AndersonAuto

I'm seeing a different story from D&B. They're saying industry revenue is up 30%. Unfortunately industry revenue data is a little hard to find without buying an investor research report. I'll keep looking though. http://www.firstresearch.com/Industry-Research/Automotive-Repair-and-Maintenance-Services.html

Thanks Scott. I try. I meet with a few other business owners I know every month or so just to kick around ideas to help with business. We met this morning and talked about marketing. There were only three of us today, a gym owner, a guy who has a company arranging international youth sports travel, and me. I said something about the fact that I use cheap oil change coupons as a draw. Almost in unison, they said "right, because it's a commodity". What do people in your area view as a commodity that can be bought anywhere anytime? I'm not saying that everyone needs to jump on the cheap oil change bandwagon, I think we've beat that horse to death elsewhere here. I'm saying that we all need to figure out what spurs the people in our area to move their business from their current shop to our shop. Bottom line is, the cars have to get into your shop by any legal and ethical means available. Do what you have to do to make it happen. It's interesting, but I think there's more to the story. It could well be that auto repair revenue is flat for the last 7 years, hard to say without more info. If that chart is showing the reality, then at some point the number of viable shops is going to go down. It may take a few years, but it will happen. Costs increase every year, and if revenue is flat, someone's going to lose. I intend to make sure it's not my shop on the losing end. I have 13 employees who depend on me to make sure their mortgage gets paid and their kids get fed. If that means Darryl and Tony a couple blocks away from me don't make it, then I'll feel bad for them, but that's about it. I'll dig into the numbers more tomorrow to see if I can find more info, but if the chart is accurate, it's just more motivation for me to make sure my marketing is on point. BTW, if it makes anyone feel better, I'm getting my ass handed to me this month.

The statistics are what the statistics are. But there are caveats. Part of the problem with them is that it's a nationwide number. While the overall miles driven and cars on the road and age of the vehicles are all up, and number of shops stagnant, this doesn't mean it necessarily applies to tyrguy's neck of the woods. If his area is economically stagnant, or the population is shifting toward older retired folks, or it's in an economic boom and everyone ran out and bought new cars, he's surely going to have problems. Even if the population and number of cars has remained stagnant for him, the increased reliability will be a problem. The problem isn't that cars are more reliable. We can't do anything about the fact that manufacturers have responded to market forces and made their cars better. The problem is how are we going to get more of those reliable vehicles into the shop given the market forces at work in his particular area. The trick is to really dig into the data and figure out what's actually going on. Then figure out what to do about it. How many cars? How many service bays? Has there been a shift in the population? etc etc. If the data shows that there hasn't been an increase in the number of vehicles in his area, or some other similar problem, he may have to make a concerted effort to steal customers from other shops. Other shop owners that he probably knows and likes are going to suffer, and possibly go out of business. Not an enviable position, but the bottom line is that he may have to make that choice.

Total miles are not down. Total miles driven per person is down. This article is geared toward financial advisors, who need to adjust the data to fit a financial perspective. They felt it was more important that people are driving slightly less per capita than the fact that there are more miles actually being driven. The first graph in the article shows the reality. More miles are being driven than ever before, with more cars than ever before. Number of vehicles on the road is up: https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_11.html Note the switch from "passenger cars" and "other 2 axle 4 tire vehicle" to "light duty short wheelbase" and "light duty long wheelbase", so the table looks a little funny but the numbers are good. The total miles driven by light vehicles vehicles is up: https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_35.html And the average age of those vehicles is going up. https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_01_26.html_mfd Meanwhile, the number of repair shops has remained largely stagnant: https://www.statista.com/statistics/436416/number-of-auto-repair-and-maintenance-shops-in-us/ So the long and short of it is that there are more miles being driven in more cars that are getting older all the time. The only thing that the financial advisor article shows is that the number of miles driven per person is down. This is a reflection of the fact that the number of passenger cars and light trucks hasn't kept pace with population growth. In 2007 there were almost .8 vehicles for every person in the US, by 2015 that was down to less than .76. This trend might in some way be relevant to financial advisors, but for us it means we have more vehicles, driving more miles, for more years, per shop, than ever before.

For the month of July my shop supply COGS was $1864. Not charging for this, and making a profit on it, is simply leaving money on the table. I track my supplies COGS as a subaccount of parts COGS, likewise with supplies sales as a subaccount of parts sales. To use something in the shop that's not billed in one way or another to a customer vehicle means you must pay sales tax for that item. No thanks.

I agree with Joe. Don't waste your time building an estimate for a radiator or valve cover leak or whatever. Sell the customer a cooling system pressure test, oil leak diagnosis etc. If it's super obvious, tell them you'll do the test for free if they decide to fix it. That way you're not wasting time bidding jobs that the customer doesn't care about.

