• One shop generates $1 million in annual sales and earns a net profit of $200,000.
• Another shop generates $2 million in annual sales but earns only $100,000 in net profit.

Which shop is more successful?

As you can see, higher sales do not always translate into higher profits.

The number you should be watching closely is gross profit—the revenue remaining after paying the direct costs of labor, parts, and sublet expenses. Gross profit is what pays for your operating expenses, including rent, utilities, marketing, equipment, and payroll. Once those expenses are covered, the money left over becomes your net profit.

This is why every shop owner must establish gross profit goals, particularly for labor and parts. Increasing gross profit dollars and gross profit percentages creates the foundation for stronger net profits and a healthier business.

Remember: Sales are important, but gross profit and net profit are what ultimately determine financial success.

Source: Feature in Ratchet and Wrench Magazine https://www.ratchetandwrench.com/magazine

Vehicle Delivery Process: The First Step to Your Next Sale

Every fall I have my chimney cleaned. For years, I would search for a reputable local company. Then, 10 years ago, I met Mike at AAA Chimney, and he became my go-to guy. Each year, Mike returns and earns my trust over and over. You may wonder if it's because he cleans my fireplace better than anyone else or if it's the price. While those are reasonable questions, the real reason why he gets my business year after year is simple: Before he leaves my home, Mike takes the time to review exactly what he did, gives me tips on how to best care for my fireplace and then he books the next appointment for the following year. In essence, he performs what we know as a vehicle delivery process, or in Mike’s case, a chimney cleaning delivery process.  

Performing a comprehensive vehicle delivery process and booking the next appointment in our industry is nothing new. Many shops have been doing it for decades. However, there are still many repair shops that have not adopted this goldmine strategy. The vehicle delivery process helps to create that memorable experience that gives the customer a compelling reason to return. When combined with scheduling the next appointment, your repair shop stays branded in your customers’ minds, improving customer retention and helping to ensure future sales.  

The auto repair business today is not like it was. Even 10 years ago we would measure customer retention with a factor of four, meaning that customers visited your repair shop about four times a year for routine services. Today, unless there’s a breakdown or a warning light, you’re lucky to see your typical customer once a year for routine service. Consumers these days don’t have the same sense of urgency regarding vehicle maintenance as they once did. Just think about all those customers who have traveled over 15,000 miles in their vehicles since their last oil change. This trend has been slowly creeping up for the past 15 years, if not longer.   

Unless you're fortunate enough to be in a heavily populated area with no competition, and car counts are never a problem, you will benefit from a well-defined vehicle delivery process; a customer touch point that brings the entire customer experience full circle. Vehicle delivery is never a transaction. It is an opportunity to keep building the relationship. It’s also essential that your service staff discusses and books the next appointment. Everyone reading this knows that booking the next appointment is a strategy being done by dentists, doctors, hairdressers, nail salons, eye doctors, pet groomers, and yes, even Mike at AAA Chimney.  

Booking the next appointment is not limited to oil change services either. Just consider all those recommendations you make on just about every car you service each day. Why not create a process that helps to fill up your calendar with profitable future services needed by your existing customers? Don’t rely solely on your CRM program either. The impact of an engaging vehicle delivery process is powerful.  

Every customer that leaves your shop today will need future services and repairs. The question is: Where will they go? Make your vehicle delivery process your first step to your next sale.  

Featured in Ratchet and Wrench Magazine - June 2023 

Steve Jobs may have been best known as the co-founder of Apple Computer and a great entrepreneur, but his style of leadership and management was highly controversial. Jobs would schedule meetings with his team, then randomly point to someone and ask, “Tell me what’s not working at this company?” After that person gave their opinion, he would then turn to the group and ask for everyone’s feedback. Then he would point to another person, and say, “Tell me what is working?” While his technique may appear divisive, Jobs placed a high value on getting valuable feedback. Which meant that he had to know the truth, no matter how ugly it might be.  

For most people, it’s difficult to receive critical feedback. No one enjoys learning that we dropped the ball, or that something isn’t going right. And how often does an employee walk up to you, and pull you aside to inform you of bad news? Not very often, right? While receiving praise and recognition does motivate us, growth opportunities also exist when things go wrong. How we deal with adversity and bounce back from failure tells us a lot about our mental toughness. Great success is never dependent on everything going right all the time. That’s not reality.  

Look at it this way: getting only good news all the time is mostly useless. On the contrary, bad news can be good news. And we should accept and welcome it. If employees are reluctant to bring you bad news, it’s an indication that they may fear confronting you. As the shop owner, you need to do a little self-reflection to ensure that you are a leader that is approachable, and not on the defensive when an employee wants to sit down and discuss things. Be mindful of how you interact with others too. Your body language and the tone of your voice will either draw people to you or push them away.  

Make it known that you want to create a work environment where feedback, especially when things go wrong, is accepted and welcomed. Remember, if people fear bringing you bad news or only tell you the good things, you may not have an open environment where people feel they can discuss all issues, good and bad. It’s also important to realize that to give critical feedback to others, you must be open and willing to receive critical feedback. 

At the start of any team meeting, let your employees know that you will be asking for everyone’s opinions on ways to improve. Emphasize that you want to hear not only what’s going right, but also where the company is failing. People’s opinions may not be shared by everyone, but one’s perspective is their reality. We need to listen to all voices. Be transparent and let everyone know that you will listen to everyone and do your best to act on everyone’s feedback. Another thing to be aware of; don’t allow an atmosphere that encourages gossip or venting. This will promote negativity and bring down morale. You need honest, healthy feedback that everyone can accept and learn from.  

The bottom line? The next time someone brings you bad news, look them straight in the eye, smile, and say, “Thank you!” 

Employees today will disengage if they don’t feel valued.

by Joe Marconi: Quiet Quitting: New Phrase, Old Problem - Featured in Ratchet and Wrench Magazine 

Some people go to work each day with great enthusiasm and believe they can change the world. But then, others anticipate each workday with feelings of despair. These employees do the bare minimum; just enough to keep their jobs and go unnoticed. They are called quiet quitters. 

While quiet quitting may be the latest catchphrase, it's not a new workplace disorder. We've called them disgruntled, disengaged and even toxic in the past. But who's responsible for this behavior? Is it the employee? Or is there a deeper problem brewing in the workplace?  

Work has Evolved 

As a young technician in the mid-1970s, the shop owner was typically at the top of the pinnacle. It was common back then for a boss to run his company with the mindset, "my way or the highway." Was it wrong? Perhaps. Thinking back, I don't think we clearly understood or appreciated the role we played in the workplace or how we fit into the company's structure. We accepted things the way they were, unlike employees today. I also believe we felt we couldn't change how things were.  

Employees Want Accountable Leaders 

Lack of trust in leadership is another factor in quiet quitting. Shop owners and managers must communicate what their employees can expect from management and not only what management expects from them. Consistency in the message and following through on promises contribute to workplace morale. After all, if you can't trust the message, you will not trust the messenger.  

Some people will excel in any work environment. However, they are the exception, not the rule. If you want a team of employees where everyone is pulling in the right direction, you should consider the needs and opinions of your employees.     

If you are concerned that understanding your employee's point of view and acting on it is giving up control of your company, don't be. Earlier, I referred to shop owners from years back. Most of them had a good business but not a great business. The reason was that they were the business. Growth was difficult because it was dependent mainly on their abilities and talents. This one fact alone causes a business to plateau. However, when a business combines different points of view and strategies from the team, greater growth is possible.  

Start Within 

Lastly, there will always be employees who won't be happy no matter what you do. If you are confident that you have done all you can to help a quiet quitter, the only hope at that point is for the employee to look within themselves, which may be difficult for most people. Instead, focus more on what you can do. Look within yourself to ensure you are doing everything possible to create an amazing employee experience. Your goal must be to create happy employees. We've all heard the expression, "happy employees create happy customers." Well, they create happy employers, too.  

When I look back at my 40-years as a shop owner, there is one thing that stands out among everything else: It’s the people we surround ourselves with that will have the biggest influence in determining our success. Think about it, even the greatest NFL coach will never win a Super Bowl without great players. 

I have worked with a lot of employees through the years, including technicians at all skill levels, bookkeepers, service advisors, managers, and support staff. I can tell you with 100 percent conviction that the years that were the most successful were the ones that I had assembled the best teams. Now, I am not just defining success by profit alone. These were also the years that were the most fun, with less stress and the years that we made the biggest positive impact with our customers and the community.  

Let’s talk about production first. Highly motivated, skilled technicians with the right attitude produce more.  They also get paid more, and they should. The right team of techs will average higher labor hours. I learned many years ago, it’s not the hourly rate you pay a tech that matters, as much as the hourly labor dollars produced by that tech. 

Next up are your service advisors. Here is where you can make or break your company. The service advisor is the face of the company. They represent you, your company and everything you do. The best brake job in the world means nothing if the service advisor doesn’t deliver a world-class experience that gives your customers a compelling reason to return.  

The long-term damage from an incompetent service advisor is hard to recover from. For the most part, you don’t run a transactional business. Your company relies on strong relationships and a strong culture.  There isn’t a big-box brand name over your bays. It’s your name. And that means service advisors need to go above and beyond to exceed your customer’s expectations. If not, you lose. 

