One of the complaints I consistently get from salespeople is in the area of splitting deals. I think that this has become such a problem in many dealerships because there are no clear cut policies for what constitutes a split deal, and how it should be handled when the issue arises. My rule behind splitting deals is easy - if the other salesperson does 50% of the work, he/she deserves 50% of the commission. But here's what has happened. Some salespeople think that just because they help you deliver a vehicle, or help your customer on an inventory walk, even though they're just sitting around do nothing, deserves a split deal. I'd hate to think that the only time they'd help another salesperson would be for compensation. But apparently that's where we've come.
One way to handle this problem is by working the Buddy System. I would pick another salesperson within the dealership to be my buddy. This person would closely exemplify the type of person I would want to deal with my customers and prospects. This person would be the only one who could handle my prospects and customers. If I'm not in the dealership, and one of my customers comes into to buy another vehicle, he would automatically be turned over to my buddy. There would be no split deals because it would all even out in the end. If my buddy wasn't available to help, and another salesperson needed to step in, then the 50% of the work rule would apply. Any mediation on the rule would always be handled by the Sales Manager, not between the salespeople.
Here are some situations that could happen whereby a salesperson would ask for a split deal. See how you as the Sales Manager would handle them:
Example 1
A salesperson is coming back from lunch and sees a prospect on the lot. He approaches the customer and says, "Hi, can I help you?" The customer says, "No, I'm just on my lunch hour and thought I'd look at some cars." The salesperson says, "Well, here's my business card, if you ever need anything, feel free to call me," and walks away. A week later, the customer comes into the dealership, never asks for the salesperson, probably threw his business card away, and gets sold by another salesperson. When the original salesperson sees his name on the sales board, he immediately says, "Hey, that was my customer, you stole my customer. I want a split deal?"
Comment on Example 1
Is this a split deal? Is it even the first salesperson's customer. He didn't do any work other than handing out a business card. He didn't even get at least a name and telephone number for follow-up purposes. And he definitely didn't do 50% of the work. As far as I'm concerned, this wouldn't even be a consideration for a split commission.
Example 2
A salesperson is negotiating a deal with a customer, when her 5:00pm delivery comes in an hour early. She needs the vehicle to be brought up front so the customer can at least take a look at the vehicle while she finishes up with her current customer. So she asks another salesperson to help bring the vehicle up front and show the customer his new car. After the delivery is completed, the helping salesperson asks for a split deal.
Comment on Example 2
Is this a split deal? It took the other salesperson 20 minutes to walk back, bring up the vehicle, and stand there while the customer looked it over. The salesperson wasn't doing anything at the time, and should realize that some day he may need her help in doing the same. As far as I'm concerned, this wouldn't be a consideration for a split deal. What I would consider is taking this person to lunch.
Example 3
You're having a big sale. There are a lot of prospects in the showroom and around the lot. One of the salespeople keeps going up to customers and says, "Hi, I'm Bob, what's yours? Bill? Have you made up your mind yet on purchasing a vehicle? No! All right, here's my business card. When you're ready let me know. He does this to five additional prospects until he finds one who's ready. One of the prospects he gives a business card decides to deal with another salesperson. When he sees Bill with another salesperson, he immediately goes up to him and says, "That's my customer. I'm going to want a split deal."
Comment on Example 3
I don't need to comment on this one. It's the same as Example 1. But believe it or not, in some dealerships, Bob would get away with this.
Example 4
I greet the customer at the door, do a proper job of qualifying, an excellent presentation, an enthusiastic demo ride, and go into negotiations. I wasn't able to close the deal right now because the prospect wants to think about it, and walks. About a week later, the prospect comes back into the dealership unannounced and wants to purchase. I don't happen to be there that day, so another salesperson writes it up, takes him into Finance, and they spot-deliver it that day. Does this salesperson deserve a slit deal?
Comment on Example 4
Absolutely! This salesperson actually did a lot of work on this deal. So he deserves 50% of the commission.
These are just four examples of splitting deals. I'm sure there are many more. If you happen to have more examples, or have a different opinion on any of these, please feel free to email me your examples and comments. I hope these will at least get you thinking about developing a policy in writing for your salespeople, and discuss it in your next sales meeting. Once you develop your policy, strictly adhere to it, and personally handle any disputes between salespeople. Don't leave it to the salespeople to handle it themselves. It's the easiest way to destroy a team you worked hard to create.
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