How to Design a Winning Service Advisor Pay Plan | SDR #250

Today we're going to talk about what's the best service advisor pay plan. There's a lot of ways to go when it comes to paying service advisors. What are, what are we seeing that works? What's our experience? What do we, what do we know?

We know a thing.

Yeah. What? Yeah, we're going to tell you a thing. We got some things to say. I'm also going to tell you about a incredible, incredible experience I had with jet skis.

Yeah.

It's the only way to describe that incredible experience. Coming up on this edition of Service Drive Revolution.

I bought two jet skis.

Yep.

Now granted, the dealer is like an hour away from my parents house.

It's a hall.

It's a hall. So my stepdad and I go and we get him, we take them back to the lake. Right. And now Missy.

And my mom are there and I'm trying to get Missy excited about these jet skis. By the way, has she ever been in one before? Never.

This is fun.

So do you know a lot of people that live in LA that have been on boats? Like the most I think she's done is fishing on a rowboat.

Really?

She would fish when she was younger, but.

Okay. So I guess I never really put two and two together. But you're right.

Like people here, they're not boaters. No, not in la.

Yeah.

And she's a native to LA right now. She has a taco guy.

Which you could make a case that's much more valuable.

I don't know. My memories of water skiing on the lake when I was younger are pretty valuable.

Me too.

But yeah, they're not tacos. So I'm trying to get her excited about this whole thing. Right.

I think jet skis are a magical.

Way to do it, but it's also intimidating. She was intimidated.

And. And you're gonna fall off once.

No. Out these jet skis.

Okay. Have fun.

Jet skis aren't. They're not like that anymore. Like where that you need, you need zero, zero skill. Except for sitting down and having a thumb.

Yeah, maybe I'm. I'm probably a little more aggressive than you are on the jet ski then.

Okay. So part of the delivery was.

You got to burn a tank of gas.

On eco mode because these engines need to break in. Yep.

Okay, got it.

And then burn a second tank of gas on like normal mode. And then by the third tank of gas you can open them up. And these jet skis, I think the top speed without Chipping them is 70 miles an hour.

That's fast.

Way too fast.

Yes.

45 miles an hour on that lake is too fast. So.

So she's never done any of this. Right. And.

I'm trying to walk her through it and make her feel okay. So a Jet Ski has the little. The little fob that you put on, and then it's attached to you.

Yeah, A little clip that goes on.

Usually they give you wristbands, but we didn't for some reason. Oh, yeah, with the Velcro, we didn't get wristbands. I don't know.

Or leg bands.

None of that. So I just. We're gonna hook it to our. Our life jacket. And the idea is if you fall off the Jet Ski, it kills the Jet Ski. Maybe the Jet Ski turns around and comes back to you. I'm not sure how that works.

Pretty quickly.

Some of them used to do that.

So I. We're backing the Jet Skis from the truck at the boat launch into the lake. You follow me?

Yep.

So she's sitting on her Jet Ski first, and I'm walking her through what is about to happen. Okay. These Jet Skis have never. According to the dealership, they take them to a lake and run them. But I don't think that ever happened. And I'll tell you why I don't think that ever happened. I think that's just an excuse for them to delay the delivery because they don't have text.

Yeah, well, you can check the hour.

Counter because there is a shortage of texts.

Yes.

Believe it or not. So.

I undo the thing, you know, the little belt on the trailer, and I push the Jet Ski back. And so that I push her away from the shore and away from the dock, and I tell her how to start it. Wait, let me back up. One thing that I did to try to get her interested is the Jet Skis are similar, but they're different colors. So one was blue and white, and one was green and black.

Okay.

And to get her excited, I asked her which one she thought, you know, she liked would be hers. And which one do you think she picked? The blue and white or the green and black? Green and black, blue and white. And I think we. We were getting to the point where she's going to name it because, you know, we name our cars.

Yes.

It's a good move. What is. What is her car's name?

Clyde.

And what is my car's name?

Winston.

What is mine named after?

Winston Churchill.

Why?

Because you are a huge fan of the. Of the British Prime Minister. And also because it's a Land Rover.

It was.

It's a British car.

Yeah. And then why is her Tesla Clyde?

Because of Bonnie and Clyde.

Because her gun is Bonnie. And then. So she named her car, which is the same color. That's silver.

I did okay on this test.

You did great. So we're in the habit of naming things on what happens when you name something.

It's yours and it's your friend. Yeah.

You get attached.

Yes.

To it. Right. You start to think about, like a dog. Yeah. Maybe you could modify it or chip it or put a cute seat cover on it. I don't know what people do to jet skis.

I wouldn't chip it at 70. Oh, my gosh.

So she has picked this one. This is her favorite color combination. This is now her jet ski. She's going to break now for three or four days, however long we're going to be there. She's going to try to burn a tank of gas, which was really hard to do, actually. So I push her away. And she's all alone out there drifting in the lake. And she starts it. And I explained we had kind of played through, you know, on a sea do, the left one is like a reverse.

