Commission only service advisors?

[ZFAN24]

Anyone here pay advisors with commission only? How is it scaled, and are they happy? Do you implement a "draw" similar to sales? Do you feel that it's made your service department more profitable?

Should I even be considering this?

[MGARNOLD]

I HAVE 8 SERVICE ADVISORS IN 3 STORES ALL ON 100% COMMISSION. SINCE WE MAKE TWICE THE PROFIT ON LABOR, WHY WOULD YOU PAY ADVISORS OFF OF PARTS? IF THEY SELL THE LABOR, YOU'LL GET THE PARTS SALES. MY FORD STORE HAS INCREASED FROM 1.8 HRS PER RO TO 3.2 HRS PER RO IN THE PAST 18 MONTHS. HERE'S THE FORMULA. (parts per ro are up $60.00 in the same time frame)
7% OF TOTAL LABOR SALES AS A BASE
THEY EARN UP TO 4% MORE AS FOLLOWS
.5% TO 1.0% FOR HRS PER RO 1.5 TO 3.0
.5% TO 1.0% FOR CSI 75--85--92+
.5% TO 1.0% FOR MAINTENANCE PENETRATION 50%TO 90%+
.5% TO 1.0% FOR DEALER RECOMMENDATION 70%-90%
THESE VARIABLES ARE CHANGED ACCORDING TO WHERE I WANT THEM TO FOCUS i.e....
E-MAIL COLLECTION %
TIRE, BRAKE, BATTERY, FILTER SALES PENETRATION
YOU GET THE PICTURE LOTS OF FLEXIBILITY WITH THE 4% THE 7% BASE REMAINS THE SAME.
I'LL SEND YOU A COPY IF YOU'LL E-MAIL ME.
HOPE THIS WORKS AS GOOD FOR YOU AS IT HAS FOR ME. GOOD LUCK!
I ALLOW THEM $600.00 DRAW EVERY 2 WEEKS

[This message has been edited by MGARNOLD (edited 06-05-2007).]

[ZFAN24]

Very helpful. Please send the e-mail to zfan24@hotmail.com if you get a chance.

Thanks!

Anyone else have any experience with this?

[robc]

I just wanted a few clarifications. Is it 8 advisors in 3 stores or 8 in each of the 3 stores?

I assume the 3.2 average is per CP - how is the gross percentage? Is that with or without LOFs?

So with normal 21 days month, 18 Ros a day, $85 FRH, if the advisors hit .75 bonus on each of the targets they are making $96,000 a year - and they only draw $300/week? Do you pay on warranty and internal labor?

If you average 3.2/RO why have the first bonus? If an advisor averages a 75 CSI they get a bonus? Isn't that a fairly weak score? How do you determine maintenance penetration - by customer pay type, unique labor operation? Who is a qualified number? If a customer was in three weeks ago for a LOF and is returning today for installation of an SOP warranty part, are both ROs counted as the percentage?

At 3.2 with normal parts distribution your average customer pay ticket is $385 - again unless you exclude LOFs.

[Mike Vogel]

The other thing to look at is what is the effective labor rate on your 3.2 hours. Any advisor can overflag his techs to hit the hours per ro number but will be sacrificing effective labor rate.
I do agree in not paying on parts.
A good pay plan I have seen is paying on hours sold plus base salary. ELR must be kept to whatever management sets to keep under control. This pay plan will have the techs and advisors looking at the same thing, hours sold instead of dollars.
A base salary is important today with all the hoops advisors have to jump through for CSI and the freebies we take care of to satisfy our customers.

[This message has been edited by Mike Vogel (edited 06-05-2007).]

[ZFAN24]

Good points Mike.
The "overflag" issue could be taken care of by simply reviewing the ROs before they go to the cashier I would think. In fact, I usually write the flag hours on the RO after the work has been approved, so in most cases I know what should be flagged once the work is done.

The problem I have is that the DP at our store is all about upselling, but there is very little incentive for our advisors to do so. I took a look at our ELR report from last month, and both advisors, had they been on the above plan would have made almost exactly the same thing they do each month. With some real incentive I think that they could really start selling, and I'd like to give them that opportunity.

Robc, this is just a guess, but I think the reasoning behind the first bonus is that because they were selling 1.8/RO initially they were given a goal of 3.0/RO, which once met would mean that they would be compensated for the additional sales. A reason to improve.

I have been at this store for about 9 months. In that 9 months, we've broken the monthly gross record three times, yet the advisors have recieved virtually nothing for a great job. When I say "break" I mean "shatter." I just don't feel that it's fair to the advisors, and I'm looking for a way to correct the issue that will please the bottom line, the advisors, and the DP.

Thanks for all the input, keep it coming.

[zekensted]

I worked as a service writer and was paid a commission on our individual total sales, parts and labor, based on our dealerships service CSI ranking. If the service department was ranked 1st, 2nd, or 3rd - we each were paid 6% of our individual total sales. If we were ranked 4th - 8th we were paid 5% of our individual total sales. And, if we ranked 9-16th we were paid 4% of our individual total sales.

Worked for us.

[MGARNOLD]

robc (Moderator)
In response to your inquires. I have a Quick Lane and we do very few oil changes in our Ford store. Our Quick Lane hrs per ro YTD are at 1.2, avg ro runs $160.00. When I started at this store, the CSI was at 46 so getting to 75 at the time was a vast improvement (were now in the 90s) thats the best part of this plan is the ability to change the advisors focus when I see the need to. I have 3 Ford advisors they do cars and trucks the lowest average CP ro runs $395.00 the best runs $540.00 YTD 2007. The maintenance penetration is tracked by my B-G Dist. based on labors ops for services and retail ro count. My ELR for the Ford store last month was $74.86 my door rate is $85.00 with grid pricing. We have had over 24 consecutive months of YTD growth in labor sales. Our other stores are not quite up to the Ford store level but very close. This has been an easy plan to hire experienced Advisors with.