CHICAGO -

Are you still paying your sales team on gross? If you are, you are not alone.

This approach still is used by many dealerships across the nation. When these pay plans were developed consumers had little knowledge of how our business worked, and it was tough to really shop all the competition. Do you remember when your dealership got their first website?

Back then the question was; should I even put my inventory online? And I am certainly not putting a price on them.

The world has dramatically changed to the point where the Internet drives the automotive retail world. Today 90 percent of car shoppers do research on the web before buying a car, and on average they are spending 11.5 hours doing it. This means they sit on their couch and shop the entire market from the comfort of their home. Now the argument for the gross pay plan made sense.

You want the sales team to hold every penny of gross in the deal. However, now that consumers shop online, visit only 1.8 dealerships on average, and online competition is driving you to be far more aggressive upfront: does this process still work?

Used-car managers work diligently to price and advertise as effectively as possible to beat the competition and drive traffic to the store. This means that there is not a ton of room for negotiation. With that being the reality of our used-car business, does a gross based pay plan set up additional road blocks to sell your aging inventory?

As a salesperson, why would I sell that 65-day-old unit when there are three fresh pieces that probably have far more gross? So they walk around the aging unit that you desperately want to move and take the customer to the fresher inventory.

At the end of the day, we want our salespeople to take care of our customers, sell them the car that best fits their needs, and give them the best experience possible. That experience should be void of worrying about which cars have the most gross in them.

For those dealerships that have moved to a one-price philosophy, this approach seems to definitely make sense. Even if you negotiate and want the salespeople to hold all the gross, you are negotiating far less than you used to. As the automotive business continues to evolve many more dealers are beginning to move to volume-based pay plans.

Or maybe a hybrid approach that takes both volume and gross into account. A wise colleague of mine always says, “a person’s pay plan is their job description.” The questions for dealers is: has the description changed and should we change with it?

Editor’s Note: Steve Miner is the director of product marketing at FirstLook. This entry can be found within the Drive Your Numbers blog here. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.