By Bob Cooper
If you are looking to drive up your profits, you need to ensure you have service advisors that have the right attitude, aptitude and ethics. They will need to have the natural talent to sell, they will need to be well trained, and they will need to have the proper support systems in place. And lastly, you will need to have the right compensation and incentive plan in place to help your advisors excel. Here are some tips you can use to drive up your sales, profits and customer satisfaction scores, all at the same time.
1. In drafting any pay program, the first question you should always ask yourself is what are you looking to accomplish? With service advisors, you should be looking for them to generate three things: sales, gross profits and happy customers. This is why at Elite we encourage our coaching clients to implement pay programs that only reward their advisors when all three objectives are met. For example, the advisor can earn a graduated commission on sales, but in order to be eligible for the added income, they will need to meet minimum requirements for gross profit and customer satisfaction scores. With a program like this in place, with each sale the advisor will work toward ensuring that it is profitable, and that the customer is pleased. Compensation programs for advisors that only address sales without considering gross profit and CSI requirements are set up to fail because the shop typically encounters much higher expenses, and lower CSI scores. Remember, the behavior we get is the behavior we reward.
2. If you have more than one advisor at your shop, you have a number of options for how you can compensate them. Many shop owners will put each advisor on their own commission program, but unfortunately, this leads to an unhealthy type of competitiveness, and there is no incentive in place for them to help one another. This is why we recommend a shared commission whenever there are multiple advisors, especially when they have to cover for one another. If you have a more experienced and more productive advisor working with a less experienced and less productive advisor, you can easily adjust by either giving the more productive advisor a larger percentage of the shared commission, or you can provide them with a base pay that is supplemented by the sales commissions they will earn. These pooled commissions incentivize the teamwork you need to grow a successful auto repair shop.
3. One of my best-kept secrets is implementing daily car count goals and daily sales goals. If your monthly sales goal breaks down into a daily goal of $4,000, and if your ARO is $400, you would need to bring in 10 cars a day. When your advisors come to work in the morning they can write the amount of $4,000 on a note pad, and next to that dollar amount they can write the number 10. As soon as they write up the first repair order that day they would strike a line though the 10, and write “9” (the new, revised goal) underneath. As soon as they sold the first job that day they would strike a line through the $4,000, and write the new revised sales goal underneath. If you apply this procedure to your company you will be amazed at how it will help keep your advisors focused on the vehicles they need to generate the sales, and the sales they need to reach their goals.
When I first applied this procedure to the shops I owned, our sales went straight up. If you don’t have clearly defined car count and sales goals in place, your advisor may go home tired, and they may say they were busy, but there is no way they can say they were “successful” when the definition of daily success has not been established. On the other hand, if you have these goals in place, then you can reward your advisors at the end of the day by congratulating them on reaching the goals, and letting them know how much you appreciate them being a part of your company. That in itself is a reward they all need, and one that money just can’t buy. It’s called recognition, and you have my promise - it’s a reward that every superstar needs.
Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses.
By Bob Cooper