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Service Advisor Pay Plan Examples: Driving Performance and Simplicity

In the fast-paced world of automotive service, effective pay plans for Service Advisors are crucial to drive performance and deliver exceptional customer experiences. In this edition, we’ll continue our journey by exploring real-life Service Advisor pay plan examples that prioritize simplicity and motivate advisors to excel.

I’m going to share an “incredible” experience I had with jet skis. I decided to buy two jet skis and take them to the lake near my mom’s house. Now, the dealer was about an hour away, so it was quite a haul to get them there.

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My stepdad and I went to pick up the jet skis, and we brought them back to the lake. Missy, my fiancé, and my mom were already there, and I was determined to get Missy excited about this new adventure. You see, Missy had never been on a jet ski before. She’s a native to LA, and boating isn’t exactly a common pastime there.

I tried to explain to Missy that jet skis are magical. They don’t require any special skills—just sitting down and using your thumb. She was hesitant, unsure about the whole experience.

So, to ease her nerves, I decided to walk her through it step by step. Now, part of the delivery process was breaking in the engines. We had to burn a tank of gas on eco mode, then another tank on normal mode before we could really open them up.

These jet skis had a top speed of 70 miles per hour, which was way too fast for our peaceful lake. But I assured Missy that we could start slow and work our way up. As we were getting ready, I realized we didn’t have the wristbands or clips to attach the little fob that shuts off the jet ski if you fall off. A minor oversight, but it added to the excitement and made things feel more spontaneous.

We launched the jet skis into the lake, and Missy was on her jet ski, all alone, floating out there. She started the engine, but something wasn’t right. It wouldn’t go into neutral, and she was getting flustered. I was worried and thinking I might have to swim out to help her.

Eventually, I made my way to her on my jet ski, but the problem persisted. The light indicating a malfunction was on, and we couldn’t figure out what was wrong. It was frustrating, to say the least. I had just bought these jet skis, and now they were giving us trouble.

When I reached out to the dealership for assistance, they didn’t show much urgency. The next available appointment was months away, and that didn’t sit well with me.  I mean, come on, where’s your sense of urgency?! 

This got me thinking about poor performance – or any behavior for that matter – being driven by service pay plans. So let’s dive into that. 

The Complexity Conundrum: Unraveling Pay Plans

Working at a dealership with complex Service Advisor pay plans can be a real headache. Many Managers struggle to attract talented Advisors or find that their pay plans fail to drive performance effectively. But pay plans do play a role in shaping behavior and outcomes.

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The Power of Simplicity: Keep It One Page

Let’s face it—pay plans that require a degree in quantum mathematics are more likely to confuse than motivate. If a pay plan can’t fit on one page, it’s time to simplify. By keeping the structure concise and easy to understand, you empower Advisors to focus on what truly matters: serving customers and driving sales.

Sales-Based Compensation: Fueling Motivation

At the heart of any successful Service Advisor pay plan lies a focus on sales. Paying Advisors based on sales performance has long been a proven strategy for encouraging proactive customer engagement. Deducting discounts from sales figures ensures accurate measurement and fair compensation.

Inclusive Compensation: Embrace the Whole Picture

To foster a comprehensive approach to service, your pay plan should encompass all aspects of the business. Customer pay, warranty, internal jobs, parts, and labor—everything counts. Avoid the pitfall of excluding parts or warranty sales from compensation. Incentivize and reward advisors for their efforts across the board.

Unlocking Potential: Effective Labor Rate Bonuses

Effective Labor Rate (ELR) is a crucial metric in the service department. Recognizing the importance of maximizing revenue per hour, consider incorporating an ELR bonus into your pay plan. By rewarding advisors for achieving high ELR scores, you motivate them to optimize efficiency and drive profitability.

The Quick Lube Paradox: Spreading the Load

Dedicated quick lube advisor pay plans may seem tempting, but they rarely make financial sense. Instead, distribute the workload and create a fair compensation structure by paying everyone a percentage. This ensures consistency in the customer experience while providing equitable rewards for all Advisors.

Regular Review and Adjustment: Keep Up with the Times

In the ever-evolving automotive industry, regular pay plan reviews and adjustments are essential. Market conditions and manufacturer requirements change, and your pay plan must stay aligned with your dealership’s goals. Periodically reassess the structure and bonuses, making necessary tweaks to ensure continued effectiveness.

Simplicity is the key to unlocking the potential of your Service Advisor pay plans. Keep them concise, easy to understand, and focused on sales. Embrace an all-inclusive compensation approach, rewarding advisors for their efforts in all areas of the business. Effective Labor Rate bonuses incentivize efficiency and profitability, while distributing workload ensures fairness. Regularly review and adjust your pay plan to stay ahead of industry changes. By prioritizing simplicity and motivation, you’ll pave the way for outstanding service experiences and a thriving service department.

And remember, as the automotive landscape continues to shift towards a more direct-to-consumer model, the role of Fixed Ops becomes increasingly vital. To excel in this new era, optimize your Fixed Ops strategies and pay plans. For further guidance, consider exploring “The Millionaire Service Manager” book—a valuable resource packed with insights and strategies to help you succeed in the changing automotive landscape.

Stay tuned for more valuable discussions and insights on Service Drive Revolutiooooooooon. Until next time, my friends!

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