xrac

Here is how I handled the situation. Let me re-cap. As I wrote previously, a customer accused us of breaking her windshield after we performed a routine oil change service. My tech followed the walk-around procedure, noted the broken glass on his tech sheet and informed his service advisor. The customer was adamant about the fact that we broke the windshield.

 

In the end I felt it would be better to pay for the glass. The glass cost me $185.00. I weighed all the possibilities and came to the conclusion that I would rather loose the battle and put my self in the position to win the war. This customer was recommend to me by another long-time customer. By loosing this customer, I might loose more that $185.00.

 

Agree or disagree? Let me know…

Joe, that is more of a gut decision than anything. Maybe you made a good decision that will pay off. Maybe you got taken advantage of. It is ironic that the last time I paid for something that I didn't feel responsible for was when a long time customer recommended someone to me. I probably wouldn't work on anything for this guy again. In the case I described earlier about the people who thought we damaged her door our deductible was $1,000 so that was the minimum I was going to pay. I couldn't take that kind of hit at that time.

We all need to reflect during this holiday season and be thankful for our family, friends, customers and staff. We should do something special for our employees and it doesn’t have to be lavish or cost a lot. But a little recognition will do wonders for morale and help your company start off on a positive note in the New Year.

 

What will you be doing?

We normally give our guys Christmas day as a holiday plus close early on Christmas Eve. THis year we are going to give them an extra day. We will still be open on Saturday after Christmas but with a skeleton crew. It will be myself, my service manager, my service manager's son, and a former employee (working that one day). My service manager will spin wrenches as needed. This will give them a longer Holiday as a spiff plus a small cash bonus.

As we approach this Thanksgiving season, take just a few minutes to look at the link below.

http://www.cpmsglife2.org/MSG/Pres/td/td1.html

Charging list price may or may be correct for your business. You need to sit down with your accountant and establish your “breakeven”. After that is determined you will find what mark up you will need to achieve not only breakeven, but to make a profit.

 

Shops that I speak with usually look for a GP% on parts any way from 45% to 55%, but every business is different. Don’t’ be afraid to charge over list and don’t change your entire business model because one or two people may call around to check your prices. Those people won’t care when you don’t have enough money to pay your bills.

 

Joe

What do you guys do as far as marking up dealer parts? Do you charge list or more than list?

Just curious on what the best method of paying your top technician is. I'm paying salary currently, but not sure if this is in my best interests. I should be doing some sort of flat rate program and maybe a guarantee? My guy works about 50 hours and gets $1400 which means a $28 an hour rate or so. I need a plan to get more out of him, although I'm really not measuring anything right now..like productivity.

 

How do you pay your top guy(s)?

We pay either a base guarantee or commission which ever is greater. Our commission is for parts and labor and has different % categories. Tires = 5%, oil changes and batteries = 10%, alignments = 30%, and everything else = 14%. At one point we paid our top tech 30% for all diagnosis time billed. Our better techs simply get a higher base guarantee. Our system isn't the best and I have considered changing it.

Ducks Quack, Eagles Soar!

http://deepsm25.wordpress.com/2008/07/26/d...ck-eagles-soar/

Published: 16 Oct 2009

 

 

Automotive Maintenance Takes a Hit from the Economy

 

 

Date Published: 16 Oct 2009

 

 

 

 

By Mary-Beth Kellenberger, Program Manager Automotive Aftermarket, Frost & Sullivan's Automotive Practice

 

As the economy tanked and consumers held back on durable good purchases including cars, there was much hope that the repair industry could be one industry that succeeded during the recession. That success has yet to materialize. In late 2008, there was a spurt of consumers heading to their repair shops, investing in repair services as they prepared to hold on to vehicles longer. That burst, however, was short lived. In early 2009, at the height of the recession, consumers retracted their spending dramatically. In recent research released by Frost & Sullivan, U.S. vehicle owners reported purchase rates of key maintenance services, including oil changes, air filter changes, tire rotation and tire balancing, that were an average of 14 percent below rates reported in 2006. The drops in these services were consistent across different vehicle types, vehicle ages, and vehicle brands.

