Driving profitability in an auto repair shop requires a combination of skilled service advisors, robust training, and the right compensation structure. Service advisors are central to sales, gross profits, and customer satisfaction. To help them succeed—and your business thrive—you need a well-crafted pay program that aligns their efforts with these objectives. Here are actionable tips to design effective compensation programs that motivate advisors and benefit your shop.
- Align Pay Programs with Clear Objectives
Before creating any pay structure, ask yourself: What outcomes do I want to achieve? For service advisors, the answer is likely higher sales, improved gross profits, and satisfied customers. A successful pay program ties rewards to all three metrics.
For example, you might offer a graduated commission on sales but make it conditional on meeting minimum requirements for gross profit and customer satisfaction index (CSI) scores. This approach ensures advisors prioritize profitability and customer experience alongside sales.
Compensation programs that only incentivize sales often fail because they encourage advisors to focus solely on volume, potentially at the expense of profit margins or customer satisfaction. Remember, the behavior you reward is the behavior you’ll see.
- Foster Teamwork with Shared Commissions
If you have multiple advisors, compensation should promote collaboration rather than unhealthy competition. Many shop owners put each advisor on individual commission plans, which can discourage teamwork and create friction.
A shared commission structure is an effective alternative, especially when advisors need to cover for one another. If you have an experienced advisor working alongside a less experienced one, you can adjust their compensation by providing a higher percentage of the shared commission to the senior advisor or supplementing their income with a base pay.
Shared commissions not only encourage cooperation but also create an environment where advisors support one another, leading to stronger overall performance.
- Set Daily Goals to Keep Advisors Focused
Daily car count and sales goals are simple yet powerful tools to keep your team on track. Break down your monthly sales targets into manageable daily goals. For instance, if your monthly goal is $120,000, with an average repair order (ARO) of $400, your advisors would need to bring in ten vehicles daily to hit a $4,000 daily sales goal.
At the start of each day, advisors can write these goals down—both the target dollar amount and the number of vehicles needed. As cars are checked in and jobs are sold, they update the goals, creating a visual representation of progress.
This system keeps advisors focused on two critical metrics: the car count and the sales they need to succeed. When implemented in a shop, this simple strategy often leads to immediate increases in sales.
The Power of Recognition
Compensation isn’t just about money. Recognition plays a vital role in motivating high-performing advisors. With daily goals in place, you can celebrate their successes at the end of each day. Acknowledging their achievements fosters a sense of accomplishment and belonging rewards that money alone can’t provide.
By combining clear objectives, teamwork-focused compensation, and a culture of recognition, you’ll empower your service advisors to drive sales, grow profits, and enhance customer satisfaction.
