What would you do in this commission sales situation?

In My Humble Opinion
1

Hypothetical + poll, ignore if you don’t like, cheesecake, blah blah blah.

Today’s story is about Katina, the sales director at a luxury car dealership. This dealership is one of several her family owns, and it’s understood that she will be in charge of the whole chain when her father retires. In the meantime he’s put her in charge of this one so she can get the experience she needs. This is only the latest of several jobs she’s had there; she’s a salesperson, used car manager, new car manager–and even a service writer.

It’s been a bad few months at the dealership, and a lot of Katina’s sales staff are struggling. One person in particular really worries her: Sean, who is her personal friend as well as employee; she recruited him to work in the business and hopes one day he’ll be manager material. Ordinarily Sean is one of the store’s best performers, averaging between ten and fifteen cars a month; he’s also one of the hardest workers, doing myriad boring but necessarily jobs that make the business run smoothly without being asked. The latter is still true, but the former is not. Last month Sean sold only two cars; by the 25th of the current one, he’s sold exactly zero. Katina doesn’t believe the bad streak is Sean’s fault–or, more accurately, it didn’t begin as his fault. He’s been working hard to catch fresh ups (i.e., customers who walk onto the lot without an appointment or any particular salesperson in mind); he’s been working the phones diligently; he’s been doing all the stuff he’s supposed to do that ordinarily works. But simply through bad luck, practically every customer he closes fails to qualify for a loan, or wants ten grand more for their trade than it’s worth, or something else like that. The sales staff work straight commission, so Sean’s having some financial trouble; he’s also losing confidence in himself, which is deadly for a salesman. He is not, of course, unique in being in this situation; he is, however, by far the hardest worker of the persons having trouble.

This morning Katina got a phone call from an old college classmate of hers, Diane, who happens to be richer than Croesus. Diane is in the market for a new couple of new cars: one for herself, one for her new husband. Back in her saleswoman days Katina sold her a car a year, and Diane’s never troubled herself to haggle; to her, dropping a hundred grand on a new sedan is insignificant. This typically means a nice big commission.

The specific car Diane wants is on the lot; it’s just a matter of doing the paperwork. Katina could do that herself and save the store the commission. But what she’s more typically done in the past is gather all the salespeople together, have them all drop their cards in a hat, and pull one out, letting chance determine who gets the easy sale. But that’s just her custom; there’s no rule requiring her to do it. In short, Katina can, if she chooses, just give the sale to Sean. Some people may grumble if they hear about it, but it’s Katina’s call.

What should Katina do, and why?

2

I’m going to go with Katina should give Sean the sale. It’s less a matter of helping out a friend and more a case of helping to save a good employee.

3

Well I said Sean, because she should make sure a good customer is well taken care of. Her relationship with Sean helps her make sure that happens. The confidence boost for Sean is another factor, but not as important from a business standpoint, he is replaceable, customers like that aren’t so much.

4

Is Katina any good at slight of hand? Maybe do the hat thing for show, with a predetermined outcome?

5

Seems riskier than just calling Sean into her office, handing him a piece of paper with Diane’s name, number, and desired vehicles on it, and telling him to make the first phone call outside and on his cell phone.

6

Having worked in commissioned sales, I can say that there is sometimes no good way to do this that doesn’t involve hurting someone’s feelings. That being said, however, giving Sean the sale outright and on the QT is probably the best option because Katina can defend it as a managerial decision that was hers to make. But she should then be prepared to hand sales to the other salespeople to ensure fairness.

On the other hand, if she draws names out of a hat, she risks undermining her authority unless the process is completely transparent, and even then, someone will undoubtedly call foul if the drawing doesn’t go their way. It’s not worth it.

7

Katina should just tell Diane to stop by the lot and ask for Sean. No need to bring Katina’s name into it at all.

8

I’d say a case can be made either way. Sean’s a good employee and as a manager, Katina should help him get past a rough spot for the long term good of the business. On the other hand, showing favoritism to a particular employee will create resentment among the other employees. Katina, as a manager, needs to weigh the pros and cons and decide where the balance is in this particular situation.

9

I’m not asking how Katina can avoid causing trouble in the dealership. Being the number two person in the dealership, she doesn’t *need *the assent of any of the sales staff or managers, and wouldn’t even if she weren’t the owner’s daughter. The question is what is the best managerial decision. What does she own Sean? What does she own the other salesfolk? What’s best for the company?

ETA: Little Nemo got to the heart of it, though I’d add that the matter would be clearer if Katina & Sean werent’t friends.

10

I used to do this for a living. I wasn’t a sales manager but I was a manager. And one of my guiding principles was to always remember when you do a favor for one person, other people are going to have to pick up the burden. That doesn’t mean you don’t do favors - it means you have to be aware of the costs and be sure the favor is worth the costs. Don’t just look at the person in front of you - as a manager you have to think about everyone.

11

If she owns Sean, the dealership’s got far more serious problems than a slump in sales.

12

I voted for The Hat, because of this:

I’m not in sales, but I am a manager. That’s really the only fair way to handle it.

13

I voted for the hat, but on rereading I see there are two cars in the sale; one could go to Sean and the other into the hat.

And also if Sean’s been selling 10 - 15 cars a month and has money problems after less than two lean months he needs financial advice.

14

I vote hat.

If Katina and Sean’s personal friendship is know by the other employees, and she gives him the sales (two cars, so two commissions), there are going to be some pissed off employees. Not the end of the world, but it very well might be if you loose their trust.

Same goes for Katina doing the sales herself. By doing so she is breaking with tradition for no good reason, and in the process screwing two salespeople of their commission.