An interesting variation of this plan that has generated interesting results is to pay 15% of the overproduction to the technicians. Take the other 5% and add that together in a pool to reward the inside team for the extra support they contribute to the technicians’ success.

Also remember, for every $1.00 that is paid in R/S, the company keeps $4.00. So, the more we pay out in R/S, the more profitable the service department becomes.

In fact, during the busy season, it is not unusual for the service department Gross Profit to cover the company’s entire overhead!

Remember, this is NOT something to share with your service department without a well-thought-out transition management plan. Here’s why:

• Most technicians generate between $50.00 and $70.00 per hour prior to implementation.
• We need to set up performance criteria for a technician to qualify for R/S. This is not owed to anybody. This is a way to compensate for what I will call, ‘Craftsmanship Pay.’

Criteria for R/S may include the tech achieving a 95% first-time fix rate, achieving a successful maintenance agreement conversion rate (you determine what that is), and no customer complaints for the month.

Keep in mind, if any of the criteria you set for R/S is perceived as unobtainable, nobody will even try. There is a way to build up capabilities before the R/S is made available.

Another item that will make this plan work better is if your company consistently builds its maintenance agreement customer base. More on this later.

Transition Management

Have you ever announced a simple process change to technicians? After the meeting, you notice a meeting in the parking lot about the meeting you just had. Then a week later no one is doing the process you requested. Then you wonder, who’s really making policy in my company?

The solution: invite those parking lot influencers into the decision-making process. Give them a chance to give input and feedback, and often they can become the primary endorsers of the new process or policy.

And it works. We have smart people working with us and it shows by the great ideas they contribute to making good ideas work even better.

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