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Auto Dealership Sales and Service Commissions Best Practices: Part I

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 Author: Michael Stus, Managing Partner

The sales and service commissioning process should be an integral part of strategic operation of an automotive dealership. The most successful auto dealership groups and stores employ key best practices when it comes to paying commissions to their sales and service personnel. What are some of these key best practices when it comes to paying commissions to sales and service representatives? Here one such best practice in a multi-part series.

CSI Influenced Commission Plans

Automotive manufacturers care about customer satisfaction through the sales and service process. There is plenty of evidence of this:

  • They consider CSIscores when determining how inventory of high-demand vehicles is distributed; if a dealership is not keeping customers happy in the sales and service process, they won’t get as many vehicles allocated to them versus a dealership with higher CSI scores.
  • If CSI scores are low enough for long enough, automotive dealerships groups and individual stores can be shut down by the manufacturer.
  • CSI scores are considered when a dealership group wants to acquire or open a new store within a manufacturer’s brand. Dealership groups with a track record of high customer satisfaction have a better chance of being allowed by manufactures to add stores to their group.

The best run dealerships and groups tie individual sales and service reps’ CSI scores to commission plans to influence higher aggregate satisfaction scores. Often this can be done with gates that restrict commissions payments if a rep registers below a certain CSI level; alternatively the commission rate earned by a rep can slide up or down a scale, or an accelerator type rate increase can kick-in based on CSI performance.  

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1Customer Satisfaction Index

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