Every dealership thinks they’ve nailed their pay plan—until they realize their SERVICE ADVISOR pay plan mistakes are driving away top performers and rewarding mediocrity. In this episode of Service Drive Revolution, Chris Collins, Christian Lafferty, and Hogi break down the top SERVICE ADVISOR pay plan mistakes that quietly kill motivation, reward mediocrity, and drive your best people out the door. From confusing bonus structures to poorly aligned incentives, they reveal how to fix these issues—and design pay plans that actually boost performance, CSI, and profitability across your Fixed Ops department.
1. Overcompensating Mediocrity
One of the most common SERVICE ADVISOR pay plan mistakes we see is overcompensating mediocrity
Too many dealerships reward average performance as if it’s excellence. Advisors get comfortable salaries, low-bar CSI bonuses, or blanket pay increases with no tie to results. Before long, the best advisors leave—because they see that performance doesn’t matter.
Most SERVICE MANAGERS think they’re motivating their team with complex bonus structures — but all they’re really doing is confusing their ADVISORS.
đźš« The truth? Paying for mediocrity kills motivation faster than any low paycheck ever could.
💡 Better approach: reward measurable results — Hours Per RO, ELR, and CSI that beat benchmarks, not just match them.
👉 Related: Are You Ruining Your New Service Advisors?
2. No Minimum Performance Standards
A surprising number of dealerships have no clear minimum requirements for advisors.
If your advisors don’t know the baseline for CSI, sales, or customer-pay labor, how can they hit the target?
Top-performing MANAGERS clearly define:
- Minimum CSI scores
- Hours per RO goals
- Minimum monthly labor sales
When employees know the rules, performance rises — not because of fear, but because of clarity.
đź’ˇ SERVICE MANAGER Tip: Success follows structure. The strongest departments make minimum standards visible, signed, and coached weekly.
3. Overcomplicated Pay Plans
If your pay plan reads like a tax form, you’re doing it wrong.
Some dealerships have three-page pay structures full of “if-then” conditions that even MANAGERS can’t explain. That confusion kills engagement.
A great pay plan fits on one page and clearly answers:
“If I sell this, what do I make?”
When advisors can calculate earnings per RO instantly, motivation skyrockets.
4. Socialism Doesn’t Work in Fixed Ops
Pooling pay might sound fair — but it destroys performance.
When everyone shares the same pot, your best people carry your worst performers. Over time, efficiency drops, morale plummets, and your top advisors leave.
Performance-driven people need control over their outcomes — not to split them with the unmotivated.
👉 Related: Top Fixed Ops Performers: What Car Dealership Service Managers and Advisors Do Differently
5. Paying on Gross Instead of Sales
Most advisors don’t understand gross profit — and that’s a problem when their pay depends on it.
Paying on sales, not gross, creates clarity and momentum. Advisors can directly connect their daily actions to their paychecks, without needing to decode accounting formulas.
Rule of thumb: Keep pay tied to controllable actions — sales, hours per RO, and CSI.
6. Constantly Changing Pay Plans
Nothing kills trust faster than frequent pay plan changes.
When MANAGERS adjust pay every few months, ADVISORS stop believing leadership — and start looking for other jobs.
Consistency builds confidence. Adjust only when you’re improving the system, not cutting costs.
7. Cutting Pay to Save Money
If you’re redesigning pay plans just to “lower expenses,” you’re missing the point.
The goal isn’t to pay less — it’s to pay more to the right people.
When you reward top performers, you attract more of them. Before long, your entire service drive transforms into a results-driven culture.
The Big Takeaway: Pay for Performance, Not for Presence
Your pay plan is one of the most powerful tools for shaping behavior in your dealership.
Avoiding these SERVICE ADVISOR pay plan mistakes can dramatically boost advisor performance, profitability, and CSI.
The right structure doesn’t just motivate — it builds a culture of ownership, accountability, and performance.
When you align pay with measurable results, you stop managing problems and start building leaders.
