mspecperformance

Anyone been involved with "Repair Shop Coach"? I just started with them this fall after many years with Elite. Elite was very good for our business as were the management courses and consultations before them. (this is our 27th year in business) It is always scary and different when you go down a different path, you sort of wonder what's about to happen, if you made a smart choice. Any stories you folks have about adventures in business coaching and consulting?

Why did we change you ask? Just because... things became stagnant, we plateaued I suppose. Every time you shake things up it seems that there is a renewed energy, things that you have forgotten or never knew before come to the forefront and you get results once again.

It's much like the day to day events at the shop. Unless someone new takes a look from the outside - in, you may never see how you can improve and grow.

You never see what is broken because you are so used to looking for the same things all the time...

awesome. Let us know how you like it! Any reason you didnt graduate into a 20 group?

 

 

Jesus Christ when did this forum turn into 'Auto Shop Owner and those who just have an opinion about owning a shop'?

 

I literally find myself spending more time on another forum due to this issue. It's really a bummer, because there are so many insightful shop owners on here like mspec, Joe, xrac, and others, but to have to sift through people's opinions who have never looked through a P&L, cash flow statement, file for an EIN, or got a bank loan really sucks.

 

I feel l'm not the only one on this forum who would love to see all members submit an EIN in order to continue posting. Everyone else can go jump on Reddit or make a facebook page. Hell, I'd even pay a membership fee as long as I knew I was reading advice from an actual shop owner who has been there and done that.

 

I know this is way off topic, but it's really been getting under my skin lately. Rant over!

 

 

Felix,

I worked at 2 dealerships for about 3.5 years each (7 total) as a technician before my dad finally pushed me to start my own shop. He had absolutely no automotive experience, but had worked for a HUGE company for about 25-30 years before they laid him off on Christmas vacation. He didn't know what he was gonna do, so he started his own business and instantly regretted not doing it earlier on in life. So between his advice and a few other mentors, I decided at 25 (no wife, kids, and only student loans), I was never gonna have a better opportunity. So I turned in my 2 weeks noticed and never looked back. Started out really small and cheap and grew it from there. Almost all my shop equipment was purchased used on craigslist except for my lift. I will say this, before I left, I had it in my head that the dealer was making a killing off me and I would be able to open my own shop at half the labor rate and still make a killing. Boy, was I in for a rude awakening.

 

If there is one bit of advice I could give, it would be to attend as much training as possible. RLO, ATI, Elite, or one of the many other companies out there, take AT LEAST one. Elite as some AMAZING videos on youtube (can't believe they are free for the information they are giving you), RLO has some old videos out on youtube that still have valuable info, R&W magazine is a great resource, Elite has a 'blog/article library' on their site which is a goldmine. Sure, one company might be better than another, but your biggest mistake would be delaying signing up with one of the companies. I can personally vouche for an RLO course that I think would be a perfect fit for any new shop owner, but again, any course/coaching will do wonders for you. I know of 2 very successful shop owners on here who are still active in training/coaching.

 

I'm sure many of the successful shop owners on here will agree with my above statement, in fact, another member on here actually encouraged me to sign up for my first RLO course (and man am I grateful he did).

Please tell me you carry liability and workmans comp, nothing pisses me off more then someone undercutting legit shops by not being licensed and insured.

 

I think you should have to submit an EIN and proof of garage keepers insurance to be a member on this site, unless it is becoming how to become an auto shop owner instead of autoshop owner.

 

I would like to know this other forum that was mentioned if you can PM me please.

I feel you guys I really do.

I would caution to say that you have to expect this from a public forum. The forum operators are here to make this an open environment so that the members can share information freely which will in turn get some really good info from a lot of great members. The flip side to a public forum is you have a lot of people from different places in their career and differing levels of expertise. I do agree there are some completely jaded A-holes that need to be banned as they seemingly are covertly hostile or openly hostile.

I do not believe the OP to be someone that is out sabotage any shop owner but rather wants to join the ranks! That should be applauded.

If you guys are looking for more expert level advice and participation I urge you to join a 20 group or mastermind group. Yes it costs money, but if you can't afford it then maybe you aren't ready for that step and will have to deal with a free forum such as ASO.

