mspecperformance

There are many CRM companies out there both automotive industry specific and broad based. I heard Fredrick is gaining traction. There is also Mitchell CRM and MechanicNet I think. There are a bunch. I used DemandForce years ago and I hated them. 

It really depends on your business model. To hit industry target numbers you are looking at getting an average GP on parts of about 50%. If there are lot of dealer parts in your mix and you are not comfortable charging over "list" then you better make sure your labor GP will make up the difference. Essentially all you would be doing is hiding the profit in your labor so you can show your customers a lower parts price. I personally have not had an issue with any customers bringing up the price on our parts. We charge higher than list on dealer parts but we also provide a much longer warranty and an expert certified technician that is performing the service on their vehicle. They get our continued support as a client after the service. Our customers see it as a win and vote with their dollars. Also let us not forget that when you take your car to the dealer for service, you are paying over list for the parts portion of your ticket. If you aren't then that is a poorly ran dealer and you bet your ass their profit margins are in the toilet!

2 hours ago, xrac said:

mcspecperformance, I am curious to which one is your favorite. 

Honestly I don't really have a favorite. I like the more literal logos but everyone seems to like the wrench and piston logo!

1 hour ago, AndersonAuto said:

Influence by Robert Cialindi.  It's about the psychology of why we do or buy certain things and not others, and the triggers that cause us to do it. Listened to it in January. About to do it again because there's just so much great stuff in there.

I've read Influence and I can only imagine its more powerful as an audiobook. I have his latest book Pre-suasion is on my list. 

http://www.designcrowd.com/vote/essential-auto-care-logo-poll

Hey ASO community, we are planning on opening a general repair shop and we had some logos created. Please vote and help us narrow down our choice. Any feedback is greatly appreciated!

http://www.designcrowd.com/vote/essential-auto-care-logo-poll

11 hours ago, 328ijunkie said:

Signed up for yelp a few months ago. I see alot of leads coming through Kukui and have sold ~10k or so through them. My biggest complaint currently is my SA's getting annoyed by the barrage of messages/calls from people wanting their 20" impala wheels powdercoated or their suburban seats reupholstered or a starter for a kia optima. About 1/30 leads are even worth answering. I suppose a lead is a lead at the end of the day. Were at the ~675/mo tier.

 

Whats everyones experiences... 

I get a many non Euro requests as I do Euro requests. People don't seem to read very well on average as we have nothing on our page that indicates we work on anything but Euro. The positive is we have has such a positive response for non Euro (and amongst other sources) that it has prompted us to start a general repair shop as a second brand. Lets see how that goes LOL

PAP, what model rack did you get? 

10 hours ago, Jay Huh said:

But yea cash flow is important but when you already have a location making money, you don't get as stressed about the new location. Also with 2-3 months free rent, expenses are low so you should at least break even. Also for your second and third locations, you already have a customer base. 

But you should probably get advice from someone more experienced lol. I am experimenting as I go 

Jay I understand your logic however I would be wary if I didn't have a better plan of how my car count, ARO and profitability would look like beyond the 2-3 months of free rent. That's why having the right marketing plan and projections is of particular importance to me.

49 minutes ago, Wheelingauto said:

Anderson, I have read this entire thread and it appears like you've been a very good student. Unfortunately I feel you are also quite arrogant in thinking you are the authority in auto repair management.

I realize the written word can sometimes be misconstrued but sometimes the things you write allow no other plans to be successful. Your way or the highway. You have a lot of reason to be proud and strut your stuff but when you do it I wish you would recognize there are other as successful if not more successful business models out there. You are also not the first person to be part of a 20 group, they have existed much longer then your business.

I realize I am new to this board (as far as participation) and maybe I am out of line but all I see is preaching from you that the way you do things is the ONLY way, and I am here to say it's not.

The statement above is what I am referencing, I have a similar sized shop, smaller staff, more sales and better net profits than what you've shared. I do no discounting of any sort, I have no menu based pricing (not even an oil change) and our business continues to grow without the headaches associated with discounting.

As far as accounting while I agree with your statement, I went to a seminar by Bosch a couple of weeks ago and the trainer was begging people to expense the cost of labor and not include it in COGS. So there are some out there teaching the opposite of RLO.

