David Rogers' Blog

This article is from my business partner, Terry Keller, who owns Keller Bros. Auto Repair in Littleton, CO. For more information about Terry, you can check out his free ebook on our website, "Is My Story Your Story?" Click here to get it!

Benchmarking

Most of us shop owners understand the process of comparing our numbers to a set of benchmarks or standards. I remember way back over 35 years ago, I had monthly meetings with my accountant where he showed me my shop’s financials with the percentages and ratios, and then told me where they should be. It was always a frustrating experience – not just because my numbers were off, but because I didn’t know how to fix most of them and neither did he.

A decade later, as my experimentation nudged some of my numbers to higher levels, I ended up believing it was impossible to improve them above a certain point. Looking back now, that level of performance was mediocre at best…and by today’s standards wouldn’t allow me to stay in business for more than a couple of months! As uncontrollable overhead continues to go up, we shop owners must have our pencil very sharp and keep our production and profits at the right levels.

So What Are the Right Levels?

This is EXACTLY the age-old problem that every business owner has faced since products, services and money first started changing hands thousands of years ago. Who is to say where sales, profitability and production levels SHOULD BE? How much is enough? How much is too much? Can you try for too much?

If you set your prices high enough to make a good profit but don’t work hard to control your expenses, can you price yourself above the market and out of business? The answer is YES! What if you don’t charge enough to make a reasonable profit…how long can you do that? How long will your family put up with not getting regular paychecks? What if your employees can’t produce an adequate quality or quantity of work? How is that working for you?

Needless to say this stuff is way past important. With the lingering bad economy and higher inflation just around the corner, it is vital to know exactly where your numbers are and where they need to be.

But there’s something even more important than understanding some set of so-called benchmarks put forth by some so-called industry guru. It’s this: do you BELIEVE THEM? Do you believe they are real? Have you seen first-hand evidence that they are really being achieved AND SUSTAINED by other shops just like yours?

Stay tuned for next time, when Terry covers what your shop SHOULD be comparing numbers to and who you can TRUST! In the mean time, if you have any questions, leave a comment below or contact us at [email protected].

Back in November, the Federal Reserve announced that it would purchase $600 billion in U.S treasuries. What does this mean? What could it mean to your shop?

Very high inflation will cause prices and the cost of living to go way up. That will hurt your customers and your business in several ways. Is it possible to fix it? What can we do right now to stay busy and profitable in the face of high inflation that may continue for years?

If you've been wondering what Quantitative Easing II, inflation, hyper-inflation, and the economy in general mean for your shop, I encourage you to read my business partner Terry's new blog, "Will Hyper-Inflation Kill Your Shop?"

It's a no-nonsense guide to what we as shop owners can expect over the coming weeks, months and years as the government continues to print more and more money. Click here to read it!

This is part two of an article from my business partner, Terry Keller, who owns Keller Bros. Auto Repair in Littleton, CO. For more information about Terry, you can check out his free ebook on our website, "Is My Story Your Story?" Click here to get it!

The Missing Piece of the Puzzle

It wasn’t until I discovered a way to measure performance that the light went on. Let me caution that measurement by itself will not ensure sustained improvement. However, I found that just by measuring, improvement occurred in every part of the business we tried it in.

The next task was to figure out exactly what to measure and how. We worked for years at perfecting this process using reports, spreadsheets, management checklists and duties checklists. It was many years later I found that replacing myself with a strong manager/leader in my shop and establishing a solid chain of command were the last missing pieces to this puzzle of sustaining improvement.

Today, we have established a firm baseline of performance in every aspect of our shop. Each manager, supervisor and service writer operates from a set of metrics every day. Even the techs know what is expected of them and that management is measuring their daily performance and will hold them accountable for any under-performance trend. Everyone on the team clearly knows the duties, processes and policies for their job position through the use of forms and checklists that must be turned in with each job or, as the case may be, daily.

This is absolutely necessary in each area you wish to apply a training program. Unless you know where your current level of performance is in that area, you cannot measure improvement after training. Any evaluation of improvement you attempt is meaningless without honest, objective measurement...unless you like to guess or continue to lie to yourself like I did for years!

