We do not have to motivate service advisors and technicians to go that extra mile. They do that all on their own. But when developing a monetary incentive plan here at Hanover Chrysler, we think we have come up with a workable solution that has benefited the dealership way beyond our expectations.
In the past year-and-a-half, customer service sales have increased over 40 per cent.
Fortunate to have a team of highly trained, long-term employed technicians and experienced service advisors who genuinely care about their customers, we have developed a bonus incentive plan that motivates, encourages and creates a competitive environment.
Employees are challenged to look beyond the everyday lube, oil and filter job and search for additional work. Service managers, fixed-ops managers and dealers alike are scratching their heads and asking the question “How did you do that?”
Well, all it takes is an idea, a little bit of daily paperwork and a pretty smart service manager who knows how to motivate and implement.
Hours-sold-per-day are calculated and posted daily for all techs to view. It is important to note that this posting should be done at the same time every day. It becomes self-motivating and a friendly competition amongst all service staff and sets the tone for the day.
Monthly shop targets for hours sold are set. Each day, technicians can see where the shop is in relation to the monthly target and also where they are personally in relation to the hours sold.
We also include our apprentice and lube technician in the equation. Every one of them has the opportunity to share in the monthly pot.
At the end of the month, each service tech gets a share based on their contribution to the hours sold. If a technician has sold 50 per cent of the hours for the month, they get 50 per cent of the pot.
Here is an opportunity for the technicians to see the big picture. They know every day how many hours they have to sell in order to reach the monthly target and how much of the bonus they have earned so far.
Each member of the service team is working towards the goal and if someone is not contributing their share, they hear about it.
Based on a tiered system, if x number of hours are reached, the bonus is $x. The higher the hours, the more the bonus.
Morale is high in the shop and the culture has changed dramatically. Technicians are working together for a common goal. Vehicles are being serviced better than ever and maintenance issues are being prevented before they become a bad problem for our customers.
Service advisors are taking more time talking to the customer regarding the work that needs to be done and assigning to the correct technician before the customer even comes in the door for the appointment. Technicians do not need to be encouraged to check for additional work, they are doing that all on their own.
Service advisors are bonused on department gross sales as well as individual targets of effective labor rate and hours per RO sold. This ensures that the right technician is being assigned the right job and eliminates very little comebacks.
Technician sold hours per day have almost doubled in two years time.
We have three licensed technicians, one apprentice and one lube technician. We have two advisors.
We are open 8 a.m. to 5 p.m. Monday to Friday and 8 a.m. to 12 p.m. on Saturday. That amounts to eight and a half hours per day per tech plus four hours on Saturday times two – a licensed mechanic and an apprentice.
We have seven service bays.
You must be committed to any new incentive plan or process change for a minimum of three months. It has to be transparent to the employees with easy-to-read and easy-to-understand reporting.
It has always been our firm belief that a team-based work environment is the best way in which to function as a dealership. I also believe that if you provide the opportunity, it motivates employees to work hard, try harder and take ownership of their own professional success.
When staffers realize how they can benefit by accepting a new process, their ability to adapt is much easier and successful. The final outcome is that customers, dealership and staff all benefit.
Tom Brown is our service manager. Tom has been in automotive for over 20 years and it is this experience that he is using to drive his department’s success.
He may be contacted at firstname.lastname@example.org. Tom would be happy to answer any questions you may have and provide further information regarding tier systems and target goals.
Paula Domm is the controller at Hanover Chrysler, Hanover, Ont., and the president of the Secretary Treasurer’s Association of Ontario. The STA is always looking to increase its membership. Please contact her at email@example.com for information regarding this article or for more information on the STA.