O’Brien began tweaking the used-car compensation plan after noticing that some sales reps only sold five or six vehicles a month, but “kind of always kills it.”

“They were inventory hunting,” O’Brien said.

So he looked for a solution other than paying a lump sum for each vehicle sold. The dealership’s seasoned sales force loved the commissions and, as one “workhorse” salesperson put it, knowing that every morning the theoretical opportunity existed “to come in and earn $10,000 that day” , O’Brien said.

But to keep these sales reps interested in selling even the vehicles priced to produce lower gross profits – vehicles that would undoubtedly provide the best fit for some buyers – it was necessary for Roy O’Brien Ford to balance this gross profit when it came to calculating commissions, O’Brien said.

Rather than viewing each used vehicle’s gross as a set number, O’Brien came up with the idea of ​​taking the monthly used vehicle gross profit and redistributing it among the individual models so that each has a gross. similar on paper. This could be done at the time of sale at a manager’s discretion – for example, subtracting $1,000 from gross on a model with profits to spare and adding $1,000 to a model with little or none. The vehicle’s actual gross does not change, but its paper gross does move for compensation plan purposes.

The strategy has developed over the past two years. The dealership formalized this last January with a formal compensation plan outlining management’s ability to adjust the value of the vehicle at any time.

“All chords are healthy, no chords are thin, and no chords are monsters anymore,” O’Brien said.

Even the hard-working salesman “couldn’t have been happier” after the first year under the new commission format, he said.


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