River City Ford is taking a new approach to auto sales.
As of January 1, the dealership, located at 3636 Portage West near the Perimeter Highway, began paying its sales reps a straight salary supplemented by team performance bonuses, instead of commission.
Dealer principal Trevor Boquist acquired the former Cam Clark Ford in the spring of 2009. Boquist is also the dealer principal at Bennett-Dunlop Ford in Regina and tried the salaried approach there last year before introducing it here.
"Customer satisfaction at our Regina store is up 13 per cent since we introduced our new team approach there," said Ryan Monczunski, River City Ford's general sales manager.
"With our new policy, we're 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 ... numbers, everyone gets a bonus."
With the new system, the pressure is off in the showroom, he added.
"Our guys don't have to worry about the size of their paycheques anymore. 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."
Monczunski said River City customers are responding positively to the new approach, and January sales were up 15 per cent over January, 2012. "We hope word-of-mouth drives up our repeat business and referrals."
While River City Ford is the only dealership in Manitoba currently paying sales reps salaries rather than commission, it's not the first Winnipeg dealership to try this approach. The pioneer in paying salaries instead of commission in both Saskatchewan and Manitoba is Terry Ortynsky, president of Royal Ford and Royal Honda in Yorkton, Sask.
Ortynsky has operated Royal Ford for more than 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 and later added a Kia store a few blocks away. He sold the Kia store to the Birchwood Group in 2009 and the Nissan store to the Vickar Automotive Group in 2010.
Throughout his tenure here, he operated his stores on a salary basis.
Echoing Monczunski, Ortynsky said a sales rep on a straight salary will be better motivated to do what's 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 commission. He started his auto sales career with Terry Ortynsky Nissan and continued on at the store after it became Vickar Nissan and commissions were re-instated.
"There are pros and cons to both approaches," Kueneman said. "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 all right."
On the other hand, he said, "you could see that some sales reps receiving a salary were losing their drive to move products."
As for himself, Kueneman said being on salary or commission, as he is now, hasn't made much difference to his sales totals "If you're a strong sales rep, then it doesn't matter that much," he said.