As online sales continue to spur major changes in the sales process, dealers often ask whether they should reconsider the way they compensate Internet managers. Too often, once I answer, they end up more confused than before they asked. It is a complex issue, so let’s get to work.
Our goal is to build a pay plan that fits the needs of your dealership and rewards your Internet team for a job well done. Before we get into it, it is critical that we determine exactly what this individual will be responsible for and how their success will be measured. Our keyword for today is “clarity” — you must clearly illustrate the steps, actions and tasks assigned to each individual. Without clarity, there is no way to determine proper compensation, let alone drive additional revenue.
With that in mind, here is my six-step process for developing a pay plan for Internet managers.
1. Orchestrate and Evaluate Every Detail
In this team’s job descriptions, a little clarity goes a long way. Clear definitions of each Internet manager’s role will help build their confidence, decrease turnover, increase CSI and limit the number of “got-a-minute?” meetings. Unfortunately, these jobs can be the hardest for many dealers to define.
Too often, an Internet manager is hired and told to respond to leads quickly and get the shopper on the lot. They are advised to steer the conversation away from discussing price or trade-in value. That’s a good start, but this general description lacks actionable items.
To create a list of responsibilities, you must first have solid data to shape the goals you wish to set for your Internet manager. Having a customer relationship management (CRM) or information lifecycle management (ILM) tool is crucial to collecting this data. If you don’t have either, I suggest you start looking. Meanwhile, here is what you need to know before you start creating goals for your Internet managers:
• Number of online leads you receive each month
• Average response times, including (a) to stop the clock and (b) to provide a quality response
• Conversion rates for lead to contact; contact to appointment set; appointment set to appointment show; and appointment show to sale
• Number of chat leads and conversion rate
• Number of phone calls from web visitors
Next, determine which tasks your Internet managers should perform, and which should be left to your sales team or business development center (BDC) agents.
• Handle all incoming sales calls.
• Set appointments for sales and/or service.
• Follow-up on appointments and/or sold customers.
• Manage online ads and data feeds from the website.
• Manage online sales and service specials.
• Negotiate with third-party retailers and classified services.
• Manage the CRM and/or ILM.
Finally, consider the fact that many Internet managers are taking on middle-management and leadership roles as well. Can your web specialists handle management-level tasks? That could include:
• Provide daily or weekly lead status reports. (I suggest daily reports if you are receiving 500 or more leads per month.)
• Provide reports detailing the performance of third-party lead providers and each provider’s cost and gross per lead.
• Coordinate co-op advertising campaigns and funds.
• Shoot vehicle photos and videos and manage listings.
• Attend management meetings.
• Create eblasts.
• Maintain social media feeds and manage your online reputation.
I realize these are long lists, but what better time than now to divide the workload?
2. Determine Income Potential
Once you have a robust description of the Internet manager’s roles, you can approach the topic of pay. Here is a basic formula to determine income:
• 100 leads per month
• 70% contact rate = 70 leads
• 70 are contacted and 70% agree to appointment = 49
• 60% of them show = 29 shown appointments
• 50% are closed = 14 sales
Apply this formula to the last four months. Determine what you would have to pay someone per response time, appointment shown and vehicles sold, plus base, for them to provide for their family.
3. Plan the Work Week
Divide the Internet manager’s duties into a typical week. Try to predict the time each task will take, and be prepared to make adjustments. The time remaining will be used to work the leads.
If you expect your Internet manager to perform a majority of the tasks mentioned above, you will have to pay them a higher base salary. That base also depends on your market. I have seen base salaries for heavily tasked individuals in competitive markets vary drastically. Online sales directors who successfully oversee multiple rooftops can and should demand a high salary.
Ultimately, the most important thing you have to determine is what benchmarks or goals you want this individual to focus on. Is it improving response time, making more appointments or creating more sold customers? Outline your expectations and, when in doubt, remember: The name of the game is clarity.
4. Don’t Get Greedy
Overloading your Internet manager will invariably compel them to cherry-pick leads. I suggest you limit leads to 150 for the appointment setter-type structure — until they show they can handle more — and pay a tiered bonus structure on appointment shows.
If they are currently at a 40% show rate, kick the percentages up when they hit 50% and get real serious at 60%. Pay this individual on what they can control. There is nothing more frustrating than being paid on a vehicle sold if the closer is weak or tries to skate the Internet manager.
That isn’t to say that paying on vehicles sold is a negative move. If the closer blows the customer out, pay the Internet manager on the lead so they can get that person to come back.
5. Find Creative Ways to Move the Needle
If you have a lot of cash buyers, consider paying the Internet manager a bonus for financing deals in the dealership. If you are paying them on volume of vehicles sold, they will find a way to get the deal, even if it means laying down when a shopper thinks credit unions have better rates.
Teach your Internet managers the word-tracks that will sell customers on your selection of banks and special APR rates. It’s also never too early to start talking about F&I products. Yes, this means training your Internet team on warranties, paint treatments, clear hood bras and other select items. I would even go for upgraded wheel packages and spray-in bed liners; these are services and add-ons that he or she can include in emails during the shopping process.
6. Motivate, Motivate, Motivate
By providing total clarity to your Internet team, you will keep them motivated and productive. They will know what they’re working toward and how their performance affects your bottom line.
The role of online sales today and in the near future remains somewhat uncertain, but you have the power to make those decisions for your staff and compensate them fairly. Everyone wants to be successful. Give them a chance by demonstrating and demanding clarity. You will be rewarded with a more productive team and a competitive edge over dealers who are too slow to adapt to a rapidly changing industry.