By Myron Love
River City Ford is taking a new approach to auto sales. As of Jan. 1, the West Winnipeg dealership is paying its sales reps a straight salary – supplemented by team performance bonuses – instead of commission.
With this move, the Ford store is following the lead of its sister Ford store, Bennett-Dunlop Ford in Regina, which introduced salaries last year.
Trevor Boquist is the dealer principal at both stores. Long established in Regina, he bought the former Cam Clark Ford in Winnipeg in the spring of 2009.
“Customer satisfaction at our Regina store is up 13 per cent since we introduced our new team approach there,” says Ryan Monczunski, River City Ford’s general sales manager.
“With our new policy, we are getting our cars over the curb as a team. If the team performs well, everyone’s spirits are lifted. And, if the team hits certain sales and CSI numbers, everyone gets a bonus.”
Monczunski says that with the new system, the pressure is off in the showroom.
“Our guys don’t have to worry about the size of their paycheques any more. They can better focus on giving customers a good buying experience rather than trying to get more money from them. They can focus on finding the right vehicle for the customer, the vehicle that best fits their needs.”
He reports that customers are responding positively to the new approach. The proof? He says January sales are up 15 per cent over January, 2011.
Now, while River City Ford is the only dealership in Manitoba currently paying sales reps salaries rather than commission, it is not the first Winnipeg dealership to attempt this approach.
The pioneer in paying salaries instead of commission in both Saskatchewan and Manitoba is Terry Ortynsky, the president of Royal Ford and Royal Honda in Yorkton.
Ortynsky has operated Royal Ford for over 25 years and has always paid his sales reps a salary.
In 1998, he expanded his business operations into Winnipeg with the acquisition of the former Nairn Nissan. He then added a Kia store a few blocks away.
He sold the Kia store to the Birchwood Group in 2009 and the Nissan store to Stephen Vickar in 2010. Throughout his tenure here, he operated his stores on a salary basis.
Echoing Monczunski, Ortynsky argues that a sales rep on a straight salary will be better motivated to do what is best for the customer.
The difference between the Ortynsky and Boquist approaches is that Ortynsky doesn’t have any incentive or bonus structures built into his operations.
Bill Kueneman is a sales rep who has worked both for straight salary and on a commission basis. He started his auto sales career with Terry Ortynsky Nissan and continued on at the store after it became Vickar Nissan and the commission approach was re-instated.
“There are pros and cons to both approaches,” Kueneman says. “Under Terry, we had seven sales reps and it didn’t matter which of us dealt with the customer as long as the customer received the help he needed. Some customers were more at ease because there was no pressure. We had more time to look after customers, deliver cars and clean the lot. And if it took six months for a customer to make a decision about buying a vehicle, that was alright.”
On the other hand, he says “You could see that some sales reps receiving a salary were losing their drive to move products.”
He says that it hasn’t made much difference to his sales totals whether he was receiving a salary as before or working on commission as he is now.
“If you are a strong sales rep, then it doesn’t matter that much.”