Full Video Transcript
Welcome to the big show. Today we’re going to talk about the top seven service advisor pay plan failures, and then I don’t know, we just have a bunch of fun. There’s a big letdown in this show. There’s a surprise story about an accident.
There’s all. I mean, trust me, you’re going to want to stick around. Christian’s here. Hogi’s here. I’m Chris. And it’s all coming up right now on this edition of Service Drive Evolution.
You know how they say you’re the average of your five closest friends? Financially, I guess your income is usually the average of your five closest friends, right? So, my closest friend is a lot wealthier than me, and I think he is right in his advice in the sense that this far into the football season, watching football is a complete waste of time. I have no power or control over the Seahawks. I have no input.
I sit there and watch a dope, believing that they’re going to be good. Believing a bunch of stuff that doesn’t ever come to be. And it’s if I spent that time reading a book or bettering myself, working out, volunteering to feed the, I don’t know, anything but watching football, I would be better off. It’s a dead end hole that never leads to anything.
I don’t think you’re thinking about it in the absolute full scope of how it messes with you, though, because it’s not just three and a half hours while you’re watching a game, because you’re upset about it for two hours after the game, and then you come in in the morning, Monday. Yeah. And then Monday’s ruined, right? So, now we’re down to a four-day work week. I’m here to get stuff done, Chris. And so, and you guys know Mike, he does it. He always, if I’m over at his house on a Sunday, I’m like, “Hey, bro. You mind if I turn on the game?” And he’s like, “You watch that stuff? Just a waste of time. Waste of time.” And he makes more money than me.
It’s interesting. He has more fun than me. He’s traveling more than me. Yeah. Now, his life is better than mine in every single category. It’s probably not true. But, so, I shouldn’t spend so much time on all the press conferences. Forget the Chiefs. Do you really think the Chiefs are going to win a Super Bowl this year? No, they’re not. There’s nobody ever loses a, except for the Bills three years in a row. Any part of being a fan, hanging on to hope, though? But it’s hope. We’re not. Think about all the stuff that we understand now about human nature. How much of what we do in every other aspect of our life comes down to hope or externalizing control to some general manager and coach that talk about 30 years working against them.
Yeah, I like to approach my fandom from, I have a team, but that’s where it ends. I don’t know much about the team. I know they’re from Chicago, and I know they will not win the Super Bowl this year, but that’s as much brain power as I put into it.
Yeah, but there’s a bunch of people that think that the Chicago Bears will win the Super Bowl this year. You know a couple of them. You’ve met them. And they’re nice folks. They’re just, but it’s delusional. It’s delusional. It’s delusional that they probably will win half their games. That would be a really big surprise. But what if it’s scripted and the Chiefs have to win this year because we’re externalizing control to a thing we don’t even really understand? Do we think that it’s a coincidence that the NFL now traded the NFL network to own part of ESPN, who is a joke now on ESPN? And even during the games, they’re talking about the spread. They’re talking about FanDuel and all this stuff.
Wouldn’t you love to control the input and the output? For the love of Pet Rose, how is possible? Biggest sports franchise league in the world, arguably. Crazy. Besides soccer. You control what people see. So nuts. Let Pete Rose in. What Pete did isn’t even that bad. No, there’s a way bigger thing going on. And somebody’s sitting in a room going, “No, that little team up in Seattle.” No, they can’t. In the playoffs, the ratings go down when they’re. Nobody bets. We want real gamblers. That’s funny. That’s so funny.
How many Cowboy fans think that they’re going to win the Super Bowl this year? No. No, you know Cowboy fans, come on. I don’t know. They usually give up two-thirds of the way through the season. How much time do you spend on a weekend giving your energy to football and the conversations you probably have with your dad, putting on the outfit? The whole thing? Oh, I don’t know. How many games do you go to? Not a ton, because I’m not necessarily in the area, right? But that’s what I mean. Yeah, it’s for sure. You know, when we do it, it’s plane tickets. It’s the whole thing, right? I don’t know. I mean, definitely a game does take a ton of time. It’s half the day just for one game, you know.
