ScottSpec

1 hour ago, AndersonAuto said:

Well, hell. You'd think I could figure out a message board by now. I guess not. 

Thanks for taking the time to share all this insight and info. You've given me a lot to think about. Your last comment about figuring out a message board has me a little confused though. I have another question about your oil change specials. Is this an on going special/price, or a offer that comes and goes. Do you have a time when customers are paying your normal price for oil changes? 

Thanks
Scott

On ‎6‎/‎26‎/‎2017 at 9:39 PM, AndersonAuto said:

It's a house brand oil from our local supplier, Allied Oil. It's Dexos approved, but we don't have to pay for the brand name. Very few customers know or care, and if they do we are glad to install whatever oil they want, but certainly not for 29.95. The filter is also a house brand from Factory Motor Parts. Super cheap, and hasn't given me a bit of trouble for over 4 years using them. Again, if someone cares, we'll be happy to upgrade the filter as well, for a price.

We are certainly doing well with this. I did just short of 2 Million last year (as in 1.5 days business short) and as of today I'm up 17.89% over last year. The second half of last year was really strong, so I suspect that gain over last year will shrink a bit, but I expect to end the year at 2.2 and a 20% net.

That said, oil change marketing does produce a fair number of "one and done" customers. Quite often they will spend money fixing other things they need on that first visit, but you may never see them again. It's just a part of the model. A lot of guys couldn't sleep at night knowing they're going to have 100 customers fall into the Lost Customer category in a given month. I just roll with it and keep pounding the marketing. We're certainly doing things to try reducing the outflow, but it will always be there to some extent. 

I have been reading your post over the last several weeks and what you have had to say has really intrigued me. It makes me want to come check out your shop. The cheap oil change has never worked for me and you have me wondering what I'm missing. Right now we are doing a $80 synthetic oil change that is bringing in customers that are willing to invest money in their cars. When we have tried the $19.99, $29.99, $39.99, etc., we get customers that usually don't spend more than that. Also you continue to beat previous sales. Most shops I am in contact with are seeing year over year sales on a steady decline for several years now. In fact, I just purchased the customer base of one that went bankrupt.

 I have a few questions in you have the time and are willing. The first question is how do you handle the oil change part of a service. For example, a 15,000 mile service on my Volvo includes a little more than an oil change. It includes a few other checks, a cabin air filter, and we also put some BG chemicals in it. For this example lets say we get $200 for this service and we normally charge $85 for an oil change. In this case would you modify the price of the service because of the oil change special price?

 I know you said you will accommodate a customer's requests when it comes to oil and filters, but do you try to upsell the oil change itself? Do you try to move them to a better oil or filter to increase the R.O.?

Do you have any insight on why like my shop, most shops dislike and struggle with the oil change specials, while it seems to be working so well for you?

Last question. Do you have any thoughts on why you have been able to thrive over the last few years when most in this business are experiencing flat to no growth?   

Thanks
Scott

Never had one breakdown. We are pretty vigelant about maintenance, keeping them clean, and inspecting them between each use. While this does not eliminate the possibility of problems, it greatly reduces them. We have had a few check engine lights and one Customer mentioned that one of the cars seemed very sluggish. It turned out to be a fuel pressure sensor. I do have BG on the road cards in each car and NAPA road side assistance cards in each car, just in case.  

We do have a large decal/wrap across the top of the back window. And small ones on the side glass. You can't miss them, but almost a year of having the loaners and not one call because of them.

Knock on wood, so far no damage other than a scratch or two. Hope I am not jinxing myself. Right now I have full coverage on all the cars. I was surprised to find out it was less than $200 a year more for full coverage. I think right around $160. When I started this, while I would prefer not to loose a car, I figured there is a chance it will happen at some point. I accepted that as part of the costs. Loosing an engine or transmission might be more costly.

