How can a service advisor get in the fast lane, the passing lane, and really jump ahead in their career? Today we're going to talk about the top five career moves a service advisor can make!
We've been selling a lot of our OnDemand platform that comes with Service Manager University, the best service advisor training in the industry, along with technician training, pet the dog customer service training, and more stuff that we’re adding to it all the time.
What also comes when you buy it is a free strategy session with me once you’ve gone through Service Manager University. Two reasons why I do this: one is I want to make sure that you understand the progression and that you don’t have questions. Two is that I want to talk to you about our coaching group and tell you the other things that we offer. I’ve been doing a lot of those and when I was doing them yesterday, it came up two times that there’s a company out there charging dealerships to help maximize their warranty, labor, and parts gross. And I’ve heard about this before and I’m guessing that you have also because you’re in the field more than I am.
So why don’t we do that? Because here’s the thing: when we go into any service department, the effective labor rates go up and then it’s easy to do the parts part. So call us if anybody wants help maximizing their warranty gross profit in parts and service. We’ll do that just for being in our coaching group, and we’ll save you a lot of money!
This company out there is charging something like 5-10%, which doesn’t sound like a lot, but it’s that percentage of the increase for a set amount of time. The thing is, that warranty stuff is predicated on customer pay, and we add so much value to what we’re doing on the customer pay that it naturally lends itself to this huge warranty and labor increase. And so this company is chopping at the bit to come after us, but we can do all that without getting a percentage.
I was showing them the ROI, because a lot of times, the warranty rate increases by like $30-40 the first time after we go in. I wouldn’t want a company that’s incentivized to upsell or maximize warranty to their benefit and not the dealership’s benefit. Of course, we want to maximize it, but we don’t want that to be our objective.
So now we’re going to talk about the Top 5 Service Advisor Career Moves. How can you move into the fast lane as a service advisor?
The first one is commission. You want a performance-based pay plan.
That’s right. You get a report card every month. Your paycheck is your pass or fail. I think that if you’re going to be a top advisor, one thing you have to be able to do is assess yourself and how you’ve done honestly. And if you get a big paycheck at the end of the month, that means you’ve done great, and if it’s a crappy paycheck, then what does that mean? When it’s performance-based, you’re not using excuses of salary or anything like that. What you’re saying is that my results are dictated in my pay.
And that’s a thing that I’ll see consistently with most advisors is that they want performance-based pay. They want the reward. They want all the glory for the perfect job and they’ll take the lumps if they didn’t because they know they’ll learn from them.
Understand that the dealership and your manager look at you as a percentage of the performance, so if your performance is up or the department’s performance is up, your pay is going to be up but it’s relative to the increase. So you’re never really expendable because you’re producing what you’re getting paid, right? I mean, 8% or less usually would go to the advisors of the gross.
Quality, not quantity. It’s amazing when we’ll do this exercise with service advisors on how to maximize your pay plan that most advisors can make more money, have a better quality of life, collect more customers, make friends and collect more customers by writing less.
When you’ve got eight ROs a day with 11-hour days, you do the math. You can spend over an hour per person. You know that not every RO’s going to take an hour of your time so on the really, really challenging ones where the customers aren’t used to getting all the information, you’re going to over-communicate with them.
(And hey, if you have a little spare time, make some TikTok videos and send us the links.)
Sell cars for two months.
Christian’s advice is that he would want to do it fairly early in his advisor career, and the first thing to understand is that being a service advisor isn't’ a sales trap. Just selling cars lets you see, ‘Okay, so this is sales, right?’ You have to overcome five no’s to get somebody to buy a car from you, and you start to appreciate the relationship that you have to build on service in the long-term. It’s really important as a service advisor to see what customers look like when they’re in the ether and understand what their expectations are when they buy a car, along with what their service experience is going to look like.
I think, too, that one thing to appreciate is the salespeople that have to go get customers where they are coming in. It’s way harder to sell cars, just mentally, because most of the time your commission and variant paychecks are crazy.
Think like the owner of the dealership. Nothing will move you ahead quicker in your career than to think about the company and not yourself. Put the company first. Think about the customer’s perception of the company. Think about representing the company, and you’ll become invaluable for them. I think a lot of advisors, even the tone of some of the questions we get, is like me, me, me, me, me!
The big thing is that if you’re starting to think like the owner, you could eventually become the owner!
Avoid parts. You probably weren’t going to end up in parts anyways, but I’ve seen career paths that go to parts. Not a lot of parts managers become general managers.