But it is. It does take a lot of bandwidth. No doubt. I’m out. I’m going to read a book. That’s what I’m committing to. Three hours of Sunday afternoon. Do something else. Yeah, maybe I need a hobby. It’s not a bad idea. But a hobby that makes me better. Not whittling or something. Maybe a hobby like trading stocks, day trading, something like that. One of those low stress activities. That’s great. Penny stocks. That’s my new hobby. There you go. It sounds like you don’t have a lot of risk. You pennies.
You weren’t here, Hogy, but I took Winston, my Rover, in for service. And a while ago, I hit one of those Breaking Bad RVs with my mirror. I had a garbage truck next to me, and I, you know, just had to make. So, here in LA, you’d have to come here to see, but there’s parts of the city where the, I don’t know who these people are, but they live in RVs that are just broken down, old, held together with duct tape, sort of thing, Breaking Bad. And it was sticking out, and it hit my mirror. And so, I go in for service. Oh, because I popped my tire. I’m hitting a lot of stuff. I’m driving like Christian.
My car is in perfect shape. And the mirror’s still on there, but it’s broken. Every time I get in, I have to adjust it up. But I asked the adviser. I was like, “Hey, can you order me that mirror or whatever?” So, meanwhile, it’s $4,000 before labor.
You have to tell him what he said to you first before he gave you the price. Do you remember he said, “You should turn this into your insurance company?” Whenever someone says that to you, you know you’re in trouble. But would you turn in something for that to your insurance company? No. I mean, especially with what insurance is. It doesn’t. It’s not going to take you that long for what you’re paying in insurance, you know, because it’s going to go. You turn in a $5,000 claim for a mirror. Your premium skyrockets. Yeah. It’s crazy. It’s nuts. No, I try not to. I don’t want to get on the topic of turning stuff into insurance.
I’m not turning it into my insurance, but my daughter backing out of the driveway. We just got her a car. Wait, what kind of car did you get her? She has a 2021 Acura SUV, MDX, RDX. That’s a really good car. Yeah, it was great. Great deal on it. Great car. I love the car. And I have a 3/4 ton pickup truck, a diesel truck, and it was parked out by the shop. She comes out of the garage. It’s your truck. Huge driveway. It’s 70 feet by 100 feet. Huge driveway. And she finds my trailer hitch with the back of the RDX. And that thing just disintegrates. I didn’t know there was that much red reflector material on the back of an Acura, but I can’t get all the pieces picked up.
So, are you home when this happens? Oh, yeah. I’m. Do you hear it happen? No, I don’t hear it happen. I’m in the office, informed. My daughter’s leaving for school. My wife comes up. This is in the morning. She’s like, “Are you on a call?” And then what does your wife say to feel out what kind of mood you’re in? “You’re not going to like what I’m about to say.” 100%. Gives me the runway to it, you know? And then you’re like, “Just tell me.” Which, when I bought her the car, I knew.
You don’t give a car to a 16-year-old girl and, I don’t know, maybe that’s not a 16-year-old anything. 2021. That’s pretty new for a 16-year-old kid. Yeah, but it’s not a crazy expensive car. It’s a four or five-year-old car now. Actually, ’26s are here. It’s got, you know, 90,000 miles on it.
So, how does your wife tell you? It’s like, you know the thing, “Hey, I’m going to tell you something, but promise you won’t get mad or whatever.” Never promise that. Oh, no, for sure. And, but I’m starting to get the idea of what’s happening, you know, and stuff. Do you think it’s worse than what it actually is? Yeah, for sure. Because she thought it was worse, part of your wife, because the carnage was awful. But where she hit the bumper and the, you know, just the bumper. Yeah, I was able to get out. I got parts laying there to fix it and just haven’t done it yet. But I think I got less than a thousand bucks on it for sure to fix it.