For the success of any repair shop, I put great emphasis and responsibility on the owner when it comes to employee management. All too often, a poorly run, failing shop is the fault of bad leadership. The shop owner’s ability to lead and motivate is crucial with building a winning team and successful business.  However, I have also learned that sometimes we have the wrong people. And no matter what you do or how you try to motivate and lead, there are some people that just don’t “get it.” If it’s not in someone to begin with, nothing you do will change that person. 

In today’s business world, you need a team of great players.  You need to hire people that can produce quality jobs, with minimal comebacks, have the right attitude, self-motivated, willing to attend training and have the willingness to work in a united, team environment.  You need to hire people that “get it.” 

With regard to your customers, your business hinges more on the customer experience than it does on the equipment you have or the brand of parts you use. Of course, the parts you purchase matter. Of course, your alignment machine matters. But none of that is as important as what the customer sees.  The customer sees and judges you on her overall experience. Which is how she was greeted at the service counter, how she was spoken to during the sales process, the car delivery, and the experience driving away with a smudge-free steering wheel.  

Lastly, here’s something you need to accept as a business owner. There isn’t a process anyone can create that will make up for mishaps caused by employing the wrong people. You do need to have processes and policies in place. It’s how you build a smooth-running and efficient business. However, we don’t run a McDonalds or a Dunkin Donuts. We can’t make up for poor customer service with a process or with a point-of-sale computer terminal. The processes and policies you create will only work the way they were intended to when you have employees fully aligned with your culture and have the right attitude. You need to have the right people. 

There are many components of business. The financials, choosing the right vendors, training, equipment, and advertising are among them. The two most important components of your business are your employees and your customers. However, you have great control over who you hire. And we all know, great employees create great customers.  Assemble the right people around you and the rest will fall into place. 

This story was originally published by Joe Marconi in Ratchet+Wrench on August 5th, 2020

January 2020 started without a hitch. We hit our sales and profit goals in textbook fashion. However, by the end of February, it was obvious that something wasn’t right. Sales for the month dipped by more than 30 percent. It was devastating. What we didn’t realize was that this was just the beginning of even greater losses. By the time Governor Cuomo of New York issued the stay-at-home order on March 22, sales had dropped 75 percent. With most of the country in lock-down, I didn’t know what to fear more—the coronavirus or the impending financial disaster the world was about to endure.  

Before we go on, it’s important that we all remember those that have lost their lives due to COVID-19.  As in any crisis, there will be suffering. However, as a society, we must not dwell on it or let the crisis beat us. We must find a way to fight it and succeed.  

When the impact of the virus first hit, emotions filled my mind every waking moment, mostly due to the uncertainty of the situation. Then, reality set in and all I could think about was my obligation to others. As an essential part of the community and the nation, it was my obligation to keep the doors open and be there to make sure that those that needed to get to work, could. If we were to win, survive and thrive, we had to create a winning environment. That meant that I had to elevate my leadership to a new level, put the health and welfare of my staff before anything else and realign my goals. In the coming days and weeks, I would get a working man’s PhD on how to win in times of crisis. 

The first lesson learned in all this is to have the right mindset. We can’t look backward in time or wait around for a return to what we perceived was once normal. Looking forward and building a new future is all that matters. If you tell yourself, “the sky is falling.” It will.  Negativity spreads like a virus and infects everyone around you. Your mind shuts down in panic mode, clouding your judgment and mentally and physically paralyzing you. You must remain mentally strong and positive, even when you know the brutal facts of the situation. This is crucial. You, the leader of your shop, cannot lead others if you show fear and negativity. Be human, show emotions, but have the mental fortitude and show your team that we will get through this crisis. 

The next lesson is to make sure you have the right people around you. A strong team with the right culture is important in business. In times of crisis, it’s the difference between success and failure. As the weeks unfolded, it became clear to me who my leaders were. It would be those employees that I would turn to in order to maintain morale and lift everyone’s spirit. Leaders cannot succeed without having the right team around them. Take a look around you. Do you have the best employees with the right attitude? If not, begin the recruiting process today. 

Realigning my goals and understanding my new key performance numbers was next up. My 2020 business plan, created in December 2019, had little meaning by mid-March. I am not admitting defeat for the year by any means. Rather, we now have new objectives and a clean slate. From this point on, it is critical that we remain profitable: watching every expense, tracking production, keeping payroll within budget, and building for the future. The past is the past, it cannot be changed. What we have now is the opportunity to make each day better than the day before. 

Perhaps the biggest lesson learned was more of reminder than a lesson. It’s that above everything else, people come first.  All the planning, goal setting, marketing and number crunching mean nothing unless you understand that you, as a shop owner, have the power to achieve great things by your words and actions. Yes, it all goes back to leadership and understanding your obligation you have to others. All of us will have different lessons learned from crisis.  Which means, there is great opportunity on the horizon. Use those lesson to make your tomorrow better than yesterday. 

My hope is that by the time you read this article, COVID-19 will be well under control.  Human interaction is crucial to our overall well-being. We need not only, the emotional touch of another person, but also the physical touch of others.  While Facetime and Zoom will get us through, it will never replace a good old fashion handshake and a hug. 

This story was originally published by Joe Marconi in Ratchet+Wrench on June 5th, 2020

Nick is on the front lines of customer service each day. He is a talented service advisor, with a passion for helping others. Nick and I often debate what’s more important to the customer: price or value? He’ll often tell me, “I know you preach value, Joe, but people care about price, too. In the end, price is a major concern.” I always respond, “Nick, it’s not all about price, it’s really about value. Build a strong relationship, reach the customer emotionally, have them believe in you and they will trust you. And when that happens, price will not be the focus.”  

Here’s the reality. I would be lying to you if I told you that price has absolutely no bearing on a person’s decision to buy from you or not. However, are consumers only interested in price? I know that sometimes it may appear that way, but the bottom line is this: being competitive and profitable is a fine line we walk each day. When the perception of value diminishes, price then becomes the focal point.  Nick, who debates me on the philosophy of value, learned a valuable lesson recently, which made him a believer that there is most definitely a difference between value and price.  

About a month ago, a first-time customer called us to ask if we could take a look at her son’s tire, which was losing air pressure. Nick took the call and said, “Sure, we would be happy to help you.” He took down all the needed information and let her know that he would follow up with a phone call as soon as her son arrived.  

When the son arrived, Nick wrote up the car and dispatched it to a technician and then called the mother to let her know that her son had arrived. He also let her know that he would call her as soon as he knew something about the tire. 

About ten minutes later, the tech informed Nick that the tire was damaged from riding with too little air pressure and that the tire would have to be replaced. He also said that the other three tires looked new and that it would not be a problem replacing the one tire.         

Nick prepared an estimate for the tire and called the customer. Nick explained why the tire needed to be replaced and let her know that we could have the tire installed and have him on his way in about an hour or so. Nick then gave her the price for the job. The mother replied with, “Ok, give me five minutes and I will call you right back.” 

Fifteen minutes later the mother called, and said, “Nick, I found another shop that will install that same tire for $50.00 less than you can do it for.  So, can you put air in the tire so I can have my son drive it to the other shop?” Nick thought for a second and responded, “putting air in the tire and having your son drive his car to the other shop is not safe. Here’s what I will do. I will have my technician put the spare on the car. He’ll also check the tire pressure in the other three tires. Afterall, we want to make sure that your son is safe.” The mother thanked Nick and hung up the phone.  

A few minutes later, the mother called again, asked for Nick and said this, “You know Nick, you were so nice to me from the very beginning when I first spoke to you and right up to now, and you put my son’s safety first. You also didn’t try to force me into buying your tire. Please install the tire at your price.” Nick, now on cloud nine, hung up the phone and told the tech to finish up the job.  

Nick learned a valuable lesson that day. He learned that he didn’t sell a tire—he sold something much greater. He sold an emotional feeling. He reached the customer on an emotional level and the price of the job became less important. Does this work with everyone? Of course not. But, if you want to make more sales and build the right clientele, sell value, sell relationships and sell a positive emotional feeling. 

Later that day, Nick told me what happened. I could tell that he was proud of how he handled the situation. And he should be. I just listened as he told me the entire story and relived the moment. After he had finished, I calmly asked him, “So Nick, is it really all about price?” Nick just smiled. 

This story was originally published by Joe Marconi in Ratchet+Wrench on May 5th, 2020

Your lead tech is not performing up to expectations. Shop production is slipping and you’re not sure why. You hear through the grapevine that some of your employees are wondering when they will get their next pay raise. After a few agonizing weeks of pouring through reports, you make the decision to give across-the-board pay raises. Almost immediately, you see a boost in production. The shop is more upbeat and all is well. Your decision appears to be correct. Three months later, your shop is once again struggling to meet its sales and production goals—and morale has slipped, too. 

I have seen this scenario all too often. And, while there are times that we need to give pay raises, if your shop is struggling to meet its sales and production goals, increasing pay to improve business is not the answer. The reality is you have deeper issues.  