Great to hear. Sounds like you're getting things rolling. Google reviews are a lot easier than we make them out to be in our heads. Kind of reminds me of a Jr high dance. There's always a girl you wanted to talk to, but were afraid of being rejected. The truth is that she wanted to talk to you too. Your customers are no different. We feel funny asking someone to say nice things about us, but our customers are already thinking nice things, they just need a little help knowing where to write them down. The more you ask, the easier it gets. Be sure you know exactly how to leave a google review, on both Android and Apple phones. Most people will need a little instruction. You don't necessarily need to keep "unprofitable" jobs out, just price them differently. I look at it this way: I can say no to a job, and not get the job. Or, I can price the job so it's profitable, and either not get the job (same outcome as saying no) or get the job at a profitable price. Granted, there are jobs that are just a "no win" but I think most loser jobs simply need to be priced correctly to turn them into money makers.

This thread started (actually I think may have been peeled off another thread) with you talking about closing your doors. We all go through ups and downs, and we've all been there, done that. It seems to me there are some really basic things you can do to steer things in the right direction. Here's what I would do. First and foremost, get your waiting room and write up area in order. You don't have to spend a lot of money on this, but clean and organized goes a long way toward customer confidence and their willingness to be back and tell their friends. SOAP, PAINT, LIGHT. You can buy an inexpensive service counter online, or you can make one from lumber, drywall, and a bit of countertop from home depot. Pick up some waiting room chairs on the cheap through craigslist or Govdeals.com and you're in business. If your shop isn't the cleanest shop in town, make it that way. Get rid of any "good" junk. It's just junk and technicians are notorious for hanging on to it as if the next car rolling in your door needs a "good" used steering gear with 200K on it. If you have that sort of junk laying around the shop, inside or out, get rid of it all. Get your web site redone. Focus on getting mom and dad to work, and minimize the performance work. You said 90% of your work is "regular" cars, make your web site reflect that. Take pictures of your happy customers standing next to their nice car, and get permission to put it on your web site. Get google reviews. The easiest way is to ask them to review you from their phone while they're standing at your counter. People would much rather do this on the spot than do it later after they get home. It's amazing how easy this is, and how much good it will do for your business. Become the biggest "yes man" you've ever met. Any time a customer needs something, you need to find a way to say yes. Say yes, then find a way to make it happen. Customers call you because they want to be in your shop NOW, not 2 weeks from now. But once you say yes, it's on you to make it happen. Figure out a way. It's been a long time since I've had a 2 bay shop, but these things have always served me well no matter what size the shop.

I spend about $400 a month with them. There's a flat fee, then a "points" scheme for the text messages. I do a lot of volume, so I spend a fair amount, your mileage may vary. I should also mention that they'll hound you for a while about using their full program. I only do the text messages and follow up emails with them. They do postcards and letters and gift cards as well. I have that handled through other services, so I stick with just their texts and emails. While their text system works fantastic, I've noticed a huge uptick in out google review generation from their follow up emails. We've added about 50 new positive reviews in the last 3 months with them. I couldn't be happier about that aspect.

I use it and it's wildly successful. But.... Much of what they do is text message based, and no one ignores a text message. This is obviously a good thing, but people also don't like their text messages ignored. A lot of the text responses we get don't need an answer because it's a "how the car doing?" type message that gets a "Doing great, Thanks!" type of response. However, some of the messages will need to be responded to, which means that you have to read them all, and you have to do it in a timely manner. For me, that means reading through 5-600 text messages a month. It's a lot to keep up with. It's a fantastic system, but be ready.

I figured you were going to say most of your work is daily drivers. I almost addressed it in my last post. I wonder then, why doesn't your web site reflect what you do? Your web site is dedicated at least 50% to the DIY performance crowd, not getting mom and dad to work. Why aren't you soliciting google reviews from those daily driver customers? Reviews are important, but when I read your reviews, it looked to me like they were from your performance customers. If 90% is daily drivers, then let your marketing and web presence reflect that. You're currently trying to draw in your least profitable customers, I suspect because you like doing performance work. I used to like it too, but I had to learn the hard way that it's a lot more fun to pay the bills and have money in the bank. Also, what does the inside of your shop look like? If it's clean and tidy with a decent customer waiting area, show it off. If it's not, make it that way. SOAP, PAINT, LIGHT.

