Challenges and Opportunities
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By Joe Marconi
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
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By Joe Marconi
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
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By tco
Accepting Credit Cards at 0% cost
Credit card fees for merchants have drastically gone up in recent years, especially for reward card purchases, making credit card fees one of businesses largest expenses. Interchange fees for reward cards have gone up by 24% in a recent 4-year period. The highest reward card fees to a merchant are now around 3% of the transaction total (not including what the markup from whomever sold you their credit card processing). Many people have probably seen Samuel L. Jackson TV commercials promoting Capital One’s Quick Silver credit card, paraquoting, “The Quick Silver credit card will give you 1.5% cash back on all of your purchases.” Who do you think is actually giving these customers 1.5% of their cash back on their credit card purchases? You guessed it- you, the merchant.
What’s a business owner to do?
Do nothing Raise the products or services prices to account for higher credit card fees Offer a cash discount Don’t accept credit cards Or, provide your customer a choice when they pay with a card to pay a surcharge or not- 0% credit card costs to the merchant All of these options have their pluses and minuses, but with the ever higher and higher fees credit cards are charging to merchants, there are other methods where technology and consumer choice can help mitigate these fees.
0% credit card cost is relatively new legal method of accepting card payments in the US. The credit card companies fought to not allow consumers a choice to pay a surcharge with credit card or zero fees with a debit card. The credit card companies make much less money with a debit card opposed to a credit card... This case went all the way to the US Supreme Court this decade. The credit card companies lost and consumers being able to choose to pay a surcharge with a credit card or zero fees with a debit card is now legal in 45 states. The remainder of the 5 states will likely be joining the other 45 states in the near future as there are still ongoing court proceedings.
The US is now following the Australian model which has been allowing merchants to surcharge since 2003. Currently, 42% of all merchants in Australia pass on a surcharge to customers who use a credit card.
Here’s an option that you might not know about, until now:
When your consumer decides to pay with a card, they have two options. If they use a credit card, a small fee will be charged to their card. If they use a debit card, there will be no fee to the consumer. Our software does all the work and explains to the customer of their choice prior to the charge being authorized.
What exactly are the costs to the merchant and to the consumer?
For credit cards: Merchant pays zero credit card fees, the consumer pays 3.5% of the transaction amount
For debit cards: Merchant pays 1% + $0.25/authorization, the consumer pays Zero fees
Facts:
A card swiper is not needed: credit card information can be typed in a phone, computer over the phone and in-person. A 'brick' card swiper/dipper is available if needed.
Works with online sales/invoices
Simple application process, no upfront cost, no term contract, no cancellation fee and complies with all credit card rules and regulations
If you auto batch by 8:00 PM EST, you get your money the next day
Up-and-running within a week
Benefits to the Merchant:
Being fair to your consumer by offering them a choice to pay a fee or not, while eliminating your credit card fees, which can be up to 3% of your total credit card sales.
Simple to use and all charges are viewable through real-time online portal.
Support: our team is there when you need us, but it truly is very straight forward.
We realize this solution is not for everyone. But, you now have the opportunity to no longer pay credit card fees, forever. Reach out through ASO or here if you are interested in discussing further: https://www.lomasolutions.com/contact
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By insomniac
Iv noticed over the years there are times when business/car count drops off by a huge amount all at once. Last year it was brutal in January and got worse in February. It got busier the 2nd week of March and was pretty steady the rest of the year with my best month ever in November then even topped that in December. But this year its back to the same. January came leads completely dropped out, February came and it got worse, just like last year. Now I know its just a waiting game and business will pick back up. Its not just me every shop in the area is completely empty. --- What triggers these pattern down turns? Has anyone ever figured that out? Thought?
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By Elite Worldwide Inc.
Let’s say you’re looking to hire a superstar technician. You find one who has a proven track record of success, and put them through a well-constructed interview process. You decide that the person sitting in front of you is the perfect fit, and you make them a formal job offer in hopes that they will agree to join your team. They agree, and for the first time in a while you’re able to sleep throughout the night, because you know you’ve done your due diligence, and have finally found the top tech you’ve so desperately been needing. All good so far, right?
Your new hire comes to work on Monday, and you’re off to a great start. And then…. it happens. Within the first few weeks you start to get the sinking feeling that you may have hired the wrong person. There’s no question that they can fix cars the right way, and they do it quickly. They also show up every day on time, and they keep their workplace clean. The problem is, they don’t follow your procedures very well. Your key employees are telling you that the new guy seems to complain quite a bit about meaningless things, and they’re sad to report that he’s not very social either.
You start to hope that he’ll either “adjust or come around”, or that he’s just dealing with some personal issues that will soon pass. But after a month or two you reach the inevitable conclusion – this guy doesn’t like to follow rules, he has an attitude that doesn’t fit well in your shop, and your other employees are not very pleased that he’s working with you. After many sleepless nights, you decide to let him go, and you start the process all over again.
Unfortunately, many shop owners live in this world of high employee turnover, or end up telling themselves that they’d rather keep someone who’s not a good fit than run the risk of simply swapping out one bad employee for another. If this sounds all too familiar to you, then consider this:
The trap most shop owners fall into is they hire people for what they know, and they end up firing them… for who they are.