 

The threat from the recession was so broad that consumers did not know when or how they personally would be impacted. In response, they cut back on all types of spending. Twenty five percent of vehicle owners reported cutting back on meals and entertainment expenses, even though they personally had not experienced a job loss in their household. Frost & Sullivan's analysis indicated that these new behaviors allowed consumers to be segmented into one of three categories.

 

•The fiscally challenged; those whose income has dropped

•The fiscally responsible; those whose income is flat to moderately down but are uncertain about future income

•"Cheap is chic;" Consumers believe they are financially secure but are cutting back

When it comes to automotive maintenance, vehicle owners simply cut back; nine percent of vehicle owners reported that they were less likely to follow the vehicle manufacturer's recommended maintenance schedule. Even consumers who had not experienced financial challenges changed their maintenance behaviors. The driver for this change is not really apparent; it could be fear of impending changes, a need to conform to the prevalent social atmosphere, or seeing the downturn as an opportunity to capitalize on the value presented by businesses during a recession. Research indicates that consumers did not report changing service locations in search of a lower cost provider, and they did not shift their behaviors to become do-it-yourselfers; rather, they simply cut back on services. The challenge to the industry is that the cut backs reduced not only the number of maintenance opportunities but also the number of opportunities to identify needed repairs.

 

In 2009, 7% fewer vehicle owners were likely to repair their vehicle on the spot when a service provider identified a specific problem than in 2006. When respondents reported a recent job loss in the family, the likelihood to repair an unexpected issue when identified dropped by half. In 2006, the economy was doing well and consumers really valued their time. In 2009, cash flow is the all-governing issue, forcing consumers to not only hold back on identified issues, but to prioritize their repairs. North America is a vehicle-based society, so it is not likely that we will see a mass abandonment of the vehicle. As time moves on, the repair shops that help vehicle owners deal with their repairs in the most dignified and cost-effective manner are those best positioned to reap the benefits of the current repair environment.

 

For more information, please contact Johanna Haynes, Corporate Communications, at 210.247.3870 or [email protected].

I am in NY. I would like to which health insurance companies are affordable, would also like info on how to offer 401K plan. Thanks!

I am trying to come up with someone who can be helpful but NY is a tough state for health insurance. Here is an article I think you guys may find interesting:

http://www.nytimes.com/2009/11/11/health/p...mp;pagewanted=1

I offer my love, respect, and appreciation to all of those currently serving in our armed forces, our veterans, and their families. Your service and your sacrifice are deeply appreciated. May God bless you and may God bless America.

We at AutoShopOwner.com want to express our condolences to the families of the 13 soldiers who died this past Thursday at Fort Hood and offer our prayers for those wounded and hope for a speedy recovery. We owe a great debt to the military and to the heroes who fight for our freedom.

They have been in my prayers. God bless our loyal patriotic soldiers and may He execute judgement on cowards who slay the innocent.

Cash for Clunkers is another of those dumb ideas that only a politician out fo touch with the people down in the trenches can come up with.

Not only was Cash for Clunkers a bad idea and ineffective but the Tire Tariff that this administration signed is also another very bad idea in my humble opinion:

http://tirereview.com/Article/66890/fixing...re_wronged.aspx

How would you handle this situation? A customer was in for a routine oil change on her Cavalier. The tech noticed a small crack at the bottom of the windshield in the black tinted area while performing his walk-around. (The car was dropped off for service the night before).

 

The Tech told the service advisor and noted it on his work sheet. The advisor called the customer and informed her of the crack. She said there was no crack before she brought it in. When she arrived to pick up her car, she didn’t say a word. She would not even engage in a conversation. She paid the bill, walked out in a huff. The advisor walked after her but she ignored the advisor. I decided to call her. She insisted that we broke the windshield. I explained to her that we did a pre-check walk around and noticed the crack. There was no reasoning with her.

