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When is it time to cut your losses?


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We opened in January this year. I spent the past few years going to school and learning from a really successful mentor. Sales have been steadily increasing until mid May then almost everything dropped. The customers are coming in, getting estimates then either saying they cant afford it ie. "I'm just gonna sell the car"(most likely making payments from buy here pay here place and are just going to to abandon car), "I don't have ANY money" or everything sounds good, they make an appt and then never show(won't answer our calls). I feel like we have a really good formula and we have really happy customers(surprisingly happy) but when 90% of our appts are no shows and the other half walk its getting difficult.

 

 

our formula (things we do differently):

-Customer service is above any in the area including dealerships- we have sales backgrounds

-We are following up all leads - call backs, house visits, text

-we pick up and drop off customers and cars, any time day, night, or weekend

-Good location - high traffic count, clean, professional painting

-Best tech in the area - there is no one that can argue this fact

 

 

Our Pros

-Customers love us...period

-Most customers have repeat visits

 

Marketing

-Direct mail

-coupon book(the best results yet)

-facebook - we have the biggest auto repair facebook following in town

-we have visited most any local business personally and gave out flyers and a warm invite.

-fleet accounts - visited all fleet business in an 5 mile radius

 

 

It hurts me to face this reality but a happy small customer base does not keep the doors open. I wonder if this is common in my area(the bmw dealer said it happens in their service dept all the time) or if my expectations are wrong....

 

 

I know its only been 6 months I am just feeling discouraged and I don't want to spend alot more money on something that may never take off....

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90% of our appts are no shows

Is that really true? Just seems hard to believe. I get maybe one no show every two weeks on a full schedule. Could you be hard selling them to get them scheduled? They finally say yes and then have no intention of showing? Just guessing here.

 

I put nearly zero sales pressure on my customers. Simply put I explain what's wrong, what it will take to fix it, the parts I use(sometimes), how much it will cost and when I can get them in. I think I sometimes use a little reverse psychology when it comes to my schedule. "Sir, I can get it in next Wednesday at one", "really, nothing sooner", "well if you can drop it off Friday and leave it I will fit it in". "sure, perfect". I do that quite often actually, not really bs'ing most of the time.

 

Also is your pricing in line for your area? What do you think caused the decline after good sales over the winter? What part of the country are you in, around here winter is the slowest and we get slammed in the spring.

 

Good luck man. There are much more knowledgeable people here then me and hopefully they can help you.

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I have had similar issues with the no call no shows. In my experience customers want it NOW, very few will wait (atleast in my area). We make the appointment for that very day, if it is going to take a few days, I tell them, but i try to keep the car with us. We normally give the customers a ride back if they can't get a ride, and start on the car. It may take a few days to complete if we are very busy (and we let them know in advance), but they minute they leave your lot with a quote they start calling around, price checking, and seeing who can get them in right now in this Mcdonalds/walmart land we live in.

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First of all , there is no such thing as customer base in only 6 months. Assume these customers are giving you a test drive. The 90% no shows are probably shoppers also on the test drive. By how you are marketing you are casting a wide net. You can only count on a few good fish at a time. Loyal customers take time to build. A lot of time.

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We have a very high no show rate. Not actually 90% but up there. Hard sales are not apart of who we are. While we arnt afraid to assume the sale we are not a quick lube that pushes hard.

 

Prices, we are in the lower side of average for a legit shop.

 

We have so many cars towed in then towed to the customers house. I even bought one to fix and sell myself.

 

It's just frustrating right now. And again i know we are a very new business.

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Example:

Previous paying customer brings car in for Ac not working. We diagnosis as compressor and give a fair price. Cust says "yea, I already new it was the compressor, that's what the last shop said. I can't afford it". Our response is "what can you afford?" Cust says "I don't have any money I am just going to sell it."

 

I can't fault someone for having no money but why bother.

 

These senerios have become the norm. It hard to start a job same day as they always need their car(most likely stalling). I know for me personally I want my car fixed ASAP not next week so when I have taken it in the past to shops I want to pick it up done.

 

Another issue is parts stores. We have had a lot of issues with parts not fitting or missing parts that it "includes". Now this is not killing our business but added too the rest it wears a little heavier than it should.

 

 

/rant

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We opened in January this year. I spent the past few years going to school and learning from a really successful mentor. Sales have been steadily increasing until mid May then almost everything dropped. The customers are coming in, getting estimates then either saying they cant afford it ie. "I'm just gonna sell the car"(most likely making payments from buy here pay here place and are just going to to abandon car), "I don't have ANY money" or everything sounds good, they make an appt and then never show(won't answer our calls). I feel like we have a really good formula and we have really happy customers(surprisingly happy) but when 90% of our appts are no shows and the other half walk its getting difficult.