Having the confidence to charge the correct markup, deny customer supplied parts, and not compete with but beat mail order parts is the key.

 

If you call your local dealership parts department and ask for the price on a water pump it will be list price. If you call the same dealership service department and ask for the installed price and then a breakdown you will find the part price is doubled. Nothing illustrates the difference in correct markup between the two industries and you need the same mentality and markup.

 

When we are told "I can get it for less" we state that we can too. Then we calmly explain that a local service department and a warehouse in the Midwest have very different business models. Our service model have a heavy investment in floor space, technicians, overhead, the local economy, and most importantly local taxes. We are an integral part of our local community and support local charities, the highway department, the school district, state taxes and levies, state labor regulations, state consumer protections, and the list goes on and on. Unfortunately, the out of town warehouse model and it's inventory of Chinese parts does not in order to increase sales for their shareholders. That's why you can't go into red Lobster with your own lobster. (The local likes his road plowed, his children to go to school, etc. and will be willing to support that).

 

When we are asked to install parts purchased elsewhere we explain we can't. Then we calmly explain the part markup supports the entire business and its employees as stated above. But the biggest reason is liability. When you supply a part not only do you forgo all consumer protections and warranty claims on the entire repair, you incur a liability most consumers aren't aware of. We have an insurance company and they require product liability coverage from our suppliers. If you purchase a Chinese part from an out of town supplier and heaven forbid someone gets injured when it fails who pays the claims? Your insurance company owns the right to sue anyone it wants to recoup claims including you, it's in your policy. If we use our part it is an easy claim because our insurance will pay it and then go after our supplier. If you hand someone a part and ask them to install it who is liable then?

 

Most people don't understand the intimate details of running a service department and probably shouldn't learn as they go.

All great points however my experience has been that you can rarely go into such an explanation and have a customer follow along. My best strategy is to change the conversation entirely. Sometimes we use elements of some of the point illustrated above. We have noticed that it is a rare occurrence that you can actually convert a hardcore price shopper when you throw your fast ball, curve ball, change up and they are still beating your door on price and "I can get it cheaper."

To the OP's original question, I still believe that if you are having problems with client's questioning pricing after the fact then there was a problem with communicating and selling the value of your service. Sometimes they are just that type of person and you have to resell them on the value of what they purchased opposed to the nuts, bolts, fluids and parts.

Lets remember no matter who Mr. Customer when you are talking about YOUR costs of doing business they are tuning most of that out. The only station Mr. Customer likes to listen to is WIIFM, WHATS IN IT FOR ME. Make the conversation about them and make them feel that what they purchased from you is of great value to their lives. It is true after all isn't it? We all believe that what we are selling to our client's is the absolute best service for them. I know that I do.

Can a moderator please deliver the Hammer of Ban?

Mechanics use to be payed 50% of the labor and some got paid a smaller percentage of parts. The cost of doing business has NOT gone up that much! Something is wrong with the system. Mechanics/ technicians are getting cheated. The shop managers and shop owners are being told how their shops should be run by all these professional business advisors and their software management systems and they use the "numbers" to beat over the head of mechanics. In addition there is this whole expectation that they have to totally up to speed on all the new cars and technology. The shop owners and managers need a reality check.

Steve, respectfully do you own a shop? Do you really know the day to day struggles of a shop owner?

I am about 6 months in with Elite, and it has already taken me to places I never would have thought before. As a tech turned business owner, it was a must.

 

 

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Awesome. I have a great relationship with Elite as well. Great organization.

Participate in the poll and if you care to share, what kind of management training do you participate in? Feedback? Positive? Negative?

I love your answer. That's great. I will try to remember that next time I get a price objection. And we all know it will happen.