So, it’s definitely not worth turning into the insurance. But does shame a little bit, or did you pick a bumper that was a different color? The part of the bumper she damaged is that unfinished gray and stuff with the reflectors in it and stuff. So, it really ended up not being. It just clips on. Yeah. It’s not too big a deal. Okay. Back to my story. Sorry. Sorry.
So, I tell the guy, I’m like, “No. Let’s get it. I’m not going to turn it into insurance.” And he goes, “Okay, we got to prepay for the parts.” So, I prepaid for the parts to order the parts. Guess how long it’s been? I’m almost going on a month and a half, right? How many times has he called you? Zero. None. Nothing. No times. A month and a half. What do you think? If we call right now, do you think the parts are in? I bet they’ve been there forever. I don’t know. You don’t know?
I’m going to say, do you think they’ve been there forever? I think they’ve been there for a while. And if he talks to the adviser, I believe the adviser is going to say exactly this. “Oh, Chris, I was just going to call you.” You think so? I don’t know. I guess I’m just a little jaded on JL parts. I feel like a lot of them are a ways out right now, but maybe not. His mirror, I mean, his color is special.
Honestly, when it comes to this stuff, whatever the outcome of this is, will you be surprised either way? No. I guess that’s kind of where my head’s at. Well, if it’s been there for a long time, they wouldn’t tell him.
Okay. Let’s talk about the subject today. The top seven advisor pay failures. Top seven advisor pay plan failures. And for those of you listening at home, Chris is on the phone with his dealer as we do the podcast. It’s almost being live. So, we’ve got a list of seven. I think we call them big mistakes, things that we see very regularly when we’re looking at pay plans. And these are in no particular order, I don’t think. But maybe the last one is one of the bigger ones. But the first one, Hogi, is. Oh, I heard a ring. Still ringing. Extra credit if he says parts hold. Anticipation’s building. I think you’re safe to keep going. Okay.
So, the first one is the top five advisor or top seven advisor pay plan failures. The first failure is overcompensating mediocrity. What do we mean by that, Hogy? So, yeah, it’s definitely probably one of the main things we see is, “Hey, Jackie. My name is Chris Collins.” Here we go. “And I was in there a while ago, and they ordered me a part, and I was wondering if the parts were in.” Getting transferred to parts. Please. Parts hold. I think the MO here is they don’t even pick up and put you on hold, because I went to the main reception. Parts voicemail. No, it just rings and rings.
“Hey, this is Chris Collins, and my service advisor, I think about a month and a half ago, ordered me some parts, and I was just wondering if they were in. It’s a mirror.” “I don’t remember his name, but it’s Chris Collins.” “Yeah, that sounds right.” “So, it’s been over. Yeah, it’s been about a month and a week.” “Does that sound right?” What if it never got ordered? I forgot about that as being an option. We were roll over mediocrity.
So, with overcompensating mediocrity, a lot of times when they’re backing into pay plans, they’re just saying, “Hey, this person needs to make this amount a month.” And so, it’s very easy when you do that enough times where you look up, and a benchmark or metric that we’re looking for is 8% of parts and labor gross for advisor pay plans, right? On hold. Okay. And so, they didn’t say parts hold, but they meant it. There she is. Why do you think that’s so rampant? I mean, well, part of it is what we talk about a lot, tribal knowledge. It’s just how they learn to do it.
And so, they do it, and they’re not looking for a specific outcome, and then they realize that compensation gets too high as a percentage, and then they change the pay plan, right? And we see pay plans just change over and over again. But, I don’t know. It’s interesting, but I don’t even know that it’s fair to say that they’re even watching what their compensation percentage is, right? I think you’re giving people too much credit that they would actually check and measure it against what the employee is producing.
Can I give you a more cynical approach to why I think that we get to overcompensating mediocrity? There’s a couple of things. I’m going to give you the two things that I think most lead into overcompensating mediocrity. The first, when it comes to advisor performance, is the level of salary. So, the first thing is that that’s a performance position, and what usually happens in a case is that one advisor will come in and try to negotiate a salary, and then they negotiate a salary, and then they just decide they’re going to pay everybody a salary.
