How do your service advisors close their sales with a customer? Are they pre-scheduling for future maintenance appointments? Brett Beachler’s business has a 40% close rate for pre-scheduled maintenance appointments. He discusses how to make your current customers, your future customers. Grab a pen and paper or head to the show notes on this episode. You don’t want to miss Brett’s closing presentation that can be implemented in your business.
Brett Beachler, Beachler’s Vehicle Care & Repair, Peoria, IL. Listen to Brett’s previous episodes HERE
Key Talking Points
Customer close procedure/presentation Try to understand what the other person sees and not just what your shop wants Factory specified maintenance review on cars- review the history on Carfax, review what the car needs according to the factory maintenance specifications. The system will actually calculate a date when it thinks you'll be due. Ask what are your plans on the car? Is the car paid for? Review with the customer what your technicians did. Solidify them saying “You guys are my guy.” Lay the groundwork for them to say “You know what? You just gave me all the right reasons to make an appointment 4, 5, 6, 7 months in advance” Send a text to them about a week ahead What you don't want to do- run the actual credit card amount and then try to explain it to the customer the factory maintenance and review etc.. As soon as they run that transaction, they're done. You must direct your advisors the best way they will get the highest batting average for pre-scheduling. Don't start with a closed transaction. If you don't capture them at that closed sale then the next thing is the email and the text, if we don't catch 'em there, then they call up three weeks later and say, “Hey, I just wanna schedule an oil change. And we go, oh, whoa, whoa, whoa, wait, wait, wait, wait, wait, you got all this factory maintenance dude. You wanna do it?”
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Motivation- based on relationship, culture, and attributes that empower them. You must be profitable to have financial rewards Your business model needs to be sustainable, growable, and expandable based on labor- you need to be profitable in labor Performance-based pay: pure pay for what they produce, to hourly based with an incentive scale that gets them to $50 to $70 an hour. Interview- paid training, employment programs for career growth, ask about their dreams and their ‘why’ and plan their incentive pay You're not hiring a technician, you’re hiring for a career and lifestyle Employees are looking for security and longevity Bonuses: it’s the cherry on top, monthly/annual hours into training raises base hourly, ASE master raises base hourly, longevity bonuses for tenure, tool bonus based on hours or punctuality, consistency bonus: produced 50 hours or more for 2 to 5 weeks in a row earn up to another $5 an hour, leadership & personal development incentive: be a better version of themselves, Apprentice toolbox they get to keep after 5+ years, etc 74% labor GP on highest-paid tech- take 74%-100% = 26%, $40/.26= labor rate to be at 74% Modifying pay- what is the intent? Can it continue to change? Are there potential negatives by adding to the pay if something goes wrong in the pay plan? You can’t compromise and be a giver and taker. Incentive plans don’t work if the employee doesn’t know how to track themselves. Teach your employees to watch themselves in the simplest way. Give freedom- expand to quarter or every 6-month programs to take into account vacation, sick time, etc. Don’t make it a disincentive plan Critical sick time, health spending account, ‘pay the vacation,’ health benefits plan for families, team bonuses Your incentive plan should build your bench of technicians wanting to come work for you. One pay plan doesn't work for everyone. It also needs to be tied to your vision for the business.
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By Joe Marconi
I will never forget the day when a customer, who didn't like the price, took cash out of his pocket, crumbled up the cash, and threw the money at me.
This customer clearly crossed the line, in my opinion.
Before I tell the rest of this "true" story, I would like to hear from you: How would you have handled this situation?
By Joe Marconi
I thought this article from Ratchet and Wrench was an interesting perspective. Let me know what you think? Joe Marconi
Is It Time to Raise Your Labor Rates?
May 27, 2022 Nolan O'Hara No Comments With increasing costs and rising inflation, many shop owners realize it may be time to raise their labor rates. But it’s always a battle.
There are several factors to consider, including customer satisfaction. Every shop owner needs to keep their pulse on the industry and make sure they're running an effective business, but when do you know, and what steps should you take when you’re considering raising your labor rates?
Andy Massoll, founder and CEO of The Detroit Garage, has been working in the auto industry for over 20 years. His father opened their first store, Curt’s Service Center, which Massoll still operates as part of The Detroit Garage auto family.
Massoll understands the battle shop owners go through when considering raising their labor rates. He also knows there’s a misconception in the industry that gets a lot of shop owners into trouble: the difference between a door rate and an effective labor rate.
It’s difficult to run a shop, and it’s certainly not easy to find and keep professional technicians. It’s vital to know your numbers. Massoll bases his labor rates on his effective labor rate, analyzing his wages and costs.
Massoll says understanding your effective labor rate is critical and provides a better insight into your true costs, including the costs of obtaining and keeping your skilled labor.
“If I can’t obtain or retain (professional) talent … that is when, clearly, I need to pay more,” Massoll says.
Shops need to control rates to balance customer expectations and run the business.
Massoll keeps a close eye on his shops’ productivity. That means understanding how many billable hours your shop is producing and comparing the number of hours worked.
Understanding where your productivity is at is crucial in determining raising your labor rates.
“You can’t begin to make an educated guess on what (the) labor rate you should charge is until you truly know your labor costs,” Massoll says. “And it’s hard to know your labor costs if you don’t understand and know your labor proficiency or productivity.”
Close supervision is key, but you don’t need to write it all out on a whiteboard. Massoll uses a software program to make sure he has a keen understanding of his shops’ productivity. Their goal at The Detroit Garage is to always be at 100 percent productivity overall. That helps Massoll understand when it’s the right time to raise his rates.
Additionally, Massoll is on top of his numbers. He spends time in the weeds, analyzing his total number of labor hours and the labor dollars they sell per store over a month, comparing that to his employees’ wages, and understanding the true costs of his business.
Massoll knows when it’s the right time to raise those rates because he’s spent the time analyzing his numbers, working to keep on top of a gross profit goal of 70 percent to 72 percent on labor.
Eventually, there comes a time when it’s necessary to increase those rates, and Massoll has done so fairly recently.
Economic factors are also important to consider—factors like rising parts costs and inflation. As inflation soared to around 7 percent in 2021, Massoll gave all his employees a 7 percent pay rate increase to counter that economic influence. Because of that, he increased his labor rates.
With prices going up everywhere, Massoll’s biggest piece of advice for other shop owners is to charge appropriately for your work.
He says too many shop owners think of the decision emotionally, wanting to help their customers. Massoll acknowledges it needs to be a factual and calculated decision.
Massoll notes that he once had a long-term customer come in, who, when he paid for his bill, asked, “That’s it? That seems too cheap.”
Massoll explained to him that he was a good customer, and Massoll wanted to take care of him. The customer told him, “If you don’t charge me appropriately and be profitable in your business, and you go out of business, how does that help me the next time I need your service?”
That’s a lesson that’s stuck with Massoll through the years.
“This industry is full of very good people; our business is in helping people. People have car problems, and we help them,” Massoll says. “But we do that for a monetary exchange. And too many business owners run their business with their heart, and when it comes to business, you have to be profitable.”