To put it another way, shop owners often hire people for their skills, and they fire them for their behavior. So, the best-kept secret to hiring superstar techs and advisors? It’s going a step beyond learning about their skills and experience, and learning more about who they are as a person. As someone who has grown some of the most successful shops in America, I’ve learned over the years that in order to hire top employees that my entire team will really enjoy working with, I have to pay very close attention to their personalities and behaviors during the interview process. I do that to this day with Elite, and it’s been one of the most important keys to my hiring success. However, I also know that my perception of someone’s personality will only take me so far, so I have every applicant complete a 45-minute online behavioral assessment before the first interview. Here’s why.
An assessment can tell us whether an applicant has the propensity to follow rules, how social they are, their level of optimism, how open they are to constructive feedback, and a whole lot more. Not only do these assessments help us conclude whether the applicant is even someone we should interview, but they also give us direction on where we should dig deeper, and the questions we should ask during the interviews. For example, if the assessment suggests they are not very social, then you know you need to ask questions about how they worked with others in the past so you can discover if there were personality conflicts, ego issues, etc. If the assessment suggests they have a propensity to ignore rules and procedures, you can ask them specific questions about how they inspected and repaired cars, and how they interacted with the advisors.
So here’s what I’m going to ask you to do. First, think about the people you’ve fired. Hopefully it hasn’t been many, but I suspect you will discover that with rare exception, the reason you fired them had little to do with their skills, but was because of who they were as a person or how they behaved. Secondly, I’m going to ask that you accept the fact that there are many behaviors (and propensities) that will show up on behavioral assessments that you or I would never be able to detect during an interview, no matter how thorough we may be. And lastly, consider that if you do the math, hiring the wrong person is going to cost you at least $5,000.
If you now agree that you need to dig deep and learn more about who the person really is before you hire them, you need to do what Fortune 500 companies and the top shop owners in America do, and have every applicant complete a behavioral assessment before the first interview. There are many companies that provide such services, such as Predictive Index, Berke, and Myers-Briggs, to name a few. We use Berke, and have been quite pleased.
If you do begin assessing the people you may hire, then you have my promise: You’ll have a much higher probability of hiring the techs and advisors that your other employees will enjoy working with, they’ll follow your rules, and you’ll be able to go to sleep at night knowing you have an incredible team…of superstars.
“Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers the industry’s #1 peer group of 90 successful shop owners, training and coaching from top shop owners, service advisor training, along with online and in-class sales, marketing and shop management courses. You can contact Elite at [email protected], or by calling 800-204-3548."
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By brian lorenzo
I have an opportunity to rent a 3rd location in a fairly busy area with a lot of potential. Problem is the current shop that is there owns the building and is moving 3 1/2 miles down the road will be the land lord.
Is this a good idea? anyone else have this situation?
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By Elon Block
Hi everyone,
In case you hadn't heard, here's something you need to be aware of...
AAA is making some changes, in the way they are doing business.
Within the last few years, AAA has decided to build their own company-owned facilities.
Here is a link, with an example of search results, drivers will see when they type in a zip code:
http://bit.ly/2bk7prG
Pay special attention to the search results marked (AAA Owned Facility).
The facilities are impressive and are gaining traction:
http://midatlantic.aaa.com/Automotive/ClubOwnedRepair/Aboutus/New
As you can see, their slogan is, "Auto Repair From A Name You Trust".
This is genius marketing, on their part...
Because customers equate the AAA logo, as a shop they can trust.
The other major change they've made is...
The new requirements for the AAA certification renewal.
Many shop owners did not read the fine print or notice the changes to the agreement.
In other words, the fine print requires certified shops to give AAA access to the shop's customer database.
The biggest concern is if you give them access to your customer database and then, they open a AAA Owned Facility, in your backyard...
They now have a built-in customer base they can market to.
What that means to you is...
This a major conflict of interest because now, they have all of your customers' information, which they can use to actively market and essentially steal your customers.
So, this is something to be considered, in deciding to continue to be affiliated, as a AAA certified shop.
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By Elon Block
Hi everyone,
New blog post on this very important topic here:
http://www.autoshopowner.com/blog/16/entry-190-did-you-see-the-latest-goodyear-tire-rubber-announcement/
All major pricing changes like this one, affects everyone in the auto repair industry.
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By Elon Block
New announcement from Michelin. Looks like they're getting into the online game with a new and
different approach to making it easy for the customer to do business with them. There are a number
of interesting things in the website's FAQ's that caught my eye.
http://www.moderntiredealer.com/news/story/2015/08/michelin-pilot-program-sells-tires-online-and-offers-concierge-service.aspx
Even if you're not a tire dealer, this move is a game-changer, What are your thoughts on this?
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By ncsvoboda7
Hey guys,
So I am still working on a business plan for a central Kansas startup shop and I am looking around and am thinking to myself, how on earth am I going to rise to the top and be better than every Joe Shmoe that knows how to turn a wrench and has a garage on that busy little corner lot.
Before I go any further in planning my business, I want to decide whether or not I can compete with all the different competition and I would really like everyone's input on this.
We have everything from the "best price in town but here is a Ziploc with some extra parts we didn't know what to do with" to the "would you like a refill on that shade grown Columbian imported coffee?" shop in town.
Where can I fit in? How do i build my own niche to make money and gain market share? What can I do to compete or rise above the rest? How can I stand out from the rest and nudge my way in to gain some share in the auto repair industry?
I am planning for a slightly higher end shop, I don't want to be the lowest price shop in town for sure but I also don't quite want to be the most expensive. I want to charge a little more for a quality job, great customer service and a few extras like maybe pickup and dropoff services or free coffee and cable in the waiting area. How can I make sure I can succeed in an already saturated and very competitive market?
Thanks!
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