Two questions service managers often ask are:
How many daily repair orders should my advisors be writing up so that they're at a manageable level?
What's the most effective pay plan for service writers?
The answer to the first is as varied as there are personalities in the shop. To answer it, one must know the aspects of a particular service department.
Does your shop have a quick lube? If yes, are dealership advisors booking quick lubes or is there a quick lube service area with its own service writers?
Are the advisors booking telephone appointments or is there an appointment coordinator? Are they dispatching their own work?
Variables aside, how many repair orders can be managed on a daily basis. DaimlerChrysler tells service managers 18 is a good manageable number.
Yet, realistically, the number could be double that, depending on the time of the year and how short staffed a dealership might be.
One thing is for sure: gross overall labor sales can be about the same volume in February (notorious for being slow in many areas) as in June or July (usually a busy time of year).
Why's that? The reason for this is simple. In February, the writers and the technicians have more time to spend with customers and their vehicles, so they take more time to upsell maintenance work where it's necessary.
The next big question I'm frequently asked is, “What's the best pay plan available for advisors?”
There are again many variables. But first and foremost, promoting team work should be the objective. This cannot occur when each advisor is commissioned individually and generally.
Take a morning rush-hour example. The advisors may be jumping over themselves to write up a service-needy vehicle behind a tow truck, while neglecting a first-time appointment customer who'll be filling out a customer satisfaction survey form!
I am not suggesting everyone should be paid equally. That's crazy and unfair. There should be a base for everyone on the team and bonuses for enterprising workers.
Most service-advisor pay plans depend on these variables:
- % of parts sold
- % of internal sold
- % of warranty labor sold
- % of extended warranty sold
- Increasing schedule based on hours-per-repair-order averaged at month's end.
One of the major responsibilities for the service manager is to keep expenses in check. That's why some managers pay their advisors by non-traditional criteria such as:
- Effective Labor Rates (How much discounting is occurring)
- Amount of unapplied time
- Write offs or service policy written off
Other service managers may pay their staffs on more long-range objectives such as:
- Customer satisfaction index (CSI) bonuses
- Bonuses for above regional and district performances
- Spiffs for non-traditional upsell services such as chemical flushes, tires, premium oil changes, windshield repairs and detailing services.
Pay plans can be based on a percentage of parts and labor. They can vary on whether the work is customer-paid or warranty-covered. There can be spiffs for high CSI.
There are a number of ways to pay advisors. A main objective should be to keep the compensation plan fair, essentially a combination of base pay and commission.
If advisors are not getting out of their comfort zones and working for the extra sales, then there's no sense in them being rewarded.
Consideration has to be given those who've stayed long enough to build up a clientele. Veterans' hours per repair order should be high because they have built up trust and a good customer base.
Another important consideration should be for newer customers to be appreciated. They may not represent large work orders now, but they could and should be later.
Customers should be comfortable and know that everyone in the back of the dealership is willing to help. A proper pay plan promotes that.
Dave Skrobot ([email protected]/1-888-681-7355) is vice president of fixed operations training for the Automotive Sales College.