I recently had some work done on my BMW, and a friend mentioned to me that the BMW Service Advisor (the person who calls you after the technician looks over your car and tells you what they found and what needs to be addressed) works on a commission basis.
I am wondering…
Is this true?
Is this a BMW-only thing, an industry-wide thing, or is the industry a mix of commissioned SA’s and salaried SA’s?
if anyone knows (or better yet, IS an SA), who makes more, the Salesperson, or the SA?
as a follow-up to 3), if known, what percentage of the sale would a salesperson make on a car vs the percentage on the sale of service work? If numbers are needed, say a salesperson sells a $30k car, and the SA gets someone to pay $1k for service work.
We are not a dealership, instead we are an auto repair shop that’s been around since the 1980’s. I know that our service writers (or advisers, if you like), are paid on a straight salary with no commission. In fact, I’ve never heard of a service writer receiving a commission, although it may be that some do. Frankly, it sounds like a recipe for problems, and I would never set foot in a shop where their service writers were paid on commission.
I’ll check in with some of our guys tomorrow and relate if they know of any similar situation.
My father was a service manager for a Chevrolet dealership more than 20 years ago. He managed the shop for close to 25 years. His service advisers were commissioned. A good service writer would more than equal his salary with commissions. As far as I know over selling was highly discouraged as they preffered a happy return clientele but it always remained a problem with some service advisers.
On a dealership level almost all service advisors are paid some type of commission.
I say some type because the total compensation package usually is comprised of various combinations of salary/draw/commission/bonus/CSI bonus.
I can’t answer for all dealerships but over the last 25 years customer satisfaction has become more and more important in compensation plans.
At one dealership where I was the service manager my compensation plan was 50% of my income was dependent on the store maintaining above national CSI.
As I have told every advisor I have ever employed “CSI is the price of admission”. Meaning I would terminate someone with chronically low CSI. (And yes I have). This tends to cut way down on overselling.
With my comp plan I would not tolerate it.
Comparing salesmen and service advisors pay is difficult at best.
Salesmen may have their pay plan juiced or modified every weekend as sales dictate. Also their commission is often based on the profit in the deal. Sell a car at near cost you don’t make as much as on with a couple of grand profit.
Service advisors on the other hand are paid (in general, pay plans vary) on gross sales less discounts.
On large exception to this type of pay plan is “Express lube” or “Quick Lane” advisors who only write oil changes are often salaried with a CSI bonus.
I hope this answers your questions
My second ex-husband was a service advisor at a Porsche/Audi dealership. He was paid salary plus commission, and there were monthly bonuses for the SAs who generated the most sales. They had a whiteboard in the rear office (not seen by the clientele) with the running totals for all sales positions, including SAs, posted throughout the month.
Whether they oversold or tried to scam people I don’t know but in general probably not - it was (and is) an established dealership with a smart clientele but as Daylate says, that model definitely has potential for abuse.
Where are you located? Because you might be worth the trip… Literally! i’ll be interested to hear back what you’ve learned.
Rick,
Thank you for the information. I have to say, I am a bit shocked by this comp plan, because it would seem to have the potential to be highly abused. Especially now, with cars being so complicated (at least we are all led to believe that.). My dad, who was a DIY mechanic by necessity (he literally had to fix everything himself because he could not afford to take it somewhere), now doesn’t even bother. He shrugs his shoulders when I ask him questions about cars, and his POV now is “I don’t have a clue what is going on in there anymore”. I know that is not entirely true, however I do understand that newer cars require specialized training and an educated staff to fix some of the more dicey issues. And he is old now… He can’t physically fix much anymore. But there are plenty of jobs that a decent DIY’er (like our Gatopescado! :)) could do with a free afternoon, the right tools and the right parts.
How negotiable are prices quoted to the customer by the SA? If they are on commission, and a customer was being indecisive on whether to give the go-ahead or not, can the SA take 10% (or something) off the job, or cut an hour or two of labor charges or whatever to make the sale?
I don’t know about that. The clientele isn’t as smart as they think, and I am sure the dealership knows that. If they were keeping totals on a white board, that would seem to me to put serious pressure on each SA to put up high numbers, or risk falling behind their fellow SA’s. Maybe the cars that come in need enough work that costs enough money that they don’t have to gouge or pad the work, but man, I can see that being a very tempting carrot to dangle in front of a SA.