The Bottom Line

The bottom line is you have to lead, or you must find a leader who has the strengths you lack (either by promoting within your organization or by hiring one). No one is perfect. We all have strengths and weaknesses. Do you know yours? Have you honestly thought about it? There is no shame in recognizing your weaknesses – only in continuing to ignore them!

There are dozens of necessary traits in the overall leadership team of any successful organization. It’s impossible for one human being to have them all. The smartest and best leaders out there know this and hire and delegate around their own weaknesses.

Once you begin to address this issue and implement a good set of measurement systems, your training programs can be elevated and improved.

If you want to know more about how we do this in our shop, contact us at [email protected].

This article is from my business partner, Terry Keller, who owns Keller Bros. Auto Repair in Littleton, CO. For more information about Terry, you can check out his free ebook on our website, "Is My Story Your Story?" Click here to get it!

I can just imagine some of you thinking, “Why waste time reading this when I’ve already tried everything to train my people to act right and perform well AND IT CAN’T BE DONE?! Why keep beating my head against the wall?”

Or, maybe you’re not so cynical and would like a couple of tips on how to improve. Either way, I believe that your investment of the next couple of minutes will be well worth it!

For the first 25 years in my career as a shop owner I tried every kind of training for myself and for my employees I could find. Of course there was a lot of technical training out there and we pretty much did it all. We could fix cars well, but the rest of the operation was not performing as I would have liked. In fact, it was in chaos most of the time.

Why Training Didn’t Work!

It seemed that every management or sales class we went to created some hope and motivated us to change. However, after a few weeks, things had drifted back the way they were except everyone was even more frustrated. I was angry because my team couldn’t or wouldn’t make the new ideas and systems stick. And they were upset because I expected them to do things they were incapable of doing – because of their lack of aptitude, or because of my poor communication/teaching skills or my inability to manage or lead them properly.

It was the little things that drove me nuts: parts returns and credits, parts not billed, customers not taken care of, things forgotten, and many other broken rules or procedures. I didn’t know it at the time, but I was not fit to lead. Yes, I got very upset every few months and threatened everyone in a fit of anger, but that only produced a momentary improvement in performance. They all understood my routine and knew within a few days they could slack off again...AND I LET THEM!

On the surface, it appeared I was the only one who understood what I wanted. However, the truth was that no one was committed to making new training knowledge stick. I repeatedly stated I did not want it this way, but the proof of my actions (or should I say inaction?) and those of my staff overpowered any thoughts, feelings, or vision of sticking to a better way of doing things.

Why couldn’t we pull this off? What was missing? Stay tuned...I'll post the missing piece of the puzzle next time!

Hopefully you're getting ready to attend CARS in a few weeks. If you're coming, be sure to stop by our booth and see us!

But no matter what your plans, I wanted to address a problem we dealt with in our shop for years: training that didn't stick.

There's no denying that one of the greatest things that ever happened in our shop is service writer training. We have tracked our training experiences and how they affect each individual, and have at times actually experienced an increase in our sales, average repair order, and of course, our profits...sometimes as much as 30% after a single training!

But the downside (as I'm sure you know) is that it usually didn’t last! It seemed we could not sustain the results from training for more than a range of a few days to several weeks…but almost always, the majority of the information was either lost, forgotten, or discarded within 90 days.

The good news is you don’t have to put up with wasted time and money...here’s how we’ve reversed that trend in our shop...

1. 
    
   
2. Constant training...every day, every week. We never stop teaching our staff what we expect and how they can improve.
   
3. We measure everything they do, and hold them accountable to our expectations daily. We also are able to better appreciate them when they are doing it right. The key word is accountability…set benchmarks, track their numbers daily, and make sure that both you and your service writers can see their training turn into real dollars.
   
4. We make sure that ownership is on the same page by having owners attend the training with the service and sales staff. If the owner is above what we’re trying to teach, then he’ll never get the employees to do it 100%. Why? Because he doesn’t even know what the training specifics were, so how can the owner hold the staff accountable to performing something he didn’t attend?
   

