Goodyear's announcement that it is eliminating sales commissions for its auto service personnel is a prudent, praiseworthy step toward improved customer relations. After all, Sears, Roebuck and Co. came to the same conclusion a couple years ago after being scorched by allegations of auto service fraud. But is such a policy switch right for every service shop in the industry?
It addresses symptoms more than causes and may raise more questions than answers. It also distracts tire dealers from related but more urgent aspects of building consumer trust.
In this column and the next, I'll be reviewing vital issues that are repeatedly overshadowed by this ongoing all-or-nothing sales commission debate.
The elimination of sales commissions sends the wrong signals to the entire auto service industry, leading some to draw the erroneous conclusions that sales incentives are inherently bad or wrong, and that it's impossible to police sales incentive programs.
I've carped long and loud about the need for informed, involved, and firm but even-handed managers. Years of street-level experience in our industry has convinced me that effective front-line leadership is critical to developing reputable service departments that are successful long term.
Military units reflect their leadership. Likewise, experience confirms that service departments mirror their leadership. When leadership is lacking, soldiers may indiscriminately shoot any target. When leadership is lacking, service personnel may do whatever they can get away with.
W. Edwards Deming-the American business hero, managerial magician and statistical genius-frequently emphasized the same point. When workers weren't productive, Mr. Deming challenged executives: ``Is someone leading the work force? If so, who's leading them? Who sets the example, sets the tone of the business for them?''
Within the last few years, a number of major auto service providers have come under fire for allegedly overselling auto repairs. With due respect to the executives of these firms, I must repeat Mr. Deming's question: Sales commissions or no commissions, who was leading the troops when these allegations were made?
Were field officers actually leading them or hiding their heads in a foxhole somewhere? Or were these officers lounging comfortably in a rear-area bunker, oblivious to the battle raging on the front lines?
Working as a technician, manager, equipment salesman and reporter, I've seen the same patterns repeated over and over again. Namely, the shysters' reputations get around the local automotive community. Show me an auto repair shyster and I'll show you five or 10 of his competitors who know about his scams.
Competitors learn about it from disgruntled ex-customers and ex-employees and capitalize on the information.
The question I don't hear anyone asking is this: If people outside the business know the scam, why aren't managers inside the store aware of it?
I've seen some enterprising and aggressive shysters. I also have met many technicians who decided to change jobs rather than risk tarnishing their personal reputations (and possibly getting caught in a sting operation) by remaining with a shyster. These fellows confirm my impression that one of three scenarios occurs:
Many managers take a laissez-faire approach to the service department because they are so hopelessly, technically ignorant that they must take workers' word on what repairs vehicles need.
Or, they blithely ignore just how the service department makes money as long as it does so.
Or genuinely ruthless managers openly push workers to sell as much as possible.
Regardless of what incentives are offered, managers need to justify their existence to owners and/or top management. Increasing service sales numbers is the easiest and most common way they know to build job security.
Commissions or no commissions, show me a service department that oversells or sells the wrong thing, and I'll show you managers who, in effect, are accomplices to the deed.
To me, selling the wrong thing is as bad as overselling because it wastes consumers' hard-earned dollars and further damages the already shaky image our industry has in their eyes.
Simplistic approaches aside, every tire dealer out there who operates a service shop needs a few good people minding the store.
Indeed, eliminating commissions makes it tougher for any thieves within their ranks to steal. But it still doesn't clarify and qualify who's minding the store.