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Higher Car Counts & Quality Control


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Since our expansion last year, our car counts have increased significantly, possible too quickly. We shot out of the gate like a race horse but stumbled a bit on the turn. Nearly doubling our weekly car counts from 110-120 to over 200 at times can be challenging.

 

Although we had clearly defined processes and policy, nothing is like real-life. We pulled back on the reins and assessed the situation. We learned that we were understaffed in the shop and on the counter. We hired an additional service advisor and tech among other workflow changes.

 

It’s no secret that I am a proponent of healthy car counts; car counts equate to opportunity, opportunity equates to increased profits. My advice to anyone looking to increase car counts: create a systematic plan and implement the process in stages. Attempting to climb a ladder too fast might cause you to miss a rung and fall to the ground.

 

Joe,

 

That's great that you are doing so well. You don't seem to have been impacted by the economy too much. In San Diego (where its only cloudy and overcast when Joe Marconi visits) we all took a huge hit starting in 2008 but especially 2009. I went overboard with specials and advertising to get as many people in the door as I could during that time. Although we ended 2009 down 5% in sales, we were actually up 5% in car counts. This tells you that you average repair order went down, which often happens when car counts are too excessive to handle. There is a positive to high car count and a negative to high car count and it is important as a shop owner to identify this. I found when our car counts were high everyone was getting burned out and overworked. Profitability dropped and customer complaints can start to rise. You can go too fast too soon and destroy your business and reputation if you are not careful.

 

I also know that the effort in 2009 has paid dividends for 2010 as we are up 5% in sales and the profitablity is back. I scaled back on the coupons and advertising and the car count is now a little lower but the average ticket is higher and we are more profitable. The important thing is as a business owner, you need to understand this dynamic and not just from a "feeling" point of view. You should be tracking your daily sales, average repair order, car counts, and use accurate statistical data to make the proper management decisions.

 

So, here is what I've learned going "backwards", (I worked for an auto repair management company for over 5 years then left and bought my own shop. I call this going "backwards" because most auto repair management trainers no longer own shops. They sold them and now do training.)

 

1. Be careful about implementing all the programs, ideas, etc. that the management trainers teach. I implemented many ideas to increase car counts "oil change packages, lifetime oil changes, free oil changes, etc." While these can be good then can also be very destructive if not thought out. If you have a smaller facility you will turn it into a large volume low average repair/profitablity shop and burn everyone out. Many of those customers will not turn into anything because they after the freebie only. You have to kiss a lot of frogs with these programs to get a price and you can be "married" to the frogs if not careful. Again, do not make "emotional" decisions based on ideas from a seminar. Implement these things based on your statistics, management philosophy, business plan, and how they can fit with the ideas you recieved from a seminar.

 

2. Be even more careful about implementing employee management ideas from a seminar. Once you put an plan into place it is very difficult to undo it and will kill employee morale. I found through consulting with auto repair shops and dealing with their employees that the employees hated when the owner went away to a management seminar. This is mainly because the employees felt the owner took a "left turn" on them and became someone different and so the employees entire foundation of their employment is turned upside down. That could be a good thing in some cases but a disaster in most. Your employees choose to work with you in small business based on who you are more than anything. You wouldn't like it if your top employees took a "left turn" on you and the feeling is mutual. So, when before you implement employee management ideas, think through the process. I don't have enough time to tell you my ideas on how to implement these things successfully. I simply want to emphasize knowing your facts carefully before implementing.

 

Keith - Robert's Auto Service

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Keith,

First, let extend my sincere appreciation for your insight and sharing your thoughts with us. I want to emphasize to all ASO readers that Keith's background from the training side of business combined with actual shop ownership experience is a unique situation which we can all learn and benefit from.

 

I agree with your assessment. I warned many of my colleagues not to compromise on price in an effort to maintain car counts. As you have found out, an increase in car counts can decrease your overall profit. Busy does not always equate with profit. There needs to be a delicate balance between being accommodating and profitable. In addition, we must understand who are client base it and continue to market to these people. We have lived through possibly the toughest economic period in recent history. In the 30 years I have been in business, this appears to be the toughest.

 

I think the reason we were up in sales is due to our recent expansion and marketing programs. We did a lot of homework and due diligence finding our target audience and market heavy to this audience. I don't compromise on quality or want to be known as a discounter. And, so far it's working.

The issue with implementing ideas from a management training seminar is a touchy one. Many struggling shop owners, who happen to be great techs, are overwhelmed with new ideas and because of the problems they are having with their business, feel that they need to play catch-up. And, often ends up with a frustrated staff and disappointed results.

 

Keith, it was great hearing from you and please continue to participate in the forums. It's what ASO is all about; the free exchange and sharing of ideas and opinions.

Joe

 

Joe,

 

Thanks for the kind words. I will "come out of hiding" and be more proactive with this website. I really like this website and feel it is the best thing I have seen out there in terms of education and training for our industry. I will respond to more posts using my background of training and my past seven years of business ownership. I hope all is well out there.

 

Keith

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Keith, can you tell us a little about what lost leader programs you are using, if any. You warned about some of the oil change programs that may be destructive; are there any programs that are working for now?

 

Joe,

 

I don't have a quick answer on this one. I have a marketing program that ties everything in together. If you go to my website you will see my specials that I run. We don't have state safety inspections in california, only emissions testing. When I get a minute I will outline what I have been doing the past two years now that is working VERY well!

 

Keith

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  • Have you checked out Joe's Latest Blog?

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      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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