So, everybody starts to get a salary. And then the second thing, how long’s it been there? So, do you think they’ll call me? “Oh, so he’s not there anymore.” “Okay.” “Can I get, well, I guess I’ll call back and make an appointment, right?” “Okay. Thank you.” “Bye.” He even said, “Yeah, call back.” Yeah. “Don’t let me.”
My advisor is no longer there, and he should have called me, but it’s been there. Did he say how long, or did he try not to roll the bus completely over that? He said over a week. Yeah. But the adviser when he ordered it said it would only take a week, so I’m pretty sure it’s been there. Well, he’s not lying if he says over a week. And also, smart of them to make me prepay for it, because they don’t care, right? They got their money, right? It’s only the service department that hasn’t been paid yet for the labor. So, what I know now is that not only is the service department in that store broken, the parts department is also broken, because nobody’s working.
I would love to buy that. I would just like a couple hours in that place just to see what we can do. I’d love to buy that dealership. We could run all our training in there. Oh my gosh, that would be so close to my house.
But yeah, so we’re talking about overcompensating mediocrity. So, an example is that if we’ve got exorbitant salaries that then just make people get paid regardless of whether they do something. And then I see a lot of times they might go to a 20 group, and then the 20 group says, “Oh, you should pay a CSI bonus.” So, they’re like, “Oh, okay.” They come back, and then they implement the CSI bonus. And the CSI bonus pays for being at or right over district or region average or whatever the thing is. Literally, you’re saying, “Here’s a bunch of money for being just like everybody else.” There’s no performance base to it. And literally, if you’re under the average, it’s like, “Come on, Billy.” “You’re almost there. You suck. You’re below average.” That has to be the thing. But you can get money for being average.
And I think that there’s a lot of things like that. I’ve seen things like the CSI bonus. I’ve seen. I just had this happen not too long ago where it was in a GM store, and they were paying a bonus if your advisor hours per hour were 1.5 or higher in a GM store. It’s just they set this bar so low. And I believe that that’s because people are just hiring for pulse in a lot of cases on the service drive. So, I think that’s how we get into that we’re paying for mediocrity, and then you can’t figure out why you can’t find a good advisor, because a good advisor is attracted to the big pipeline with the big payday. Yeah. But then you would scare them off and fire them, because they make too much money.
All right. Number two, and this is something I think when it comes to Hogy, you probably know more about this than me at this point, but where managers don’t do minimum requirements because they’re mean. Yeah. It’s an interesting thing, a minimum performance standard, and you know, there’s a long way around explaining this and there’s a short way, and I think the way that resonates with a lot of people is, you know, I think everybody agrees the workforce today is different. It’s different than when we came up in the business.
I just remember my first jobs. I didn’t have an idea of how things should be done. I did it how the boss said to do it, and that’s kind of how I was raised, and that’s just kind of what I did. And I think everybody agrees the workforce today is different, and it’s not all bad, but it’s different. But there is a percentage of the workforce today that, left to their own devices, will get by on the bare minimum. And if that’s the case, it’s up to us as leaders to grow them and to kind of raise the bare minimum, right?
When you start talking about minimum performance requirements, there’s a lot of people that have a response that has kind of escaped me a little bit, and in trying to understand where they’re coming from, they have this response that it’s a dark cloud, rule with an iron fist type of thing. But if you put into place minimum requirements, and you as the leader say, “Hey, we’re not going to perform below this point.” And they sign it, and you sign it, you set a strong frame for them. There’s clarity as to what’s expected. Success is tied to clarity in a big way. We talk about that a lot. And you’re eliminating chaos. You just take order and chaos. Yeah. And there’s structure.
The crazy thing in the industry is we talk about how much turnover there is with advisors, and there’s a lot of them that get fired, and they’re surprised when they get fired. And if somebody’s surprised when they get fired, that’s as much the leadership’s fault as it is the individual’s fault. And so, when you put minimum requirements in place, and you decide that we’re going to perform at this level in CSI, and this level in, you know, CP labor or whatever the couple basic metrics. You don’t need a bunch of them either. You just need a couple of minimum requirements that are towards the end goal of the business, which is profitability and customer experience.