Obviously, there are risks. Not sure if it is more or less risk then any of us take every day. Your mechanic can forget to tighten the drain plug, leave an important part loose or off. The master cylinder he installed could be faulty and fail causing an accident. That is why we have insurance, and you can minimize your risks with the loaners the same way. 

If anything changes with our loaner situation, I'll try to post an update here.

Scott

Like Joe says, there is a lot of gray areas with issues like this in the business.  Like most of the other reply's here, a lot of it has to do with how you present it to the customer.  It's not totally clear from your post, but it sounds like your CSA presented the issue "bulb out"  and the solution "replace bulb" and the cost.  The customer agreed to the "cost" to "solve his issue".  So if the "issue" is not resolved, you cannot fault the customer for not wanting to pay the "cost".  A lot of customer's will understand, but it is not unreasonable for a customer to see this as unfair.  Now, if you state to the customer, "you have a bulb out and we need to start by finding out why, and that will cost x and if it is just a bulb, it will only be x", what you are selling them and what they agree to are very different.  That way there should be no conflict getting paid for it as you should. 

Scott        

7 hours ago, xrac said:

Scott, thanks for the answer.  Your response is what I would have expected flexible as the situation calls for.  I really appreciate you sharing the loaner vehicle agreement! 

xrac,

I realized I did not address one of your questions.  We have not modified any contract.  I would markup the agreement in a warranty situation if the customer requested it, but no one has ever asked.  There is a lot of trust between us and most of our customers, so when we tell them the loaner is free with the warranty work, it is good enough for them.  Other than that, right now I cannot think of a situation where I would be willing to modify the contract.

Scott

10 hours ago, xrac said:

Scott in your loaner agreement you have this provision:

Your acknowledge that there is a minimum of $125.00 in service or repairs required while using the loaner car.

Is this hard and fast? Do you make any exceptions for example on some diagnostics situations where you don't know where the repair is going or if it may turn out inconclusive?  Do you use the loaner for warranty work situations for either your convenience or the customer convenience?  When this occurs do you make pen and pencil alterations?

Does anyone else have a dollar limit on use of a loaner? 

 

xrac,

For me, the loaner agreement is for legal protection, and to prevent being taken advantage of.  We have loaners to make life more convenient for our customers and us and I don't want it to become something that creates more stress for anyone.  So the minimum of $125, and or the time limits for example are not hard and fast.  Neither are the gas and toll charges.  For me, they are used when a customer is not playing fair to speak or the cost is significant.   

Do keep in mind that a large portion of our customers are, or become long term customers.  So looking at one visits expense might skew things a little.  Here are a few examples.  A few months ago a long time customer's car was towed in for a fuel leak.  She took a loaner car.  The plastic gas tank was obviously cracked.  When I gave her the price to do it, she decided to get a new car.  I looked at her service records, we had over $7,000 in income from servicing this vehicle.  I think letting her use the loaner car for free was the right thing to do. 

One evening we had a customer come to pick up her car after we had done some servicing.  When she went to leave, the car would not crank.  One of my mechanics went out and determined the started was bad.  We had just replaced it 3 months earlier.  We put her in a loaner, sent her on her way and took car of the car the next day.  I think charging her to use the loaner in that situation would have been wrong. 

I did bill a customer for $35.00 worth of tolls.  A few others for speeding tickets.  I have had cars come back with only 1/2 a tank of fuel, but since the customer's bill was over $2,000, I did not worry about it.  Funny thing was the next customer filled it up. 

So far, offering the free loaner cars has been one of the things I have done to help my business.  And so far, it has not been as costly as I expected.  I realize that issues may still arise.  The last thing I want to share is that we are getting ready to give customers the option to fill the tank or be charged.  That way at the end of the day if their time is limited, the don't have to stress about filling the tank.

Scott

Everyone in our shop is paid a gross salary plus a percentage of gross sales.  This way they have security and an incentive to produce individually and as part of a team. 