Let’s address employee compensation first. You must pay people a competitive wage with the opportunity to earn more. There should be incentives in place to reward your employees for reaching their personal and team goals. And, there needs to be a process in place where your employees understand how and when they will get a pay raise. 

However, in terms of long-term company growth, a focus on pay alone will never be the formula for success. In other words, throwing money at a problem is a short-term fix. It’s putting a Ban-Aid on a more serious injury that requires much more care and attention.  

About 10 years ago, Mercedes-Benz was struggling with its customer experience at many of its dealerships. In response to this, Mercedes decided to increase pay incentives, implement new policies and training programs. No improvements were realized. Mercedes top executives could not understand why customer service was not up to company expectations. After all, this is Mercedes, a car company that represents quality and sophistication. Why were their dealer employees so indifferent? 

A senior leader at Mercedes recognized the problem and stated, “Pride in the brand was not quite as strong as we thought, the level of engagement with work was not as deep as we thought.” Mercedes finally realized that until the employees at Mercedes genuinely cared more, no amount of money, policies or training would make a difference. 

Understanding the need to get front-line people more engaged and take pride in their work, Mercedes began to invite its dealer employees to spend 48 hours with the model of their choice. To experience not only the amazing performance and mechanical attributes of the vehicle, but also that they can turn heads as they drive through their neighborhoods or when they drive into the little league parking lot. 

Mercedes also built its Brand Immersion Center in Tuscaloosa, Ala., in 2014, where hundreds of employees go each year to spend time getting to know how the cars are built, gain a deeper understanding of the brand, the history of Mercedes and experience the legacy of the company.  According to Philippa Green, brand immersion trainer for Mercedes-Benz, “The ultimate goal is to engage their hearts and minds around the brand. We’re teaching them about our legacy.”  

As business owners, we track KPIs, set goals, work on marketing and refine our business plans. We also ensure that we provide our employees with adequate training and a well-equipped environment. These are the essentials of our business.  However, we must never overlook the importance of your employees taking pride in their work. And, pride comes from employees knowing who you are, what you stand for, what you do for your community and for the industry.  

Giving people pay raises can motivate them. But the bounce you get from that is short-lived. Once people have gotten over the excitement of the raise and made the financial adjustments to their lifestyles, the raise is long forgotten. If there are no other intrinsic motivators, then shop morale, production and employee engagement will fall right back to where it was before the raise. 

Anyone who knows me and has read my articles, knows how much I preach about leadership. The theme of this article also has its roots in effective leadership. You, the leader of your company, have the power to transform the people around you. Focus on the person, not the position. Recognize when your employees do things that are from the heart. Promote your company’s brand, vision and legacy. These are the keys to a long-lasting company. This is what will improve morale, not a pay raise. 

This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2020

The year was 1980 - the year I founded my company. And, like many new business owners, I didn’t have a clear understanding of what was needed to grow a successful business.  I thought that success would be determined by my technical skills and my willingness to wear the many hats of the typical shop owner. It wasn’t until I began to let go of trying to do everything that I realized that success is not just dependent on what I do, but by the collective work accomplished by the team. I eventually discovered that I was not the center of my universe.  After a few years in business, I began the transition from simply owning a job to becoming a businessman. And, while technology has reshaped our industry throughout the years—and will continue to do so—there is one constant that will never change: success in business rests largely on the people you have assembled around you.

By the late '80s it was obvious that I was doing way too much. I looked at each role I had my hands on: shop foreman, service advisor, shuttle driver, bookkeeper to lot attendant. And, as long as I’m confessing all this to you, I need to disclose that I was also the shop’s maintenance person; making repairs to the bay doors, the slop sink and equipment. You name it, I did it. I was literally too busy to be successful.

In order to lead my company, I had to first clearly define my responsibilities. These are working on the business, recruiting and hiring the best employees, becoming a leader of people and making sure that my business was successful. I also needed to fulfill the obligation I had to my employees. I realized that this required a deep understanding that putting people first is the best strategy for success. This was difficult at first because it requires working on things that have no immediate impact on the business. Unlike working in the trenches and having your hands on everything, working as a businessperson means that you need to spend time building for the future. The things that are most important to your success in business are the things that have a payoff down the road.  

I also clearly defined the duties I should not be doing and assigned those tasks to others. This is a critical step for any shop owner.  Warren Buffett says that in order to be successful in whatever you do, it’s crucial to focus on the things that generates the greatest return and that you can’t do it all, and that means sometimes you have to say, “no.”  

By the late '90s it became clear that the most valuable role I played in my business was that of coach. All the best marketing plans and the best business strategies mean nothing without a team of great people around you all pushing in the right direction. And that takes a strong leader. Not just a boss, but a leader.  Leaders inspire people. Leaders get others to reach down deep inside themselves and perform at their best because they are aligned with the leader’s vision. 

Leaders inspire others through praise and recognition for the work they do. When people feel their work matters, they have a purpose. People are motivated by the heart, not the wallet. That’s not to say earning a decent wage isn’t important. But a focus on money alone is not a strategy for success. Focus on people first and profit will follow.  

Spend time with your employees. Get to know them as people, not just the role they have in your company.  Find out what their dreams and goals are. And then find a way for others to achieve what they want out of life.  People cannot be motivated until they realize that what they do every day helps them to achieve what they want in their personal life.  

There are other people in our business world that we must never forget. And that’s our customers.  If you were to ask me, who is more important, my employees or my customers? I would answer, “They are equally important.”  You cannot have a successful business without the right employees and the right customers.  

One last bit of advice I can give you is to focus on your success, no one else’s.  Be very clear about the pathways you take and never forget about the obligation you have to others. Build a company culture of teamwork, quality and integrity.  Focus on what’s in the best interest of the customer and the people around you. Put people first, and everything else will fall into place.  

This story was originally published by Joe Marconi in Ratchet+Wrench on February 4th, 2020

“Why are we discussing these issues when the people who need it the most are not here? We’re not reinventing the wheel. We get it. But the ones who don’t get it need to be here, too!” 

Those were the words spoken by one of my service advisors during a recent meeting. We were discussing quality issues and ways to improve overall production, which, we determined, would improve sales and profit. I listened as Tommy (not his real name) continued for a few minutes. I could hear the frustration in his voice, so I let him speak until I felt he expressed all his feelings to the group. 

I am a firm believer in holding regular meetings. And, while there are times when the group gives me feedback, rarely does anyone voice their opinion with such passion and intensity the way Tommy did that day. Drawing on experience, I thanked him for his openness and honesty. I also asked him if we could continue this discussion in the morning in private. He agreed. 

The next morning, I paged Tommy and asked him to come to my office. I thanked him again for his openness and asked him to elaborate more on what he said the night before. Tommy hesitated at first, but slowly began to tell me his frustrations. It really boiled down to the level of commitment from a few techs. Tommy spoke in length about what he would like to change in the shop, and again repeated that we’re not reinventing the wheel. His words were clear and on point, “Joe, we all know what to do. We all know our goals. And we all know when we perform to the level we are supposed to. So, I just don’t understand why all of us can meet those expectations.” 

Tommy’s insight into the work environment and the dynamics of people’s behavior was perhaps deeper than he even realized. When people within an organization feel that some of their coworkers are not pulling their weight, animosity begins to set in. Essentially, your top employees want to make sure that everyone is committed to the company’s success and doing their very best for the greater good of the team.

We also need to remember that people look at things from their own perspective. And their perspective becomes their reality. The key thing is to keep the lines of communication open, learn from each other and try to view different situations from the viewpoint of others.  

After nearly 30 minutes of discussion, it was time to give Tommy my input on how I viewed the situation. I let him know that, while not everyone will be in total agreement with how he views these concerns, he has made a giant step forward at letting me know the issues we have in the shop. I then asked Tommy, “Out of our 16 employees, how many people in your opinion, without giving me any names, do not live up to the expectations of the company?” Tommy thought for a moment and replied, “Well, when I think about it, just a few. Two, maybe three.” Here was my opportunity to bring logic into a very emotional discussion. “So, what you are telling me is that the majority of your coworkers do live up to the company’s expectations and do a quality job?” Tommy replied, “Yes, I didn’t see it that way.” I let Tommy know that I would take his ideas and implement them into my strategy to improve the work environment. He appreciated the fact that I listened to his concerns.  

Here’s the bottom line. When a person speaks up like Tommy did—listen to them. Don’t shut them down. They are expressing more than their frustrations over a few of their coworkers. They are giving you real-life, from the trenches information. And although it may be from their perspective, their viewpoint can give you valuable information that will help you and your company improve. Even a few people not pulling their weight can be enough to affect morale. And others may be feeling the same way. 

What you don’t want are “yes” people who merely agree with you because you’re the boss. No matter how uncomfortable it may be, welcome feedback and criticism from your key people.  We also need to listen more and speak less. And most of all, we need to understand that the solutions to our problems don’t always have to come from us. Sometimes, an employee’s outburst is just what we need to put things in the right perspective. 

This story was originally published by Joe Marconi in Ratchet+Wrench on January 1st, 2020

What’s wrong with my employees? Why don’t they do what I ask of them? It’s the same thing every day.  I say one thing, they do another. It seems as if I am the only person who knows what to do around here.  

