My brother started working as a Sales Representative at Cars.com. His primary job was to contact car dealerships, build relations with them, and eventually close sales with them to purchase online ad packages through the Cars.com platform. The triangle in this case is my brother being the agent and the two principles being his clients and his managers. From talking to my brother I have learned a good amount of insight on the expectations for sales performance rom the managers perspective, and also from the agents perspective.
With that said, it is in the Sales Representatives best interest to get as many closings as possible, for each closing you receive a significant commission incentive. The managers set prices that the Sales Representatives are supposed to base for each and every client my brother talks to, but those numbers are not always what my brother sells. In order to get more sales my brother has given discounts to clients, especially if they are reoccurring customers or if it is a very large deal. He does this in the best interest of himself as well as the client. However, this is not something that management pushed the Sales Representatives to do, they push for he most money on each and every deal and they think the best way of doing this is to stick to the price they set out. At the end of they day, my brothers perspective is that he is reading the customers well enough to see if they are going to buy the package at the high price, if they are not as interested as he would like this is when he gets into cutting discounts for the clients. When he does this he is maximizing the amount of customers he can close on and not limiting the amount of customers he will succeed on selling to in his book of business.
In practice this difference in views got resolved by my brother being one of the highest performers numbers wise. Although he might have done it in not a conventional way, this was easily looked passed when management saw how much money he brought into the company. Another way to resolve this could be to give management commission that is tied together with the Sales Representatives sales success. This will make management more inclined to seeing success from Sales Representatives, and be more allowing of giving discounts when they are necessary to ensure that sales are made as often as possible.
I do think that some managers may always look down at my brother for how he obtained his success. Most of them easily got over it due to how much money he brought in, but in the eyes of some he might have "failed" because he didn't do it sticking to the price that most stick to. He did satisfy his clients, himself, and the company as a whole though by bringing in many more customers then the typical Sales Representatives do.
One of the issues with the story you told is what information the customers have about whether your brother (or other sales representatives) are willing to cut a deal. You said some buyers will pay full price but others not. You didn't say why. You might conjecture on that.
ReplyDeleteI don't know the business well enough here. Does Cars.com have competitors? If so, do dealerships buy from the rivals or only from one? This might explain some of the story you told.
As far as negotiating each deal as its own unique situation rather than sticking with a strict schedule, there are a couple of additional thoughts to consider. Does Cars.com divide up territory so that no two of its agents are selling to the same customer? Or can a customer go outside in search of a better deal? In other words, is the success of your brother adding business to the company overall or is it taking business away from other agents who work for the company? The attitude about this would be quite different depending on which it is. In other lines of business there is something called retail price maintenance, where the parent company imposes a retail price and doesn't allow discounts, so various outlets don't end up competing with one another.
You should consider that issue in your response. Your brother, of course looks at the sales he generates. But the company looks at the sales of all the agents.
There are varying reasons for why some of the customers pay full price while others don't. One reason is how knowledgable they are in regards to the competitors. If the price is lower to market cars through a different company, and the customer knows this they will use it as a tool to get a better price from the Sales Reps. Another reason might be need for the service, if the dealer has a prime location for walk in sales they might be more reluctant to purchase online marketing through Cars.com. This is because they are already having success selling without the service. As I mentioned above, there are may rival for Car.com, a lot of dears buy from multiple companies to get as many potential buyers as possible.
DeleteThey are groups of sales representatives for each territory, so I would say that another sales representative could potentially sell the product for more. If he sells at a discount there is a chance that another Rep could have sold the same products without the discounts.
I think that your scenario is interesting. I thought about sales representatives when I was writing about the prompt as well. I took a different approach, since I thought of it in the way that a sales representative is more inclined to stay on track and not shirk since they're income depends on the sales. I think that your perspective about setting the price is an interesting thought.
ReplyDeleteI can understand why a manager or company wouldn't condone selling, in this case, cars at a discount, but at the same time I'm sure they have the same sort of mindset as your brother. They want the highest price possible, as I'm sure your brother would negotiate for as well since it benefits him as well, but at a point you need to make sure that the sale is made.
Something that I think would be interesting to know is how he did on sales per car. I'm not sure when you mentioned how your brother had the best sales if it was the most total or the most per car. I would think that it would be the most in total sales, but I wonder if there was another representative that sold more per car.