Hey Joe,

I need some advice and was hoping you could point me in the right direction. The General Manager asked me to think about changing the pay plan structure for my team into a commission-based BDC. She wants to pay them a percentage of the Salesperson’s commission moving forward. They’re currently paid hourly plus flat rates for appointment shows and sales. With the gross profit decreasing, she feels this may be the best way to go in 2019. I would love to hear your thoughts on our current setup vs. moving to this pay plan.

I hope you and your family had a wonderful Christmas! 
(Requested to remain anonymous)
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Hope you had a merry Christmas. I’ve seen stores try to “share” commissions between BDC and salespeople, but never without a significant amount of upheaval and resentment from the sales team. Many deals are turning out to be mini deals for which I’ve seen stores simply give $25 of the mini to the BDC agent (as that is traditionally close to what they’d get paid for a sold deal anyway).
I can completely understand that as digital retailing is championed by dealers and customers alike, more of the actual deal is being decided upon in advance of the appointment, and in many cases, all a salesperson needs to do is not screw it up. For this, I can see how rewarding a BDC for that additional work makes sense. DealerKnows has been advocating to call BDCs “Deal Zones” nowadays as it changes everyone in the organization’s perception of what transpires in that room. We also believe having a fully-operational desk manager in the BDC is becoming a necessity as well. So if a deal is taken further down the pipeline than before, I can see how cutting the BDC agent in on a level of commission is logical. With that said, it will certainly cause consternation between sales team and BDC. More skating may take place by changing names/info when logging into CRM and tracking becomes more problematic.

If your General Manager intended on universally rewarding 25% commission of deals onto the BDC, it may benefit them on 40% of all deals tops, but if you remove the appointment bonus from that equation, it could potentially hurt their YTD pay. The last thing you want to do is to cut the pay of people doing more work while simultaneously disrupting the sales floor’s take from a car sale. I’m sure she’s done the math to know what the expectations are, but I still think BDCs, while a holistic part of the sale, need to be separated by pay plans (salary/hourly plus flat rate bonuses with escalators) and goals (appointments show rather than solely on sale). This way the two departments operate independently, but on each other’s behalf rather than with animosity toward each other. 

If your only thought when taking a sales call or Internet lead is whether or not this will culminate into commission for you, I foresee a lot more cherry-picking occurring, as well as giving up on leads quicker, thereby delivering a less-than-ideal customer experience for all prospects involved.

Just my $0.02. I’d recommend sticking with the pay structure of what you have and experimenting with commissions only on deals that originated from leads off of a true digital retailing solution. See how that plays out, as you’d then be rewarding them for completing much of the deal in advance – and they’d deserve some semblance of commission more than had they simply set an appointment from an interested shopper.

Joe Webb