And the other thing you’ll find when you do this is it’s clarity for them, and it sets a strong frame for them. And then when I put my name on someone else’s minimum requirements, I’m making sure that person is getting the training they need. I don’t want to have to. Nobody wants to terminate somebody. Nobody wants somebody to lose their job or anything. And I think that’s the other thing with it is, I think they’re afraid that they’ll have to hold people to the minimum requirements, but it’s amazing how many people go past them just because they know where the mark is, right? Which they never knew before that moment. That’s what I was going to say is that the big spin of this whole thing is, how many times have you put minimum standards in and everybody hits it?
As a matter of fact, if it all goes really well, don’t you kind of adjust it in a few months, because it goes up, because the expectation and the value and the level of performance goes up as it is. And I think that, I’ve said this to a lot of people, is that my favorite thing about being in sales was that I always knew how many cars you had to sell. I always knew what the first place I worked at was eight cars. The second place was 10. But there was no mystery.
What happened if you sold four? But on the service drive, if you don’t have minimum requirements, there’s no, “What stinks?” The only thing that’s really clear, if your CSI is bad, you know you’re in trouble. But your CP labor sales or whatever it is, if you don’t put a number on it, then you don’t know what a good job is. Yeah. So, “minimum requirements are mean” is why people, another advisor pay plan failure.
The next one is the pay plan that looks like it was drawn up by the OJ Simpson legal team, where it’s several pages long. But we believe that your pay plan for your advisor should fit on how many pages, Hogi? One. Exactly one. Unless you’re in California, then it’s 13, which is still short. And another thing that happens with the pay plans, they’re not only long, they’re confusing. And we like to talk about the confusing things as if-then statements.
Want to unpack that? Yeah. I don’t know, just reading some of them, I just get flashbacks to the times I’ve tried to do my taxes by myself. You know, and then it’s like somewhere across between that and I was never a big video game guy, but some of those cheat codes that were like, “Back, back, down, a button, hold left trigger,” or whatever. Are you talking about the Contra code?
I forgot to rub my belly button or whatever, and the cheat code didn’t work. Trying to go through them all and figure. It’s painful. For the record, what he’s talking about is up, up, down, down, left, right, left, right, B A start. What is that? That’s the Contra code to get 20 extra guys. Oh, really? On Contra. It’s an old Nintendo game where you had to do a whole bunch of things. I also, Mike Tyson. If you want to fight Mike Tyson in Punch Out. Remember that game?
Oh, yeah, I remember. 0073735963. Yeah, that’s the code. Oh, look at Rainman showing off his savant skills. Everyone’s like, “I knew it.” But make them simple. Your best advisors, your best techs are on a daily basis tracking where they need to be with every ticket, with every day, with every week, as to if they’re pacing for the month, for the paycheck that they want to have. And the more you align their goals with yours, it’s a roadmap to the outcome you want financially for the department, right?
Yep. As a client, the Chris Collins pay plan changed my life. It was so complex before we moved to that simple pay plan, and there was just relief from all of the advisors. I remember being in store one time, and a kid sold a big ticket, and he’s like, “Hey, you were talking about wanting me to understand the pay plan. Can we figure out how much I made on this ticket?” “Yes, we can.” That’s happened a few times. And that’s the way it should be. It should be that dialed in. It’s good.
All right. Next up, this is my political one on here, is that socialism does not work in car dealerships. Oh, the worst. What do you think about that, Chris Collins? I mean, I tell that story in the book, right? That I took this job, and I got my paycheck, and it wasn’t what I thought it would be, and I went into the manager’s office. I’m like, “Hey, man, this isn’t. I had my rap report, and I’m like, “This doesn’t make any sense.” He’s like, “Oh, no. It’s a pool. So, you got to have the other three advisors, and then it’s divided by four.” And I go, “Hey, Jerry, that’s not going to work at all,” because the guy in front of me would never get up and do anything. The advisor in front of me. He was a ghost.
