Should you provide a salary to your Internet manager?

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WEIGHING IN THE PROS AND CONS WHEN IT COMES TO PAYMENT OPTIONS FOR YOUR DIGITAL SALES AND MARKETING STAFF

digital_marketingA common question I get in speaking to the thousands of dealers I face per year is, “should I or shouldn’t I pay a salary to my Internet manager?” As with all things in the dealership, your decision-making for this topic and most others should be part of an overarching strategy.

Historically speaking, the automotive industry has leaned heavily on commission-only pay plans, which has its pros and cons. One of the benefits in that plan from a business owner’s perspective is that it takes a lot of risk out of the equation. Risk comes in fixed costs, and if you have to pay a fat salary every single month and the employee doesn’t perform, then you’re still paying that fat salary. Of course, if the employee performs, you benefit, but the risk is if their performance drops, you still have the high pay.

FACTORS TO CONSIDER
However, I wouldn’t go into an Internet department and impose a commission-based pay plan simply because that’s how we’ve always done it. Here’s what we need to think about before nailing down the pay structure:

Typically, when you look at your Internet role, you can split it between two types of employees: Internet marketing employees and Internet sales employees. On both sides of that equation, you’re going to have a management track and a staff track. On the sales side, commission-only or commission-focused pay plans are traditionally more acceptable than on the marketing side, where you pretty much always need a salary.

DEFINING ROLES
We figured out a long time ago in this industry that our salespeople were best at meeting and greeting customers, building relationships, demonstrating the product and closing deals.

And our sales managers were best at managing those people to ensure they are doing all those things effectively to sell cars. So you have a sales track and a management track. Usually that sales track doesn’t do your marketing, except for maybe your general sales manager. Usually a marketing manager or maybe a general manager does your marketing, but your employees generally don’t do your marketing.

Separate out the sales and marketing and once you do, it will become very clear that those who are on the sales side of the fence can have commission-only or commission focused pay plans that work very well. If their job is on the marketing side of the fence, then you probably should pay them salary. Now, they’re not taking the risk that a commission-only paid employee might because if they have a bad month, they’re still going to get their salary. But what you’ll find is that you typically have those people on the marketing side of the fence tend to make less than your highest performer on the sales side, but more than your weakest performer in sales.

Divvying up the roles between sales and marketing personnel and understanding each employee’s responsibilities should arm you with the information you need to pay your professionals appropriately for your market, your employees, and your business.

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Canadian auto dealer