 

I think your scenario and tact will work with some people but I don't think it will work with most people who are objecting to what we charge for that part. Their distrust, lack of respect and value of what we do is what drove them to doubt us and check the price of the cheapest part they could find. No amount of rational explanation will convert that consumer. The ones I think your attitude and approach will work with are the ones who aren't objecting to the price of a specific part but to the cost overall. And that may be caused by tight finances or an outdated idea of the cost. Such as a starter and dad's old truck only cost $80 installed and today we can't buy a starter for $80 wholesale. So when we quote them $205 for the starter and $187 to install (have to pull the axle shaft and disconnect the stabilizer bar comes to mind) they immediately question why it costs so much. They aren't really questioning why you're charging $205 for the starter when they checked and they can buy it for $120, they aren't distrustful of us or lack a sense of value in what we do, they are simply surprised by the cost. Or say their other car (hypothetically a GM 3.1) needed a water pump and it was $350 with a flush (purely fictional numbers) and this one is Quad 4 variant where you have to pull the exhaust manifold and timing chain and it's gonna cost $875. "My Grand Am was so much cheaper, why does my Cavalier cost so much more?"

 

I have found that trying different approaches, explaining the warranty, the knowledge of what parts will ultimately provide the best value (reliable long-term service) and that I am not selling parts, I am providing a long-term solution to an automotive problem, etc. doesn't work for the consumer who doesn't trust and is only looking for the CHEAP. I have never won one of these arguments. I have tried the steak to the restaurant and that didn't even get an acknowledgement, "Well I have 5 kids so we don't go out to eat." You just can't win with the customer who already has so little regard for you and your profession that they see no value in the intangible value that you provide in a job done right instead of a job done.

 

But as I said, I like your approach and will certainly try to keep it in mind the next time I have an objection. Maybe I can turn my losing streak into a winner.

Thanks!

I think we have to have a basis for how my method works. Our whole sales process starts with taking the conversation away from auto repair and breaking it down bare bones with the customer. The customer has a problem and we are here to help them. Their problem is not a broke car but rather its I can't get to work, I need reliable transportation to take my kids to school, I have a hot date and I need my car for the week, we are taking a long road trip for the holidays and I don't want to get stuck, I am stressed I don't know who to trust with my car, etc. Our goal is to tackle their real problems through repairing their vehicle. Our conversations focus on how what we are going to do is to help them have trouble free driving for their road trip, get their kids to school, get them to work etc.

When we have a customer that only focuses on price we put them through our process. Our goal is to turn their thinking away from auto repair being a commodity. If after this process they are still stuck mentally in the same place, we fire them as a customer. There are plenty of shops out there that need the headache... I mean business. They will not be my customer.

In theory you want to fill your shop up with the best profile clients. In reality that means you will be picking and choosing the good ones and firing the bad ones. If you are having problems with customers questioning your prices and integrity most likely its either your sales process that is broken OR your customer acquisition strategy needs some help.

This is just my humble opinion.

My guess Is that if most of us did a spreadsheet with our monthly labor sales as a starting point and subtracted ALL of our costs, at best we would be at break even and in most cases we would be in the negative.

 

I explain this to customers to point out that the parts markup is our profit if you look at the numbers this way and when you want to bring in a part for us to install we lose money. When they tell me the part can be bought cheaper online I fully acknowledge that fact but tell them that buying parts online is for do-It-Yourselfers. If explained in a friendly but confident tone I have found that most people will understand.

SPG365, with all due respect I believe you may need to revisit how you are calculating your numbers. If you are properly calculating costs directly related to Labor you will find wages, payroll taxes, benefits, unemployment insurance, possibly business insurance. Your loaded costs should never be 100% of labor sales. Industry targets 30-35% loaded costs. If they are you are really upside down.

Also beside that, breaking down the finer points on how you make your money will ALWAYS go right over the head of a customer. To business owners and entrepreneurs we love the word profit. To the regular consumer, profit is a dirty word and it is generally related to negative feelings of big business. It is human nature for people to not want you to have more than they have. What they see is a shop full of cars, a building they probably think you own, assets and equipment etc. You get the picture.

In my experience it can go both ways. If you get an intelligent customer they may understand. Otherwise you will find people don't seem to understand why you need to make money on parts.

I had a customer lask week sent me a very mean e-mail because I kept her car all day and I did not finish her rear shock absorbers, the item she dropped it off for.

 

What I did do was a complete inspection on the vehicle during which I found a leaking transmission cooler. I sent her an estimate stating this to which I got the nasty response.

 

When she came t pick it up, I showed her and her husband the leak, they said "oh". The vehicle came back in today, we are fixing the leak, they are putting off the rear shocks as they are not as important as the leak, imagine that.