Oh, okay.

So you have two triggers. Left is a reverse. Right is like a throttle.

Oh, all right.

Now if you just tap the left one, it goes into neutral. So that's how you get it into neutral. So she starts the thing, and the thing just starts going. And the way that those jet skis troll, they're like trolling at five miles an hour. They're not slow.

Yeah.

And so she's trying to put it in neutral or whatever, and she can't get it in neutral. And I'm thinking, oh, boy, I'm gonna have to swim out there. I don't know what. She's kind of freaking out whole thing or whatever. And then the thing starts doing, like, weird, weird stuff. Like it just wouldn't, you know, and she said the IB. IBC light is on or IB. Something.

I wonder what that is.

Yeah, I looked it up. I googled it. It's a thing on jet skis. It's a valve, I think, or something.

Okay.

And.

I get on mine and get out there and get to her or whatever. And it doesn't. Like, it's not. It's just not working. The thing isn't working and the lights.

On and it's maiden voyage.

PDI'd tested on a lake. So now my stepfather says, you know, our neighbor had a.

Ski do and it sucked a rope in and he had just bought it, and they came out and picked it up. And so I'm thinking, okay, I bought these today. Like, I bought them today. And so I reach out to the dealership, and guess what they told me.

Next appointment available September 19th.

Yeah, basically.

Yeah. That's great.

No sense of urgency.

So you wait.

And then.

Imagine what it's like working there.

Oh, I don't think they have a care in the world. What do you mean?

Oh, my gosh. I wouldn't be able to sleep.

Nobody cares. Nobody cares.

I've got a story. This is really, really good news. And I think that everyone listening is going to appreciate this.

Ford.

Ford trucks stolen from factory lots sold in Arizona.

And it's news, and it's created a giant mess for everyone involved.

Where was the factory?

Detroit.

Oh, that's a nice drive. Yeah.

Paper found a pipeline of Ford F150. So it's a pipeline. Ford F150 stolen from factory storage lots in Michigan, transported to Arizona, and stolen blank vehicle titles from Georgia. Because we've got to get Georgia in on this thing. Helping to cover the tracks. But the natural assumption is after some vehicles are stolen from a factory storage lot, the automaker would immediately report them as stolen. No, not Ford. But as we've highlighted before, Ford and other automakers seem to not have the best inventory controls. They make them, but they don't count them. Ford might not have even known which trucks were stolen. This is great. But the people that lose out are the people that bought the trucks. Right. So that's pretty crazy. But, yeah. So if you're paying attention to Arizona, you can. You can get a really cheap new truck. Don't ask questions.

You meet a guy at a gas station, he's like, hey, you want to buy a truck?

Got a 2023 F150.

What do you think signs a yellow note over to you?

Is the title in crayon?

I don't want to text you the title.

It's got two E's in title.

So we get this a lot about advisor pay plans. Oftentimes it comes up in reference to I can't hire good advisors.

Yes.

And they don't want to come work for me. Or a manager feels like their pay plan isn't working or it's not effective. It's not driving performance. I think we would all agree that pay plans to one degree or another. Drive behavior.

Yes.

Why the hesitation?

I was trying to think of they encourage bad behavior or what? But either it's driving it. Yeah. One way or Another.

And so that whenever this subject comes up and I asked to see the pay plan, usually the pay plan is so complicated.

Let me even back up. I'll say, what is the pay plan? So manager will talk about the pay plan. I'll say, what's your advisor pay plan? And then that goes something like, well.

There'S a say, well, you know, you're in for it.

And then they're like, it varies from here to there on this, but that. And, and then I'll go, so you don't even understand the pay plan. And like, well, you're like, okay, so the first thing that you have to understand is if you want a pay plan that drives behavior, it has to be simple.

I wrote down that you don't need a degree in quantum mathematics.

Well, you do, but not for the pay plan.

Yes.

That's funny.

Yeah.

No degree in quantum mathematics. And if it can't fit on one page.

That'S a great piece of advice.

If you can't fit it on one page, it's not a pain point. Then the next thing I would say is I have no idea how this happened or why it happened.

And there's a bunch of people out there that will fight for this like it's fighting for their.

Mother firstborn. Like seriously, that they pay the advisors on gross. Advisors don't understand gross or control gross. Really? Yeah.

Oh, that reminds me. What's the difference between in laws and outlaws? What outlaws are wanted?

It's pretty good.

I don't know. I. For a long time, people would come back from a 20 group meeting and then they would, they would be like, oh, we're going to pay our advisors on gross. But it does, it doesn't make sense. The advisors don't understand it. They can't figure it out. You can make whatever case you want. You're wrong. It doesn't matter. Pay them on sales. It's simple. What we want to do is we want to drive sales and we want to drive effective labor rate. I would say it's sales less discounts.

So I would deduct the discounts from the sales. But I would always them on sales.

No hours per hour, bonus hours, pero.