So, with only a few weeks left until CARS in Vegas, what do you do with your team in your shop to make sure the training sticks? Please share!

Are you coming to CARS in Las Vegas this year? You'll want to stop by the Auto Profit Masters booth!

We're giving away two iPads, a VideoStik tool for diagnosing hard-to-see repairs, and much more...

Plus, we're going to be showing off the earth-shattering RPM ToolKit, the SCAN TOOL you've always wanted for your shop!

I hope to see you there!

If you've missed the past couple blogs, I've been sharing the secrets we use in our shop to increase our Lube Lane tickets by $200.

To quickly recap, on every oil change ticket...

1. Tell the customer that you are going to perform a complete inspection on the vehicle when you first sign them in.

2. Be SURE that you begin asking questions about the HISTORY of the vehicle, and WHICH services have been performed as far as the PM goes!

3. Get the vehicle pulled around and out of sight of the waiting customers IMMEDIATELY (even if you aren’t ready for it in the bay yet)!

4. Make SURE that your technician INSPECTS the vehicle FIRST, and that the customer receives the ADVISEMENT on what he finds within 15 MINUTES of signing in!

The final thing we ALWAYS do is...

5. TAKE the Customer OUT INTO the BAY to SEE what’s needed!

Next to #4 above, this is the biggest mistake made in shops every day…people think telling someone about their needs is the same as SHOWING them...this is simply WRONG. It will never work as well if you do it like that.) We have found that by SHOWING the customer WHILE they are SEEING it with their OWN EYES, it is literally 5 times MORE effective in capturing the sale NOW.

Ok…now you have the 5 MOST important KEYS to CAPTURING the SALE in your Oil Change operations. The only question left now is: Are you a good enough LEADER to MAKE IT HAPPEN EVERY TIME?

It’s changes like these that can turn around your Average RO and start to make you some real money...

One last thing…I know there are some of you out there who want to make small changes like these to turn around your Average RO, but you can’t find the right people to make it happen, or can’t find right customers who appreciate service like this or spend money.

I know because I’ve seen and helped hundreds of shops in the same situation...you’re not alone, and you’re not out of luck. Take a look at some of the other ways we help shops like yours and then drop me a line...I’m here to help.

Hopefully you saw my first entry for "Timing the Advisement of an Oil Change!" It covered the first two things you should ALWAYS do. To recap:

1. Tell the customer that you are going to perform a complete inspection on the vehicle when you first sign them in.

2. Be SURE that you begin asking questions about the HISTORY of the vehicle, and WHICH services have been performed as far as the PM goes!

Here are the next two things that can add $200 to your ROs if you do them EVERY TIME:

3. Get the vehicle pulled around and out of sight of the waiting customers IMMEDIATELY (even if you aren’t ready for it in the bay yet)!

Customers want to feel that they are the only thing that matters to you, the second they show up… Waiting will create doubt, feelings of neglect, and will delay the process and lower your sales!

4. Make SURE that your technician INSPECTS the vehicle FIRST, and that the customer receives the ADVISEMENT on what he finds within 15 MINUTES of signing in!

If we wait til we have already filled the vehicle with new oil, and put the wheels back down on the ground, it’s TOO LATE! The customer is already thinking about the rest of their afternoon…their appointments, promises, shopping, etc…and whatever you say will bounce off their ears like they are filled with concrete. You MUST advise them RIGHT AWAY, BEFORE the "wheels are back down on the ground."

What about you...what do you do every time to increase your lube lane tickets?

Stay tuned for the third and final entry in this series!

In a session with a client last week, something I had been trying to teach everyone for a long time suddenly became brilliantly clear to both of us…and it’s going to mean a HUGE difference for his shop this year.

I call it the “first quarter” of the sales “game” concept. It’s the difference between a $15.00 oil change and a $350.00 average ticket!

The idea is this: when a person comes in for a quick service like an oil change, it’s important that we understand that we are dealing with an entirely different customer than the one who comes in on a tow hook, or who is seeking a diagnosis for whatever sound, smell, noise, or light that’s flashing on their dash.