 

Before I tell you how I handled the situation, I want to hear from you. What would you have done?

Those are tough ones. If you have someone you can't reason with it is a tough situation. On an oil change once we had a customer return claiming we had dented the passenger door. The door was dented like someone ran a bumper along it and had black markings. All we had done was pull it in the shop, pull it onto the rack, and pull it back out after we changed the oil. My technicians all said that nothing had been done to it and I believed them. I was present the whole time and I do not believe anything happened in our shop. I walked the customer through our shopping looking for something it could have been scrapped against that was the right height and color. There was literally nothing that was the correct height or surface. My guess is that it had happened in a parking spot prior to coming to our shop and they didn't find it until after they left our shop. Because I had no evidence or belief that we had any responsibility I refused to do anything (it wasn't a regular customer). We did get a letter from a lawyer for them but I ignored it and that was the end of the matter.

I am in NY. I would like to which health insurance companies are affordable, would also like info on how to offer 401K plan. Thanks!

NY is a tough market for insurance but I'll see if I can find someone who can help you.

To stay competitive in our area and to retain employees we offer 50% payment for health insurance policies.

We also offer 401k and match up to 3%

You need to contact one or two local health insurance agent/brokers and let them do a group quote for you. This will give you the ability to decide if it is affordable or not. There are actually a couple of ways of going at this. First, you can do a straight group plan. What some people don't realize is that usually group plans are more expensive if a person is in good health. They are more expensive because everyone in a group has to be covered and because the state will often mandate that certain coverage be included in a group plan that can be excluded from an individual plan (say pregnancy or mental illness). If the agent/broker has the ability to set up a 125 (cafeteria) plan and your employees are in good health one can look at individual plans. How this would work is that the employee funds this with pretax dollars (you can contribute as well). The policies can then be set up on what is called a list bill and they are billed to your company but you pay the premiums out of their 125 plan dollars. Someone who does volunatry benefits can help you on this one. If you will tell me what state you are in I may be able to put you into contact with someone.

We close for Thanksgiving, Christmas Day and NewYears Day. For Christmas Eve, we do not book any work. We finish up what ever is left over, clean up the shop and have a shop party. I order in hot food and invite all the shops, automotive sales people and part houses in my area. It's a tradition I started 25 years ago.

 

We get 50 or 60 shop owners, techs, sales people and parts people combined. it's a nice event and kicks off Christmas really nice.

That sounds really neat!

The holidays are special to me. It’s when family and friends get together. It’s when we need to take time out and reflect about things that you can’t put a price on.

Very true. What days will you be closed during the Thanksgiving and Christmas Holidays. We will be closed Thanksgiving and Christmas day but I am debating what do with Christmas Eve and the day after Christmas this year.

I knew you would be! Thanks.

 

We need to go to lunch one day...

That would be really nice.

We use brake clean as well. You can use the non-chlorinated version. However, we have found a cleaner called Drive-up that is made to clean oil from concrete but a solution of it works great as a degreaser on engines. It is not a petroluem based product but must be some type of akaline. It does not have any obnoxius odor or fumes. Driveup is a good product.

http://www.driveupusa.com/store/dynamicIndex.asp

I usually don’t mix politics with business, but this year is different. I feel that we need to get out and vote in order to preserve our future. There is a strong movement toward bigger government and more government control. And I don’t like it.

 

I don’t know what side of the isle you stand on, but I want less government in my life and business, not more. I pay enough taxes. It’s time that the people of this great nation take a long hard look at what is going on in Washington. Our president promised us change, but never told us what that change would be.

 

Thomas Jefferson said it best…

 

"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.”

I am with you Joe!

$3,300! WOW. We should get into the insurance business. Or, maybe find a way to sell a maintenance program to our customers. We dealt with Royal too, not a happy experience.

I am license to sell insurance and have some experience. I have thought about finding a good warranty company that would let me sell their extended warranties. However, the problem would be how would people pay for it. Most people can't come up with the money independently and are only able to do it when they purchase a vehicle because it is all rolled into the loan.