I’m sure it’s happened, but it doesn’t happen a lot. If you want to move up and your goal is to be a dealer or general manager someday, you want to be somebody who’s more interested in sales than parts, right? Now, I would say if you’re a parts manager or your’e in parts, go write service and sell also. It’s very rare, though. In fact, Gary was one of the only parts managers I ever worked with that had worked in service, worked in sales, and understood the whole picture from a parts manager’s point of view. That’s why he sold so much in his boutique and he was so progressive with what he did was because his context wasn’t just parts, it was marketing and displaying things and he really pushed the envelope on that stuff.
So quick recap: #1. Performance-based commission. #2. Quality over quantity. #3. Go sell cars for a couple months. Learn the other side of it in the circle of life. #4. Think like an owner. #5. Avoid parts.
That was the Top 5 Service Advisor Career Moves. So now, I want to try something else because we get so many questions, it’s getting hard to navigate so we set up a hotline. If you want to ask a question, we would love it if you would call in and ask your question through voicemail and then we’ll play it on the show. Same thing as always, if your question makes it on the show, we’ll send you some Service Drive Revolution swag like a coffee mug, t-shirts, notebook, and we’ve got our own number at 1 (833)-ASKSDR which is (833) 327-5737 if you don’t want to spell it out.
“Hey there, Chris. Long time listener, first time caller. I just wanted to know, how did you become a general manager?”
The funny thing about the story is that I was never a service manager. People assume I was, but I went from being a service advisor to working for a consulting company as an advisor trainer, and then I became a consultant. And for most of my early 20s, I would go into service departments on commission and turn them around, and I would get a percentage of the new clients that I would create. I was going all over the country doing this, but most of my clients were in California. It was a lot of intensive work and I could only do a couple clients a year, but eventually I had a couple people working under me. My deal with the consulting company was that I had to get my own clients, but I would get a percentage out of it.
I knew the key to my success early on, even when I was a service advisor, and that mysterious thing was called the financial statement. I remember it would be sitting on the dealer’s desk in the service manager’s office. Sometimes, if I was in there, I would kind of look at it and try to understand it because I knew that the key to understanding how to make a dealership go was the financial statement. SO when I went to work for the consulting company, I actually traded advisor training for them to train me on the financial.
So I would get $1,500 for a couple days of advisory training in the service drive; sometimes it was $2,000 for a week. Trust me, I needed the money, but I would tell them, “Hey, I’ll go do this advisor training for free if you’ll train me on financials,” so they took it seriously and they trained me on the whole financial, every department! What would happen is as I would go into a dealership and fix the service department, I’d become friends with the dealers because I was kind of the only person they could talk to, right?
That happens to us, especially when you start to get them results and you take an asset. Let’s say they have a department that’s making zero, and you take them. Now, they’re making $3-4 million a year. It’s life-changing money, even for a dealer! Then, they invite you over, you meet their spouse, you become friends. Then, they’d see you as an expert on the financial statement, and then they’ll say, “Hey, I’m thinking about this dealership. Would you look at it and tell me what you can do with it?”
Still to this day, I get excited when somebody hands me a financial, because the financial is a story. You can tell what’s going on in a business with the financial. I can look at all of it and tell if the culture is broken. I can tell if the leaders are good or not. I can tell if they have systems in place.
One of my clients that I had done a pretty good job for and would hang out with was thinking about buying a Saab dealership. Imagine if that would have happened, right? So I did a projection on the front. I built this Excel spreadsheet and I project car sales, F&I, used service parts, the whole thing, and I would say, “This is what I think we could do with the backend.” and I knew it would give him kind of an analysis of the financial statement and what I would look for.
And I knew because my goal was always to be a dealer, that I had to do one of two things: be a general manager or go to the dealer academy. Now, I didn’t work for a dealership so I needed somebody to sponsor me to go to the mysterious NADA academy.
I had this client that I really liked and we became friends. One day, he hired his friend whose dad had just sold his dealer group, and I remember the first time I met that guy. I was there doing my visit in the service department, and the guy came back and said, “There’s some customers out that need help. Why don’t you go out there and help them?”
And I go, “Oh, I’m the consultant. I’m not the service advisor.”
“I don’t care. This customer’s not getting help. You go help him.”
The guy was really short so it was probably a little Napoleon Complex, but I said, “Okay.”
I just didn’t get along with that guy so I went to my client and I told him, “Hey, you need to tell that guy to be nice, or you could run with him for a while and I’ll be back when it doesn’t work out.”
It didn’t work out… After that, the client said, “Hey, I know you want me to sponsor you going to the dealer academy. Well, instead of going to the dealer academy right now, why don’t you come run my stores as the general manager, and then you can go to the dealer academy?