Does any of this sound familiar? Have you said these words, or a variation of these words, from time to time? If so, you’re not alone. Getting people to follow policy or a new marketing strategy sometimes feels as if you are trying to move the earth off its axis.  

People in high levels of authority are well-aware of the need to get things done. Each member of their team plays an integral part in the success or failure of the organization. In your shop, you are the authority: you are the shop owner. You know that the responsibility of attaining success directly rests on your shoulders. This is a weight you carry around with you each day. 

Eventually, if your efforts don't attain the results you need to run a successful business, you begin to look around to find out what’s causing the problem. And the tendency is to assign blame. All too often, you find that your employees are not all pulling in the same direction. And you determine that this is the cause of your problems. The following may not sit well with you, but if most of your employees are not engaged and not performing up to your expectations, it’s probably not their fault. You need to take a long hard look in the mirror. The fault may lie with management, and that means you. 

Assigning blame is destructive. It keeps our focus directed in the wrong areas. This is not to say we can never have a bad employee. But, if we focus on seeking blame, we are directing our attention from where our focus should be; and that’s accepting the responsibility to correct what’s happening and make the necessary changes. 

In order to really get things done and achieve personal success and the personal success of your employees, it takes the cooperation of each team member. Getting people to work as a unified team involves commitment, not compliance. Compliance is demanding people to do something. And they will—but only up to a certain point and only for a certain period of time. What you need from your employees is not compliance; you need commitment. 

Surveys have shown that the majority of employees in most businesses are not engaged at work and the primary reason is that most employees don’t know the overall goals and vision of the company. And they also don’t know what’s expected of them. Employees are largely left to react to their situations during the day; never really having a clear understanding of how their role contributes to their success and the success of the company. 

A business team is no different than a sports team. Every member needs to know the objective and goals. Imagine the coach of a football team who does not let the quarterback—or the other players— know what the play is? He simply tells the players to get out on the field and perform. After all, the players are well-trained, highly capable and all professionals. Shouldn’t they know what to do to win?  And when they fail to win, the coach ends up blaming the players. Is this a ridiculous analogy? It may be, but this is what happens every day in shops across the country.  

Your best employees don’t want to fail. They don’t intentionally ignore what you want from them. It’s more likely that they really may not know what you expect from them. Employees need to know exactly what is expected of them and they need to be motivated and inspired to perform their best. However, the only way your employees can perform at their best is for each of them to know what the company goals are. In other words, what is our overall objective and how we, as a team, are going to achieve it.  

Each employee also needs to know that when the business wins, they do, too. When employees realize that achieving the company goals is also aligned with achieving their personal goals, you have commitment. And commitment equates to success. 

Communicate the goals of the company often. Communicate what success looks like and how we are going to attain it. Create a workplace where the goals of the individual are aligned with the goals of the company. If things get off track, just look in the mirror. If you want to blame someone, you might want to start with yourself.  

This story was originally published by Joe Marconi in Ratchet+Wrench on December 3rd, 2019
 

A few years back, my service advisor, Tony, was trying to sell a customer a new battery. Let’s call this customer Ed Jones. Here’s how the conversation unfolded; “Mr. Jones, my technician completed our 21-point inspection on your vehicle and everything checks out fine. However, I do want to discuss the battery. Your battery was tested with our Midtronics digital battery diagnostic tool, which is a very accurate piece of equipment. Your battery is rated at 575 cold cranking amps, and your battery tested at 300.  Would you like me to replace the battery today?” Ed Jones looked at Tony, and three seconds later said, “Thank you for the information. Let me think about it.”

I know Ed very well. The car we were servicing that day was his daughter’s car, who was home from college for the Christmas holiday. Ed’s daughter is in her first year at Plattsburgh University in upstate New York, which is about a five hour drive and near the Canadian border.  

I could see the frustration on Tony’s face, so I gave him a little advice; “Tony, ask Mr. Jones who drives the car. After he answers you, ask him what the car is used for. Listen to his answers and then use that information to sell safety and peace of mind, not a battery.”

Five minutes later, Tony reported back to me excited and amazed; “Joe, great advice!  He authorized the battery! I guess you knew he would buy the battery with the right questions?” I replied, “You were trying to sell Ed Jones a battery by pointing out the technical process we use to determine the health of the battery. What you need to do is reach the customer on an emotional level. The questions I recommended you ask made him realize that it’s the welfare of his daughter he was really buying, not a battery.” 

Now, let’s clarify something. Tony didn’t say anything wrong with his sales presentation. But he got the process backwards. He was leading with logic. If you’re trying to sell something by using logic alone, you are going to struggle. People make buying decisions based on emotions. To make a sale, you need to connect with the part of the brain where emotions reside, and then back it up with logic.   

Bombarding the customer first with facts and features tends to confuse the brain as it tries to make sense out what you are saying. That can be difficult because the technical information is usually not fully understood by the customer and the confusion usually results in the customer saying, “No.”  

Let’s review the conversation when Tony asked the right questions; “Mr. Jones, who drives this car?” Ed replied, “My Daughter.” Tony continued, “And what does she use the car for?”  Ed replied, “She uses it to go college at Plattsburgh. She’s home for the holidays and goes back to school on Monday.” At that point, Tony realized why I urged him to ask those questions, and continued with, “So, your daughter drives this car back to college, and leaves on Monday. She goes to Plattsburgh, which is near the Canadian border.  Mr. Jones, it’s wintertime and that’s a long, lonely drive. Her battery tested weak and may fail without warning. For peace of mind and your daughter’s safety, wouldn’t it be in her best interest to replace the battery before she leaves?” Ed now makes the emotional decision, “Yes.” 

Here’s the bottom line. First, know your customer. Build rapport during the write up process and find out all the details of why the car was brought in for service. Second, tone down the technical side of what you do. That’s not to say it’s not important. But, before you give the technical facts, reach your client on an emotional level. Ask questions to find out as much as you can about the customer, and then direct the conversation to the reasons why what you are trying to sell will benefit the well-being of the customer and/or the customer’s family.  

Remember, decisions are easier to make when it has meaning to them or a family member. In Ed’s case, not replacing the battery would have been unsettling to him. Tony’s recommendation to replace the battery is perceived as the right decision because it promotes the safety and well-being of his daughter.

Humans are driven by feelings and make emotional decisions, then justify it with logic. Next time you are trying to sell anything to a customer, ask yourself, “Why should the customer buy what I am trying to sell?” The answer may surprise you. 

This story was originally published by Joe Marconi in Ratchet+Wrench on November 1st, 2019

We all have those customers that focus on price alone. And we all struggle with our persistent attempts at converting them into believers. Believers of the concept that, while we cannot totally dismiss price, it’s the value of the product or service the customer needs to consider when making a purchase. What’s funny about these customers is that each visit tends to start with a complaint about price, even before the car is looked at. We recently had a situation that started off on the wrong foot, with price being the issue; but ended up a win for us, and for the customer.

Charlie Challenge (not his real name) arrived at our shop and asked for an estimate on replacing the timing chain for his Nissan Altima. My service advisor responded with, “Mr. Challenge, that’s a big job.  How do you know your car needs a timing chain?” Charlie replied back, “Another shop checked it out and they told me it does. Can you please give me a price?” My advisor continued with, “Well, before we do anything, we need to perform a few tests to make sure you really do need a timing chain.” Charlie emphatically replied back, “And how much is that going to cost? All you guys want is my money! I asked for one thing; a price on a timing chain and you just want to make more money on something I already know I need!” 

It took a lot of composure, but my advisor calmly stated all the reasons why testing is the best way to go, emphasizing the fact that if we replace the chain and it’s not the problem, the money spent would be wasted. Charlie shook his head, threw the keys on the counter and authorized the testing. 

I’ve known Charlie for a long time. He’s not a bad guy. But price is always the topic of discussion. He has told me in the past that I should take a look at what other shops charge, and be more competitive with my prices. I have told Charlie that I don’t, and never will, price my services by what other shops are charging. I have also told him to look beyond price and look at the value you get. Besides, all the quality shops that I know are pretty much the same when it comes to pricing.  

During the write-up process, Charlie revealed to my service advisor that the check engine light had been on, and that’s why he took his car to the other shop. The other shop replaced a valve timing solenoid, but that didn’t fix the problem. He was then told that the next step was to replace the chain. 

Later that morning, the car was dispatched to a technician. A multipoint inspection was performed, along with all the tests related to the check engine light; which was a timing error.  After the MPI and the tests were completed, we found a few things wrong with Charlie’s car. His Altima needed an oil change service, a battery, rear brakes, an air filter, the cabin filter had a mouse nest in it and the car needed an intake timing control sensor, not a timing chain. This engine has two intake control solenoids. One was supposedly replaced by the other shop. So, did this car have two bad sensors? Or was the wrong sensor replaced by mistake? 

When my service advisor called Charlie to tell him the good news, he was silent for a moment.  He was shocked that the car didn’t need a timing chain. He authorized the solenoid replacement, the oil change and replacing the mouse-infested cabin filter. He declined the other work.  

I purposely did the follow-up call with Charlie a few days later.  He was happy to hear from me and told me that car hadn’t run this good in years. I had to needle him a bit, “So Charlie, are we really expensive? We saved you a ton of money by doing the tests first and not just replacing the chain.” He said, “Ok Joe, I get it, I really do this time.” 