People often come in with an extended warranty contract to see if we honor the contract. We always respond the same way, “Yes we do, but what ever the warranty company does not cover, you will have to pay the difference. Plus we need to find out if the warranty company covers what’s wrong with your car”.

 

Too often I see the same puzzled look on their face and hear the same response: “I was told that this contract covers everything and all I have to pay is the deductible”.

 

We know the real truth, don’t we? I don’t know how you handle this issue, but I tell the customer upfront that if it is a covered repair and my invoice is more that what the your warranty company is willing to pay me, you will need to pay the difference.

 

I am successful with this upfront approach 95% of the time.

 

I do not want someone at a warranty company sitting behind a desk telling me how much to charge or tell me that they can get a used steering rack from a junkyard half way across the country.

 

How do you handle extended warranties?

We do the same thing that you are doing and it works o.k. Some of the warranty companies are great. Think AUL or GE Capital. Some are almost worthless. Think Penn Warranty. This past week we dealt with one called Royal Warranty Services. We had a car with a bad fuel pump. They told us to do nothing untilwe heard from them. It took them 2 1/2 days to send out an adjuster although they then did do an approval. This is the first time in ten years we have had an adjuster. The good warranty companies always have us fix it on the spot. The consumer paid $3,300 for this warranty.

http://www.ripoffreport.com/Auto-Warranty/...royal-fd78c.htm

What about pricing. I do get some people come in after reseaching parts online and hand me a printout from some cheap site. I really do not want to go down this road with customers.

 

Your thoughts?

This is a path fraught with peril. The consumer will not know why you use a more expensive direct fit oxygen sensor verus a cheaper universal. He has not saw a wiring splice fail, ground out the ECM causing a new running problem and necessitate the replacing of a computer but I have. He will not understand the difference in the cheap chinese bearings and the Nationals, BCA, or Timkens. The reman water pump looks as good to him as a new one. After all they are all "warrantied". Even the repairs the consumer thinks he needs are the majority of the time not the problem. The shop who low balls a repair on line that the customer doesn't need is then free to charge what they like on the repair that actually gets completed when they get the car into the shop. The dishonest shop can get people to give them positive reviews, etc. etc.

Our sales are down less than 1% for the year. We still have hopes of topping last year. May, June, August, and September were soft.

Thanks I needed that!

Installing nitrogen in tires was probably the fastest growing service in 2008, for automotive service centers. In just the last 3 years over 25,000 nitrogen system have been sold, that's more than any other piece of equipment in the at price range. Within 5 years all new vehicles will come factory equipped with nitrogen when delivered, how will you be able to service them if you don't have a filling system? I have heard a few shop owner say they will just fill the tires with air when they need to balance, rotate or align a vehicle that comes in with Nitrogen. My response to them is... How do you think the customer will react when they find out you ruined the service they paid $50 for, a few weeks or months earlier?

 

Bottom line, there is not one negative for Nitrogen inflation! Every value, TPMS, corrosion, excessive heat, expansion vs contraction, blowouts, accidents, wasted fuel, excess emissions, loss of life, etc, is virtually immeasurable. Everyone needs to be offering nitrogen, even pushing nitrogen, as it is a valuable safety item for the vehicle owner. Additionally, since cost is pennies to the shop, it has become a great new profit center for owners.

 

You can find a lot of the statistics and details on the safety items at our web site... www. Premier Nitrogen .com

Thanks for the comment to my post, I would be happy to speak with anyone that has questions on this subject.

Do any of you guys currently have nitrogen or intend to add nitrogen soon?

Sales are up 7% over 2008, not great but a nice increase

 

We have never opened on Saturdays and I would never consider it unless I was facing going out of business.

I opened a shop to avoid all the Saturdays that I had to work at a dealership. I wont go back down that road again. Plus I enjoy the outdoors and my family and most of the time 2 days does not seem like enough!!!!

Our sales are down less than 1% for the year. We still have hopes of topping last year. May, June, August, and September were soft.