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By Joe Marconi in Joe's Blog13 commentsMost shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.
Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
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By carmcapriotto
How do you create an amazing customer experience in your business? Guess what? No one is born with those skills, but your employees are can turn talent into a skill with proper training.
Joe Marconi, Executive Council Member, Elite Worldwide. Auto Shop Owner. Joe’s Episodes HERE. @Joe Marconi
Show Notes: https://www.autoshopowner.com/
It's never too early in business to prepare for the unexpected and your eventual exit. Life can throw you a curveball, and we have all heard the stories of a shop owner that had a life-changing illness or worse. As a shop owner, are you prepared for life's curve balls? And what about your family? In addition, the primary responsibility of the business owner is to create an exit strategy. It's not that you are selling tomorrow, but preparing for an exit strategy grows a successful business and is worth more. Curveballs and Exit strategies go hand in hand. Build your business as a home; build it to sell in the future THA 316 surviving health scare Delivering an amazing customer experience is taught, not assumed Amazing customer service is lacking these days, and so is creating a world-class customer experience. By the way, customer service and customer experience are different. All too often, we blame the employees, especially younger people, for not having the people skills to create an amazing customer experience. Well, no one is born with those skills, and just like the skill of playing the piano or shooting a basketball, having the talent is one thing, but to hone that talent into a skill takes training. What is great customer service? What does it look like? Do you have in-house training in place for everyone in the business? Be prepared for customers- lower their anxiety. Get into the hearts and minds of the individual- personalize it, make notes Talent comes first, develop the skills comes second
Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Connect with the Podcast:
-Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
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By carmcapriotto
Transforming your business doesn't happen overnight, but it starts with committing to one small change. Recorded live at the 2023 Institute Summit, Anthony Bodine shares his remarkable journey of trusting his coach and how it changed his business.
Anthony Bodine, Protech Automotive Solutions, Johnston, RI.
Show Notes
You must understand your numbers. Grew ARO from $287 to $800 with the help of coaching. You need somebody to hold you accountable. Trust the process and trust that what's the worst that can happen? Commit to making small changes. A big pivot in the business is getting a coach to change the things that hold your business back from making a profit. Understanding KPI’s Big change in business- went from having waiting appointments to no waiting appointments. Closed Saturday’s Have a success plan Paying a premium for exceptional customer service- to feel important, to feel like your business matters. From a customer standpoint, what can they expect from our shop, and what should they expect? Trust your employees; they have the brains, knowledge, ability, and moral compass to do the right thing. One of the most memorable things is when you take a situation where you've let somebody down and completely turn that around. Don’t compare yourself to other shops; compare yourself with where you were yesterday and last year.
Thanks to our Partners, AAPEX and NAPA TRACS. Set your sights on Las Vegas in 2023. Mark your calendar now … October 31 - Nov 2, 2023, AAPEX - Now more than ever. And don’t miss the next free AAPEX webinar. Register now at AAPEXSHOW.COM NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at NAPATRACS.com Connect with the Podcast: -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections Check out today's partners:
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Erich and Lauralee Schmidt went to a 4 day work week during COVID and haven't looked back. They also have an app for their shop with benefits to customers.
Erich and Lauralee Schmidt, Schmidt Auto Care, Springboro, OH Show Notes:
4 day work week- exhaustion during COVID, started cutting Fridays with three day weekends. Prefaced it as summer hours and would go back to 5 days in the fall. They never went back to 5 day work week. Revenue, productivity, and efficiency increased. 8-7 pm work hours. The check-in process includes 4 day work week schedule. 40 hours of training a year minimum- observing efficiency, open communication, partnering with employees with their training. Training is a requirement when hiring employees. “Where are your interests?” Service Advisor=Serice Specialist Free Schmidt Auto Care App- started 6 years, App Fueled is a customizable garage for clients and a bevy of services outside of just communication. Special pricing, birthday specials, loyalty touch points. 30% of the customer base has the app. Had ADAS for 3 years, one of the first in the area to get it. Program and calibration.
Thanks to our Partner, Dorman Products. Dorman gives people greater freedom to fix vehicles by constantly developing new repair solutions that put owners and technicians first. Take the Dorman Virtual Tour at www.DormanProducts.com/Tour
Connect with the Podcast:
Aftermarket Radio Network
Subscribe on YouTube
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Buy me a coffee
Important Books
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By Joe Marconi
ICE Vehicles Will Long Dominate Aftermarket
"The media teems with reports of surging Electric Vehicle (EV) sales and how EVs will soon replace Internal Combustion Engine (ICE) Vehicles. However, an examination of EV sales reveals a different picture and underscores the unlikelihood that EVs will displace ICE vehicles in the aftermarket any time soon."