The customer with the broken car KNOWS that he’s in for a process, perhaps even days. On the contrary, the oil change customer (think “fast-lube”) has an entire agenda already planned out for their day, and leaving their wheels with you for the rest of it just isn’t in the plans. So when there is a serious issue with the vehicle — be it a raw fuel link onto the exhaust or 3 broken wheel studs on the driver’s front — if you want the opportunity to capture that work at YOUR shop, there are a few things I’ve learned, (and that we teach) that you may like to adopt.

Here are the first two things to ALWAYS do (stay tuned for the rest...I'll post them later!)...

1. Tell the customer that you are going to perform a complete inspection on the vehicle when you first sign them in.

It’s a courtesy, but it’s non-negotiable. If they try to refuse, simply advise them that you aren’t trying to “sell” them anything, but that due to the fact that the car is in your bay, you have certain responsibilities…one of which is to do your best to inform the customer of any and all needs (especially of a safety nature) and that your “regular customer” actually want and expect this valuable service, so it is policy.

(Remember that letting them dictate that you do not do the inspection could open you up to legal liability if they then leave your shop and something falls off the vehicle and they have an accident or incur some expense!)

2. Be SURE that you begin asking questions about the HISTORY of the vehicle, and WHICH services have been performed as far as the PM goes!

This is to open their minds to the sale and remind them that owning a car is much more than knowing where to put gasoline and where their keys are!

Stay tuned for the other things to always to do to increase the size of every oil change ticket...I'll post them soon!

The RPM ToolKit I mentioned a few weeks ago is so close to being ready to go live it hurts!

We're finishing up the ability for shops to be able to compete with other shops, service writers with other service writers, and techs with other techs on benchmarks...it's got me excited and our clients excited and I wanted to share it with you, too!

But that's not my only reason for sharing...I thought I'd ask you: how often have you ever thought about being able to compare your shop to other shops across the country? What sets you apart from all of the other shops out there...what can nobody beat you at?

Anyway, I won't ramble on for too much longer. If you want, drop a line and tell me about your shop! And if you're interested in learning more about the RPM ToolKit, click here.

Have a great rest of your week!

Last Saturday, I cleaned out my car…after putting it off for over two weeks! What is it about the smallest of tasks that we just cannot drag ourselves to do?

I mean, isn’t it crazy that we’d let something we’re putting off, sit in the back of our minds and eat away at our enjoyment of everything we’re doing until we get it done…just because it’s less fun than watching TV, reading your HOA rules and regulations, or cleaning the cat’s litter box?

What a nice feeling to have it done, though…I can actually get more than one person in my Yukon XL now…

Now that you’re thinking about the things you are putting off and how they are affecting your well being, I’d like you to take a step further into this thought and ask you how this relates to your current financial life, and your future plans…such as retirement. We all know the stock market is a mess, and that it’s scary to invest out there…even banks we’ve long trusted have taken nose-dives.

So what’s a hard working earner to do? Well, I can’t be the one to tell you that, but I am willing to share with you a few of the most critical changes I’ve made in my own finances lately. I am not a financial advisor, I am not an expert. I am simply a guy in his 40’s who refuses to start all over again, or watch his 401k and other investments dissolve, dilute, or shrink…and I don’t want to work past 50, so I have no time to sit this out and hope things change. I have to be proactive and aware of what is going on around me or I could be in some real hot water, and that’s just not an option at this point in my life.

So…first of all, in order to understand what you can afford to invest, you must first take a real inventory of your situation. I know what you’re thinking… “What if I don’t have ANY money?” Or, “What if I am in serious debt?” Or maybe even, “Investing isn’t a reality for me!” It’s ok…no matter WHERE you are in the list above, what I am going to share with you will help you snap out of your current state and into more control of your personal situation, so that you may pay off debt, reduce expenses, find better rates on your money, and help you feel free.

To get a clear picture of where you’re at, there are several resources I recommend! First register at www.Mint.com, it’s free and it could truly change your life if you are honest with yourself and take action on what you find there. This is a site that will allow you to see ALL of your money matters at a glimpse…every account in one place…and that’s just the start. I can’t begin to explain it all (and this is no infomercial), so just trust the author a touch, and go there and register…almost every one of you will be impressed, I am sure.

