Stair-Step Incentive
Definition for canada automotive professionals.
A manufacturer incentive program that pays dealerships escalating bonuses based on sales volume thresholds. For example, a dealer might receive $500 per unit for selling 80 vehicles, but $750 per unit for selling 100 — making those last 20 units worth significantly more. Stair-step pressure can lead to increased desk overrides as managers push to hit thresholds, often approving aggressive pricing on the final units needed to reach the next tier. The economic logic is sound (the bonus on all units more than offsets the per-deal margin loss), but without override tracking, it is impossible to verify whether the discounting was proportional to the incentive at stake.
Canada Context
In the canada dealer market, stair-step incentive operates within the context of Provincial dealer licensing (OMVIC, AMVIC, SAAQ, VSA) and Competition Act — transparent pricing. Dealerships running PBS Systems, Quorum DMS, CDK Canada encounter stair-step incentive in their daily workflow. DealerInt captures the decision layer around stair-step incentive that your DMS wasn't designed to track.
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