 

My point is that no matter what you are going to have some problem or trouble customers that just don't "get it" Just keep doing the right thing and do not let the jerks get the better of you.

Good job. Best way to stave off pissed off customers is to set time expectations during the check in process.

paradigm shift in the way you approach situations like this. Instead of TELLING and explaining your business model immediately try this...

Ask yourself why are they questioning the price after the fact? What compelled them to be so emboldened to call you or ask you about charges after the fact?

The obvious answer is that person at some point became skeptical of whether or not he was charged fairly. He then went and price compared which validated his fears. There was probably a little of anger and the feeling of injustice for him to contact you.

The first thing I would do is to ACKNOWLEDGE their assumptions. Nothing in the world will get you to listen to them better than getting on their side. "Mr. Customer, I understand that you have found X part for a different price and that you feel you may have improperly charged."

Next follow up with questions like,

"Would you happen to know what type of warranty that part comes with?"

"What happens when the part fails? Do they tow your vehicle and pay for the repair? Do they get you in a vehicle in the meantime? Do you know how long that whole process takes?"

any time you get a objection, try an acknowledge what they are saying and ask questions questions questions. Let them think it out and understand your POV rather than you dictating it to them. People can be illogical and stubborn especially when there is a loss of trust.

No matter how much experience someone has what I look for is attitude, aptitude and ethics. I look for someone that can be a team player and is willing to LEARN. Prima Donnas need not apply.

You need an outside sales guy. Either ownership or a new hire. You have to go out and get fleet accounts, they will not come to you unless there is a severe need for it in your market.

Whatever smoke machine you get I would suggest you charge a separate fee for that test alone or package it together with a series of tests. For instance we package a smoke test into our level 1 diag which comes out to $150 before tax and fees. We used to charge $99-119 alone for a smoke test but we have since developed a tiered system for our diag process which makes us more profitable, streamlines the process, and has much more detailed explanation of all the tests and procedures we are doing which equates to value for our clients.

We have both an OTC smoke machine (which I'd like to upgrade) for our regular smoke tests and also a high PSI smoke machine by redline for boost leaks.

Harry, being in Florida I do a lot of work for people travelling. Years ago I had an older lady come in for an est for A/C repair. I explained my warranty (at that time) was in house. She declined the work and went to one of the national retailers. After discussing it with several of my "snowbird" friends I felt it would be in my best interst to offer a nayionwide warranty of some sort. I was with Federated for 2 years. Great program if the customer is broken down more than 25 miles from the shop. What was distressing was the fact that if it was towed back here I DIDNT GET PAID LIKE THE GUY 25 MILES AWAY. The local store that was my federated partner didnt pay shinola. After an estimated loss of over 2G in labor over the course of the 2 years I switched to Tech Net. better coverage and I GET PAID. I have looked at several other programs and none seemd to be a good fit. NAPA required you to stock parts..why..when my Napa store is 3 blocks away and so poorly stocked they dont have parts for their own delivery vehicles. The local store that represents Auto Value is staffed with the most inept countermen I ever had to work with. No one locally offers Bosch.

The bigger question here is HOW DID AMERICA GET TO THE FREE MIND SET? Ya gotta know nothing is FREE. I feel we need to do more to advance our PROFFESIONALISM. Again I would say we need some form of PROFESSIONAL RECOGNITION that is promoted in some form nationally. We need to stand up to the states and municipalities that expect us to pay fees and follow regulations when they wont police the shops that dont. We need the same recognition (and pay) that an electrician, plumber even doctors get. What sets these trades apart? Apprentice programs, state testing of their skills..regulation and policing of those trades. UNTIL WEARE RECOGNIZED AS THE PROFFESIONALS WE ARE THE FREE SHIT WILL KEEP COMING. The wiper blades and batteries are only secondary to the bigger problem.

Jeff,

I could see where that is a concern of yours where you aren't getting paid on a claim while other shops will. I am not sure of what the costs of the program are but being the devil's advocate so to speak, I am going to assume that the costs go into a program that allows you to offer a nationwide warranty outside of your shop which you could not do otherwise. If a parts supplier is going to give you warranty dollars, they should be doing so with or without you participating in paid into warranty program and rather off the merit of your parts purchasing relationship.