 

 

our formula (things we do differently):

-Customer service is above any in the area including dealerships- we have sales backgrounds

-We are following up all leads - call backs, house visits, text

-we pick up and drop off customers and cars, any time day, night, or weekend

-Good location - high traffic count, clean, professional painting

-Best tech in the area - there is no one that can argue this fact

 

 

Our Pros

-Customers love us...period

-Most customers have repeat visits

 

Marketing

-Direct mail

-coupon book(the best results yet)

-facebook - we have the biggest auto repair facebook following in town

-we have visited most any local business personally and gave out flyers and a warm invite.

-fleet accounts - visited all fleet business in an 5 mile radius

 

 

It hurts me to face this reality but a happy small customer base does not keep the doors open. I wonder if this is common in my area(the bmw dealer said it happens in their service dept all the time) or if my expectations are wrong....

 

 

I know its only been 6 months I am just feeling discouraged and I don't want to spend alot more money on something that may never take off....

 

Don't give up. 6 months is not enough time to tell really. If you are really doing everything you say you are doing, you should be fine. If it was easy, everyone would do it. I had a pretty good dip right about 8 months after opening, followed by some pretty good months. I say keep at it for at least a year.

 

Funny timing, I just finished watching 'Pursuit of Happyness'. Watch that, then ask yourself when you should give up.

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  • 2 weeks later...

your first two years is going to be getting your name out and weeding out the scumbag, no money customers. It does get better, just stick to it. I wanted to close up during my first year. I think every shop owner has that feeling at first

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Business ebs and flows when you have an established track record. The ups and downs become manageable to some extent. Even so, events out of our control always get in the way. Being new is hard mostly do to lack of having been through it before. It seems like everything is against you. And in fact it really is. You just have to be patient and dilligent in navigating rough stretches.

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Ive experienced the same things as Ive been open only year and half. 6 months is not enough time to measure. I do read a couple of areas for improvement off the bat. #1 your customers dont have the money. Offer financing. GE CAPITAL is who i use. It works! Research that and get on board. #2 add more customers with flipping few cars if you can. Depending on your dealer laws, etc. this adds revenue for you and helps keep techs busy. #3 you said you have 1 of the best techs in area. Do you only have 1? If many folk are setting appointments bc you are busy then maybe need more help.

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We only have our lead tech that handles real repairs but maintenance,brakes,oil changes, ect are done by my partner. We have yet had to schedule many jobs due to our schedule. Most of our jobs are smaller(not many major jobs yet) so that hasn't been an issue.

Plus I'm there a few days a week helping with everything in between.

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Is it possible you are lacking in inspecting for other/future repairs OR not selling them properly? I have my share of cheap customers however I also have customers that are conscious of driving safe and reliable. These are the customers you need to maximize on.

You should try to sell customers on anything they NEED. I use to have this mentality that if I recommend items for repairs to my customers they would think I'm a crook however with the right approach you should be able to earn their trust and have them receptive to your recommendations. Hell everyone need windshield wipers, sell all your customers wipers! Its a start.

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Well to further report this month has been a complete 180. If things persist it may be our best month. It's crazy how it just dropped dead for 45 days. I just sent my accountant our sales tax info for last month and it was truly sad to remind myself. But I believe we have ready doubled our gross profit mtd in July vs entire month of June.

Edited by mccannable
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Keep the big picture in sight and don't worry about the short term. I used to get stressed about the ebbs and flows now I have a fleet of my own used cars that need to be reconditioned so if it's slow "GREAT" we get a car retail ready if it's busy "GREAT" we are busy and once we get everything fixed the garage needs to be painted. It sucks when it costs $1000 a week to go to work but it happens to everyone at some point. Typically when property taxes are due it's tight and the same thing when people get their Xmas credit card bills in the mail. This summer has been good so far but when people are on vacation they aren't in your service bay. If it's slow all the time for you park some cars out front and in a bay so it looks busy, people tend to go where everyone else does and if they see an empty parking lot they keep going.

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Heck, it took me three years to figure out I wasn't making any money. I would not be in business today if I had not enlisted the help of a coach. Get a good one, put aside your ego and do what they tell you regarding marketing, margins, hiring, etc. No one is a genius in all of the skill sets needed to be a success in this business. My family and I have been coached for seven years and will continue to be. It has more than paid for itself in increased car count, sales and terrific margins. I will be happy to talk about who I use offline - not going to promote here.

 

Mark Anderton

First Landing Autocare

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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