Carlos Uruchurtu, general manager of George Chevrolet in LA, had a problem, his hard-working sales staff would do their best to get a customer into a car only to have the deal fall through when it came time to get a loan. Uruchurtu came up with a plan to pay his staff even if a customer didn't drive home with a car.
George Chevrolet is situated in a lower-middle-class area area, 65% of it's customers are what the industry calls "credit challenged." Even though new car sales are up and loans are easy to come by, for those still recovering from the economic collapse of 2008 getting approved is far from guaranteed.
At George Chevrolet customers would come in, go for a test drive, and were ready to buy, but 20% of the sales would fall down at the finance table because the dealership couldn't find a bank to back the loan. Day after day, Uruchurtu watched his staff spend time with customers and then see their commission vanish due to a low credit score, bankruptcy, or any other of the numerous reasons to be denied financing. He didn't want to lose his staff to the other dealerships that did not face the same challenges.
So he came up with a compensation model that would give his staff $25 for their work even if the deal could not close due to customer being denied financing. Uruchurtu also implemented other initiatives so that his staff could work better as a team-
The rewards can come in different ways. If a salesperson isn't getting anywhere with a customer and hands him or her to a colleague who might have better chemistry, the second salesperson stands to earn the entire commission. But the first salesperson gets $100 for getting things rolling. Same goes for the Internet sales department: If an Internet salesperson hands off a hot lead to a floor salesperson when the prospect walks in the door, the floor person gets the commission, and the Internet salesperson gets $100.
Uruchurtu says he didn't want his staff sizing customers up based on whether or not they are credit worthy. He wanted them to focus on giving the best service possible. We have discussed before how salespeople are often a product of management's philosophy, while $25 isn't much, it is good to see people being compensated for their work even if doesn't result in a sale.
(Image Credit: George Chevrolet) (H/T to Christian)
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