The Best Way to Pay Service Advisors: Commission VS. Base + Commission

Another thing that we've asked Ms. Mia to do is to do like your little countdowns. I'm huge fan of. Of your stuff on TikTok and you just crack me up. So today we're going to talk about the difference between base class.

Base plus commission versus commission.

Yes.

And this is specifically for advisors.

Service advisors, whether you should pay them a base plus commission or straight commission.

Yeah.

So tell, tell us your thoughts on this.

You know, being in service for the past 10 years and working on both sides where I've worked dealership and I've worked independent and I've had both pay plans or pay setups or whatever you want to call it. Just for my personal experience when I worked at dealerships that were set on that full commission.

Pay plan, it just. And maybe it's not even the commission that's the problem, but it always created such a cutthroat attitude between everybody, which I obviously have a problem with. I don't think anybody really likes the cutthroat, you know.

So what percentage of the pay do you think should be commission versus base?

I'm trying to. Trying to remember how it was at my last shop, but I don't remember off the top of my head, so I couldn't tell you.

You're not really one to worry too much about the pay thing.

No, I do. It matters.

I can still tell you my pay plan from being an advisor 25 years ago.

Wow.

Because I used to just sit there and figure out every day what I was tracking to make.

Yeah. I mean, when I was working at the last dealership I worked at, I made. I want to say it was 1.8% off of gross. Off of gross. And then this is a completely other topic. All the male Advisors made 2.3.

Really?

Yep. And maybe that's why I also have a problem.

How many female advisors were there?

It was just me. I've only been the only. Ever been the only female in service.

I've got clients where they're only females.

I think.

I have never seen where the pay plan for a female advisor was less than a male ever.

That's usually how it was. Where. I mean, I'm from Colorado and I don't know if they're less progressive there. They could be, but I was. Yeah. I was always the only female and I usually made less. Or I was on a different pay plan. Even if I had more experience. It was so weird. And I know that.

Is Colorado less progressive?

No, I don't think so.

I feel means they are.

Well, I Think that all, all states have their goods and bads. Right? Like, we can probably find it.

What's, what's, what's good about North Dakota?

Everyone's really sweet there.

What's bad about it that if you.

Want to collect 100 people, you actually have to get everyone in the state to volunteer to come to the same place at the same time.

Have you been to, like, every state?

What's good about Alaska?

The northern lights. And also it's a great fishing industry.

I feel like you read that in Wikipedia or something. Have you been to Alaska?

No. So it's one of the few states I haven't been to.

What states haven't you been to?

Okay, so I've got Alaska, Wyoming.

You've never been to Wyoming?

Nope. Idaho.

Maine.

Oregon, and Washington. I'm almost done.

I'm sorry, what was the second to last one?

He said it wrong. Oregon.

Oregon.

What is it again?

Oregon.

So Oregon and Washington.

It's not origami.

That's great.

I've probably almost been to every state twice.

Wow.

I have a lot of catching up to do.

How many states have you been to?

Not enough. I could count on my hands how many I've been to.

Okay, so what do you. What do you think about her position on. So we need to table the whole idea of that females would get paid different than males, because that seems.

Seems crazy. So let's just talk about commission.

And base.

Yeah.

It is crazy if it happens. But like I said, I haven't witnessed that happen. So I don't think it's that commonplace. I think that's an isolated, weird, nutty thing that you experienced.

And it could also really quickly boil down to when I was a new advisor, I didn't quite have the backbone that I do now. And I don't think I had that authority or advocated for myself properly. So it probably could have been partially my fault of letting them walk all over me, you know? Cause I would never allow that to happen.

Now, I don't know. You're at a huge disadvantage if that's the pay plan because you also run the risk of, you know, getting terminated if you complain about that or whatever. So that's a weird situation to be in. But I'm just saying that is fairly isolated in that I've, most of the time, the female advisors in a drive when we're doing a pay plan are the top performers. And there was. You would never. It would never even cross your mind when we're changing a pay plan that you would pay a female Less. What you're trying to do is figure out how to make the pay plan so they're okay, you know, because the pay plan change is always hard too. Nobody likes it.

Yeah.

So you're always trying to navigate how to sell them on it. Not that there would be a different one from. I don't even know how. How you would come up with that idea that the male and female pay plans would be different.

And I just don't understand what the. Is it really worth it to save the, like, 0.5%? Like, I don't understand the logic would.

Be such a motivator.

Yeah, it's horrible.

Well, they, they would. In my experience, all of those employers told you that you're not allowed to know everybody else's pay.

Well, in my experience, that never happens.

Everyone finds out what everybody else pays.

It's almost like they leave. They leave whatever meeting and, you know, group text everybody.

Yeah, I'm pretty. They send pictures of their paper. So who.

Whoever that. Whoever that leader manager is, is extremely naive. And I. I have a gherkin cigar I'd like to sell them. Kind of warm.

It's from Trinidad and doesn't say Gurkha on it at all, but it's a Gurkha.

Okay. So what's your. What's your take before. Before I tell you mine, what's your take on the base plus commission versus commission? And I am wondering if you will have the same opinion. Hoping. I'm hoping to God, Christian, that you give the right answer here. That's really what I'm trying to say.

Oh, the right answer.

So don't mess this up.

I'll do my best.

