by the Internet Manager via the internet resulting in a Finalized Sale or Lease (collectively referred to as a “Finalized Sale”), the Internet Manager will be paid a commission of $25.00 (taken out of the commissionable gross).
If generated by an Internet Specialist the Internet Manager will get $10.00 and the Internet Specialist will get $15.00
• On Dead Deals (deals that were written up but not finalized or actively followed up by the original salesperson for 72 hours) that you bring back to the dealership resulting in a Finalized Sale or Lease (collectively referred to as “Finalized Sale”) the Internet Manager will be paid a commission of $50.00.
(All orphaned owners, lease renewals, galley lists etc. will be directed to the BDC OR the Internet Department. The Internet Manager will distribute the contacts at his/her sole discretion to himself /herself or an Internet specialist)
• On New and Used Car Sales appointments that show up that the Internet Manager generates the Internet Manager will be paid a commission of $10.00. If an Internet Specialist is involved they will each get $5.00
• On Service appointments and Parts sales that the Internet Manager solicits from closed RO’s that show up and close a customer paid RO in excess of $50 the Internet Manager will be paid $5.00. If an Internet Specialist is involved they will each get $2.50.
• If we meet our VPA goal the Internet Manager you will receive $100 – Internet Specialist $50
• If we exceed our CSI/SSI/FFV zone average the Internet Manager will get $100 – Specialist $50
• If we have a positive “bottom line Net Profit” for the entire dealership the Internet manager will receive a one time bonus of $500.00 to be adjusted to monthly profit goals thereafter – the Internet Specialist will receive $250.00.
ADJUSTMENTS TO EARNED COMMISSIONS AND BONUSES: The Internet Manager and Specialists agree that the Earned Commission and Bonuses may be adjusted at any time,
(1) to correct any error in calculation, whether that error is the result of miscalculations by the Company, the General Manager, any Sales Manager or any other person;
(2) if any sale or lease is subsequently determined not to have been a Finalized Sale,
(3) if a Finalized Sale is rescinded, reversed, rewritten to adjust to bank approval, rolled back or otherwise unwound for any reason; or,
(4) if there are any finance and insurance related returns and/or chargebacks including, but not limited to, prepaid loans and warranty cancellations. Any such adjustment that results in a decreased Earned Commission will be treated as an Advance, as defined below. Any such adjustment that results in an increased Earned Commission will be paid at the next pay day.
Shown Appointments: No commission will be awarded on any deal unless the Internet Manager or Specialist has an entry on the desk appointment log signed by a Sales Manager proving a confirmed appointment with the customer prior to the date the customer arrives for the appointment.
Commissionable Gross Defined for Vehicles: Commissionable Gross is the total gross sales revenue (that is, the aggregate selling price of all vehicles) of the Sales Department minus the total expenses associated with those vehicles as determined by normal and customary company accounting procedures. Commissionable Gross does not include:
(1) the vehicle’s cost as defined below,
(2) a dealer pack as set forth below (which is determined by the dealership at its sole discretion),
(3) all costs in any way associated with the sale of the vehicle including but not limited to: costs related to dealer trades or similar transportation costs, costs related to commitments made by the dealership to the customer at the time of sale for additional equipment, accessories or alterations or repairs, bank and finance company fees, management fees ($200.00),
(4) the difference between the trade allowance credited to the customer for their trade minus the trade’s actual cash value determined by the sales manager (over allowance amount) or (under allowance on a trade). Commissionable Gross includes holdback paid to the dealer.
The dealer pack on New and Used vehicles is $200.00. The cost for a new vehicle is the vehicle’s “invoice” cost plus the costs related to any equipment, accessories or alterations or repairs made to the vehicle and any related factory delivery fees or charges (e.g. Express Delivery fees).
