Paying salespeople by commission isn't as popular as it once was, but the method still has some strong backers.
Robert Melloy, who heads Dodge, Nissan and Suzuki dealerships in New Mexico, gives his sales staff a choice of salary and bonus or commission. Most of them start with salary and later switch to commission. Every member of his current staff is on commission.
The dealers profiled in this section offer their staffs a salary-plus-bonus arrangement, and several have linked it to one-price selling.
'It doesn't make sense to pay commissions when you're a one-price dealership,' says Bill Marsh, who holds seven General Motors and Chrysler group franchises in Traverse City, Mich.
'We still try to sell the car,' he said, 'but now the focus is on selling value instead of trying to manipulate the customer psychologically.' The salesperson's compensation is based on the number sold, 'but the price of the vehicle has nothing to do with it.'
At Bowen Scarff Ford in Kent, Wash., salespeople receive $250 per vehicle for the first 10 sold each month (new or used), says Mark Scarff. The stipend rises to $285 for the 15th and to $350 for the 20th. It's retroactive. Scarff says his salespeople average $63,000 annually.
In White Bear Lake, Minn., Bill Krouse reviews salaries monthly and pays a bonus starting with the eighth sale. He says sales staff turnover has dropped 80 percent in the eight years he has been using the plan. Don Pascoe of Serra Chevrolet in Miamisburg, Ohio, bases salaries on a rolling six-month average of vehicles sold. Salaries are adjusted every three months. With bonuses, salespeople make $30,000 to $85,000 a year.
Pascoe's advice: 'Pay your people in a manner consistent with how you want them to act.'