How To Solve Dealership Turnover & Staffing Issues Forever (PART 6)
TRANSCRIPT: All right, let’s jump in to part three, the pay plan. This is tricky for a lot of you. A lot of you continue to rewrite your pay plans today. Oh, by the way, I’m not advocating a new pay plan. We’re going to talk about some things today. It’s important to understand, I get it. Pay plans change and your people will get it too, but they should only change because of new or unexpected market realities. That’s the key. It’s not your pay plans, by the way. It’s that they think you lied about the pay plan or you keep changing the plan is the reason that people are quitting. Moving the goalposts, it’s just not fair and great people won’t stay, okay? Our goal is to write enduring pay plans.
That means they last for a really long time. Our goal is to write fair pay plans, fair to the employee and fair to us. Our goal is to write pay plans that drive the behavior that we need because everybody works their pay plan. You need to assume the worst when writing the pay plan. You need to figure out how somebody can cheat you. This is my second favorite saying in business. “Everybody works their pay plan.” It’s my second … By the way, it’s not just an automotive saying. It’s in lots of businesses. Everybody works their pay plan, my second favorite saying. We’ll do my first favorite saying in just a second. Make certain that when they maximize their pay, when they’re working their pay plan, that you’re getting the results that you want.
Now my favorite saying in business is this. “Pigs get fed and hogs get slaughtered.” This happens with pay plans all the time. Your managers may think they’re smarter then your salespeople, but they’re not smart enough to steal. Realize this. Great salespeople can work everywhere, right? Didn’t we agree to that before we started today? We agreed that great salespeople can work everywhere. It’s not about pay. It’s about the perceived unfairness of a pay plan that will make me leave if I’m a superstar salespeople because, again, I can go work anywhere.
“Steve, are we going to write actual pay plans today?” No, I’m going to give you the guidelines. There are just too many variables — your market, your make, whether the team is all new, all used or combined; whether you have a BDC or an internet team, what kind of packs you have, etc. — to write the perfect pay plan for everybody. Instead, let’s write some pay plan guidelines. These are going to help you write fair, enduring pay plans regardless of your market, regardless of what type of story you have and regardless of whether or not you’re running a BDC or not.
All right, so the first guideline we’ve actually already written. That was our protected prospect rule. This is a pay plan rule. It’s going to ensure that the customer is ours, the dealerships, unless or until someone sets an appointment. This means an open floor unless you’re using an up system. We talked about if they request a salesperson by name, but I want to make sure that you understand that. I’m going to protect a prospect that asks for a salesperson by name in earshot of a manager on the day the salesperson works. You know why? Because if somebody comes in asking for that salesperson on a day they’re off, we’re lucky if we sell them a car. They could get stuck with a green pea. They could get stuck with somebody who blows through ups. There’s no guarantee we’re going to sell them a car.
We need our team to set appointments, so it’s not enough that I caught an up on Saturday and I’m off today, Tuesday, and they came in on my day off and asked for me. We got lucky if we sold them a car. Why wasn’t I calling them Saturday evening? Why wasn’t I calling them Monday morning? Why wasn’t I setting an appointment for Monday afternoon? Why did I let them just bop on in on Tuesday? If you think this is too harsh, if you think I deserve half a deal for a be-back showing up without an appointment, then be prepared because you’re competitors are going to sell that be-back every time, because if you think that they only visited us and they were coming back Tuesday no matter what, you’re crazy.
The only reason they walked in on Tuesday is because nobody called them. There’s nobody calling be-backs today. If your team knows that they’re going to lose that deal, a 100% of that deal unless they’re calling their be-backs and setting appointments, guess what? They’ll start calling their be-backs, they’ll start setting appointments. Let’s look at the other one now. Same day be-backs. I’m going to protect the same day be-backs and here’s why. It’s Saturday. It’s 9:15. I catch an up. I work with the up till about 11:00 o’clock. They got a small child with them. She’s cranky, she’s hungry, the dad’s going crazy.
We’re about to do the deal. We’re in the write-up stage, but you know what? “Listen, I got to get her something to eat. We’re going to run over Wendy’s. We’ll be back in a little bit.” He leaves and 45 minutes go by and he doesn’t come back. I catch another up. Then he walks in the door without an appointment, but I put all of their information in the CRM. I still deserve half of that deal because we’re not going to try to set the appointment in that case. These are my rules. Again, write your own rules. This is the first guideline for your pay plans, is to worry about protected prospects and put pay plans in place that drive the behavior you want.
You want your team to make be-back calls? This is the rule. You want your team to set appointments that show? This is the rule. By the way, for those of you who’ve never been through Creating an Appointment Culture, my free online training on stevestauning.com, let me tell you the reason you want appointments. Here’s the reason that you want appointments and that is that the average dealer closes about 20% of their traditional ups on the first visit, but the average dealer closes 50% of their internet appointments that show on the first visit and 60% of their owner marketing appointments that show on the first visit and two thirds of their be-backs appointments that show on the first visit. Appointments close at a much higher rate than traditional ups. That’s why you want your team setting appointments that show.