Although each area of a dealership serves a different purpose and functions in a unique way, leading dealers are finding methods to create accountability among all of their employees.
A large part of creating accountability is rewarding good performance. Tom Rigg of Rigg’s Mowers & More, a four-location dealership headquartered in Valparaiso, IN, says it best: “Whether you’re a salesman, parts person or technician, I think everybody needs a goal.”
At Rigg’s Mowers & More, equipment sales reps earn a commission on everything they sell, in addition to a base salary. And if they perform well according to their original sales budget, additional incentives are in place.
“Our salesmen are given goals at the beginning of each month,” Rigg says. “When they reach their first goal, they are given two percent of what they’ve sold. When they reach their second goal, they earn another two percent. The third goal is based on the profit derived from their sales. This is really important because it keeps guys from cutting prices.”
It’s also important that each sales rep is aware of everyone else’s goals—and whether or not goals are being met. It creates healthy competition between reps, not to mention stores.
“Every month we offer another cash bonus for the store that has the most sales,” Rigg says. “Instead of cash we sometimes offer up a manufacturer-supplied spiff or the opportunity to attend a sales training event, for example.”
Things get tricky from time to time, Rigg points out. “It’s not often, but every once in a while we’ll find that customers are price shopping between our four stores,” Rigg tells. Communication and the bonus based on profit help keep this in check.
Generally speaking, your technicians must bill at least 50% of their total hours if you want your service department to make a profit. In Tupelo, MS, dealer Russ Harrington of 4 Seasons Equipment wants his service department to be highly profitable, which is why he incents technicians to bill at least 80% of their hours.
Each of the dealership’s four full-time technicians earns a base salary. Then, each obtains a monthly bonus based on the amount they produce that month. “It’s very simple: The more hours they bill, the more money they make,” Harrington says.
“More money” definitely talks, but is not the only secret to building accountability in the service department. Harrington invests in tools and training so his staff remains equipped and inspired to perform.
“Every technician attends service schools,” Harrington points out. “We try to make every one within a couple hundred miles. We also sent two of our techs to the STIHL factory in Virginia Beach to become STIHL Gold-certified.”
With respect to tools and equipment, every technician has his own lift table. The shop also has a Heftee lift, which sometimes becomes an issue when more than one tech needs to use it at the same time. “We plan to invest in a second lift once business improves a bit more,” Harrington says.
The shop has also invested in a laptop computer and software program from Kohler so techs can work on Kohler EFI engines. A STIHL specialty tool set is also the property of the shop. Technicians are expected to furnish their own basic hand tools.
Some might refer to parts department employees as the unsung heroes in an equipment dealership. Although parts sales play a significant role in a dealership’s overall profitability, parts staff are often left on their own to sort, stock and search, and occasionally deal with that unruly customer. How can you recognize and reward these critical members of your frontline force?
“The occasional pat on the back can go a long, long way,” says Ernie Buttita of K&D Rent-All & Hardware in Baton Rouge, LA. “Then again, nothing is as rewarding as more money!”