Bell to Bell is like a fishing trip, you don’t want to waste an opportunity for a sale (or fish), so you spend 50, 60 or 70 hours at a dealership each week to make sure you don’t miss out. This creates a burn-out for salesmen and makes it difficult to attract people who could be very good at selling cars, but don’t want to be away from their family or other activities for the majority of each week. It’s not like more than 50% of those hours spent are constructive, in the majority of cases, they are not. But, in order to make a living, you spend the time.
This doesn’t have to be the case for most salespeople if a little creativity in how commissions are figured is applied.
The problem with ‘team’ selling, is that it has a tendency to reward the inactive and penalize the active. That doesn’t have to be the case with a formula I have devised to make each salesman who wants to participate, a 40 hour a week professional.
Salespeople who do not want to participate, don’t have to, but the rest will form teams of 3 salesmen where all appointments and customers stay within the team unless the customer decides that there is someone else they want to work with. The gross commission for the team is rationed out on a point system to each member of the team as follows for each sale:
- 1 point for doing the test drive
- 3 points for closing the deal
- 1 point for performing the delivery
- 5 points for sale that was a referral to a salesman by name
- 8 points for a self-created prospect
Let’s say the team has 30 sales in a two-week period. The commission on those sales is $18,000. Salesman 1 on the team has 51 points because he provided 8 test drives (8 points), 11 closes (33 points), 10 deliveries (10 points), 0 referrals to him and 0 self prospected customers = 51 point. Salesman 2 has 70 points because he provided 9 test drives (9 points), 11 closes (33 points), 10 deliveries (10 points), 2 referrals (10 points) and 1 self prospected customer (8 points) = 70 points. Salesman 3 had 47 points. Total points for the team is 168. Salesman 1 gets 30.357% of the commission, Salesman 2 gets 41.667% of the commission and Salesman 3 gets 27.976% of the commission.
The points for each activity can be adjusted and other categories can be added. Bonuses can be awarded teams with most points for the pay period, etc.
The salesmen who do not wish to participate, will run their business the way they always have, but will not have the built-in support of his team members so as to keep from being at the dealership more than 40 hours a week. Because the points are weighted towards referrals and self prospected leads, the ambitious get rewarded. You could even weight those two categories a little heavier if you see fit to make sure that those activities are heavily rewarded, thus building the opportunity for sales by the dealership without paying for more leads. You might even consider awarding only 2 points for a close to not make it seem like a penalty to the salesman who originally worked the deal, but was not around when the close was done by his/her team mate.
If you would like a copy of the spreadsheet formulation, let me know and I will send it to you.