Since this thread has been revived, I might as well chime in. 😉 Looking at your web site, reviews, competition, and demographics, it seems to me that you might want to change the focus of your operation. It looks like the focus is on performance, and catering to the DIY hot rod crowd. This can be profitable in the right market, but you're in a smaller town and I doubt you're going to see enough car count with enough GP to make life good. Your web page clearly markets to the DIY performance crowd. 3 of 4 panels on your home page market to them. 3 of the top 4 panels on your services page markets to them. Your entire customer gallery markets to them. Your google reviews also indicate that your DIY performance customers love your work when they need someone other than themselves or their buddies to work on it. Not what I'd call a recipe for steady car count and great profit. In my experience, the DIY performance crowd shops for parts on the internet constantly, and expect that you'll sell them the parts for very near the same price that they can get them online. They also do most of their own work, and as a result will undervalue your work. Even when they know the job is over their head, the simple fact that many of them believe an hour of your time is roughly equivalent to an hour of their time in the driveway is a real problem. I would try to shift the focus to daily drivers. People need to get to work every day, and if you can make sure they get there, they'll pay you enough to make it worth your while.

There are several ways to go. I think the RAP reflash technology is a bit young and they're having trouble with it. I got the DrewTech RAP box a while ago, and it's pretty limited on what it can do. They also bricked a PCM on a ford van. They stood behind it and bought a new PCM, but it put my customer out for a couple days waiting for the new PCM and for DrewTech to send us the Rotunda tool to program it. I'm confident they'll fix this issue, but it's not fixed yet. You can get a Snap On j-box for reasonable money, and a cheap laptop will run it. I think my laptop still has a "Made for Windows XP" sticker on it. The real problem is that you need to figure out how many flashes you do, and what the vehicle mix is. I've found that even though we see 400+ vehicles a month, we only do about 5-6 flashes a month. Spread that among lots of makes, and 6 technicians, and none of the techs will get any good at doing any of them, resulting in spending way too much time on them. Plus it seems that the software always needs to be updated, wasting another half hour before the flash can start. In short, it's a PITA. But, much like having an alignment rack, it's more convenience for the shop than taking (or towing) the car to another shop to get it done. BTW, yes, we charge full boat for it no matter what else we do.

I don't see the more reliable cars as a problem. There's no denying that cars are more reliable and require fewer visits to the shop, but there's also no denying that there are more cars on the road per shop than ever before, leaving each of us with more cars available even if those cars come to us less often per mile driven. There's also no denying that people in most areas of the country put more miles on their car every year. This leads to more wear and tear on the car, and more needed repairs. You just have to go out and get them. My car count is up 11.75% on the year. This has been my trend for the last 5+ years. Probably more if I go back and look.

Like Joe said, more info would be needed to make a full diagnosis, but there are a few things we can glean from your post. First, your labor rate on your master tech is low. If he's producing most of your hours, you need to base your labor rate on his pay. You should be targeting 70% GP on labor, so divide his pay rate by .3. Also, I would be looking at what your Effective Labor Rate is with your current sales mix. Divide your labor sales into the labor hours flagged. Divide your ELR into your door rate to determine what percentage you're off. If your ELR is 85% of your door rate, then when you adjust your door rate to reflect your desired labor GP, increase it by 15% more to compensate for your ELR. This will compensate for the low labor rate on flushes etc. You might find this a little strong for your taste, but get something, a few bucks goes a long way. Friends and family are a real problem. In my shop the only friends are my friends. And I mean friends. People I actually do things with on the weekend. I've found over the years that there are a lot of people who want to call themselves your friend when it's time to get their car fixed. Those are acquaintances, not friends. Your employees friends are not your friends. There's no reason for your employee's friends to get a discount from you. Family is family. Family includes your parents, and anyone who lives in your house. Cousins don't count. Sister in laws don't count. If they aren't your parents or they don't live in your house, they are extended family, and they get no discount. Been down that road way too many times. Hope this helps.

July has opened weak for me as well. But... When I compare to last year, which was a good July, we're ahead and not by a little. Like 45% ahead. You'd think I would remember last year starting out so weak. I need to go back and look at my daily sales from last year to find out when we came on strong.

There are those instances, but I've found they're pretty rare. I also get a 3-100 warranty with the reman that I don't get with a local rebuild. And I've had an almost zero warranty rate with the reman vs a much higher rate with local builders. In those few cases where the reman is sky high, I check with the dealer. In those cases the dealer is usually at or below the reman price. Then I can mark it up, and sell the value of a genuine part to the customer. I get the job more often than not. If I don't get the job because the local builder is cheaper, then so be it, but we don't lose many. People understand the value of the better warranty. Simply explaining that the transmission gets a test run on a dyno where they can monitor the shift patterns and quality goes a long way too. It makes people uncomfortable to know that at the local builder shop, their car is the test bed to see if the transmission is going to leave them walking.