And I remember he said to me when we got our paychecks or whatever, he was like, “Man, I hope you don’t quit, because he made me a lot of money.” What a jerk off. They also built so many systems around incompetence. So, they also, because we did 30 minutes or it’s free oil change, all the oil changes went into advisor 99, and then that was split up and put against your hours per RO bonus. So, do you think the guy in front of me put rotations? He put everything in 99, right? He had six ROs for the month, but it didn’t matter, because he got paid off what Chris did, anyways.
A couple times, they audited 99, and they were like, “Hey, you can’t be putting that in.” You know, it was super unfair. But I got him to get rid of that, too, because I was like, “I won’t avoid the oil change. I’ll write all the oil changes.” But what I would do is I would have my team leader come over and inspect my oil changes, because they were just on the other side. So, they would just walk over and inspect them at the quick lube.
And so, I was like, “I’ll write all the oil changes, like Cadillac customers.” They spend. Didn’t every car have an oil leak basically back then? Well, those Northstar engines did. That V8? Yeah, those were great. Those were 12 hours. And the dealership was so good, every one of those had an extended warranty. So, it was just basically telling the customer it was going to take a week to do it.
But that was it. But the socialism thing kills top performers. I don’t know how many times, especially years ago—this doesn’t happen as much, but it still does—you would go into a Toyota store to fix it, and the techs would be on socialism. So, they would be on actual teams where they pooled their pay. And you would try to hire techs coming in, and the good ones would be like, “Oh, no. I’m not doing that.” And you, you look. Let’s say we have 20 Toyota stores in our coaching group, and this Toyota store is running at 140% efficiency, and this one’s running at 80.
Because it does. You can just watch the efficiency go down when what you do doesn’t have instant impact. It’s like with spiffs, right? If you spiff cash on the spot, the performance goes up, versus if they get it in their paycheck once a month. It’s the same thing with techs and flagging hours. If they can figure out what they’re making every day, versus, “Well, I got to worry about these other five guys and what they’re doing,” you’re not as quick to run out and get that waiter.
You would never own the results at all. Ever. You wouldn’t try to get a six-hour job done in four hours. It’s a weird culture. It just changes the culture. Everything just slows down. Socialism is not. You don’t see people from America hopping off a plane in Russia, going, “Hey, can I defect? I like your style.” Yeah. Those people, like performers there, want to come here. They’re like, “Oh, we can see a return on our efforts, you know.” And the harder I work, the more I can achieve. That’s the American dream. So, it just, yeah. It’s never worked. Totally agree with that. But there are people out there that want it, but I would contend that those are the wrong people, or they’re not looking at the right things or something. There’s just a lot that goes into that.
This is another one that I would say is probably the most popular form of pay plan. And I would just contend that I think that it’s not the most efficient for advisors, and it’s paying on gross instead of paying on sales. And you’ve heard us say it already in this, that I think Hogi said it, is that our benchmark is that we’re trying to be 8% of gross, but that’s not the language that an advisor speaks, right? They sell. They just sell stuff, and every time they sell something, they perceive that they’re putting something in a hopper.
But when you’re figuring it out on gross, my favorite thing is when I go into a store that’s paying on gross, I go up to the first advisor that I see, and I say, “Hey, how do you calculate gross profit?” And it happens. They never know. Even if they stumble through it, they’re like, “Well, it’s the tech,” but they don’t understand. You’re like, “Okay, well, what does the tech make?” “No idea.” “Well, what’s your effective labor?” “No idea.” They have no idea. I don’t think I’ve ever had an advisor answer that question, right? A lot of times managers can’t answer that question. That’s a good point.
But you’re paying on a mystical thing that there’s no way to attach it to, but it’s an insight into how inept our industry is, where all these dealers go to 20 groups and start copying each other, and nobody asks, “Did your profit go up?” “Did the performance of your advisors go up?” I don’t know how many times I’ve been in meetings like that, and I actually go and do the research, and I’m like, “Well, hey, ever since this pay plan’s been in place, your CP labor per advisor has gone down by 15 grand,” or whatever. You’re making less money. It doesn’t. It’s facts over feelings, right? That’s right.
