Best Practices: Service Department Pay Plans
Advice From an Industry Expert
We asked our friendSteve Nickelsenfrom Nickelsen Partners to weigh in on processesand service departmentpay plansthat driveservice activity. Here is what he had to say:
“My clients that are growing customer pay gross and repair order counts focus on different measurements than they did just five or ten years ago.This has been driven by the realization thatretaining the customer is the most significant contributor to long-term net profit increases. Here are four areas that are key to keeping hours and retention at ‘best practice’ levels:
- Insure that service advisors conduct a thorough walk-around inspection of EVERY vehicle.These need to be reviewed and tracked on a daily basis by someone in an administrative support position. The inspection sheet needs to be attached to the RO.
- Provide serviceadvisors with “word tracks” on selling each finding.To determine the need here, ask each advisor one at a time to sell you a rotation, an alignment check, a menu that is due, tires that are below 4/32nds, battery and any fluids that are beyond their anticipated life.
- Track the ASR’s (Additional Service Requests) by technician on average per repair order.
- Measure what percentage of these ASR’s are being sold by the advisors. To see that your retention is at ‘best practice’ level, you have to measure your current state. If your DMS provides this data, that’s great, but if not you need to have someone do it manually.One way to do this is to go back a year or so, and for one month have someone pull up each customer that bought in that month, then record what percentage of them have NOT returned for maintenance work. This will tell you your estimated percentage of defectors.Many have an associate contact customersand record the ‘reason’ they haven’t been back to see if there are any trends that can be corrected.You might hear things like, ‘the last one took too long’, ‘the waiting room isn’t comfortable’, or ‘the advisor didn’t listen or wasn’t friendly’. If you can, fix the process that is causing significant problems.”
Steve is the founder and CEO of Nickelsen Partners. He is a leading coach and consultant in North America for automotive and RV dealerships. He’s worked with over 600 dealers from Puerto Rico to Vancouver. A four-time NADA convention speaker, he’s been studying dealership best practices for over 30 years. He is an active consultant today, working with over 40 dealers and dealership groups both on-site and virtually. He has been featured inseveral articles, television shows and webinars to assist dealers and managers improve their profitability.
Ready for a Change?
Is it time to reevaluate your service department pay plans? Learn how CSI Incentive Pay Plansturn oil changes intoan opportunity, rather than a pay cut.
Wanna chat about best practices? Schedule time with me to discuss your current pay plansandcustomer retention strategy.
Customer Retention Exec.