"The U.S. vehicle population has a much larger segment of older cars and light trucks than any other country with a VIO (vehicles in operation) of comparable size. Accordingly, it will take many years (even decades) for EVs to have a significant impact on ICE aftermarket sales in the U.S."
EV Sales in the U.S.
The U.S. pace of new Electric Vehicle sales is lagging behind many other major countries. Sales of all types of EVs in the U.S. topped 780 thousand in 2022, less than 6% of the 13.8 million total new vehicle market, which suffered its weakest performance in over ten years.
After peaking at 361 thousand in 2018, EV sales in the U.S. shifted into reverse, falling to 318 million by 2020. In 2021, EV sales rallied to 546 thousand and reached a record-high level last year.
Differentiating EVs
Not all EVs are the same. The different EV powerplant configurations vary in their potential for disrupting the aftermarket. There are three types of Electric Vehicles: Hybrid Electric Vehicles (HEV), Plug-In Hybrid Electric Vehicles (PHEV), and Battery Electric Vehicles (BEV).
HEVs and PHEVs are dual-powered, using an Internal Combustion Engine and Electric Motor, which work in cooperation. According, HEV and PHEV Electric Vehicles have a large portion of their miles powered by fossil fuel.
Focus on BEVs
In measuring the disruptive impact of Electric Vehicles on the aftermarket, it is best to focus on Battery Electric Vehicles (BEVs), separating them from the other types of Electric Vehicles (HEVs and PHEVs), which significantly rely on gas engines.
Annual BEV Volume
The EV light vehicle market in the U.S. differs from total EV sales when BEVs are separated. From 2018 through 2022, all Electric Vehicles sales topped 2.3 million.
BEVs represented 1.7 million EV sales from 2018 through 2022, just over 76% of the total. Accordingly, BEVs generated only 2.2% of new car and light truck volume in the U.S. during these five years.
BEV Small VIO Impact
Battery Electric Vehicles represent an even smaller portion of cars and light trucks on U.S. roads. Between 2018 and 2021, BEVs climbed from about 0.3% to just over 0.6% of the nation’s VIO.
Record-high BEV sales in 2022 did not push their VIO share past 0.8%, only about one-third of their 2022 new vehicle market share.
Aftermarket Vehicles
Lang Marketing has developed the concept of Aftermarket Vehicles: cars and light trucks at least four years old. These vehicles generate over 95% of total aftermarket product volume, not including Tires and Accessories.
In 2022, BEVs represented less than 0.3% of Aftermarket Vehicles in the U.S. This underscores the significant time lag between the new sales share of EVs and their aftermarket impact.
BEV Aftermarket Impact
So far, Battery Electric Vehicles have replaced only a minuscule number of ICE vehicles at least four years old. Lang Marketing estimates that BEVs eliminated only about 0.3% of ICE aftermarket volume last year.
Aftermarket Sales of BEVs
BEVs do not share many operating components with ICE cars and light trucks. Nevertheless, BEVs still require aftermarket products, primarily Tires, Accessories, Batteries, and Electrical Components.
BEV Impact on Aftermarket by 2030
Lang Marketing estimates that less than 5% of ICE vehicle product volume (not including Tires and certain Accessories) will be eliminated by BEVs during 2030 compared to what it would have been without BEVs on the road.
ICE vehicles will record substantial aftermarket growth between 2022 and 2030. In fact, the annual rate of ICE aftermarket product growth between 2022 and 2030 will greatly outpace the “loss” of ICE volume due to BEVs during these eight years.
Six Major Takeaways
1. New Electric Vehicle sales in the U.S. lag behind EV volume in foreign countries.
2. To accurately measure the aftermarket impact of Electric Vehicles in the U.S., it is necessary to focus on Battery Electric Vehicles (BEV), the only EVs without an Internal Combustion Engine.
3. The impact of EVs on the new car and light truck market in the U.S. is different when BEV vehicles are separated from total Electric Vehicle sales. Over the last five years, BEVs accounted for only 2.2% of the entire new car and light truck volume in the U.S.
4. BEVs climbed from 0.3% of total cars and light trucks on U.S. roads in 2018 to about 0.8% by 2022. So far, Battery Electric Vehicles have replaced only a minuscule share of ICE vehicles at least four years old (Aftermarket Vehicles).
5. Aftermarket Vehicles (cars and light trucks at least four years old) generate over 95% of total aftermarket product volume, other than Tires and Accessories. In 2022, BEVs represented less than 0.3% of Aftermarket Vehicles in the U.S.
6. Lang Marketing estimates that ICE product volume (not including Tires and certain Accessories) will be reduced by less than 5% during 2030 compared to what it would have been without BEVs on the road. The annual rate of ICE vehicle product growth between 2022 and 2030 will greatly outpace the “loss” of ICE volume caused by BEVs during these eight years.
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