In this case I would most certainly go with the best parts supplier first and foremost and weigh them based upon what they are doing for your business. I certainly would rather have a parts supplier that does not compete with my business or have a negative influence on it than to just save myself a few dollars on warranty claims. I try and look at the ROI beyond just clear cut dollars and cents.

I can definitely understand your frustration.

 

The issue is: Manufacturers are struggling to be profitable.

 

They don't care what they have to do to be profitable. If they have to sell it retail.

If they have to sell wholesale, it doesn't matter.

 

Tire manufacturers, AC Delco... the list is endless... are all selling Direct to the consumer.

 

In this case, parts stores also have to do what they must do, to be profitable, to stay in business.

 

So, they either have to have dozens of repair shops, like yours, that buy all their parts from them.

 

Or they have to sell to the public.

 

It can be frustrating when parts stores are advertising they can do all that stuff for free but

the question becomes who's going to replace the parts.

 

For example, even if the parts store replaces a battery, they're not going to do it correctly,

so now a warning light is on or the clock isn't working properly.

 

So, the customer still needs an expert, like you to take care of the issue, which gives you an opportunity

to gain a new loyal customer that will come to you next time they need service of any kind.

 

One of my clients has an Advance right next to him and was worried about the same thing.

 

What he did was build a relationship with the manager and now, that manager sends

all the customers that need services right over to him.

 

He bumped his sales by 5% just by doing that.

 

By the way, here are some interesting statistics about the DIY trends:

http://campaign.r20.constantcontact.com/render?m=1101171307072&ca=32e8a809-81a2-4fea-aad3-30cdfb857ae8

 

Everything is about turning challenges into opportunities.

We have all dealt with a person coming from an advanced or autozone with a problem that you had to fix. I think it is very 1 dimensional to think now you have turned that person into an educated customer or for better words, a customer on your side. Taking your example, you can also say now you have given that customer the idea that he can still go get his own parts and attempt to do things himself or have another inept person work on his car and you are going to clean up the mess. I have had this happen both ways where we have turned people into returning customers (rare) or they think its ok to call us to fix their mess (wrong). I'll even go as far as to say we are expecting people to be rational and learn from these types of experiences that you get what you pay for. I can cite numerous examples where that is a complete fallacy. A large majority of people will continue to put a square into a round hole.

Part of the reason why we don't have too many returning customers is we do cater to a slightly different demographic. Our target customer is someone who really would never step foot into an advanced to borrow tools or get free services. It does not however mean they are not influenced by the marketing and advertising of FREE FREE FREE that Advanced and the like are putting out there. The psychological influence of big box store marketing affects us all.

If providing a nationwide warranty is your concern then there are a lot of options and a lot of banner programs that you can buy into. I forget who bosch uses however you can buy into the program for a few dollars a month to offer a 12/12, 24/24 or 36/36. Otherwise as I understand it there is very little on going monthly commitment to be apart of a banner program to get some of the perks. I guess it depends on the banner program but the point is there are options.

 

I got a call the other day from a shop owner who happens to own a repair shop in the town I live in. He told me that a new Advance Auto Parts store has opened up down the road and they want him to buy from them. I asked him how he felt about buying from Advance Auto Parts. He told me that he really has an issue due to all the signage in front of the store: Free Wiper Blade installation, Free Battery Testing, Free Battery Installation, Free Alternator Testing and Free Starter Testing. There’s even a sign that says, Loaner Tool Sets Available!

I don’t know how you feel, but as a shop owner I cannot align myself with a company that devalues the work we do. It’s hard enough to generate a profit these days, but to compete with the same business that wants me to buy from them? That’s insane.

Advance Auto Parts claims that they target the DIY, not my customers. But the truth is, everyone sees and hears their advertising. So my customers here the “Free message” over and over. And, let’s not kid ourselves: If Advance Auto Parts can convert a few motorist to try to do auto repairs themselves; that would be just fine for Advance Auto Parts. All at the expense of the auto repair shops.

The bottom line here is truly the Bottom Line. Advance Auto Parts has to answer to Wall Street and its investors. I have to answer to one person…myself. And I will not compromise my beliefs for anyone or any company.