The reason I brought this up was because of my recent issues… I have done some research on the particular jobs that were done, as well as the one that wasn’t. I can get into those if anyone’s interested, but the one job that wasn’t deemed necessary for immediate fixing was a small oil leak in a specific location.
While I was paying my bill, I heard no less that two SA’s (different than my SA) on the phone tell their customers that they had the exact same oil leak that I had. Coincidence? Sure, maybe. But it seemed like a bit of an epidemic considering I was in there for less than 5-7 minutes to pay my bill and get my paperwork.
Up until now, I had no idea these guys were paid a commission for the work they get the customer to approve.
Every pay plan has the potential to be abused by the employee. This is why hiring the correct person is so important.
Depends on the dealership and the situation. Rather than overselling a problem often seen in a poorly run establishment is the service advisors are giving away the store and selling the work at huge discounts. Even in a tightly controlled dealership there is some leeway with some prices. I say some prices because there are things that are already discounted and no I’m not going to drop my prices on that. On a straight repair here is a possibility depends on the repair, and the store, I never stopped my guys from discounting, but I did control it.
Never met a Porsche owner I see. They often know more about their car than the advisor. As far as the whiteboard goes losers don’t keep score. In a properly run dealership is is entirely possible to have high sales, no gouging, great CSI, and happy employees. If management doesn’t track this stuff how do they know if everyone is doing their job? Every morning I would prepare a report for each advisor showing sales, CSI for the month and three month and projected finish at the end of the month at the current rate. Once again there is the potential for abuse in ANY pay plan. Even Pops garage on the corner with just Pop working there can be dishonest.
if a car company builds a million identical cars it is not surprising that they many will develop the exact same failure in the exact same way. For example if you own a late model Volvo 6 cylinder with say 70,000 miles the vacuum pump is probably leaking. Or a mid 2000s Hyundai with one particular V-6 the front valve cover leaks and will drip onto the alternator and eventually take it out and leave you stranded. (This one happened so often it became a recall). Also don’t forget the advisors don’t make up what they recommend. They are going off what the technicians have reported after looking at the car.
Also one quick word about Internet car repair research. There are huge banks of total miss information out there. It is quite often very difficult for a lay person to know if a given piece of advice is correct or not. I know you won’t believe this but many times people on the Internet are wrong. So be careful. If a quality repair shop disagrees with your research don’t assume they are lying. They probably aren’t. Talk to them, ask questions.
I have been taking my car to the same dealership for service for 11 years. The service advisers used to look like guys and the occasional gal who might work in the shop (wore shop clothes, complete with sewn-on name badges, were mostly in their 40s and 50s). I never had any problems with them up-selling me with bullshit rationale.
About five years ago, I went in and it looked like they’d hired from a modeling agency. No one over 30, mostly women, dressed better than the management consultants I work with. In the last twenty-odd visits I’m rarely served by a male attendant.
And now the flirty up-selling is out of control. People who clearly have no idea what they are talking about feeding me crap about why I need to go beyond the factory recommendations on every service. I’ll come in for a “minor service” (oil, filter, tire rotation, check a bunch of things, $35) and she will write up a $95 ticket. Then I have to talk her out of it. I’ve started to get increasingly short with them. I suspected they have moved to a commission plan. And the shuttle driver confirmed this to me recently.
For an example of the questionable value of internet car repair searches may I present a recent thread here with that noted internet car expert The Second Stone. The fun begins at post #12
Over selling and doing your best to make sure the customers car is reliable can be easily confused. A good service adviser will advise customers of componets that should be changed at specific intervals, he will also advise them of the ramifications of driving with worn parts. Any car on the road should be theoretically ready to take off across the country on a moments notice in any kind of weather. Advising a customer to keep his car in this kind of condition is not overselling. I keep my own car in this kind of condition and would hope service advisers at least assist customers in maintaining this goal.
It’s hard to think of another pay plan in which the customer is likely to get fucked, though. I have a few friends who are service advisors and I’d never asked about their pay structures. However, if I had known that a commission basis was common in the industry I would probably have never taken my car to a main dealer for non-warranty service.