7 minutes ago, AndersonAuto said:

It's possible that I can be a bit opinionated.   At the same time, it's exasperating to see so many shop owners say that you can't possibly make any money with cheap oil changes, and that you'll only attract the "wrong" customers. I've turned cheap oil changes into a thriving business with a great bottom line. The last 5 years have been fantastic compared to the previous 15 years of working much harder for much less. Since I've seen a lot of data from other shops, I know that my customers are as loyal and spend as much as shops that refuse to use cheap oil changes as a marketing tool. Cheap oil changes are nothing but a tool to get people to notice you. I think it's a mistake to see it as anything other than that.

I'd love to see the Bosch trainer's reasoning for taking technician labor out of COGS. If you're not paying on flat rate, I can see it, but it makes way more sense to me to include flat rate techs in COGS. Every management system I've seen also calculates labor as COGS by default when looking at sales summaries.
 

It all depends on how you analyze your financials. For tax purposes we have to all file our figures accordingly so nothing is different when it comes down to filling out IRS paperwork. 

With that being said there is nothing inherently wrong with setting up your P&L to show labor costs as an expense and not apart of COGS. You would just have to come up with a system and key metrics to track your numbers differently. I think most of the aftermarket indy industry at large is used to calculating labor as COGS so it's much easier to relate financials and also get great ideas from different sources. It still doesn't take a genius to figure out your own calculations. Bottomline is the bottomline. If you are making money consistently and have a repeatable and explainable system then who cares.

In regards to "cheap" oil change. I believe that the biggest gripe is not with the business practice itself not working but rather the perception that it devalues the industry as a whole with discounting and the "cheap" mentality. I have to admit I have definitely struggled with this concept mightily over the years. I think part of the problem I have is that virtually 100% of the shops around me that have a culture of discounting and using price tactics are horrible operations and are a black eye to the industry at large. The strategy works. There is no denying that. Look at Greg Sands and the 100's of shops he has operated. 

39 minutes ago, Jay Huh said:

Not sure if I understand the question but in Jan my car count was 178 and Feb was 179. My ARO Jan $159, Feb $238 (hired master tech and his apprentice and they do awesome inspections - reason for the jump in ARO)

Now March was when I increased Adwords budget and started campaigning like crazy bc of the new shop. Yelp ads I kept at $425 and I boosted Adwords from like $1000 to $2000-$2500, also spent $50 on a couple small Facebook campaigns. March car count was 261 with $229 ARO. March was also when my second shop became fully open. 55 out of 261 cars were from the new shop. March of LAST year my car count was 129 with $229 ARO

I broke a lot of records in March, total sales, GP and car count. Previously my record total sales for the month was low $40's. I was like $200 shy from $60k in March, and that's with nearly $10k sitting ($2400 head job just booked out today). Only thing that I have really seen work is Google. Yelp brought me a decent clutch job so far this month. Word of mouth is good too, got a $1,000 timing belt job coming Wed that is a referral.

What I noticed after opening a second location is that my first shop started ranking better on Google (could be my imagination....) but if I type in "auto repair durham nc," I am #6 on the list and the ones before me have been open for YEARS. It's just now been a full year for me.  If you sort by ratings of 4+ stars, I am #3 on the list. I think having more than one locations gives a perception of less risk for the customer and they are more likely to try out your shop.

You are calculating everything by total sales from all locations? It may help if you do more of a breakout per location. 

I was mainly interested in how fast you are getting your stores up and what kind of car count and ARO you are seeing from them. I see that you are opening #3 which is impressive. I am in the middle of expansion myself. I have a very robust plan that I've been working on for the better part of the year but I am always looking to improve it. As you probably are aware since you've expanded, getting the car count and numbers up when launching is extremely crucial for cash flow. 

Your number seem extremely low for 2 stores, how are you handling the expenses? It might be just a different in area that I am not taking into account. 

Thanks for sharing your numbers by the way

2 hours ago, PAPShop said:

We have a Hunter scissor lift.  Besides alignments and the repairs related to them, we do oil changes on the lift and we do inspections on it.  In a pinch we've done brakes also.

I would think that monkeying with the stands would create inefficientcy in the shop, as opposed to drive on - drive off situation.

Did you flush mount your alignment rack?

1 hour ago, Jay Huh said:

I'm mostly doing google adwords, that seems to work the best. I tried  a couple facebook campaigns and I pay Yelp as well. My new shop was actually busier today than my old one - my third one opening next week I think will be busy from the getgo bc of the location. 

All my adwords ads links to my specials page and I have a really high conversion rate: carmedixnc.com/specials

What has been your experience with car count and ARO for your first month up to 3 months? 