The cost for a used vehicle is the vehicle’s actual cash value or its acquisition cost (or the averaged or adjusted cost) plus all costs related to the vehicle’s acquisition, reconditioning, including but not limited to: buyer fees, transportation fees, auction and bank fees, all reconditioning costs, costs related to accessories and alterations, lot damage costs, Certified Pre-Owned Vehicle (CPOV) certification costs and costs included as standard equipment on the vehicle.
Finalized Sales Defined: No commission or unit credits will be awarded on any deal until the deal is “finalized.” To be a “Finalized Sale”, all paperwork must be completed and approved, the vehicle must be fully paid for and/or funded by a financial institution, the vehicle must be delivered to the customer, and the deal must meet the requirements of Earned Commissions, as defined below.
Earned Commissions: The Internet Manager or Specialist must be an employee of the Company at the time a deal becomes a finalized sale; until that time, no commission has been earned by the Internet Manager or Specialist. Moreover, a commission is not earned until it is calculable, which includes the condition that the monthly financial statement has been prepared and approved by the Dealer Principal or General Manager.
The Internet Manager or Specialist only earns the commissions for each scheduled day worked during the month. In other words, if an Internet manager or Specialist is scheduled to work 25 days during the month and is absent 5 days during the month, the Internet manager or Specialist will only earn a prorated share of the commissions for the month based on each day actually worked.
Draws Against Commission/Advances: All advances/draws against future Earned Commissions will be treated as loans and will be deducted from future Earned Commissions, Wages and/or any spiffs/bonuses prior to the payment of same. The Internet Manager or Specialist acknowledges that such Advances/Draws are for the Internet Manager or Specialist’s benefit and authorizes such deductions. Any overpaid commissions or advances must be paid upon your separation from the Company and will be deducted from any pay or benefits (including vacation) you have coming. If you are terminated, voluntarily or involuntarily, prior to month end, you are only entitled to be paid for the hours you actually worked pursuant to the federal and state minimum wage requirements, taking into account the actual commissions and bonuses you earned.
Attendance Documentation: You are required by federal law and by ABC Motors to keep an accurate record of all the hours you worked each day. Hours worked in excess of your scheduled hours require approval in advance by the Sales Manager. Failure to comply with this requirement can result in discipline up to and including termination. You are also required to work all hours and days for which you are scheduled in order to be eligible for your full earned commissions or any monthly bonus.
Notice: This is the total pay package and no further payments are anticipated or expected. The Dealership reserves the right to amend or terminate this compensation plan and/or rate at any time without notice at its sole discretion. This agreement supercedes any previous agreements with respect to your pay plan. If it becomes necessary for the Dealership to amend this plan or if it is terminated, commissions will be paid at the next scheduled payroll disbursement based on “Finalized” sales as described above, in accordance with the amendment.
I understand that nothing in this pay plan creates or is intended to create a promise or representation of continued employment and that my employment, position and compensation is for no definite period. I have the right to terminate my employment at any time, with or without cause or notice, and the Dealership has a similar right. I further understand that my status as an “at-will” employee may not be changed and that “at-will” employment is the sole and entire agreement between the parties. I acknowledge that I have carefully read and understand this agreement, and acknowledge receipt thereof.
Signed/Accepted: ___________________________________ Date: _______________
Approved By: ___________________________________ Date: ________________
Thank you both for your input. Right now I have an Internet Team of 5 Specialist's whom are on a group pay system, and it is being to break the team aspect of the group. I am just trying to fin out what pay plan would work for them and still having the team concept. As well I am looking for pay plan ideas for an Internet Director who trains and manages the Internet Specialist.
Have you heard of a team pay system?
You are welcome! Yes, I have heard of team pay plans, and frankly if you note the bonuses and incentives in the sample I posted that are tied to achieving total dealership profitability, sales volume, CSI goals etc. you will see that there is an intrinsic "team" philosphy tied to individual compensation.
That said, it is imperative that individual performance and accomplished goals is incentivized for the individual who earns them or it will be impossible to assign any accountability. Teams are great but they are made up of individuals with differing skills and abilities which must be valued ... or you wind up with a government employee!