Well, it ends up that if I was running stores and I was the operator of record, I no longer needed the dealer academy, so that’s what I did. I went from service advisor to service advisor trainer to kind of a turnaround specialist to general manager. That was my career path, and then I bought my own dealerships. Eventually, those went away during the downturn of 2009.
To take it back a little, I first started thinking about wanting to own a dealership when I was a lot attendant. I remember looking at the dealership in Seattle, it was Volkswagen, Audi, Subaru, and I just remember asking the general manager, “What does it cost to buy this? $7 million?”
And he’s like, “Yeah, probably 7 or 8 million.”
Then I thought, ‘I could find 7 or 8 million…’ I always thought that way.
Part of our motto is the way that our ROs look are in direct correlation with our results. It’s funny but fixing gyms, doctor’s offices, restaurants, any sort of business to me always goes back to the repair orders. I’m always looking for where the repair orders are first thing because I wanted to know what was going on with the service department. I could tell by inspecting them; I could look at the history and see if they were recommending work. I could tell the quality and the culture by the phone numbers being there.
You can tell a lot, so when I went to run the dealership, my goal was to be #1 in the country in new car sales. That was a common goal, and that goal was probably why I was brought in to some degree. I didn’t have a lot of experience. I’d set up a couple internet departments for sales, but that’s all the experience I had in sales besides selling cars when I was an advisor. But if you have a system, that system would probably apply in any situation. When Christian was a sales manager, he brought over things in his system from being a sales manager over to service.
The big thing is that the system is the star of the show, and people hate to hear that! They feel, “Oh, the people are the most important,” but it’s really system first, people second. It’s all about the system. If you have a system, you can do anything.
“Hello, Chris. Hope all is well. I’m currently active in the military and I’ve received a great job offer to be a service advisor for a large RV and camper company when I leave the army in less than a year. The company’s allowing me to shadow a current advisor in my off time to learn the ins and outs of the game. I’d love some advice on how to make the most of this opportunity. What are some things I should learn or look for? Thanks in advance.”
Yeah so the first thing is don’t kill your customers, but I’m sure you’ve got that part down already. I think at the heart of everything that you want to understand as a service advisor is that your income and your future all come from the idea of staying in one place and collecting customers. I know there’s people out there that’ll tell you this but service advisors are also sales people; selling in service is the easiest part. Your role is to create key throwers that you have built a relationship with, that trust you, that you’ve always done right by, and you’ve always stepped up when they’re in an awkward situation or running late or broke down or whatever, you’ve always had a solution for them and taking care of them.
So just collect customers, make friends, and understand that the vehicle’s a commodity, and what you bring to the table is your relationship with the customers, not your understanding of the vehicle. You’ll gain the understanding of the vehicle, but product knowledge is not as important as your ability to build rapport and being genuinely interested in people. I think one of the reasons why I did so good as a service advisor is I was just curious about people. People fascinate me. I could meet a stranger and ask him 10 questions and be fascinated.
Read books like How to Win Friends and Influence People. Maybe get on our on-demand platform and learn our pet the dog system and how to build rapport. That’s the most important part. The other stuff like the product knowledge comes easy.
“Hi, Chris. I’m a 20 year old in a small town and I’m wondering, how should I negotiate a pay plan with my local dealer? I was thinking of starting off between hourly and commission, then going to full commission down the line. So I’m more motivated to work hard. I’m ready to jump in and be the best advisor I can be. What kind of mentality should I have in a dealership where some of the advisors and techs are 20 to 30 years older than me? It’s a small town of about 10,000. We’re an hour outside of Kansas City and the dealer sells Chevy and Buicks. Thanks.”
Well, the first thing I would say is if I’m the 20 year old and everybody’s 20 to 30 years older, I’d embrace the speed advantage that you have. Trust me. They’ll take a long lunch, so take lunch at a different time than they do and get there earlier. They’ll be too lazy to write the night jobs. I used to go in on Sundays and write the night jobs.
If I was going to be a service advisor, I would want the pay plan with the highest commission I could get and less of a base. Now, if you’ve written service before or you’re really unsure, you might want to negotiate the base, but I want the commission. And there’s a difference. Some service departments are going to pay you on sales, some are going to pay on gross, and you kind of need to understand that. But at the end of the day, most service departments in a dealership want their service advisor compensation to be under 8% of the gross. So you can kind of have that as a rule of thumb, but I wouldn’t be afraid to ask for the numbers.
When I’m interviewing an advisor and they’re like, “Hey, can I see the numbers?” I always give it to them because I would never interview an advisor without their numbers. So that’s probably the best way to do it, where they’re looking at our numbers and the pay plan.