Show Me Your Pay Plan

Show Me Your Pay Plan

Pay influences behavior. We see this statement validated every day in the car business. Want more units sold? Hand out a unit spiff. Want higher customer labor per RO? Pay your advisors a bonus on hours per RO or give the technicians an opportunity to use a “pull board.”

Do these incentives help address the current business realities we face? Yes, but only partially. They stimulate the generation of gross, but there comes an inflection point where higher and higher grosses will, over the long term, influence and possibly shift consumer choice. The reality of our business is we have in most cases too many dealers chasing the same customers, while selling the same product or slightly differentiated products in close proximity to one another. In addition, we must now contend with the Internet, leaving us no real geographical boundaries to protect us as we move forward in an attempt to gain market share.

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