February 2011 Newsletter
The Crucial Transition from Vertical to Horizontal
Written By: Jeff Sacks
Are your dealership’s pay plans aligned with the objectives and culture of
the organization, or are they designed merely to reward for transactions, such as
volume or gross? Is it possible to accomplish a mixture of all of these attributes?
In looking to the future, we would like pay plans to foster a behavior that enables
us to concentrate on improving the transaction process, as well as the loyalty of
our customers so they may continually, and without interruption, return. The dealership
needs to function as a cohesive unit – all departments working in unison –
to bring to the table an experience for the customer that is positively memorable.
This means that not only the sales transaction should be well performed, but the
transition from sales to service, as well as all communications thereafter should
be seamlessly undertaken. In many instances, we hear of the ball being dropped with
our customers, the disconnects, and the face saving gestures to redeem ourselves.
Is that due to lack of caring or could this be a function of vertical thinking mentality
where we are only connected to a customer within our own department, and we don’t
have the concern or consideration once they have left our area of influence? This
vertical thinking mentality is pervasive and invariably costing us an enormous amount
of hidden costs in the form of high customer attrition. Thinking vertically, and
behaving vertically, is invariably a direct result of being paid vertically. As
pay influences behavior, so our behavior is influenced by pay plan design.
The essence of linked pay plans is to break down inter department barriers so that
all departments work cohesively and seamlessly together, with customers, as they
move from one department to another. Therefore, paying a salesperson on a greater
than 80% first appointment show rate may appear strange at first, but it has an
inherent logic to it that should improve customer retention in service. Paying sales
managers on customer pay labor may encourage sales managers to make sure that salespeople
do an exceptional job in presenting service in a favorable light to their customers
when delivering a new vehicle. The examples of linked pay plans go on and on, but
the prime reason to put them into place is really to improve the relevance of the
dealership to its customers and to overcome inter department rivalry and conflict
as people and departments vie to own the customer when, if fact, it is the dealership
that should own the customer.
The statement, ‘Show me your pay plan and I’ll write your job description,’
merely brings to the forefront that well designed pay plans will have the beneficial
result of making your dealership the primary choice amongst your customers. The
manual, Dealership Pay Plans That Work, may help you redesign your pay plans and
lead to improved personnel productivity and customer retention. It can be purchased
by going to www.jeffsacksauto.com to view the excellent training products offered
by Jeff online.