Jay, what kind of marketing are you doing especially for launching the new shops?

16 minutes ago, meowpox said:

We still have majority IKEA furniture (Go here for some photos of our office). It's still holding up well so cant really help you with other furniture recommendations. I think the only thing I might change later is get a real reception counter just so it looks cleaner. If you're up for a fun project and have a blown engine laying around, they make interesting coffee tables! Just have to fabricate a base and paint it black

btw I love your business! I remember when you guys just joined the forum and to see the evolution of TrackSpec is impressive! 

I was trying to avoid ikea but that looks great! I totally dig the idea of making the waiting room almost like a nice home living room.

Anyone have any good suggestions on furniture for the waiting area? Stuff like Service counters, waiting furniture, refreshment table? I like the seamless look with units that have space for a fridge and integrated waste receptacle. I've looked at what NAPA Auto Care has as well as Bosch. I am a bit iffy on that stuff and its ridiculous expensive for laminate furniture.

Anyone else have any ideas?

I'm not sure if its really catching on where I am at. When we launch our General Repair I will look into it a bit further. I would need to really see some ROI.

Just now, Jay Huh said:

 I didn't want to be the first one to mention the asian thing but I was definitely thinking it lol

Everyone loves an asian boy, or at least thats what it says on my T-Shirt

14 hours ago, Jay Huh said:

Mspec I already know what you look like now lol. THey got your picture everywhere

11 hours ago, Trealubit said:

You wont regret it. Its worth it. Make sure to bring a copy of RW for mspec to sign!


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2 hours ago, Jay Huh said:

LOL. The last issue of R+W is sitting on my desk and he is staring me in the face right now lol. 

OMgoodness its going to an asian triad meeting of shop owners LMAO. The universe is about to implode. I think RW has selected me to be the token asian for the industry.

47 minutes ago, Trealubit said:

September 22-24 is ASA illinois CAN conference in chicago. Close to where RW conference will be. Lots of great hands-on and classroom technical training from instructors like John Thornton, Jorge Menchu, Eric Ziegler, Ken Sanders. And Management training from Bill hass, Jeremy Oneal.

Its the days before RW conference. Not that expensive lots of value.

Highly recommended when your in Chicago. You can take classes a la carte as well.

Check it out and register at asailcan.com


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That looks pretty interesting, I think I'll look into this! Just make sure you roll out the air mattress for me Tristan lol

15 minutes ago, Jay Huh said:

This was definitely an interesting read.

I am the newest one here with only about 2 years of experience of owning a business and a lot of that was being mobile so I don't have a lot of wisdom to offer and I know I could be totally wrong...

I honestly think it can go both ways. I remember when I used to work at Merchant's Tire/NTB, they were putting out $9.99 oil changes.... what a nightmare. So many people coming JUST for that and it was so busy that we were getting angry customers and didn't even get to do a thorough inspection and even if we did, we couldn't do the work we were so slammed with oil changes. That is the extreme....

When I opened my second location, it was dead first 2 weeks so I did $19.99 oil changes. I figure with the cost of oil, filter, labor and disposal, it is my break even price. I could either not make money and have no chance of making money, or not make money with a CHANCE of making money. 

Now would I keep doing the cheap oil changes? I have decided not to.

In my honest opinion, cheap oil changes are worth it if you have a really strong service advisor, a really meticulous tech and it's not busy (or in Andersonauto's case, 1000000 bays, very impressed by the shop btw!)

If my car count wasn't already what it is in my Durham location, I would continue to advertise $25 oil changes. I advertised $25 synthetic blend with a courtesy 22 point inspection and up to a 5min consultation for FIRST TIME customers so that we can get to know them and their vehicles. This actually worked out well but wanted to spend my adwords budget on brakes instead.

You guys probably disagree with this too.... but I've built my business not on cheap oil changes but CHEAP BRAKES! When I first started out mobile, I advertised $25 pad install! Then when I had a shop, I advertised $60 brake job INCLUDING ceramic pads. Then it got bumped up to $75, now it is $95.

Believe it or not, I still got a couple $25 pad install customers that stuck with me.... did a heater core and intake manifold for him at our current shop price- it was over $1000. It's a hit or miss, but if they like you, they will stick with you. I got a wheel bearing job in my shop right now, another customer from my mobile days. $800 for both rear bearings on a Mountaineer. He told me straight up that he was impressed by the way I worked on his car in the parking lot of Advance Auto (he had broken studs while I did the $25 brakes and was impressed by my battery powered cutting wheel and sparks flying everywhere and using a ball joint press to press in the studs lol)

It's almost impossible to stay cheap tho, I just raised my shop rate to $80 yesterday from $75. 