I'm not. I used to belong to a Gary Gunn group 15 years ago. He was teaching a course based on the E-Myth book. It was good stuff, but I wasn't in a place in my business at the time that it was a good fit for me. It was very much a touchy-feely sort of methodology, and at the time I was in need of nuts and bolts. Still am I guess, because otherwise I would feel the need to go back and reference the materials from the course.

I didn't see any change in the customer base when I switched. I still get the same great customers I got with conventional oil. I'm not aware of any existing customers who have asked for the new customer discount although I'm sure someone has asked at some point. That said, my mailer also has a tiered discount on it that's got an equally good discount as the new customer discount on my web page. You probably also noticed that the oil change coupon on the web site is 34.95 instead of 29.95. We did that so we could easily see if they were a web site only new customer, or if they got the mailer. The web site and mailer used to be the same price, but then they all got lumped together in my shop management system. I thought it would help tracking a little, but I actually don't look at the web site coupon stats very much. They get used, but I have other methods of tracking my web site effectiveness.

Mostly correct. Meaning that I could retrieve it at any time I feel the need, but it's more work than "nothing". It's not just one piece of data. She would have to separate new from existing customers on our mailer tracking and calculate ARO for each category. The tracking sheet also doesn't have her record customer information outside of new or existing, so she would have to do that. Then she would need to compare that list to the new customer list generated through the back end of our web site, and of the customers that overlap, somehow assign them to either having come through the web site or the mailer. Or maybe they came from some other source + had the coupon in hand. I think that people rarely choose an auto repair shop based on a single piece of marketing. It's entirely possible (probable?) that someone got my mailer, asked their neighbor if they've used us and got a positive referral, looked up our google reviews, clicked the adwords link to our web site, set an appointment on the web site, and finally came in with coupon in hand. When asked how they heard of us, they could have given a number of answers, all of which are correct. How would you assign the percentage of influence each source had on their decision to come in? One big morale buster that I've learned over the years is to have your employees do work or gather data, then do nothing with it. Everyone hates busy work. Getting this level of detail would take her several hours a month, maybe more. I don't know since I've never had her do this, but it's not a couple minutes job. It's an ongoing job that would have to be kept up with every couple of days. I'm not going to waste her time with something I'm not going to use immediately. Your hearing is excellent! 😃

The tracking spreadsheet does tell me how many new customers are coming in from the mailer, it just doesn't separate the ARO on new vs existing. I can also tell you that 49 of my new customers came to me through the web site either by calling the tracking number or filling out an appointment request. I can't tell you how many of those 49 also had a mailer in hand. I can assure you there is overlap, but I don't know exactly how much. I do have a pretty good handle on where my customers come from. Not great, but good. I could do a better job with it, but I see it as another ROI problem. If I tie up my admin gal doing the work that I might need if things take a downturn, my ROI is zero if I don't do anything with that data. However, I think it's important that I know that I can put those numbers together quickly should I feel the need.

You're correct, I don't separate new/existing customers in my coupon tracking. June tracking is not complete yet, so I can't give you the specifics on what the mailer coupon did. However I can pull new customer data easily and tell you that the ARO for a new customer last month was $494. Overall ARO was $457. Total RO count was 489, with 114 of those being new customers. What I can't tell you is how many of those came in with mailer coupon in hand, new or existing. While it would be nice to have the tracking spreadsheet separate the new from existing, I guess I don't care all that much. I have plenty of new customers coming in, so I know my new customer acquisition efforts are working, and I have a good ARO. There are certainly some fine tuning that could be done by digging deeper into the data, but I currently have bigger fish to fry.

Nope, unless someone insists on it, which has never happened.

I fat fingered the control-enter keys. Repeatedly. This caused my comment to repeat post 4 times. Then I tried to fix it, and thought I lost it all. Re-wrote the whole thing, then found that it saved (or a mod saved) the post as I originally wrote it. It's ongoing for the last 5 years. The only thing that's changed is when we went to full synthetic at the first of the year, and the price went up 10 bucks. We do sell the synthetic oil change for 47.50 if the customer doesn't have a coupon. It's rare, but it happens.

What has worked for me is absolute consistency. My mailers go out monthly like clockwork, and haven't skipped a beat in over 5 years. There are some months that are busier than others, but overall we're much more even keeled than we were before I did this. Being slow in February doesn't mean you should spend money on marketing in February. It's too late by then. The money needed to be spent in December so your marketing can be in their hands right when the slowdown begins. I also went with a percentage of my sales as a budget, sort of. I budgeted the percentage of the sales that I wished I had, not what I was currently doing. It hurt, but it was effective.