If you want to stir up controversy, talking about pay plans is a great way to do it. The most common pay structure used in dealerships for both salespeople and service advisors is commission-based. It’s why these positions have such lucrative earning potential and high turnover rates.

The past few years have been trending another direction. Large dealer groups like AutoNation use a salary plus bonuses pay structure for their salespeople. The rise of no-haggle pricing sees many stores using salary-based product advisors. Yet, the vast majority of car dealerships use the standard commission-based pay plan for the sales floor.

In the service drive, it’s very much the same. Some dealers have opted for a healthy salary plus a bonus (from personal experience) while others pay a mere pittance of a salary plus highly-incentivized commission (also from experience). Only junior service advisors receive a flat salary, but that’s changed out as soon as they become productive.

The question isn’t about which structure is better than the other. I think we can all see pros and cons to both types of pay plans – commission and salary. However, there’s a valid concern about whether a dealership or dealer group should have similar pay plans across all departments.

Here’s an example of what I mean: a salesperson is paid a stair-step commission pay plan that rewards high-grossing sales as well as high volume. It’s not a stretch to assume that, in an effort to close every lead they receive, high-pressure sales tactics come into play once in a while. Customers that purchase visit the dealership’s service department later on, expecting the same high-pressure environment and are met with a customer satisfaction-focused advisor who is paid a salary plus CSI survey bonuses. The experience between departments is a stark comparison, almost like visiting two different stores.

Another contrasting example is this: a dealership has no-haggle pricing and does their best to offer a transparent sales process. The salesperson is strictly paid a salary, or perhaps a substantial salary plus small bonuses, ensuring that customers get the best sales experience without the high-pressure techniques. The customer that has bought in this environment now visits the service department, where a highly incentivized service advisor applies blitzkrieg-style pressure to sell the most at the desk. The customer leaves, wondering where the no-pressure sales experience came from.

One Isn’t Better than the Other

To be absolutely clear, I believe there is room in the industry for both commission-based and salary-based pay plans. The type of clientele, the area, and the inventory can all dictate which style is most effective.

The debate isn’t over whether commission or salary is better. It’s about a uniform approach storewide. The customer shouldn’t be more comfortable visiting one department than the other. The service department and sales floor shouldn’t seem like two different stores. If you use a traditional commission-based pay plan in the sales department, it makes sense to do the same in the service drive. If you use a customer-centric salary system in sales, do the same in the service department.

It isn’t that one structure is better than the other – it’s the cohesive culture and experience you’re giving your customers