Chris Collins and John discuss why managers often earn less than their top advisors. They explain how keeping high performers well-paid actually benefits retention, how restructuring pay in struggling departments can turn losses into profits, and why industry benchmarks like NADA often underestimate what top earners should make.
I don't know if, if this happened to you, but it happens frequently that you will become a manager and then you have a couple salespeople or a couple advisors making more than you.
Great.
Thank God they don't see it. They don't see it that way. They think they're entitled. You know, the idea is you're coming in now as a Manager, you got 12 people to make better, two of them or outperforming everybody else, but your pay is contingent on the group rising. Not comparing yourself to your top salesperson.
Right? Absolutely. I mean, and I tell you the truth, a great manager, if you ask me, once there are people to make more money than them. I mean, let's face it, the more money they make, the more money you make. And by the way, I also learned the more money they make, the less, the less they're likely to leave you. So radical. That works too, right? Now you get longevity, you get the development, the training, and it gets the stick. And now all of a sudden what happens is the dealership starts to grow and then everybody wins when that happens.
That's an interesting point too, because we run into this all the time where let's say we have a service department that's underperforming and let's say they're just losing a little bit of money, like they're losing five grand a month. And so, you know, when we come in, we're going to redo the pay plan. So we're going to do the advisor's pay plan and we redo the manager's pay plan. And so, you know, you, you look at this department that was losing money. Now the manager is going to hire eight technicians and all this stuff's going to happen and we're going to go from making five to making over 100 and parts is going to come along. So now we got a fixed ops operation that's making a couple hundred thousand a month and the manager is now making, let's say they're making 20,000 or something, what will happen is a lot of these horse traders, and I've never understood this, but a lot of these guys will go, well, service manager only makes 10 grand. Like if we pay them well and they're a part of the success, we're, we're much more apt to keep them. Now if they leave, they're going to take people with them because they know, you know, and so I've never understood that. You know, an advisor doesn't make more than 5,000.
It's so old school.
It's but it's still very prominent. We run into it all the time.
Well, I, you know, I'm sure you all, both you guys have had your pay cut before, right? I know I have. I work for a guy, cut my pay three times. And, and then when I finally got a phone call from another dealership that said, hey, come work for me and I'll double your income, the question was, well, why are you leaving? And I, to this day, I've never told them. I just let it. I just let it go, you know, and I, you know what? And Chris, if you do the right job putting a pay plan together in the beginning, setting it up properly, you should never have to cut anybody.
Yeah. And I think to the other point, John, is if you would have told them, what would they have probably blamed that on? They would have said, oh, well, all these public company or all these other dealers are ruining the market because they're paying too much. And they never would reflect on it being their decision making and their approach to it that caused, you know, you to take a better deal. They would still deflect and say, you know, well, everybody's ruining the market. We run into that with hiring technicians. There's just, there's certain people out there like, well, tech can't make more than 30 an hour. And you're like, we got text making 80 in some markets, like, I don't. The customer's paying for it, you're not paying for it.
And NADA does a guideline that helps guys like me understand what the right compensation should be for those sites, at least for our market. Right. And then on top of that, more importantly, they'll let you know, too. Yeah.
And also keep in mind those NADA guides are on low perform. You know, the average dealership performs at a very, you know, subpar level when you start performing, all of those things are guides, but they don't, they don't start to make sense anymore when you're really, you know, hitting, but hitting your full potential or trying to. I don't know that we ever do, but because it is. When you look at those averages, it's pretty, you know, the average service departments.
Yeah, average, Exactly. That's average. Yeah. It gives you a guideline and that's, you know, guideline is a guideline, but.
It also means that the average service department is losing money then. Right. If that's 50%, yeah, that's bad.
I don't want to risk money.
It's great. Well, this, this was fun, John. Anything else you want to you want to talk about or kind of leave us on?
No, I. You know what, guys? All I can say is, man, just keep doing what you're doing. Because, you know, I've read your books, and I. I think you're, you know, the only. One last thing, and I meant to say this a little bit earlier, is, correct me if I'm wrong, but you guys, you guys are motivated by helping other people. It sounds to me like the driving force behind what it is that you're doing, which ultimately, once you do get to the level that you're at, becomes more powerful than why you started to do what you do anyway. It becomes a driving force. And that's what. Again, that's what I saw. I can only tell you to keep doing what you're doing. I think it's super cool, super awesome. And if I can ever do anything to help you guys to do anything at all, hey, you know, I'm gonna keep watching, listening, and, you know, I'm always available.
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 at Ask SDR. For special deals on our books and training, head over to Offers. Do Chris Collins inc dot com. Now that's Offers Chris Collins inc dot com. I'm Chris Collins, and I'll see you in the next video.