Maybe we can use cheap oil changes to get NEW customers and new only and show them such great and awesome service that they will come back no matter what. That way they can't take advantage of you but also get a chance to experience your shop

Hi Jay, 

I mean completely no disrespect and I just wanted to lay that out there because text can be misconstrued... 

When you mention your break even point for an oil change is 19.99 it kind of gets alarm bells going off in my head. Are you calculating your costs correctly? What is the oil costing? What is the filter costing you? How about the technician? Are you calculating their labor cost properly? Are you giving them additional pay/time (if you pay flat) for the inspection portion? Do you have just a lube guy do all your oil changes? Even if I were to offer a 19.99 oil change, my costs including my tech even with the crappiest oil would probably somewhere around $30-40 I am assuming. 

I am just asking because it has been an absolute mystery to me how you are making enough money to open several locations in such a short period of time with such a low labor rate and charging such low prices on for instance: brakes. I have done the numbers several times and it is nearly impossible for me to figure out how you are profitable unless certain assumptions such as you are paying a low salary to your employees (low payroll) and you are keep an insanely high car count with a decent ARO. I want to know your secret lol. If its cool send me a PM with your gross sale and net profit. I am genuinely curious. 

11 minutes ago, AndersonAuto said:

I'm using RO Writer. The glitch happened when we changed our labor rate. There's a table of various labor rates like most management systems have. Retail, wholesale, fleet, etc. If you change all of the rates at once, and we did, it sometimes has a problem keeping this setting. When adding labor to a job, the labor rate displayed matches the new rate that you put in, but then as you finalize the labor job the rate flips back to the old rate. Since we also use the linear labor matrix feature, the labor charge can be all over the board, so my guys didn't notice that it happened.

If you've ever played with relational databases you know they can get extremely complex. I'm sure the rate has to be written in more than one table on the database, or possibly on multiple databases. We just got unlucky enough for the rate to be updated where we could see it, but not where it counted. It took ROW support about 37 seconds to fix it. It took us 8 months to figure out what was happening. I had been pounding my guys about ELR all year, and we just couldn't figure it out. We figured it had to do with canned jobs as they are usually done at a lower rate to be competitive, but it was software all along.

Ouch! That really sucks. I havent played with a labor matrix as mitchell doesnt employ one but I can totally see what you are talking about. 

37 minutes ago, AndersonAuto said:

Harry is mixing a bit of apples and oranges because he failed to note that I said I've been doing the cheap oil changes for almost 5 years, and the first year I did it I had 37% growth. Then I said that I currently have 13 employees. I increased my sales from 900K to 1.2M the first year doing the cheap LOF with 6 employees. I'm sure I added staff along the way that year, but the timing of exactly when is a little fuzzy and I don't feel like digging through employment records for this.

Last years sales were right at 2 Million. Bottom line net was 251K. For those of you playing along at home, that's 12.5%. Pretty soft. We actually found a software glitch in January that literally cost me 100K at the bottom line last year. Since correcting it my ELR improved by over $10 per billed hour. 

Current year profitability, my net ran just short of 16% through the end of February. January was a little soft, and we had extra high training expenses in February due to sending everyone to training for a weekend. The Net Profit % will bounce up a couple percent through the summer. Not sure I'll hit 20% this year, but we're working on it. YTD this year (as of yesterday) we're at $440,479 in sales @ 61.56% GP. We're about 6% ahead of last years sales, with a 5% improvement on GP% (due to the software fix). Gross profit dollars are up 10%, car count is up 9%.

We've got a little HPRO problem as it has slipped by 0.15 hours vs last year. It's always something.

If cheap oil changes weren't good for business, you either didn't have the facility to service them, or you were doing it wrong.

Listen to they guys at Aspen. Implement it. It will work, and you'll make a fortune.

Thanks for sharing some of your numbers more in depth! It definitely helps give some perspective.

My current shop is a Euro only so our KPIs work a little differently. I admittedly have no experience with general repair and higher car count operations. I think the cheap oil change as a loss leader used with the correct sales system will work. I'm sure nothing else about your operation says "CHEAP" and you are selling value above all else. 

Off topic, what shop software are you using and what was the "glitch" you found? 