During our conversation, Charlie did confess that he didn’t go to another shop, but actually went to that all-knowing, all-powerful place on the internet known as Google. It was Charlie that replaced the solenoid, not realizing there were two, and not knowing how to properly test the system either.  

When I asked Charlie why he didn’t let us replace the battery, air filter and the rear brakes, he replied, “Joe, come on, I can do that work myself, and besides, you guys are expensive.”

Sometimes you win the battle, but it’s hard to win the war with some customers. 

This story was originally published by Joe Marconi in Ratchet+Wrench on October 1st, 2019

There’s an old Japanese proverb that says, “The footsteps of the farmer are his best fertilizer.” In translation, this means that the closer you are to your crops and animals, the easier it is to observe and respond to their needs. Business owners, just as farmers, have a sixth sense about what’s happening within their company. And, for the most part, business owners are the driving force behind the success of their companies. And it’s not always because of any particular training. Many times, the mere fact that the buck stops with you gives you the mental fortitude to push forward and find solutions to daily problems. Your gut evolves into a very valuable management and survival tool. 

The majority of business owners created their business with a dream and the passion to make a difference in their lives and in the automotive industry. They clearly understand the sacrifices that are needed to get a new business off the ground, and also the years of dedication it takes to reach a point where the business becomes financially stable. But, running a business takes its toll on even the toughest person, and time away from business becomes equally important. So, the question becomes, can you build your business to the point where your presence still remains when you’re away? 

Before I go on, I want you to consider something—and that’s your future. I know that many of you have a young company and plan on working for decades to come. But life goes by quickly and it can also throw you a curveball. Please take my advice with this; if you’re a business owner and you are not planning for your future, you are making a big mistake. I know too many shop owners that were forced to walk away from their businesses after decades of work with nothing more than memories. Their dreams turned into nightmares due to lack of planning. Sit down and write out what your future looks like. You will probably need help with this, but you need to think about a continuity plan and an exit strategy.

OK, I got that out of the way; now back to the article. Here’s the bottom line. Taking time off and having your business run smoothly without you there should be one of your key goals. But the truth is, many shop owners can’t let go. They find it hard to take any time off, let alone leaving their baby in the hands of a manager or another key person. They even feel guilty when they’re away. And there are others who realize that in order to have a fulfilling life, the only way to continue the business is to step aside and stay away.   

I don’t know what type of person you are. But what I do know with certainty after nearly 40 years in business is that, for the sake of your health and for the well-being of your family, you need to create a business that allows you the freedom to take time off.  And that starts with hiring and keeping the right people; people that share your culture and work ethic. Free time away from the business also requires that you understand your numbers, can generate a consistent profit and establish strategies to continually grow the business.  

Achieving your goal of taking more time off is more dependent on what you create than the actual work you do. Create a culture where people come to work because they want to. Create a management style that allows you to reach out to your employees and help them achieve the things they want out of life. Create a work environment where the people you employ feel they are part of a unified vision where everyone will enjoy the fruits of their labor. Lastly, create strong relationships with all your employees from the very first day they are hired. Building this culture will help to ensure that your employees will perform the same each day, whether you are there or not.   

I know for many it will be hard to let go. After all, your business is your baby, right? You founded it; you worked hard for years and dedicated your life to it. But, every baby grows up and becomes an adult.  And adults should become self-sufficient. If you build the right team with the right culture, you will gain the confidence that the people you employ can do an amazing job in your absence. 

This story was originally published by Joe Marconi in Ratchet+Wrench on September 5th, 2019

My son was an accomplished wrestler in high school, competing in the New York State Championships. He continued competing during his college years. At a major tournament, in which my son was ranked No. 1, the coached worried about his first match. In tournaments, the No. 1 ranked wrestler competes against the bottom-ranked wrestler in the first round. When I asked the coach why he worried about the bottom-ranked opponent, the coach replied, “Tough competition keeps you sharp. Weaker competition makes you complacent.” 

In business, as in sports, complacency occurs when you fail to recognize the strengths of your competition—even if the competition is considered weaker than you. Complacency is caused by many reasons. It could be the result of being successful, which gives you a false sense of security that the good days will continue forever. Or, it could be that the business owner is so entrenched in the day-to-day operations that he fails to recognize the world around him. Complacency also lowers your drive and your focus. It spreads to your employees. Eventually, this will have a detrimental effect on your business. 

However, loss of business due to complacency doesn’t happen overnight. It’s a slow, painful death. One day you realize that your car counts are down, your customer base is dwindling and your new customer acquisition is declining too.

Today, consumers have choice and competition is fierce. Every segment of the auto repair industry wants a piece of the service and repair pie. You need to take a long hard look at your competition, analyze it and study it. Then build a strategy around what you bring to the marketplace that will set you apart from the rest. 

One thing to keep in mind: In the business world, competition is everywhere. And it’s not just other repair shops, dealerships or the tire store down the road. Your business is being judged and compared to by every experience the consumer encounters. In other words, if your customer had an amazing experience at a local restaurant, your business will be judged against that experience, too. But the question is: How should you compete? 

In his book The Purple Cow, author Seth Godin makes the point that your business needs to be so remarkable, people will stop in their tracks to learn more about you. To make the cow comparison: Cows are essentially boring. They really don’t stand out. But, if you’re driving down a road and see a purple cow in a field, you’ll more than likely stop your car to take a closer look. Now ask yourself: Is your business boring? Does it have the look and feel as every other repair shop in town? What can you do to make your business so remarkable, so different, that people will stop in their tracks and take notice? This is a powerful marketing strategy. 

No matter how successful your business may be, it’s wise to look at all prominent businesses in your area. Find out who they are, how they market themselves and what makes them stand out. Then, create a strategy that differentiates your business from the rest. By the way, never compete with another business by copying what it does or by the benefits it offers. Copying the competition is what many businesses do, and it’s a mistake. Studying the competition is more about learning what they do, and then finding out what makes you different. What can your business bring to the marketplace that will make people take notice? Think about the company Harley Davidson. When you drive a Harley Davidson, you drive a Harley. It’s not a motorcycle—it’s a Harley. Harley Davidson is a brand so strong, people will actually tattoo the Harley logo on their bodies. Consider Starbucks. People don’t say, “I’m going to get a cup of coffee.” They say, “I’m going to get a Starbucks.” These two companies have a unique brand identity. They stand out among the rest. 

Competition is a good thing. It makes you stronger. It makes the entire business world better. It forces you to think about yourself and your brand. And by improving your brand, the customer benefits also improve, which, in turn, makes your business more successful. Never fear competition; rather, you should embrace it. Learn from it. But, remember, look for ways to set you apart from other businesses. 

One last thing: Don’t focus on what you do. We all essentially do the same thing—oil services, brake work, suspension, tires and more. Think about why you are in business. It’s your culture. Think about what makes you special and communicate that to your customers and potential customers. Make that special something your purple cow. 

By the way, my son took first place in that tournament. Although every match was a challenge, the two toughest matches were the final round and (you guessed it) his first match against a weaker opponent.

This story was originally published by Joe Marconi in Ratchet+Wrench on July 31st, 2019

There’s a lot of talk these days about the effect Amazon is having on businesses. Even Google has taken a hit. More and more people simply go straight to Amazon, instead of using Google’s search engine when looking for an item or product. Once-dominant brick and mortar stores are now ramping up to compete with Amazon’s online ordering service. Just look what Amazon did to the book industry. There is no doubt that Amazon has changed the way the typical consumer buys and searches for just about anything. 

But, can Amazon ever really become a major competitor with us; the independent repair shop? My conclusion is no. Let me tell you why.

It was the Saturday before Christmas, roughly 12 years ago. A man walked in my shop, visibly upset and holding an old Lionel train transformer. I asked him if I could help him, and he replied, “I was wondering if you could check out this transformer. This transformer has been in my family for over 50 years. Each year the family gets together to decorate the Christmas tree and set up the Lionel Trains. It’s a tradition we started a long time ago.” 

I stood before him a little confused, not really knowing what to say. Finally I replied, “Sir, I repair cars, not toy train transformers.” Getting more upset, he said, “Toy train transformer? This is a rare, vintage Lionel Duel Transformer, Type ZW!” I replied back, “OK; no promises. Let me take a look”

I set the transformer on the back bench and plugged the cord it into an outlet. The man frantically said, “See, there’s no light; it’s not working!” I turned the transformer over, and took the screws out to disassemble it. The man watched me as if I were a surgeon operating on his child. I poked around a bit and inspected the cord leading inside. I could clearly see a break in the wire. I cut the wire, stripped it back, attached the wire back to the terminals and reassembled the transformer. I plugged it in and the power light came on. “It working! It’s working!” the man said. He thanked me over and over and asked me what he owed me, and I told him, “It’s Christmas; just become my customer.” And he did. 