Or a measurement. We have that measurement in our advisor competition software. But it's one of five or six categories. So it's weighted down. It matters, but not. It doesn't matter enough that you would walk away from a tire rotation or an oil change.

Yeah. Okay, good.

The other thing to understand about service advisor pay plan is if you have a quick Lube and you have a separate quick lube advisor pay plan. Chances are that that pay plan is 40%. You're paying 40 to 50% of the gross. I've seen as high as 60%. So a quick lube advisor might produce 20,000 in gross and you got to.

Pay them seven or eight.

Yeah. To. To put up with it. So it never pencils to have dedicated quick lube advisors. We never set it up that way. It makes no sense to run the most people through your least talented, lowest paid advisors. It's better to spread them out and pay everybody.

You know, make the experience consistent. That's what I would say.

I would bonus on effective labor with most brands. There's a couple brands I might not, but I would have a. An ELR bonus. The sales part of their pay plan should be probably 50%. 25 to 30% of their pay should be a CSI customer satisfaction retention. Whatever manufacturer you're with will, you know, but 25 to 30% of it needs to be on customer satisfaction. And then the other 20%.

Would be a bonus, an ELR bonus and maybe a CP sales bonus. So we're paying them a percentage of their total sales, parts, labor, warranty, internal customer pay. That's the other thing. When they go, these guys, I don't know how they come up with this stuff or why, but they're like, oh, we don't pay the advisors on internal. We don't pay the advisers on parts or warranty.

I've heard that before too.

Yeah. What are you talking about? If they're riding an ro, they should get paid for it. And they're like, go trust me. And I'm like, I don't. First of all, I don't trust you because you said to trust me. It's like that person that says I never lie. It's like, yeah, everybody's lied. Give me a break. I don't trust you.

Whatsoever. Because you had to say that most. But no, it doesn't. It they walk away from it, they're not going to put the same energy. If we agree that the pay plans drive behavior, then you're driving the behavior away from warranty and internal. So somebody just bought a bought jet skis over the weekend and now the ICB flipping whatever lights on. And what happens when you call?

We don't care.

You can come in 2027. Good luck with your paperweight of a jet ski that you just bought and your brokenhearted girlfriend. Screw her too. We don't care because we don't get paid on internal.

That's how it goes.

Makes a lot of sense to me. Yeah.

So pay him on everything. Pay a lower percentage, but pay them on everything. Everything matters. Every customer is important. Even the customer that just bought jet skis.

You really hit everything fits on one page.

Christian. Fits a percentage of everything. Customer pay, warranty, internal parts and labor. That's one line.

3%.

It's not even a full sentence. This fits on a quarter of a piece of paper.

Yeah.

CSI bonus. Two sentences.

Yep. And then CP labor and ELR could take up a little more because there's usually a little grid.

So quarter of a page.

Right.

So you have all this room for your logo of your. Your ski doo dealership or whatever.

That's it. Simple. I like it. And it's a recruiting tool. When advisors come in and like, hey, bring your pay plan. And it's 45 pages. Like what do you get paid? And they're like, I don't know. Never makes sense. Like there. It's like a moving target. Whatever. That's a demotivator for advisors. The best advisors are constantly figuring out what they're tracking to make.

Yeah. So they have to know how to do that.

Makes easy.

Yep. I wrote down on my little thing. No if then statements was the thing I think that drives me the most. Nots the most.

It's like an SAT test.

Yes.

And then the trains going four miles an hour up a grade of 0.3 in the rain with the wind coming at it.

I'm lost. You lost me at train.

Pretty funny. And then the last thing I said is set it and then just regularly review it.

Like the bonuses.

Yeah. So don't change the pay plan structure, but definitely review what you're doing.

You shouldn't have to change it except for like if the manufacturer changes CSI or something. But it should be pretty set for long term.

I agree.

So that's my indifferent feelings on service advisor pay plans.

That was. Yeah, I like it.

What about. What about communism? What about the manager that says, hey Christian, my advisors, they just need to work together. And I feel like if we pooled their pay, then they would work together.

I would say that that's a terrible, terrible idea.

It's a great idea if you're not very good. It's a terrible idea if you're a high performer.

Well I, I was going to say. Yeah, I think that if we're. If the goal is to reward mediocrity or worse. Let's do that.

Yeah. Yeah. Let's take the, the, the high performer and cut his pay and guarantee that you'll never find share it with the guy that constantly is either on the phone or has to go to the bathroom when a customer drives in.

Right.

Give him a percentage of the the guy that works through lunch.

I say give that guy a bucket in an individual pay plan and everything will be fine.

Communism works. A lot of the big advancements in society have come from communism.

Right.

It's a highly productive environment.

You have a communism joke.

Trying to think.

Okay, while he thinks. We'll see you next time on Service Drive Revolution.

Thanks so much for watching this episode of Service Job Revolution. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333 Ask SDR. For special deals on our books and training, head over to offers.chris collins inc.com now that's offers.chriscollinsinc.com I'm Chris Collins, and I'll see you in the next video.