Scott

34 minutes ago, Wheelingauto said:

Great post! I often tell parts people who come in here and tell me it's quiet on the street as if to console me when we are a little quiet it's a BS excuse that makes everyone feel a little better. What did I do today to change that is far more important than sitting on my a@@. While there may be less cars in bays there are still cars in every shop. If I can get more of those cars to come here they can console each other it's just slow......

 

I am not a coach for elite

Joe,

I think this is a valuable discussion and I agree with most of your last post.  A good attitude is the first thing I look for in a new employee.  In this business, we have to remain positive and continue to look for ways to succeed.  But when you are coaching a shop owner, and sales, car count, ARO, or even profit margins go down, I think the first question you are going to ask is why.  If you can't identify the issue, it is hard to address it.  

Denial can be just as damaging as a negative attitude.  If a customer's car came in with a loud knocking noise under the hood, I don't think you would tell them all is well.  Being overly optimistic has gotten me into trouble a few times in my life, and I've seen it do the same to others.  In fact I just purchased the customer base, phone number, url, social media profiles, etc. from a shop owner who was getting coached, increasing his marketing, and was convinced he was going to get his business back to its peak sales days, only to end up in bankruptcy.

I think it's good to look for the reasons why business is bad or when something is not working.  I think what is most important is what you do with that information.  Do you use it as an excuse and become a victim, or do you put it to use, to find ways to overcome the situation and succeed.

Scott 

17 hours ago, Joe Marconi said:

Booking the next appointment does not mean getting 100% of your customers to return at the day and time you set up.  It works as part of your marketing strategy, and it takes time for the process to work.  By informing customers of their next service appointment and other services and repairs due in the near future, you are increasing the odds that your customers will return to you. 

When a patient leaves the dentist's office, the dentist sets up the next cleaning or dental work needed. Even the dentist knows that not all people come back as scheduled. However, many do. And those that due are the ones that value preventive maintenance and also value the opinion of the dentist.

I do agree that most shops do not book the next appointment, and most shops do have a effective rate of return.  But those that are diligent and give time to train their customers and are proactive, do see positive results. 

I also agree that it takes work.  You will need some form of reminder other than the typical service reminder or email.  Successful shops will either text or phone call the customer a few days to a week prior the scheduled appointment.  Even if the return is a handful, it's a win because you are in better control of the work and your schedule.

The repair shop business has changed of the decades. We need a proactive approach to remain competitive.

Joe,

I agree that we need to do all we can to keep customers coming thru the door, and none of us know what will work and what won't until we try it.  If you do the math, scheduling the next appointment is very appealing.  If you can add one more car a day with a 5 day work week and a $300 average R.O. it would add $78,000 a year in sales.  I have just not been able to get it to work for me.  

I realize this has gotten a little off the original topic of how was your April.  We were down 33% from last year.  I believe there is a lot of uncertainty with the new administration and we are just outside of Washington so it is very pronounced here.

Scott

I don't know much about bolt on, but I would highly recommend digital inspections over hard copies.

Scott

On 5/5/2017 at 8:35 AM, Joe Marconi said:

Booking the next appointment is a gold mine.  

I know, I know...I have heard all the shop owners that say it doesn't work. Really? Just ask your dentist, your doctor, the hair salons, the nail salons, the boiler repair guy, the chimney cleaner, the eye doctor, the chiropractor and the septic cleaning company.  They do it; why does it work for them??? 

We have tried booking the next appointment. Most customers are reluctant to do so and most ended up being a non show. We tried offering an incentive. If they came back within 6 months for their next service, they would receive 10% off labor. This just irritated a lot of customers. If they did not make it back in 6 months, the felt like they were cheated. 

As far as asking my dentist, I did just that. His response was that they we are in 2 very different businesses and he could not see it working well in auto repair.

For what it is worth, this is a young guy who has taken over a practice recently and is very business minded. He has doubled if not tripled the practice in just a few years.