Another time, a young woman in her early twenties and her father came to me with an unusual problem. I could see that the daughter was crying and the father was trying to console her. The daughter told me that she was recently engaged. As she was driving this morning, her friend reached over and tried to take off the ring. As she pulled her hand back, the ring came off and flew across the top of the dashboard and disappeared. The father said, “Joe, could it have gone down the defroster vents?” I said, “It’s possible, but if you didn’t see where it went, it’s going to be a big job to find it.” The girl began to cry again and said, “Please, can you get the ring back?” I looked at her and said, “Sure, it will take time. It’s almost the end of the day. Let me clear up a few things and I’ll get to it.”

About an hour later, I brought the car in and begin taking apart the dash. The father and daughter stood there watching me as I carefully took apart the dash, piece by piece. After 40 minutes I had just about every piece of the dashboard apart, and no ring. I climbed out from under the dash to take a break and asked the daughter, “Are you sure the ring landed on top of the dash and disappeared?” She replied, “Yes, I’m sure. It has to be there. It must!” 

I went back to work, removing more parts of the dash. I finally got down to the lower center of the dash where the ducts split off and go to the floor vents. As I removed the left side floor vent, I heard a rattling sound. I carefully picked it up, turned it over and out came the ring! The daughter burst into tears and laughter and gave me a big hug. The father told me, “Joe, I will never forget this—never.”

These two stories are true. And I’ll bet a year’s pay that you have similar stories. Each day, we put our hearts and souls into helping people. We create a customer experience that sets us apart from most other businesses. We go above and beyond what’s expected of us, and we succeed. 

Let me ask you; could the “Amazon effect” ever compete with you? The only effect you should focus on is the effect you have on your customers and your community. This will always be your competitive advantage. Use it wisely. 

This story was originally published by Joe Marconi in Ratchet+Wrench on July 1st, 2019

Roughly a month ago, two events happened on the same day that reminded me that there are things that are so precious, you cannot put a price on them. Those events also reminded me that some of the things we stress over, really aren’t as important as we think. And in the end, it all comes down to the importance of life itself.  

I got a call that day from Paul, the person who picks up our scrap metal. He asked if he could speak to me in private. Now, being a seasoned business owner, that’s usually not a good sign. But, this had nothing to do with business. I met Paul in my office a few hours later. He appeared very uncomfortable and upset. After exchanging a few words about business and the weather, he told me that his brother died last year. He was one of three other brothers that died within the past five years. He went on to tell me that none of his brothers had any savings or insurance, so it was up to him to take care of all the burial expenses for all the brothers. As Paul spoke, I could see that he was emotionally drained. Then he said to me, “Joe, I really hate to ask you this. I am tapped out. I cannot support all my financial obligations at this time. Would it be possible to lend me the money to purchase the gravestone for my brother? You can make the check out directly to the gravestone company, not to me.”

I have known Paul a long time. He’s one of those hard-working, tough-talking guys that you would never imagine asking for a handout. I didn’t hesitate and wrote out the check and handed it to him. He held back the tears as he shook my hand and told me, “Joe, I will never forget this, and I will pay you back.”

About an hour later, the owner of a local tow company walked into my office manager’s office to pick up a check we owed him for last month’s tows. I wasn’t paying much attention until I overheard my office manager say, “Oh, my God, I am sorry, Dave. I didn’t even know you were sick.” Dave is 42 years old, married with kids, and has brain cancer that is not responding to treatment.

Dave has a great attitude, but understands the reality of his illness. He’s doing his best while on the treatment, but admitted that, some days, he finds it hard to function. He told us how he started his tow company right out of high school and has worked hard his entire life. As he was leaving, I told him to reach out to us if he needs anything. He told me prayer might help. I told him I would do that.

Before the two events that day, I was dealing with a few business problems. And I need to be honest: I was not in the best of moods. After speaking to Paul and Dave, those issues that seemed so daunting before, didn’t seem all that important anymore. I sat back in my chair, looked over at a photo of my grandkids on my desk, and told myself that I need to do a better job at arranging life’s priorities.

As shop owners, we get caught up in the day-to-day struggles of running a business—sometimes at a cost to our families, friends and ourselves. We anguish over bad online reviews, disgruntled employees, slow days and declining car counts. We sometimes find it hard to sleep at night, reflecting over and over again in our minds, the problems of the day. And we repeat this cycle over and over, year after year. Let me tell you, no business issue is ever all that serious that it cannot be overcome. But, when life throws you a curveball, as in the case with Paul and Dave, those problems are not so easily overcome.

There are many reasons why each of us go into business. For many of us, it’s the passion for the work we do. For others, it’s the burning desire to improve the automotive industry. While I cannot say that we are in perfect alignment in every area of business, I do know one thing with certainty: We all need to stop and reflect from time to time on all the things that have nothing to do with business, but everything to do with life itself. Those are the things that no amount of money can ever buy. Those are the things that are priceless.

This story was originally published by Joe Marconi in Ratchet+Wrench on June 1st, 2019

“Your labor rate is too high. If you can’t negotiate your labor rate, I will have the car towed from your shop to another shop in your area that will do the work at the labor rate we want to pay.”

Those were the words spoken to my service advisor a few weeks ago from a claims agent at an extended warranty company. The name of the company doesn’t matter. What does matter is what would you do when faced with this situation.

Here’s another scenario you’re probably familiar with: After diagnosing a failed steering rack, the customer informed us that she had an aftermarket warranty policy. She asked me if I could find out if the steering rack is covered. I said, “Sure, I will be happy to help. But, just to let you know, most of the extended warranty companies I deal with have their own labor and parts pricing policies, which may not be aligned with our pricing. So, whatever they don’t pay, you will be responsible for. Are you OK with this?” My customer said, “Absolutely. I understand. I appreciate anything you can do for me.”

I thought the hard part was over. What came next was bizarre. The insurance adjuster I spoke to authorized the repair, told me the labor dollars they will pay and then said, “OK, it looks like I have a used rack in a salvage yard in South Carolina. I can have that rack to you in two days.” I had to pinch myself to make sure I wasn’t in a weird dream. Used steering rack? Salvage yard? Is this guy for real?

I quickly shot back and said, “Let me ask you a few questions. First, where does is state in the contract that your company will supply a junk yard part for your insured? And why in the world would I remove an old worn-out steering rack from my customer’s car and put back an old used rack from a junked vehicle? Is that really in the best interest of the customer?”

The claims adjuster replied back, “Well, shops do it all the time.” I said, “I don’t think so, and I won’t do it either. Let me tell you how this is going to go. I am replacing the rack with a quality part, and I will make sure that my customer gets the best job possible. So, please give me the authorized amount and I will let the customer know what the balance is that your company will not pay.” He said, “You can’t do that.” I said, “Yes, I can. My customer is already briefed on the situation.”

He reluctantly gave me the authorization number along with the dollar amount. I relayed the story to the customer. My customer then called the insurance company and gave them hell. They did end up authorizing additional money for the part I installed.

Before we continue, I want to be fair and balanced. There are some extended warranty companies that try to offer their customers a peace-of-mind policy, and do pay a good portion of the repair. However, far too often, it’s a struggle to get an extended insurance company to agree to our labor and part prices.

Here’s the deal. If you’re like me, you have spent countless hours understanding the numbers of your business. You’ve also spent a great deal of time and effort to put the right people in place, develop the right pay plans and have created the systems to run an efficient business. You know the balance between being competitive and profitable. When you consider all this, we need to carefully consider how negotiating our prices will affect our bottom line.

I understand the reality too. Sometimes, you really need the work. You don’t want to lose the job. And settling for something is better than losing the job. I have been there. But the truth is that negotiating your prices, in the long run, will not only hurt you, but will also hurt our industry across the board.

By the way, my service advisor never did negotiate our labor rate. He simply told the agent, “Our labor rate is non-negotiable. Do you have any other questions?” The agent eventually backed down and paid us the job at our labor rate.

Be upfront with your customers. Clearly explain to them that their warranty policy may not cover the entire repair and come to an agreement with your customer before you call the warranty company. Lastly, make sure you know what it takes to earn a profit. Profit is needed to pay your expenses, put a little money aside for the future, pay your employees a decent wage and also pay yourself the salary you deserve. When you really analyze the bottom line and what’s really left over, do you really want to negotiate your prices?

This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019

It was a busy Friday morning when Tom called me for an update on his vehicle. I let Tom know that his car would be ready at the end of the day. There was a pause, and then he blindsided me with this, “You know, Joe, I did a little research on that water pump you’re replacing on my car. I can get that same part for $30 less. Why does your part cost so much?” I fired back at him by saying, “That’s impossible; it can’t be.” I went on and on attempting to defend myself, but I could tell I wasn’t getting through to him. After a few more words back and forth, Tom finally said, “Look, you started the job, so you might as well just finish it.”

You’re probably thinking Tom went online to check the part. Well, this happened in 1980, my first year in business, and years before the Internet, as we know it today, even existed. Tom simply called a local part store. The parts store gave him a discounted price and then figured he would challenge me.

Consumers checking your prices is nothing new—it just got a whole lot easier these days with the world wide web. Now, let’s clarify one thing: I am not going to tell in this article that there is a foolproof way to train consumers not to go online to check your prices. However, what I can tell you with certainty is that if you continue to feature products and not the customer experience, you are telling people to please check your prices.