What is your feeling if you're an advisor? Little base plus commission or pure commission?

My preference is to work off of pure commission.

I will see myself out.

I'm just gonna tell me why.

So my belief was always that if I was on pure commission, I could always beat any kind of salary that was out there. So I knew that the harder I worked, the better I took care of customers, the more I executed, making sure that the experience was phenomenal, that the sky was the limit in terms of what I could make. And I think that. And maybe that's the thing, is that the pay plan that. Or the advisor that's attracted to that pay plan is that person that wants to shoot for the sky and thinks that everything is their opportunity. Now, I would. I would challenge you. That. The whole no teammate thing, that's way more of a personality and hiring issue. I would only hire People in that were part of the team and saw and loved customers so much that they couldn't handle seeing another advisor not take care of a customer. So when there was a time for you to hop in and get it, you would. But my belief is that I think that if I'm an advisor, I want to create my own destiny.

Right.

But I would say one other thing to the getting along thing too. But back to the pay plan thing is, you know, we've in our lifetime created thousands of pay plans for service advisors. Probably. You know why we put a base in a pay plan?

Tell me.

To keep the advisors from making too much money. Okay, so if you just think about this for a second. If you, if you're writing service and you get 5%.

And you write $200,000 in parts and labor, what are you making?

I failed math, so 10 grand. Thank you.

Okay, let's say you have a base of three grand, but you're getting 2%. What are you making?

Seven. Seven.

Good job.

So it's a way for us to.

Control the upside for the advisors.

You're doing crazy numbers. 200,000 in parts and labor, which is really good for an advisor. You're up there, you're in the top 5% of advisors, but you're making 7 instead of 10.

And then your lower performer is not making that much less when it's a salary thing too. So I think that that's the hard part is you're rewarding your ass.

And also we put minimum requirements in that kind of COVID the bottom. So the minimum requirements protect us at the bottom. But we strategically would put a base in there to keep the advisors from making 12 or 15 grand.

That does make sense. And I actually, I never thought of it that way, but I think a lot of this boils down to the fact that our experiences are so vastly different, whether it's because of where we grew up or that kind of stuff. Because in my experience at the dealerships where I was full commission. I mean, I, I'm sure every advisor would say this, but I worked my butt off every single day and tried to get along with my team. And I'm sure you guys have all heard the TikTok stories of terrible teammates who stab you in the back and everything. When I worked at an independent shop that had a base plus commission.

We had a much smaller volume because we were a small independent. There was just two advisors. So me and my co worker and we were easily combined selling 150 to 200,000 on parts and sales. A month just between the two of us. And the base was small. Like, if you, if it was just the base, it was not nearly enough to live off of. And then our, you know, the commission was 0.5 off of. I don't remember what it was off of anyways, so. But we, like, kind of. It was a team effort where, like, I didn't just make the commission off of what I sold and vice versa. It was pooled. And I made so much more money that way and sold a lot more that way. And that shop hit like 2 million in sales for the first time in history because of that.

But I think a lot of that does boil down to how the team works together.

Okay, so let's talk about that for a second. So what is the purpose at the end of the day of a service department? Like what, what determines a good outcome?

Like at the end of the day.

Yeah. Or the end of the month, or the end of the year, the end of a lifetime. It's all the same. I wish I would have a Christian joke right there.

There's one in there somewhere waiting for it.

Yeah.

No.

Oh, okay.

But I mean, what drives profit? What drives growth? What drives progress in a park service department? I mean, really, you can say any business, but specifically, what, what. What's the important outcome of what we do?

Customers.

Yeah.

Satisfaction.

And so I've seen many times a toxic work environment that had a great customer experience. In fact, some of the number one dealerships that you'll see in this country that we've worked in or worked with that are iconic and huge. The behind the scenes is super, super toxic. Really, people are. You would call it stabbing in the back.

Yeah.

But the customer experience is incredible.

And so you have to understand that from a 10,000 foot view of profitability and caring about customers.

The two aren't connected. And this whole thing, you know, that happy employees equal happy customers.

Sometimes, sometimes it would be the ideal way, but it isn't always true. I mean, it's a little bit of a trick bag because if you spend too much time.

Well, I wouldn't even say that. The problem with that scenario is, is that a lot of managers are lazy and not good at recruiting. And so if you have this team of boobs or whatever you call them, what would be a better word? Numb nuts or something like, you have a team of numb nuts and then you're like, well, I want to make my team of numb nuts happy because then they will make the customers happy. It ends up at the end of the day. It's impossible to make numb nuts happy. They're never happy. In fact, all you do is make them more entitled.

Yeah.

So they get more entitled, the customer experience gets worse. And at the end of the day, you're like, well, I read this leadership book that said happy employees equal happy customers.

Love your numb nuts.

And it's like, well, the thing that they forgot to tell you.

In that book is that you need to recruit people that aren't entitled, that have an internal locus of control, that are performers. And the problem is most of those managers, their image of themselves isn't that they have super talented people working for them. Most of the time, leaders hire people that are like them. And so you got all these numb nuts sitting around going, happy employees. And sometimes you come in there and throw a bomb in the middle and. But does that make sense?

It does.

It's a complicated thing, but many times I've seen a toxic environment that produces an amazing result.

Yeah.

Thanks so much for watching this clip of Service Driving 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.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video. Sam.