How does the hiring work? Up until a week ago, I assumed that most of the SA’s were former mechanics who were promoted into the SA role. That made the most sense to me, as I would figure they would have to know about the vehicles well enough to answer questions, but they no longer wanted to work on the cars themselves. I assumed (again, it would seem incorrectly) that a mechanic would have two basic career paths. Either continue to work on and service the cars, or become an SA (or I guess a car salesperson). Being an SA requires an ability to deal with the public, not something everyone is good at. So I am not insulting or suggesting that a mechanic who didn’t move into an SA role is incapable. They just decided to stay in the shop.
And to dovetail what TheMightyAltlas said, i bought my first BMW at the same dealership I am going to now 14 years ago. There were no female SA’s (that I recall, anyway). But last week, there was only one male SA. The rest were female, all were very cute and under 30. I remember specifically looking around the circular desk and looking at all of the cute young women buzzing around, talking on the phones and dealing with customers. These women looked like the pharma reps I have worked with. I would bet my next paycheck that none of them were mechanics before becoming SA’s. I would also bet the one man was also not a mechanic before becoming an SA. There was only one woman over 30… She was in her 40’s, and she was in charge of the service department.
Clearly, the hiring model has changed. I never thought about it until reading the TheMightyAtlas post, but it would seem that the strategy of placing a cute female in the SA role has been a conscious, strategic move by the dealership and they have seen an increase in sales as a result. I suspect this trend will continue.
Of course I have met Porsche owners. What a strange leap to make. I KNOW 3 Porsche owners. Only one of them can change his own oil.
This question was not to insult your profession, or to label them all crooks. So, please don’t take it personally. If every Porsche owner you have ever dealt with is knuckle deep in his engine every weekend, fine. But if you are telling me every Porsche owner that has purchased a new Porsche in the last 10-15 years has done most of his/her routine maintenance, ok. But that is not my personal experience with these owners. My sample size is significantly smaller than yours, no doubt.
Not sure what you mean by “losers don’t keep score”. I would assume if a dealership is utilizing a “white board” system, where every SA’s sales are tracked on a daily basis and you can see every SA’s sales against everyone else’s, that would put pressure on a bottom dwelling SA to up his sales. It is a natural reaction to the pressure of not wanting to be the lowest rated SA. When a layoff comes, I am guessing the first ones on the chopping block are the lowest performing… And for SA’s, a significant metric would be the sales they produce for the dealership.
And yes, even “Pops” can stick it to a customer.
I don’t know if I am misreading your tone, but there is no need to get defensive. The OP wasn’t to impugn you personally or your profession.
I know people on the internet are often wrong (and no, I don’t find that hard to believe). That is why proper research is vital. But people on the internet are also often right. It is up to the person doing the researching to do their work, and as you suggest, ask questions.
I agree also on the idea that with all the cars out there, especially with BMW’s being mass produced in the past decade at a level that is turning them into GM, trying to have a vehicle for every market segment, instead of focusing on making their ultimate driving machines, they are bound to have problems. As I said, the oil leak I heard two SA’s tell their customers over the phone was the same one I have. And it is a well-known problem with these cars.
When I do internet searches on repairs, it is to understand what the repair entails. How much work is involved, what special tools I might need to buy, as well as parts. I then do a quick cost-benefit to see if having my car worked on by the dealership, even though I will pay much more than an independent or if I do it myself (assuming I can) makes the most sense for me. In this particular case it did. I needed my car back, and I couldn’t afford to wait around a week for parts and the special wrenches, which, while not completely necessary, WOULD make the job easier.
I am sure in your world you run across people who act like they know more than they clearly do, and/or accuse you of gouging, or making repairs they think they don’t need. Perhaps you thought I was asking this because I felt cheated. In my particular case, not at all. This question was asked to confirm something I was told but never knew before, which was how SA’s were compensated.
In my case, what they told me lined up with what I knew (or suspected) going in.
And yes, the SA is only relaying the news from the technician who inspected the car. I wasn’t implying the SA made things up on the fly. Sorry if that wasn’t clear.
A good service advisor is worth the little bit extra it may or may not cost you for your repairs. mechanics work on commission as well and don't as a rule care much about communicating with the customers. Service advisers do a lot more than just sell service. I prefer to work with service advisers that know what they are doing.