Depending on gross, it’s probably one of the biggest illustrations of that, is one you can ask like that, right? And a very small percentage of them will stumble through some, or know a report they can go get it, or whatever, but they’re in the general vicinity, but it’s just this weird conversation, and then most of them can’t. But no report that anybody runs has gross on it, either. It has the percentage where you have to manually figure it out. And it just, it’s this conversation that goes all over the place. But a huge percent of advisors somehow then figure out that oil changes don’t have much gross in them and ignore those customers on the drive. That’s right. And so, if we know pay plans drive behaviors, pay attention to the outcomes of isolate a certain amount of customers. Exactly. Good stuff.
All right, we’re up to number six. And this big advisor failure happens regularly. They change pay plans like I change underwear. Well, and it’s always to the deficit of the advisor or manager, which is number seven. Oh, well. So, we combine six and seven. Nice segue there. And number seven is that we changed the pay plan to cut expenses, not to improve performance. That’s another one that’s wonderful is when we go in, and we’ll change a pay plan, and we’ll look at the owner, and he’ll be like, “They’re going to make less money.” I’m like, “No, if we do it right, they’re going to make a lot more money.” They’re like, “What? Done something drastically wrong.” If they’re not making a bunch more money, and all the players in the department are making.
The key is that if you start to pay people big bucks off of their performance, you attract people that want to get paid off of their performance, and then before you know it, you don’t recognize the service drive. Yeah. If we do it right, the top performers, really do well, and the bottom ones, they get hurt. That’s kind of what you want. That was a list of seven.
You want me to do a recap on the list? I got to call back and make an appointment for him, which originally I hit service appointments, and nobody answered. So, that was an SDR first. That was so fun to actually hear it. I didn’t hear a parts hold. I definitely heard a whole lot of ringing going on. So, I went through the switchboard. Service, and then, “If you want to make an appointment,” so I hit that, and then it rang and rang and rang and rang, and then eventually defaulted to the main switchboard, which actually was a human, and then she said, “You need parts.”
And then the parts guy eventually answered, put me on hold, and then told me that my part’s been there. It’s as easy as that. And the way that I know. And the way that I know that we’ll always have work is because we could just randomly pick any dealership in the United States, and it’s probably exactly the same thing for the most part. We can be so much better. So much work. That was 10 minutes of my life I’ll never get back. Wow. And I’m not done. It’s almost the first quarter. No joke.
I could have bought a Tesla Cybertruck in the time I did that. Oh, that’s an interesting way to think about it. Literally. I could go on the app right now and order a Cybertruck. It’s crazy. They also would have taken your deposit, but you would have gotten a truck, and I promise they would not forget to give it to you. No, for sure. They want to give those. They want to get those things in driveways. That’s right.
Well, thanks everybody. We’ll see you next time on Service Drive Revolution.
Thanks so much for watching this episode of Service Drive Revolution. We’re uploading new stuff every day, so make sure you subscribe and click the bell icon so you don’t miss out. If you have a question you’d like us to answer on the show, call 8333 ask SDR, and we’ll answer your question on the show. That’s 8333 ASK SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com. That’s offers.chriscollinsinc.com. I’m Chris Collins, and I’ll see you in the next video.
đź”— Related Resources:
- Are You Ruining Your New Service Advisors?
- Top Fixed Ops Performers: What Car Dealership Service Managers and Advisors Do Differently
- Boosting Service Drive Revenue: Proven Strategies for Service Advisors and Managers
- The 9 Reasons Why Service Managers Fail (And How to Avoid Them)
- The SERVICE ADVISOR Benchmark Breakdown: What Top Performers Are Doing
Feel free to explore the linked articles above for deeper insights into each strategy. If you have any further questions or need additional resources, don’t hesitate to ask!
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