He said for it to be successful in his business, it takes a lot of follow through.  Multiple reminders via email and text and they have to call any patient who has not confirmed. He said skipping any of those steps, the success rate drops off dramatically.

I know some shops that swear by scheduling the next appointment, but I know a lot more that found it ineffective.

Scott

I don't know if this has anything to do with it, but I understand that WorldPac updates their database daily to make sure they have all catalog info as current as possible.  I image that part of that update includes pricing.

Scott

We have been with RepairPal for a little over 2 year.  It has brought us some decent work and with the towing program we get a car towed in every now and then.  About $22,000 worth of work.  Not a huge number but it helps.  They are now involved with CarMax and another warranty company.  We are listed on the Carmax website as a recommended service facility, and have had 2 new customers come in recently from there.  Plus we can add that we are RepairPal certified to our marketing,  Having said all that, if we got busy enough tomorrow, it would probably be one of the first things I would drop from our marketing.  We waste a lot of time with calls from people just wanting a price, and a lot of them are shocked that you don't know the price instantly.  Not even sure I would call them price shoppers.  I think it is more of an extension of the site.  People go there to find out what something should cost, then they call to get a price as part of further research or curiosity, not necessarily because they are going to get the work done.  If you need more work in your shop, I would say give it a try and see how it works for you.  At $199 per month, it won't break the bank to try it out.

Scott      

2 hours ago, tirengolf said:

Most likely a combination of both.   

15 minutes ago, tirengolf said:

http://autosavetireshop.com/    If any of you guys have a chance click my website and tell me good or bad that you see, I pay good money for this website. At times I really do not think it works although I guess it does at some point. This is a great forum for business owners I really enjoy reading and get a lot of info from all you guys. Thanks David

Here is one of the most important things.  I did a search on google for automotive tires in Pensacola Fl and you were on the first page.  https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=automotive+tires+pensacola+fl&* and #1 in google places.

Scott

1 hour ago, HarrytheCarGeek said:

Scottspec, great write up. Thanks for sharing it, it shows how much intellectual work one has to do to work with GroupOn and still have uncertain results. To me, it is just not worth the hassle for the investmet of my time alone, much less my other resources.

Harry,

If we had enough work, I would not bother with Groupon.  Over the last few years, we have been trying everything we can think of to get new customers in the door.  We have been finding that each thing we do brings in a few customers.  Not much seems to bring in a steady stream of new customers.  So casting a wide net is what seems to be working for us right now.

Scott    

Nick,

I think we all know the type of customer Groupon generally attracts.  Having said that, we have used Groupon continuously since August of 2015.  For the most part it was a losing proposition at first, we lost a significant amount of money doing it, and as you can expect it did not generate return customers.  Then we tweaked it a little.  Now I believe Groupon increases our web presence, helped us get more positive reviews, and it does generate a little income for us.  Here is what I recommend.  While you may get one or two, don't create offers in hopes of getting more repeat customers.  Create offers that open the door to profitable work.  

It does not always work, but here is what we do.  Right now we have 2 Groupons and are working on a third.  The first is for a check engine light diagnoses.  If the car is coming in with the check engine light on, it will most likely need repairs and that is where you make your money.  The second is an AC evacuate, recharge, and performance test.  Again, if the AC is low or not functioning, repairs will most likely be needed.  Work is not always purchased, but quite often it is.  The new one we are working on is essentially a vehicle health inspection.  We are a NAPA Autocare Center.  NAPA has this great little booklet with a coolant test strip, brake fluid test strip, a serpentine belt wear tool, a page to check fluids, and a check list of items to inspect on a vehicle.  They also have a nice YouTube video promoting it.  It has a 29.95 retail value.  We put the value at $84.95 with the inspection.  We are going to offer them on Groupon.  When someone comes in for one of the inspections, they will most likely need work performed.  None of these offers have a huge upfront cost for us, but do have good upside potential.