I have never seen a group of service advisors like what you and TheMightyAltlas are describing. Obviously they exist, but I have never seen a dealership like this, and have never heard of it in any of my professional publications. I personally like the idea of a quality female service advisor, they bring a lot to the table in dealing with customers. Most customers don’t feel as threatened by a female SA. The ones I have worked with were car people, and not clothes horses dressed like Pharma reps.
FTR three of the best service managers I have ever met are female, and believe when it comes to working with customers or running a good department sex has nothing to do with it. It is all about competency. These ladies have it in spades.
As far as where SA come from, some come from former technicians, but this is more rare than you might expect. Totally different skill sets. Some people have both sets of skills (I do) but most don’t. Also a lot of techs don’t clean up well. A guy that looks like a gang banger and has a tattoo around his neck that says born to raise hell probably won’t be a moving to a SA position anytime soon. This despite the fact he might be the best tech in the shop. If he makes the customers go :eek: he won’t be moving to the front desk.
What I meant by that is that if you were to look at the percentage of say Porsche owners that are Doctors, Lawyers, and MBAs that own a Porsche the percentage is likely much higher than say KIA or Fiat owners. People in this arena are savvy. The did not fall of the turnip truck yesterday. Also expressed as a percentage the number of owners that are “into” their cars is going to be higher for Porsche than it will for most other brands.
In almost any profession the the people at the top of the heap, the best performers keep score. They can tell you their progress toward their goals, daily, weekly, monthly, and yearly. The lowest performers don’t. Losers don’t keep score. In no field is this more apparent than sales. In sales it is said people only run for two things money and medals. Metals are recognition. Recognition comes many way for a service advisor. Most sales is just one way. Other things that are recognized on a white board or a daily sales sheet are things like Highest percentage of customer pay work, best effective labor rate, highest email capture from customers, most next appointments set, best 1 month and 3 month CSI, most repair orders written. See there are lots of areas to excel. Nobody is going to be #1 in all categories.
As far as bottom dwelling service advisors go, as I think I said before I have never terminated a service advisor for low sales. I have gotten rid of them for low CSI. You seem to be under the impression that Dealerships are a Glengary Glen Ross organization where coffee is for closers. In all of the dealer I have worked in, and all of the dealers I have visited and observed when I worked for the car company I have never seen a dealership run that way. I have seen some dealerships that are super well run, and some that are complete train wrecks, but never on that that modeled Glengary Glen Ross. You can thank two things for that. First is the saying in the service department “Sales sales the first car, service sells the rest” If a customer buys a car and has a horrible experience every time they bring it in for service, do you really think they are going to buy again from that dealer? Or if they have a great experience and are treated like a friend every time they come in, they probably will at least consider buying again from that dealership.
True story, had a husband and wife that both owned Volvos. His was old, hers was new. Her car had some issues from the factory, I worked very hard to get them all resolved. Anyway, one day he brought his car in for something and I mentioned he was about due for a new car. He said he was going to buy a Lexus. OK, I understand as his wife’s car had some issues.
Anyway about a month later he shows up in a brand new Volvo for his first service. WTF? I thought you were going to buy a Lexus? His response “I was actually driving to the Lexus dealer and I realized that nobody would take care of me like you do, so I turned around and came here.”
The second thing you can thank is JD Power. He invented something that never existed and convinced an industry that can’t live without it. The pressure from the car makers and from the dealership owners to be #1 or above average is incredible.
Both of these factors are totally incomparable with a Glengary Glen Ross type of sales management.
I’m not getting defensive but you seem to be complaining about a system you know little to nothing about.
As far as internet searches goes if I had a dollar for every time a customer came to me with incorrect information they found on the internet that they were taking as fact, well I couldn’t retire, but I could buy both you and me one hell of a dinner.
My favorite internet research story: Guy comes in with his new Volvo. He wants the a particular engine software upgrade. He has the part number from his research on the interwebs. He is adamant that I have to do the upgrade (BTW this isn’t how it works, per the warranty policy software is upgraded to fix a particular issue the customer has not just because). I didn’t recognize the number so I went to do a bit of research. It turns out not only did software not apply, it would not even load into his car. Here is exactly what I told him “Sir I just went and looked up this part number you brought in. Here is the parts bulletin. This software is to correct a cold start condition on a two liter diesel motor sold in the Italy. Do you want me to try and load it?”
