NADA insight: bonus pay plans and 19 other ideas to improve dealer performance

A pyramid bonus play plan and spending time with your technicians are two of 20 ideas collated by Butch Hollister, NADA 20 group consultant, that some of the most successful dealerships in the USA have implemented.

Hollister (pictured) emphasised that all are small ideas that “will incrementally help improve performance” and have worked in practice.

A number of the ideas focused on soft skills. Here is a summary of the more pertinent points.

 

• Get involved – It takes constant attention to all the little things

that make a dealership a success. Walk in a different door every

day, manage your people by spending time on the floor and take

a genuine interest in your employees.

 

• Expense cuts/savings – On a monthly basis ask your managers

to list the top five expenses they have cut and the total amount

saved. The department with the most savings then earns an

additional bonus.

 

• Job swap – Switch manager positions for three to five days, the

accounts department could also be included in this.

 

• Technician Tuesday – Have a monthly lunch with all fixed

operations staff. Review rewards and award achievements. At the

same time set new goals for both management and technicians.

 

• 3.30pm time out – Have a 15 minute break to draw breath and

really consider the workload and technician time for the following

day.

 

• Celebrate your staff – Make them feel special and take a

personal interest in them. A happy workforce will help drive

profitability.

 

• Sales board in the service department – Start tracking daily

sales of items, break this down by advisor. The more this was

tracked the more the dealer sold.

 

* Special offers – Consider offering a cheap deal for something

like an oil change or headlight restoration system. Offer this at a

heavily discounted price. This will be good for getting “lost souls”

back in the dealership and allow you an opportunity to up sell

and book in a service etc.

 

• Increase hours per repair order with maintenance sales – At

the beginning of every month put up a bonus for each service

advisor if they sell from a list that you have prepared.

 

• Additional sales guaranteed – Put a simple sign on the

showroom door giving a salesman’s name, phone number and

e mail address with a message that they are always available to

answer a question about the new and used vehicle stock.

 

Hollister also revealed a pyramid method of bonus pay plans, tried and tested by many dealer groups in the US.

“You set a base level for a metric, for example GPU per vehicle.

“Whoever sells the highest grossing vehicle in the month is placed at the top of the pyramid, second highest in second level etc.

“You agree the bonus due at each level, but only pay out if all sections are filled up.

“Through this method you will ensure everyone works together to fill the triangle and secondly, as you have set the levels of bonus, you will know the monthly cost to the business.

“This triangle format could be used in any department ie. most hours sold, most hours per RO etc.”

KEY LEARNING POINTS

• Ensure the tone and the culture of the business are set from

the top

• Spend time with the technicians

• Product knowledge is everything

• Set goals, monitor and celebrate achievements.

> BDO attended the latest National Automobile Dealers' Association in the US and brought back insight on a number of topics, including the above.