The New Normal?

[Joe Marconi]

The other day I was discussing customer issues with my service advisors during our regular meeting. It appears, they tell me, that people are more edgy today than ever. It used to be years back that people would throw the car keys on the counter and tell us, “Just call me when it’s done”. Now, it’s more like, “Call me first if you find anything”.

 

I am not complaining about sales, it’s been pretty good lately, especially after a less than normal winter. It’s just that the mood of the consumer is somehow different. Is this the new normal?

 

I think it’s so important now that we see things from the consumer’s point of view. Give them great service, quality work, and show them that there is great value in our services and repairs.

 

I wonder what the rest of the country is seeing?

[CARMandP]

i hear that quite often. Normally they will buy we we recommend. Most customers have been burned by a shop in the past so I don't have a problem giving an estimate before work is performed if the customer wants one.

[xrac]

The other day I was discussing customer issues with my service advisors during our regular meeting. It appears, they tell me, that people are more edgy today than ever. It used to be years back that people would throw the car keys on the counter and tell us, “Just call me when it’s done”. Now, it’s more like, “Call me first if you find anything”.

 

I am not complaining about sales, it’s been pretty good lately, especially after a less than normal winter. It’s just that the mood of the consumer is somehow different. Is this the new normal?

 

I think it’s so important now that we see things from the consumer’s point of view. Give them great service, quality work, and show them that there is great value in our services and repairs.

 

I wonder what the rest of the country is seeing?

 

Much the same here.

[FROGFINDER]

Many of our "customers" are out of work or live on a fixed income. Others with family's have to stretch the dollar. Many others are people with broken cars looking for a price.

[KBenline]

I saw this in 2008 and 2009, but then things started to improve. Now it seems it's back again. It feels eerily like it did in the last recession. I think I experience these things earlier and more often than most because of the cost of living in San Diego for most people. It's to the point where almost every customer battles us over price. I can't believe the amount of phone calls we get asking us for a price so they can compare to the price they got quoted elsewhere. I've also gotten more phone calls with customer's wanting to bring in their own parts then I ever have. I think our industry has begun the battle of attrition and is going to go through a "last man standing." Unfortunately, the last man standing may not be the best shop but the one that has the cheapest expenses/overhead and can survive. It may not be in the public's best interest but that seems to be what the public wants these days and where it is headed. I'm seeing less interest in warranty on repairs and quality and more focus on "cheap" than I ever have. People have a mentality that they are only going to hold onto their car for another year so why go with the better warranty and more costly part, etc.

 

Keep in mind, we are in San Diego and we don't get the seasonal changes some of you get so there isn't a big winterizing or summerizing of vehicles for us, or rust repair, etc.

 

Do I think this is the new normal? Hard to say. I can't tell if this attitude is being driven from a poor economy or the general change in the auto repair business with cars not needing as many repairs (timing belts, etc.), and the advent of the internet with parts pricing. I can tell you since about late 2007 I started noticing the change and it has slowly gotten worse. The last three months have been ridiculous.

 

The good news is car counts are up but sales are flat. Yes, I have a few sales issues but that isn't the only answer. I thought this whole thing may have been just a locality issue but it seems like it has hit back in NY as well.

[Joe Marconi]

Great comments Keith! I feel much the same way. It’s an interesting thing about car counts. We have seen car counts remain very strong; in fact some weeks they are thru the roof, but sales…well that’s another story. Like I said in my post, it’s rare when a customer just throws the keys on the counter and says, “Call me when it’s done”.

 

I don’t know if we ever truly got out of the recession. I think the long term affects of unemployment, high gas prices, high food prices, loss of retirement funds, loss of equity in your home and the constant barrage of bad news from the media has taken its toll on the American public. We are all tired!

 

I have a good friend in the restaurant business. I asked him the other day, “How’s business”? He told me that his cliental has not diminished, and that he gets the same amount of people coming to his restaurant every week, but they are not spending the money like they use to. Many of them order just the meal, no appetizer and no dessert. So, people want to go out, but they are very cautious.

 

I hope you are wrong with your assessment of the last man standing, but we will see.

[KBenline]

Great comments Keith! I feel much the same way. It's an interesting thing about car counts. We have seen car counts remain very strong; in fact some weeks they are thru the roof, but sales…well that's another story. Like I said in my post, it's rare when a customer just throws the keys on the counter and says, "Call me when it's done".

 

I don't know if we ever truly got out of the recession. I think the long term affects of unemployment, high gas prices, high food prices, loss of retirement funds, loss of equity in your home and the constant barrage of bad news from the media has taken its toll on the American public. We are all tired!

 

I have a good friend in the restaurant business. I asked him the other day, "How's business"? He told me that his cliental has not diminished, and that he gets the same amount of people coming to his restaurant every week, but they are not spending the money like they use to. Many of them order just the meal, no appetizer and no dessert. So, people want to go out, but they are very cautious.

 

I hope you are wrong with your assessment of the last man standing, but we will see.

 

Joe - that is the best assessment I've seen of the situation. We can't afford to have that along with the fact that cars are better built and don't need as much these days. That is a double whammy. Then along with what the parts companies and internet is doing makes it a daily battle. I hope I'm wrong as well about the last man standing. These times call for aggressive management/ownership skills, that's for sure.

[Tires Too]

Joe and Keith,

These are some great comments and insights on the "new normal". We are seeing the same thing with our good long term customers now pricing services before authorizing the work. If this truly is the new normal and cost control is going to impact who is the "last man standing", what can we do to drive down our costs? Has anyone had success with pooling specialty tools with other local shops? How about local marketing groups? Should we be looking to limit the scope of our service offerings and specialize by Vehicle Brand? Do we aggressively market to drive up car counts as average repair orders are going down?

I'm just throwing out thoughts and questions to everyone to brainstorm on this subject and welcome every ones thoughts and comments. I know there is a great wealth of experience in this group and I am happy to steal other peoples ideas.

Thanks,

Russ

[Jeff]

Got a call last week from a shopper wanting a quote for A/C repair on a mini-van, a Kia I believe. Stated he ran an airport shuttle service, had a fleet and was shopping for a new shop. When asked he stated his past shop had closed. It was a one man show and the fellow had decided he wasn't making enough and was taking a job at a dealership. Before closing up they had diagnosed the problem as a failed compressor and advised him it would need that as well as the drier and expansion valve. Got his info and based on the prior shops diag wrote an estimate. When I called back with the quote the owner got rather huffy about the price. Went on to say how we are all crooks and that he could get the parts off the INTERNET for half. And in addition had gotten a quote from another shop that was half the labor! I tried to explain the differenece in cost and the reason I will not use internet parts but I was still a crook. Now I understand why his prior shop went under!!!

It will still come down to quality and integrity. The "shed" shops can only last so long before they go out of business. Lack of training and equipment will kill them off gradually. We just need to persevere!!