Consider this: You’re out to dinner and you ask the waiter for the wine list. As you scan the list, you recognize a brand and then look to the right at the price. Do you Google the bottle of wine to check what you could buy it in the store? We all know that a $10 bottle of wine in the store can cost well over $40 at the restaurant.

Here’s the bottom line: The restaurant is selling more than wine and food—it’s selling the customer experience. And if all goes the way it should, we pay for the meal and the bottle of wine, even when we know the wine is priced higher than we could purchase it at the store. And, we are OK with it.

Our business is no different. We need to focus on the experience, not the products. Yes, we install water pumps, control arms and radiators. But, that’s not our main focus. Our focus is on the value and the benefits of doing business with us. Now, with that said, there’s a delicate balance between being competitive and being profitable. But, as value goes up, price becomes less of an issue.

Here’s the difference between our business and a product-driven business. When you buy a product—let’s say a watch or a cell phone—the experience lives on long after the sale. Every time you put on the watch, or use your cell phone, you are continuing the experience. And if the product is high quality, the experience gets reinforced over and over every time you use it. With auto repair, in most cases, what we do, does not live on after the sale. Once a customer leaves with a new timing belt and water pump, there’s not much about that repair that lives on in the eyes of the consumer, except the customer experience. Your entire sales process—your marketing, the look of your shop, the people you employee and every aspect of your business that the customer sees—must tell the customer that what you sell is worth the price.

Let’s remember one thing: Your prices will be challenged from time to time. So, here are a few more tips. Get the right training for your service advisors, especially in the area of customer service. Make sure your marketing and advertising communicates your brand and your culture, and please be careful with discounting. Claims that you have the best price on tires or brakes only results in consumers checking online to see if that’s true. Highlight your warranty, which has a lasting impression on the customer. Above all, communicate the benefits of doing business with your company.

Let’s get back to Tom. After 39 years, Tom and his family are still customers. I have to believe it’s because Tom appreciates the level of service we have given him throughout the years and the relationship we’ve built. Tom has learned what Warren Buffet has often said, “Price is what you pay; value is what you get.”

This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019

Got your attention? Good! Before I start, let’s get something out of the way. Does technician aptitude or attitude affect the productivity of your shop? Absolutely. But this is the exception, not the rule. If your overall production levels are low, that is the sole responsibility of management. Let’s look at a few reasons for low production levels.

The first area I want to address is billing. Many hours of labor go unbilled due to not understanding how to charge. This area is most prevalent with testing and inspecting. If your technicians are handed a work order, with no direction and not a clear process of what to do, or when to stop and ask for labor testing fees, there will be a ton of wasted labor hours, never to be recovered again.

Next is training. Service advisor and technical training is a key component to high production levels. But let’s not forget in-house training. All policies and procedures must be reviewed often and refined if needed. Your team must follow a process. With no road map, labor dollars are lost. By the way, if you don’t have procedures in place, you need to make this top priority. Every successful organization has a detailed set of workflow guidelines.

Let’s look at shop layout. How organized is your shop? Are shop tools and equipment readily accessible? Or do techs tend to wander around looking for the shop scanner or TPMS reset tool. Are stock items such as wiper blades and oil filters fully stocked and cataloged properly? Do technicians have separate access to technical information? Or are techs waiting to use the same computer station? Again, all these things kill labor production, which kills labor dollars.

Next up is scheduling. There should be a structured approach to scheduling where the day is balanced with enough opportunity to make profitable sales. Have a process where vehicle history is reviewed before the customer arrives. Any previous service recommendations or notes is any opportunity to make a sale. But the key ingredient is in preparation. A customer that’s scheduled for an oil change may have forgotten that he or she received a recommendation for tires. Informing the customer at the time of scheduling and preparing for the work ahead of time, greatly improves productivity and overall efficiency.

Another problem area is with service advisors and their workload. The service advisor, in many situations, handles the front counter, the phone, scheduling, helps with dispatch, part procurement and sales. All these tasks are critical to the daily operations. However, nothing happens in the shop until a sale is made. You need to look at your service staff. Are estimates getting processed quickly and upsells getting back to the technicians in a timely manner? If not, this is another area where production suffers. Carefully analyze your staff and run the numbers. More estimates processed means more sales and higher profits. Adding a service advisor or an assistant may be the missing link in a shop’s production problem.

Knowing your numbers is another key component to attaining high production levels. I will refrain from giving you benchmark numbers, since all businesses models are different. With that said, you need to determine your breakeven and establish your labor goal for the week. Then knowing your labor goal, you need to calculate how many labor hours you need per technician. Then, you need to communicate this number to each technician. Having clear expectations and knowing the goals of one’s position is essential for hitting production goals.

With regard to the technician’s responsibility, let’s remember one important fact; the technician has control over his or her efficiency. That’s it. If you dispatch a four-hour ticket to a tech, the ability of the tech to meet or beat that time depends on the technician’s skill, experience and training.

There are a lot of other factors that influence production, such as the right pay plan and hiring the right people. But perhaps the most important influence is leadership. The shop owner or manager must study and look at the entire operations of the shop. Productivity goals must be established and then a system of monitoring production must be put into place. This includes sales goals, as well. Service advisors and technicians must get continuous feedback on their progress. Improvements in sales and in production, no matter how small, must be celebrated.

The bottom line is this: If you’re not happy with your production level, you need to look at every aspect of your company that influences production. Improvements in key areas put technicians in a position to win. When they win, so do you.

This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2019

A few years ago, some friends and I were having dinner at a local restaurant. There were six of us enjoying the food and having a great time. A few minutes after our waiter served us our coffee and dessert, the owner of the restaurant walked over to us, introduced himself and said, “I have people waiting for this table; how much longer do you think you’ll be?” Shocked by his comment, I hesitated for a second, looked up at him and said, “No worries, we’re done.” With just a few simple words, the owner of the restaurant wiped out the pleasant experience we were all having.

As we were finishing up, we couldn’t help noticing the stares from our waiter and the owner. Their eyes were laser-focused on us. They made it obvious that they wanted our table. We didn’t say anything to our waiter, or the owner. But we told each other, “We’ll think twice about coming back to this restaurant.” None of us ever did go back to that restaurant. And I heard similar complaints from other friends about that restaurant. About a year later, that restaurant closed its doors for the last time.

As a business owner, I fully understand what each table means in terms of profit. The tables at a restaurant are no different than the service bays in our business. The more people you can process through the restaurant, the more profitable the restaurant is. The more cars we can process through our service bays, the more profitable we are.

While I don’t fault the owner of the restaurant for recognizing the need to be profitable, I do fault the owner for not understanding a basic rule in achieving success in business. And that is: You build a business one customer at a time and by developing strong, long-term relationships with those customers. And to maintain that success, a business must continuously cultivate those relationships.

The owner of this restaurant didn’t get it. All of us had dined at his establishment before. The owner didn’t see us as an opportunity to strengthen the relationships. He saw the opposite. By asking for our table, he put the emphasis on his next sale and eliminated any chance of us returning again. Losing customers, and not understanding why, is the kiss of death for any small business.

What the owner determined important was profit per table, per person. The process to get people fed and done became the primary objective, when it should have been ensuring its customers were enjoying a nice meal and having a great time. It was a mistake that eventually led to his failure. Never think that customer quantity ever outweighs the quality of the customer experience. Making a memorable experience is the essence of great customer service.

If we dig a little deeper, we find another mistake made by the restaurant owner: believing that the customer experience was over when the meal was over. The meal was prepared, it was served and we consumed it. Then, at some point during the end of that process, we became an obstacle to his next sale. He failed to comprehend that the sale is not over when the meal is over, and that everything that occurs right up to the moment when a customer drives away from his parking lot will have an influence on whether that customer will return in the future.

The lesson for us is simple: Never lose sight of the importance of creating a customer. Establish a culture in your company that cultivates long-term relationships. Build a process that always strives for world-class customer service during the entire customer experience—and especially at car delivery.

Never think that when the technician completes the repair, your job is done. The customer experience continues right up until the time the customer is picking up their car. The time you spend with the customer after the repair is done is as important as making the sale.

Value each customer. Work on those relationships. Don’t worry about short term profit gain. Remember: building long-term relationships, builds long-term profit.

By the way, that restaurant has recently opened up again. My friends and I went there for dinner last Friday night. We noticed that the new owner was walking around greeting everyone. He eventually made his way to our table, introduced himself and said, “Can I get anyone anything? It’s great to see you here tonight and hope to see you again soon. Thank you.”

Now, you tell me: Do you think we’ll go back?

This story was originally published by Joe Marconi in Ratchet+Wrench on February 1st, 2019

I think it’s safe to say that few people go to McDonald’s for the fine dining. In fact, McDonald’s struggled a few years back when it introduced healthy choices on its menu. Even with its challenges, McDonald’s is considered one of the most successful business models on the planet. It’s a brand that is so well known for its consistency that it actually promotes comfort in the mind of the consumer—a lesson in marketing that could prove powerful for your business.