Wait, wait…
Before you said
this read by itself makes it sound like you think the dealership is campaigning these oil leaks and everyone that brings in this model is going to get sold this repair regardless of need. Now you say
Sow which is it? Is it a well known problem which should not surprising, or are you shocked to find a service advisor telling a customer what their car needs? For all we know based on what you have posted here, those other two customer brought their car in for that exact same oil leak leaving stains on their driveway. You really are coming across as a bit Claude Rains.
Again you seem to be complaining about a system you know little to nothing about.
One last thing When daylate said that at their shop the service adviors were paid salary you said
You seem ready for a road trip based on this one statement alone.
You own a BMW, which is either the most or next to most technologically complex mass produced car sold. (you and the benz owner and argue that one out in a different thread)
Instead of asking if they work on BMWs, instead of asking if they have factory level scan tools and can reprogram control units as needed, instead of asking if any of their technicians know how to work on BMWs, instead of asking if they have the requisite special tools for a BMW, you are ready to drive cross country based on how they pay their service advisors.
IMHO this is totally nuts. While I am sure that daylate’s shop is an excellent shop, I would never take a BMW (or any car) there without finding out if they know something about the car and work on them regularly.
For example, you own a late model BMW and you take it to Bob’s Bug works that only works on air cooled VWs. Your car needs a battery. Perhaps the simplest repair that can be done. Bob installs one but can’t get all the various warning turned off on the dash. That is because Bob doesn’t have a scan tool that will communicate with a late model BMW to reset the various systems. Oops. :smack:
Or you own a older Lincoln that has air ride suspension. You take it to a shop for a brake job, and when you get it back the car is slammed on the ground because the shop didn’t turn off the self leveling suspension via the switch in the glovebox before lifting the car. Again oops.
If how service advisors are paid is really that important, save yourself a trip, I think Jiffy lube guys are hourly.
I currently work as a service advisor for a dealership, and have been an advisor for many years. Each dealership’s pay plan varies, but all have been strongly commission based. For example, my current employer pays a minimum of 8% of gross (parts and labor minus cost and discounts.) The amount one can earn maxes out at 12% depending on the average score we receive from surveys our customers have filled out. We actually receive DEDUCTIONS for each survey below a preset score that is deemed unsatisfactory. Certain services from the express lane yield additional payouts in dollar amounts ranging between $0.50 and $3.00. HOWEVER, these services are recommended to customers based off a report the technicians fill out (they do not benefit from the sales as they are solely paid hourly,) and are presented in a Pass, Caution, or Immediate Attention format. Selling services that are not in the Immediate Attention category (unless requested by the customer, which must be noted ‘per customer request,’) is severely frowned upon, and will result in a deduction. The purpose of the report is to inform the customer of their vehicle to help plan for future services/repairs, as well as for liability reasons. Quarterly bonuses are also received for customer satisfaction.
Former employers paid a combination of the following:
–percentage of gross labor (labor rate minus mechanic’s rate)
-percentage increased based off of tire sales (i.e. between 0.5% and 1.5%,) alignments (pre-alignment print out required, i.e. between 1% and 3%,) etc. (fluid additives, fluid exchanges, filters, brakes, batteries, wiper blades, you get the point)
-quarterly bonuses
-sales of extended warranties (many service departments do not sell extended warranties, and are sold through the finance or sales departments instead.)
-split percentages of gross (i.e. 8% labor/3% parts)
-weekly or monthly pay out competitions (i.e. Most surveys resulting in a perfect score for the week, most alignments in a day, best quarterly customer survey score, advisor of the month.)
-salary + commission
It really depends on the dealership. They get a bad rep, but it’s no different than any other business… It just depends on the staff they choose to employ. Some are more honest than others. I personally have never been able to work for a dealership where they encourage you to sell your soul for profit. The fact of the matter is, cars break down over time and will need repairs at some point. Some people prefer to invest in a vehicle while others choose to trade in when things start to head south. I just like to provide information to customers and let them decide what to do with it.