Second of all, consider setting up an electronic savings account with a good, solid, well reputed bank that offers superior rates to your local savings and loan. I am here to tell you, I have been investing cash into my ING Direct Orange Savings account for years at www.INGdirect.com, and have consistently earned rates far above ANYTHING my bank offers, and we run literally MILLIONS of dollars through the local bank every YEAR! I like to sweep about 3-5% of every deposit into a high yield savings account, or even a money market (as long as there are no fees). That way I can sweep some or all of it back into my business checking when needed for the business (tax time, crises, etc.). I also deposit a minimum of 10% — and try to push closer to 30% — of my take home pay into a separate higher-yield savings account or money market checking account.

Third of all, consider investing in metals. I personally like gold coins. I do not recommend numismatic coins…instead I do “semi-numismatic coins.” Those are the ones that are minted pre-1933, and therefore are not subject to government recall as they did with the gold bullion in the 1930’s (and could again)! I do not recommend how much a person should invest there, but have heard form very reliable sources that it should not be more than 5-20% of your total investments…so be careful. If you want a great broker that I have worked with for some time, email me and I’ll give you his number and name. The most important thing here, is to do a TON of research and talk to several people before you buy…be particular in your understanding of the “spread”, which is the commission you will be charged to purchase. It can be truly exorbitant, and ruin the chance of a decent return on your investment. Also avoid listening to all the hype on metals…find a good broker and start there.

Finally, I suggest that you list every budget item…all your monthly expenses and get RID of as many as you can. Start with the highest interest credit card you have. Take it out of your wallet or purse, and then begin to pay more off on that each month. Pay as much as you can while still saving some money in the savings account. You can find expenses that you do not desperately need every week…take the money you save form avoiding them and write a check every week to your highest interest debt. It will change your life and free you. I sold my ATV this year, which got rid of a $200.00 per MONTH storage unit! Now I can take that $200.00 and put it toward more important things, like SAVING and INVESTING in my FUTURE!

So…no excuses left…get at it, and PLEASE comment below and I’d really love it if you came back and commented over the next few months…lets help each other keep the commitment and make the recovery in our own homes!

Whether you've heard about WebTools or not, I thought I'd drop a quick line here and let you know that something even bigger is coming...

The WebTools are becoming the RPM ToolKit -- Rapid Profit Management for your shop. It's not just a measurement, training and accountability tool anymore...

It's going to be one of the biggest things your shop has ever seen.

I'm leaking it here first because there's no better dedicated group of shop owners anywhere. Keep your eyes and ears open because the RPM ToolKit is going to be BIG!

WHO: Only shop owners like you! Or ELSE!

DATE: Thursday, July 29, 2010

TIME: 3pm ET | 2pm CT | 1pm MT | 12pm PT | 11am AT

COST: $99 for Public | Free for APM Consulting and WebTools™ Clients

Click here to join us on Thursday!

Why am I being so harsh?

If anyone found out the info I'm teaching on the phone this Thursday, they could march down the street, open up a shop of their own, and take you out. With these secrets, they could put you out of business!

I want to help your shop succeed, but I can't do that if I'm helping your competition destroy you!

So what's the top secret info I'm teaching?

I call it "How to Get FOUND When You're in a HOLE!"

For some shops (like ours), it might mean that you're in a hole on the side of the road...hard to see even if you're looking for us!

For other shops, that hole might be a black hole of a marketing budget...never enough money in the marketing budget to keep your bays full of cars...and no matter what marketing you do, it doesn't seem to be effective.

It doesn't matter what kind of hole you're in...the solutions are the same. And this Thursday, I'll be giving you the TOP SECRET marketing tips that can get you out of ANY hole. But remember...come alone! Or you could be (inadvertently) training your competition to put you out of business!!!

Click here to join us on Thursday!

One of the oddest things I run into as a consultant and advisor to business owners, is the fact that so many just show up at work each morning like a security guard, and wait for the week to “happen.”