Imagine yourself traveling with your family on a highway far from home one night. It’s late, everyone’s hungry, and you’ve been on the road for hours. You’re not familiar with the area but you tell yourself to turn off the next exit and find food. As you drive off the exit, you notice a cluster of stores and bright lights; a good sign for weary travelers. As you approach the stores and bright lights you notice two food establishments: Billy’s Burgers and McDonald’s. The only two restaurants in town. Now you tell me: Which one would you choose? Most would choose McDonald’s.

While there are many reasons why most people would choose McDonald’s over Billy’s Burgers, perhaps the most compelling reason is that McDonald’s has done an amazing job building its brand on the consistency of its service and its products. McDonald’s’ customers know exactly what they are getting, and that communicates comfort. People tend to feel more secure with what they know and what they anticipate.

So, what does McDonald’s have to do with running a repair shop? It’s the marketing lesson of consistency of service. Promoting consistent world-class service with each customer will create an experience that will give customers a compelling reason to return in the future.

Now, most of us are not franchised across the country, and many of us are single location business owners. Our business model is different in that we tend to build relationships over time. While we may not be a national brand, we can still have brand recognition in our community. We can still have a brand that communicates consistency and comfort; a winning marketing strategy.

When a customer walks into your business, it’s not because he or she is hungry and looking to eat a meal. There’s a problem with his or her car, or a service they need to have done. People rely on their cars and leaving their car at your shop can be disrupting to their lives. This causes a level of anxiety within every customer. We need to recognize this and find ways to reduce or eliminate this anxiety. If not, the experience won’t burn a positive impression in their mind, which means they may not be back.

The customer experience is a crucial element to the success of any company. But, do we fully understand the impact of consistency in service at every step of the customer experience? How being consistent can promote a feeling of comfort and security? Your customers must be greeted the same, the phones must be answered the same, car delivery must be the same, and the quality of service and repairs must be consistent. Something as simple as forgetting the lube sticker or not resetting the maintenance light can raise anxiety and make the customer question the quality of your service, which will have a negative effect on the entire experience.

However, the marketing lesson is not only how you define great customer service, but in defining how to deliver consistent, great customer service at every step of the customer experience, time and time again.

This strategy will ease the anxiety within your customer, which will benefit you the next time your customer’s check engine light comes on or when her car needs servicing again. By delivering a consistent, amazing customer experience again and again, you will instill comfort and security in your customer’s mind. This simple strategy increases the odds that the customer will think of you the next time for their automotive needs. And that’s the secret of McDonald’s.

Think about this. A consumer is traveling to work on a Monday morning. She notices that oil change maintenance is on. This consumer has been to your shop, the dealership and the local quick lube in the past. She knows the cars needs servicing. Where will she choose to get her oil change done? Will it be your shop? Will it be the dealership or quick lube? That all depends on what business made the best impression in her mind.

This story was originally published by Joe Marconi in Ratchet+Wrench on January 25th, 2019

Can someone truly have two personalities? A real life Dr. Jekyll and Mr. Hyde—the one you see, and the one everyone else sees? I had a Dr. Jekyll and Mr. Hyde employee a number of years ago; we’ll call him Dr. J. He was my shop foreman and helped the manager run the daily operations. Dr. J was employed about five years before things began to change.

I first learned about Dr. J’s erratic behavior from a few of my employees. According to these employees, his behavior was destructive, disrespectful and rude. He never acted differently in front of me, so I had a hard time understanding what was going on. I talked to Dr. J about what others were saying, and he looked stunned.

“Joe, I really can’t tell you why anyone would be unhappy with me. I get along with everyone,” he told me.

I met with the employees who expressed concerns and let them know that I appreciated their feedback. I told them that Dr. J had been with us for a number of years and that I had never witnessed any unusual behavior from him. I tried to look at all sides and suggested that perhaps he was going through some personal issues, so let’s try to be a little more understanding.

Out of respect, the employees agreed—but not for long. I was away on a business trip when I got a disturbing text message from one of my technicians. The text read, “Joe, if you don’t do something about Dr. J, we’ll deal with it ourselves.” It was late when I got the text, but decided to call the tech anyway. He told me in great detail what Dr. J was saying and how he behaved. I was shocked by what the tech told me. Could this person be a real life Jekyll and Hyde?

It was early Monday morning, my first day back, when my office manager came into my office, closed the door behind her and said, “Joe, if you don’t do something about Dr. J, people are going to quit.” I knew at this point I had a real problem on my hands.

I brought Dr. J into my office and told him everything that I had heard. I told him that the employees did not like the way he treated them and that the harsh words he used was causing a problem with everyone. Again, Dr. J was defensive and denied everything. However, this time he told me his perspective of the situation.

According to Dr. J, the rest of the employees were not pulling their weight and that all he was trying to do was to motivate them. I tried to explain to him that criticism and harsh words are viewed as an attack. And if this strategy is repeated over and over, people will push back and shut down—the exact opposite of any intended good. I could tell by the look on Dr. J’s face that he really didn’t agree with what I was saying, but he told me that he would take my opinion under consideration.

After that meeting, I paid careful attention to Dr. J’s treatment of others. All seemed good. Then one day, I witnessed the Jekyll and Hyde persona for myself. Dr. J didn’t know I was in the front office as he lashed out at one of the technicians. The tone and the words that came out of his mouth were unacceptable and appalling. I saw firsthand what everyone in the shop was experiencing. After repeated attempts to correct his behavior, his conduct never improved. It was time to let him go.

I never found out what changed Dr. J, but I did feel confident that I gave him every opportunity to correct his behavior. While Dr. J may have fooled me initially, I have to admit that I did see that the mood of the shop was tense and morale was down. With Dr. J no longer employed, morale improved and everything went back to normal.

The workplace environment is a delicate balance between culture and production. It’s also filled with emotions. People want to rally together for the greater good. But, they also need to know that their leader protects them from any threats that attempts to harm the team. It’s also wise not to readily dismiss the concerns your employees express to you. Be on the lookout in your shop. You just might have a Dr. J of your own.

This story was originally published by Joe Marconi in Ratchet+Wrench on December 7th, 2018

I will never forget the day I met Carlos. It was 13 years ago at a small business conference in New York City. The conference drew business owners from all types of industries throughout the greater New York area. Carlos was sitting next to me at orientation. The day was lined up with guest speakers, workshops and networking opportunities. By the third networking break, Carlos and I were hitting it off. We traded war stories, discussed business challenges and brainstormed new ideas. Carlos owns two Italian restaurants, one in Manhattan and the other in Brooklyn. His first restaurant was founded in 1986 when he was 27 years old. I finally asked Carlos, “What’s your background? Did you go school to become a chef? Did your family own a restaurant? Do you enjoy cooking?” Carlos turned to me, smiled, and said, “Joe, I am going to let you in on a little-known secret: I have never cooked a meal in my life.”

Unlike Carlos and his business venture, most auto repair businesses are started by technicians and use their technical skills to run their companies. I was one of them. I spent years honing my technical skills from the time I graduated high school in 1973 to my first day in business, Oct. 1, 1980. I worked hard at becoming the absolute best automotive technician I could possibly become. I also spent another decade after starting my business improving those skills. That is, until one day I realized that while I may have used my technical skills to start and initially build my business, it wasn’t enough.

In the first 10 years, I grew my business primarily with my hands, my strength and my determination. At the end of that decade, I hit a wall. Thankfully, that wall knocked some sense into me. My business was largely dependent on my abilities and what I could produce. After analyzing my business and realizing that it had plateaued for a number of years, I had to make a tough choice. It was time to put down the tools. I had to learn a different set of skills—the skills of running a company. This proved to be the right choice for me.

I’m not saying I regret what I did in those early years. I didn’t know any other way. I loved the auto industry and I loved working on cars. However, when the day came that I decided to become a business owner, my life changed. And, my awareness of how to build and run a business should have changed with it.

There are shop owners that were never technicians, and do quite well. It’s argued that they have an advantage over technician-turned-shop-owners. A technician’s brain is wired to look at the problem at hand, create a solution and move on. An entrepreneur looks at business from a different perspective: always looking to the future, at growth and what other greater things can be accomplished.

I remember many years ago meeting a very successful shop owner from the west coast at a trade show. We were both standing at a booth that displayed emissions-related products. I picked up a sensor, turned to this shop owner and asked what he thought of the new air fuel ratio sensors. He replied, “I wouldn’t know an oxygen sensor from a spark plug.” I kept silent. This shop owner was, and still is, well known in the industry—and very successful.

Here’s the bottom line: As a business owner, the skills of repairing cars have little to do with the skills needed for long-term business success. For many of you with a technical background, you may have come to the same conclusion. If you have not come to this realization, please take a long hard look at your life and your business. While you may love to be in the bays, your place it a helm of the ship. Use those technical skills, but understand that those skills may have gotten you this far, but they won’t get your business to where it needs to be. It will be your business skills and people skills that builds a sustainable company that continues to grow and becomes a source of enrichment for you, your family, your employees and their families.

Carlos and I still keep in contact with each other and he still owns and operates his restaurants. Carlos called me the other day and told me that he actually had the opportunity recently to work in the kitchen at one of his restaurants. Perhaps even entrepreneurs can cross over into the world of technicians. I’m betting it did a world of good for Carlos.

This story was originally published by Joe Marconi in Ratchet+Wrench on November 1st, 2018