In the car business, spiffs are a prominent part of the culture. Spiffs can be straight cash for certain actions and goals attained, or they can be any other type of incentive such as gift cards, or giveaways. The idea is to get employees to work toward a necessary objective and to have fun doing it.
It is proven that workers perform better when they are having fun and when they have clearly defined goals. Spiffs are a fun way to encourage performance.
On the sales floor, it is common practice to put a fixed dollar amount on the hood of an over-aged vehicle. Likewise, in the service department, you will see spiffs for selling tires or other service packages that need more focus.
Some would argue that there is no need to further incentivize employees to do their jobs beyond their standard pay plan. However, anecdotal evidence overwhelmingly proves that dealership personnel respond well to the buzz and excitement of earning a spiff.
So, how can you effectively implement a spiff program in your service department that will generate results today, and encourage consistent performance month-in and month-out? Let’s examine some basic philosophy behind spiffing, and then look at specific ideas that can be implemented.
- Spiffs should be separate from regular pay or benefits. When paid with regular pay, employees will come to see the spiff as part of their regular compensation and it will lose its effect.
- There is a lot of debate as to whether it is better to offer team spiffs, or to place more emphasis on individual effort. While there are definite advantages to team spiffs, it is recommended that more emphasis be placed on individual efforts. Service advisors and technicians, by nature, tend to prefer working alone. Large team incentives can result in resentment by those who feel they did most of the work, while others sat back and still benefited. Keep the team incentives, but place more emphasis on rewarding those who are actually doing the work.
- There is a fine balance between short-term spiffs and long-term incentives. Short-term spiffs can create short-term increases, but how do you promote consistent performance even when the spiff is taken away? Start by evaluating the standard pay plan for advisors and technicians to make sure that consistent performance is rewarded regardless of any short-term spiffs that are offered.
- Spiffs need to be paid regularly. For example, don’t wait until the end of the month to pay out spiffs that were earned at the beginning of the month. Immediate reward is incentive to keep up the good work.
Ideas for an Effective Spiff Program:
- Define the areas in your department that need improvement. Where does your service department fall short? Customer satisfaction? Hours per RO? Fixed First Visit? Create goals and spiffs centered on the areas that need improvement.
- As mentioned earlier, evaluate pay plans to ensure they inherently reward improvement in the areas identified as needing improvement. A solid pay plan is always greater incentive than a spiff to consistently do the job right.
- Identify immediate needs. Do you have parts that move slower than industry average? Do you have certain types of service that rarely get written? Do you sell warranties? Would you like to focus on a new niche of business? Consider where you need the most impact the quickest, and create a spiff for achieving it.
- Many spiffs are created with parts and service advisors in mind, but don’t forget the technicians. Encourage technicians to work more efficiently by incentivizing for completing jobs under book rate, or for fixing vehicles right on the first visit. Technicians may not sell service or parts, but they are a vital to customer satisfaction and department efficiency.
There is no how-to manual with exact instructions on implementing an effective spiff program. Each dealership is different with different goals and needs. Don’t forget that the main idea of a spiff is to make work fun and create a little more motivation or challenge.