No wonder so many businesses are struggling! I mean there are major brands out there disappearing! Wouldn’t you think that by now, people would start to realize that the old ways of doing things are not working for them?

It’s not enough to just come in on Monday and HOPE that things are going to work out this week. It’s CRITICAL that we take on the perception and responsibilities of WINNERS…and yes, I said RESPONSIBILITIES…

Crazy, huh? Well, let me put it to you this way…do you think that Lance Armstrong had to accept a greater responsibility to win all those bike races?

How about John Elway, when he quarterbacked the Denver Broncos to TWO Super Bowl wins? What if John or Lance just “showed up on Monday” and waited to see how things were going to “happen?” Do you suppose either of them would have experienced the kind of fame, income, and admiration if they had just waited for a “lucky break?”

I think not.

I start out every week, (and every day for that matter), by taking a personal inventory each morning. By that, I mean that I wake up, stretch, and get into a mind frame of taking full responsibility for everything in my life. My health, my attitude, my income, my debt, and so on. Once there, I can easily see what I need to focus on personally, and I can make a short list of TODAY’S ACTION ITEMS.

It’s really important NOT to make a list bigger than I can get accomplished today…and preferably before noon! (It feels so GOOD to reach a feeling of accomplishment midway through my day, that it often fuels me to do another list at lunch time!)

I make my list in two categories. Items I need to accomplish myself, and items to DELEGATE to my team and staff. Then, depending upon what time it is in the AM (I am known for starting a bit before the team arrives at the office, like say 4 AM…), I usually call the team and begin, one at a time, visiting with each of them. I always focus first on their lives (“How was your evening/weekend?”), and let them tell me about their life and what’s going on…then I gently point them back to the day and I let them know clearly what I need and expect from them today. I always try to take care to explain the “why” rather than just give orders. I find they are much more conducive to my ideas and directions that way.

Once we accomplish that, I then set out to work on checking off each item on my own list, as time allows! It’s a wonderful way to keep things moving forward and making sure that even if something isn’t right during the day, progress RULES!

Whenever I am hiring a technician, I’ve found that it’s critical to ask a few questions before I even identify my business. It’s important to make sure that “the word doesn’t get out on the street” every time I need to upgrade or replace a staff member. No one wants to work for a shop that they have “heard” is suffering from a turnover of people. When they hear from the tool guys, the parts salesmen, and others that the shop is having “personnel problems,” or “can’t keep their techs,” your shop is suddenly plagued by the famous Can’t-Find-A-Tech-To-Save-Our-Lives disease.

So, when I advertise, I never list the name of the shop, and I often use a service like www.evoice.com in order to help me handle the process confidentially…I have a friend who is not associated with my shop record the message, and we have them email their resume (part of the message), and leave a detailed voice message….all before they even know who we are!

That allows us to review their resumes and listen to their voices up front. This is very helpful! You might be quite surprised at how much more sharply you can focus when the person is not sitting right in front of you. Sometimes an attitude comes through in the tone of voice, a large ego is often revealed, as are many other attributes that might not be desirable for this position.

Once you listen to them, and rule out the candidates who are not easily understood (marble-mouths), people who can’t follow the simple instructions left on the message, and others-you can SAVE A TON OF TIME by not meeting those applicants and instead zeroing in on the ones that really sound like what you WANT your staff to sound on the phone…people who convey a sense of hospitality, happiness, energy, and positivity!

Once I do call the best of the batch back, I am going to ask them about 20 questions, but here are the top three!

1. 
    
   
2. Are you working now, and how long have you been at this job?
   
3. In which areas are you certified, and are all those certifications up to date?
   
4. What type of work do you prefer, and what are you least comfortable with/capable of doing?
   

Even if you don’t ask anything else before they come in, these three questions are necessary before I am identifying my shop, and certainly before I am inviting the individual to come and disrupt my schedule and busy shop for an interview!

Remember, every time you hire the wrong person, you damage your relationships and credibility with all the other staff, and you could lose some very valuable customers…quickly!

Never hire a warm body, and seriously…take the time and make SURE the applicant FITS your NEEDS!