Scott

Just now, ScottSpec said:

xrac,

No problem.  I just wanted to fill in some of the details about it and let Markas know he could use it if he wants.  It's on my site for public consumption so I don't see any issue with sharing it without clearing it.

Scott 

O yea, and I'm proud of it so I wanted to pat myself on the back a little.

Just now, xrac said:

Markas, I wasn't trying to claim credit for your document but was just trying to help answer Jay's question.  I almost posted the same question but then found your document when checking out your website.   Sorry, I probably should have cleared that with you before posting a link.  I haven't read it through yet but I really like the look and format.  

xrac,

No problem.  I just wanted to fill in some of the details about it and let Markas know he could use it if he wants.  It's on my site for public consumption so I don't see any issue with sharing it without clearing it.

Scott 

38 minutes ago, Marksas said:

We've had a couple of rentals for a number of years. They were cars we purchased from customers and they are Toyota Corolla's. Clean, automatic, A/C. We actually charge $15 per day for the use of the car, but there are times were we wave the fees. Part of the reason for the charge is based upon our carrier that we had to charge something because of Texas Laws. If I recall it ha to do with contractual agreements that makes the renter liable and the first payer should they have a claim. We only keep liability on the cars.  It does become a bit of a challenge when we are shopping for Garage Keepers insurance as the rentals scare companies and they won't bind our coverage. We have been told by some carriers to just have them as shop vehicles and then use them as a loaner or set them up under another separate company which is something I am not interested in doing as we just try to keep things simple. 

I have considered buying new ones but even I don't even buy new cars for my personal use so I just can't seem to buy new ones for the shop. Having a good high mileage loaner/rental is actually good because it shows people that  well maintained vehicles will last a number of years. We get people wanting to purchase them also. I have sold one or two occasionally just to upgrade them, but it's something we play by ear. I remember having a 2001 Camry with 160K miles on it and the customer could not believe how well that car drove and handled. Told them that's what new struts will do for you. Sold several jobs like that. 

Xrac thanks for posting the loaner document, it's better than the ones we use which had to be vetted by our carrier.  I like how it is one document with all the vehicles listed for you to check off which vehicle is being utilized. We have separate documents for each car.  One thing we don;t do is a good job of checking the car back in because we get in a hurry. Most of the time they come back in with the proper amount of fuel but there are times when they don't. I figure the charges make up for some of it. We will probably add a few more to the fleet as they are very handy to have and it does allow us to sell more work at times. 

Marksas ,

It's interesting that you are required to charge.  My agent told me that if I charged anything to use the cars, they would be considered rentals and insurance would go from $100 per month to $300 per month.  I actually have full coverage on the cars.  I don't usually carry collision on my own cars, but I thought the cost was pretty reasonable for the loaners.  The reason insurance is affordable is because the customer's insurance is primary.  Which is why it has to be a loaner and not a rental.  

The loaner document Xrac posted is actually ours.  I'm guessing he got the link off our site.  I invested some time into the agreement to make sure it addressed all my concerns.  It's a word file, so you are welcome to download it and modify it for your use.  

We keep (4) 5 gallon gas cans full so we can top off the cars without running to the gas station for a few gallons.  But fortunately, most customers bring them back full.

I hear so many shop owners talk about setting up a separate company to own the cars thinking this will protect them from liability.  From the research I have done this may actually do more harm than good.  In fact, it is illegal to do this and would probably lead to more liability than less.  To provide any protection, you would have to prove that this company does something beyond putting a firewall between your customer and you.  And even if that firewall does stand up, the argument can always be made that your company was the one that supplied that vehicle and are in some way liable.         

8 minutes ago, Jay Huh said:

Thank you for the detailed response. I will save this for the future when I seriously consider having loaners as part of my business

I wanted to add that adding loaner cars has dropped the stress level in my shop dramatically. Both for our customers and the employees. It's hard to measure the effect on the bottom line so far, but I know more work is being purchased because of them and the shop is more efficient.