2 minutes ago, HarrytheCarGeek said:

Gentleman,

The numbers don't lie. I don't have the time to go into detail, but from over 25 years experience, cheap oil changes were never good for my business.

If AndersonAuto is making a net 20%, that is a VERY impressive number with cheap LOFs as the main driving tool for new business. Except for me, in my experience it hasn't happened. Be it at the two bay shop or the 30 lift facility.

For example 900K at 37% growth yields $1.2 Million. That would be about 100K a month is sales. With 13 employess plus himself that would be $7,142 in sales revenue per employee on a monthly basis or about 85K on an annual basis. How does that compare to your numbers?

My worse perfoming shop is doing about 60K month and 145k per employee in an annual basis.

My aversion to cheap oil pricing is that it truly distorts the value of our industry.

Having said that, if he is indeed taking in 20% net, more power to him, since that is what owneship of the business is all about, how much you get to keep after all is said and done.

 

since Anderson did volunteer some his numbers, I would like to see what his his true net is for his business, not his property included. At least then we could speak apples to apples. 

I totally get what you mean by what you are getting per employee. It does make a lot of sense as I am for a more lean model with less payroll which means maximizing on my staff's abilities. 

In the way it was explained to me which makes a lot of sense, you do everything you can to sift through oil change customers and build them into repair customers. I believe it can be done with the proper attitude and system. I'm excited to try it at least.

18 hours ago, HarrytheCarGeek said:

AndersonAuto, please don't take this the wrong way. "I REALLY HATE THE CHEAP OIL CHANGE GIMICK."

In my opinion, giving out a cheap synthetic oil change like you are doing gives our industry a bad image. Why? Again, in my opinion, because it distorts the consumers' perception of what it cost to do business.

One of the reasons that fancy car manufacturers strive to have you use a machine to reset the maintenance interval is because it gives the impression that you need a qualified technician to reset the little light.

Think about the biggest industries that thrive in people's ignorance: lawyers, insurance, and finance.

Please do not take this personally, as I understand you have to do what is best for you. But in my opinion, you are hurting yourself and others by doing cheap oil changes.

Harry I'll be the devil's advocate here. As a primer I have always been against cheap oil change promotions. I never saw them work for me and I always thought they brought the wrong type of customers. 

Kind of what AndersonAuto was alluding to, you have to have the space for volume and the processes in place to handle it, it can actually be a great model. I've recently changed my tune after attending some sales training from Aspen Auto Clinic. They have grown to a 5 shop operation with a ARO of $400 while still offering a "cheap oil change" special. 

Essentially the idea is to drive high car count and use a specific process to upsell a paid inspection at reception. That is what it is in a nutshell, there are more steps to it but that's the key part. For those who don't purchase the paid inspection they still get a free inspection so you still have upsell opportunities. Another strategy is to sell them on a VIP card or a 5 pack oil change package at check out so you can see them again. The idea is to get as many "at bats" as possible.

Now when you have one of these folks that come in for oil change after oil change and get nothing done with you OR have the work done elsewhere you have to have a serious conversation with them. It would go something like this, "Mr. Customer we notice that you have come to us for several oil changes and have not acted on any of the recommendations we have made for service and maintenance of your vehicle. We love performing your oil service however these other items are rather important. The reason I am bringing this up is I want to make sure I am doing my job communicating properly about the severity of some of these items. Have I conveyed that information properly?"

If the customer tells you something negative or that he has his family shop that does his work then you have to drop them a serious line like, "Mr. Customer we offer our oil change special to give potential customers a low risk opportunity to experience our service and value. We literally lose money on every oil change at this price. What we really want is to become your shop/mechanic. Are we in the running at all? Do we have a chance?"

If the answer is no or I have a shop then its time to shut them down and tell them that you would really love to continue to service their oil change at your regular price.

I am summarizing the process tremendously and butchering parts of it along the way but that's the gist. This model definitely can work but it MUST be a whole process.

The biggest turning point for me to see this type of strategy work is the detailed process in upselling the PAID inspection (which effectively makes your oil change a regular priced oil change or better) and also explaining to the oil change customer that this a special promotion to give people a "low risk opportunity to experience our customer service and value". You need a specific sales process to turn those oil change customers into repair customers. 

Another trick is to not advertise the low oil change on a consistent basis. every quarter or 6 months with a big blast.   

I am going to pilot this strategy with my upcoming general repair shop. I'll report my findings