So Advance Auto Parts and Tech Net, say goodbye to someone that has been a life-long friend.

 

What I don't think shop owners take seriously enough is how much psychology plays a role in our business life especially in the customer's mind. A customer that would never ever ever ever step foot into an Advanced Auto for any type of FREE work is still bombarded with the idea that testing starters and alternators has no value along with whatever else they give away for free. I would even go as far as to say you look like a complete hypocrite in front of your customers at times. Lets look at this example... You have a customer that comes in that has a charging system problem. You offer to check his charging system for $29.99 (or whatever you charge). He looks perplexed and says Advanced does it for free as per the signage he sees and the marketing they blast everywhere. You do your very best to not throw Advanced under the bus by saying they are amateurs but lets be honest, that's exactly what you want to say and something along with your pitch will sound like that. Customer agrees to do the test and then after agrees to do the job of an alternator replacement with you. At some point a nice delivery car pulls up with Advanced Auto all over it and a gentleman steps out and is wearing a Advanced Auto uniform delivers Advanced Auto branded parts. What do you think is going through the mind of the customer?

Try Hogan Tire and Auto, I met the owner at a meeting.

I can't even imagine not being full service. I haven't seen any only under car shops in my area in a long time. Everyone has shifted to full service or has closed their doors.

Case in point, I have a 2005 Chevy Express that came in for an LOF and a tail light out. Parts are on order for a $2500 RO. That nicely offsets the 2011 Escape with 38,000 that needed nothing but an LOF.

 

With that said, if I am doing my job and my customer is allowing me to do my job then their car won't need more than their immediate concern. After 2-3 visits the car/truck/van should be up to snuff and only in need of maintenance or unforeseeable repairs such as the alternator that tested fine last visit.

You must have a lot of really nice roads and weather conditions where you are at. Every car we see is a disaster minus the cars that are <3 years old and low mileage.

do you mean shops that specialize in suspension/steering/alignments/tires???

I've read with interest all of the comments. There is a great deal of very good information in those posts.

But one thing I see is missing that is so often missing in a lot of the "ARO must be this much" discussions is this,

Your customer's car needs what it needs, not how much you need to sell.

 

What that means is this, do not let your need for an ARO of $350 (or whatever you conclude) cloud your judgment and destroy your reputation. If you need an ARO of $350 then that's exactly what it is, average and it is your need, not your customers. I am sick of hearing all of this "you are entitled to fulfill what you need on your customer's dime" stuff from these calculation explanations. If you have a dozen cars come in for an oil change or a tie rod end and that is all they need, then you can't ethically or honestly make $280, or $350 or $700 on those tickets. If that is all they need. But when you have the car on the hoist for the oil change, how are those CV boots or tie rod ends or an easy peek at the brakes through the wheels? Your need demands you look and identify legitimate work, but don't cheat your customers to meet your ARO. It's easy to lose sight of that when you're trying to make numbers on every ticket.

 

I am a horrible business owner. I tell my customers that they will need this work, down the road. I don't try to sell it to them today if they have reasonably 5000 miles before it's due. But if I ethically think it will fail in the next month or so I will certainly try to sell it today. You also have to consider your customer's tolerance for a breakdown or additional downtime. Don't let your bad numbers or desire for better numbers affect how you honestly deal with your customers. They need what they need, not what you need them to buy.

 

You have every ethical right to look for more work, but don't let your standards slip and try to sell unneeded work because you need an ARO of $350, their brakes are still at 50% and they came in for an oil change. It takes years to build a good reputation but only seconds to ruin a lifetime's work.

All valid points except that the reason why anyone's ARO can be increased dramatically is virtually every car older than 4 years need a lot more work than what is their immediate concern.

Doesn't sound like a well ran shop if the son was allowed to take all the money.

cloud based SMS would be very helpful. Since the SMS market for our industry runs at a snails pace I wonder when more companies will adopt this. I would rather not worry about my database being wiped out by a cup of coffee.

Very Good idea!

24 hourly the rate was at 73. I know its low.

That is a low hourly rate. Your tech pay ideally should be 30% of your total labor sales max. That would equal to a $80/hourly. Then you need to factor in room for everything else built into his pay including benefits, insurance, comebacks, etc.