54 minutes ago, Jay Huh said:

Did you buy the cars to serve as loaner vehicles or were they abandoned vehicles that you picked up? License plate wise, are they registered under business name?

THe idea of loaner vehicles would take my business to the next level. I can see a lot of benefits of having them but the cost associated with it would be astronomical 

I buy the cars from customers. We all get those customers from time to time that want to sell their clean well maintained car because they are tired of it or it needs work and they don't want to repair it. One needed an engine, one had a cracked oil pan, one was purchased from a widow. On average I probably have 2-2500 in each car.  And if it doesn't work out, I could probably get twice that for them now. So it's hard to classify that as an expense. 

For operation expenses I am currently allocating $300 per month per car until I can see what the actual expenses are. $100 for insurance and $200 for gas, registration, and maintenance I don't think I have even come close to the $200 per month. But I'm going to keep using that figure for now. I'm sure some repairs or tires will be needed at some point.

I only buy cars that I know customers will be comfortable in. They have to be clean inside and out. The first loaner I got is  a 1999 Volvo S70 with about 70000 miles on it. The car is spotless. Most customers don't realize how old it is and can't believe the low miles.

The down side to having nice loaners is that I continually get harassed to sell them. 

The cars are registered to my shop. I have a 1,000,000 liability policy + 1,000,000 liability policy on each car, and a 1,000,000 umbrella policy. For a total of 3,000,000 in coverage.

The are shops that do the create another company to own the loaners thinking this gives them some protection from liability, but I think that is a bit of a fantasy. 

My customer's get a follow up email ~3 days after they are in.  4 months later they start receiving email reminders.  They will continue to receive them every 2 months for 3 years unless they come in or tell me to stop.  Having said that, this yields very little return.  There was a post on this site a while back that talked about how studies showed that reminders in the automotive repair business are not effective anymore.  This has been my experience as well.  We do get a few responses but not many.  At times I send out several hundred and it is not uncommon to get no response.  

The one thing I do not do with my reminders that might make them more effective is to offer a discount, incentive, or something of value.  I have always tried to get customers to see us as professional just like their doctors, dentist, lawyer, and accountant.  None of mine send me coupons, so it seems counterproductive for us to so.  I don't like the discounting game, don't want to be in the race to the bottom, and don't want to attract the discount shoppers.  I will continue to send out the reminders because there is no cost involved, it keeps us in contact with customers and on their minds, and it does yield an appointment from time to time,  But I would never see it as an effective way to recover lost customers.

Scott  

Just now, Jay Huh said:

O wow. so many lol. 

How does the loaner car work out? Is it a headache? I'm sure customers try and bring it back without gas. I'd like to offer loaners cars one day but the cost of it is daunting

So far the loaners have worked out beyond my best expectations.  Just about every customer who uses one really appreciates it.  Most bring the cars back with at least as much gas as it left with.  One customer lives a mile away from the shop but still stopped at the gas station to fill the tank that was full when she got the car.  Having them takes so much stress out of the equation.  We don't have to rush to get cars done when they have a loaner.  Customer's buy more repairs because it is more convenient for them.  Several new customers said they would not have come to us if we did not have the loaners.  

It might see odd, but the biggest challenge has been turning the cars around.  When it gets dropped off, we like to do a quick check to make sure it is full of gas and ready to go for the next customer.  It only takes a few minutes, but the busier we are, the quicker the cars are going in and out and when you are busy, you don't want to pull employees off other tasks to check over the loaners.

Just now, Jay Huh said:

Nvm, I saw it on your profile. Vovlos! nice! I like the website too. Where did you get the license plate frames made and cost?

It has been so long since we did the frames.  I have a box in the back that still has a few in it.  If I get a chance this week, I will see if there is a label on it.  Check out google https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=custom+tag+frames&* you will find many companies there.

Scott