Salary vs. Commission - Impact on Performance

Sales Management Forum

 #41
Seth

Bald Dog do you think it's possible to sell run of the mill Fords and Chevrolets for more money than other dealers in the area? What would you be paying extra for?

 #42
Bald Dog

Quote:
Originally Posted by Seth
Bald Dog do you think it's possible to sell run of the mill Fords and Chevrolets for more money than other dealers in the area? What would you be paying extra for?
It's not about charging more for the commodity (the car). It's about offering various complementary professional services for buyers.
[*]Mechanical skills you must absolutely know before you start driving
[*]First aid and CPR skills for the big city driver (and at the back you can sell customised first aid packs with your logo on them)
[*]What parents of driving teens must absolutely know
[*]Learning the language of the car mechanic, so you can screen out the scumbags before they rip you off
[*]Etc.

I think, it's not what we sell but how we sell it that counts.

Could you do something similar?

__________________
Raise your sight! Blaze new trails! Compete with the immortals!
Tom “Bald Dog” Varjan
Request your free copy of "B2B Online Business Development Insider For Wise Buyers" at http://www.varjan.com
 #43
Calvin

Quote:
Originally Posted by Bald Dog
You're dead right. And it's the seller's responsibility to create a buying process (not merely the product) that is drastically different from the competitors' processes. But this takes time, effort and dough, and many companies are not willing to make the initial investment.
What kind of different processes and investment are you talking about?

 #44
Bald Dog

Quote:
Originally Posted by Calvin
What kind of different processes and investment are you talking about?
For instance, creating those workshops I mentioned in the previous message and marketing them well in advance using both off-line and the web.

I would also write a car buying guide as a lead generating tool. And create an email list and stay in touch with everyone who comes to the dealership.

There could be a owners only web section where car owners can track their mileage and service history. History adds to the resale value of the car, and staff can monitor when cars are due for servicing. I think it would have great added value to car owners.

Thoughts?

 #45
Calvin

I think setting up additional profit centers, lead generation tools and customer loyalty programs are all good ideas. Although I don't see how these ideas when put into action would change the haggling climate much.

 #46
Bald Dog

With the additional income stream who cares if they haggle on the low-margin commodity, if they buy high margin additional services.

Remember former IBM CEO, Lou Gerstner's words, "We sell comprehensive professional services and throw in some boxes for the hell of it."

 #47
Calvin

Quote:
Originally Posted by Bald Dog
With the additional income stream who cares if they haggle on the low-margin commodity, if they buy high margin additional services.

Remember former IBM CEO, Lou Gerstner's words, "We sell comprehensive professional services and throw in some boxes for the hell of it."
Oooh! Now I follow. Pretty smart.

 #48
Bald Dog

I think the problem is that we are limited by the conventional wisdom of our own industries. We too often say, "Our industry doesn't work that way!"

But we can make it work in any way.

 #49
Calvin

Quote:
Originally Posted by Bald Dog
I think the problem is that we are limited by the conventional wisdom of our own industries. We too often say, "Our industry doesn't work that way!"

But we can make it work in any way.
Kudos for thinking outside the box.

 #50
JacquesWerth

Quote:
Originally Posted by Calvin
How would this apply to a sales position like a manufacturers rep where the rep works alone?
If you check with the Manufacturers Agents National Association (MANA) you will find that the average sales agency has more than one sales Rep. The last time I looked, a long time ago, it was about three salespeople. The largest have about 20 Reps, but most have one or two.

The average earnings of the Rep/Owners is typically from two to four hundred thousand. The average earnings of the non-owners is from one to two hundred thousand. That might indicate that they tend to be more skilled than the average salesperson.

Reps are in their own businesses. They typically work on a straight commission basis. They typically represent several non-competitive manufacturers (principals). They work on a contract with each principal and they often loose those contracts if they don’t sell enough or if they sell too much.

That is quite different from working for one company.

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