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Joe Marconi

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Blog Entries posted by Joe Marconi

  1. Joe Marconi

    The Technician Shortage Is Our Fault, And It's Time We Own It

    By Joe Marconi,


    Hiring Employees, Employee Shortage
    The Technician Shortage Is Our Fault, And It's Time We Own It
    Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
    The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
    Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
    Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
    In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
    Have We Pushed Technicians Away?
    Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
    I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
    Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
    Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
    Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
    While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
    Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
    Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
    Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
    The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
    To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
    First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
    Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
    Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
    When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
    As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
    Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
    Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.
  2. Joe Marconi

    To Reduce Comebacks, Build Quality into the Workflow Process

    By Joe Marconi,


    Workflow Process, Reducing Comebacks
    To Reduce Comebacks, Build Quality into the Workflow Process
    After World War II, Japanese engineers toured American factories and were impressed by the speed and volume of production, especially in the U.S. auto industry. What they weren't impressed with was the high number of defects and the extensive rework required at the end of the production line. While the Japanese learned from the American production system, they refined the concept by adopting a better approach: building quality into the entire production process, not just inspecting it at the end.
    Auto repair shops can adopt this same philosophy. A final quality control inspection only identifies the defects created throughout the entire workflow. It reveals the errors, but it doesn't eliminate the root causes.
    I'm not suggesting you abandon end-of-line quality control. What I am saying is this: improving overall quality requires the mindset that quality begins at vehicle write-up and continues through every single step of the repair or service. In this article, I'll dive deeper into this strategy and show proven ways to reduce comebacks, improve morale, and increase profits.
    Quality Begins with Culture and Leadership
    Labor production is essential for every auto repair shop. All shop owners know this. But when too much emphasis is placed on speed alone, mistakes increase. Owners and managers must communicate the right message: speed without quality is a formula for failure. Comebacks drain profits, not only from redoing the work but also from lost opportunity revenue that could have been earned while fixing the comeback.
    Quality starts with the right culture and leadership, and it is ultimately a management responsibility. Shop owners must set the tone by promoting quality at every stage, on every job, every time. In an imperfect world where many things can go wrong, putting quality above quota is the foundation for reducing mistakes and increasing long-term profitability.
    Reward the Right Behavior and Remove Fear from the Workplace
    I've never known a technician who wasn't upset when handed a repair order stamped "Comeback." Even when the cause was a defective part, how the shop owner or manager handles the situation makes all the difference.
    First, ensure every technician is properly trained for the work they are expected to perform. Skills are learned, and ongoing training is essential for reducing mistakes. Equally important are step-by-step workflow processes and consistent in-house training so that every technician understands and follows the same procedures. Again, the emphasis should be on process quality.
    If too much reward is given to speed and not enough to accuracy, production will increase, but so will mistakes. Any short-term gains in workflow efficiency will eventually turn into long-term losses as comebacks erode profit and damage customer trust.
    When building pay plans, track production, efficiency, and comebacks. Incentives should reward both quality and productivity. This communicates clearly what matters most.
    Another critical factor is how shop owners react to mistakes. If employees fear punishment, they may hide errors, leading to much bigger problems. Understand that people are human, and things will go wrong: a misdiagnosis, a stripped drain plug, a damaged axle nut. Use these events as learning opportunities, not moments to punish. Now, if a technician repeatedly makes the same serious mistake or commits a safety-related error such as leaving lug nuts loose, that's a different issue and must be addressed immediately.
    Review, Discuss, Retrain, and Learn
    When a comeback occurs, conduct a complete review. Was it a part failure? A technician error? A communication breakdown? Once the cause is identified, create a corrective plan to prevent that situation from happening again.
    Tracking comeback data can guide better decisions. For example, several years ago, we noticed an increase in steering rack failures. Because we tracked every comeback, we identified the specific brand and supplier responsible. After discussing the issue with our supplier, we switched to a different brand, and that particular problem disappeared.
    If the cause is a technician error, review the job with the technician. Determine whether additional training is needed, whether better communication is needed, or whether the workflow process itself needs improvement. The goal isn't just to fix the immediate issues; it's to prevent future occurrences.
    Implement a "Stop the Line" Strategy
    The Japanese introduced a "stop the line" approach in the 1950s. If a factory worker noticed a door didn't fit properly, an engine leak, or a missing bolt, they had the authority to stop the entire production line and alert a team leader. The issue was addressed immediately. While this slowed production in the moment, the long-term quality gains far outweighed the temporary delay. And more importantly, many defects cannot be detected at the end of the line.
    Apply this philosophy to your shop: Give your technicians the authority to "stop the line."
    If a part doesn't fit right, a component looks questionable, or the part's quality isn't up to standard, technicians should be empowered to raise the concern immediately. This may slow production for that job, but it prevents comebacks, protects your reputation, and improves profitability in the long run.
    Give Technicians the Time They Need—Focus on Quality, Not Quota
    Some areas of our industry consistently suffer from inadequate labor times, especially diagnostics and testing.
    Technicians become very efficient at repetitive jobs, such as brake or suspension work, often beating the allotted labor time. This is good, it's how shops generate labor profit. But complex diagnostics, such as electrical issues, drivability problems, and complex check-engine-light faults, are rarely repeatable or predictable.
    Ask yourself: Are you giving enough time to these jobs? Can a technician realistically "beat the clock" on complex diagnostics? Usually not.
    You need to review the assigned labor times for complex diagnostic and testing jobs. Speak with your team. The labor time you charge must be fair to customers and to your technicians. If you want better diagnostic accuracy and fewer comebacks, you must focus on quality. That means providing proper training, tools, information, and, most importantly, adequate labor hours.
     
  3. Joe Marconi
    I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
    Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
    Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
    Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
    Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
  4. Joe Marconi
    It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
    While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
    Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
    One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
  5. Joe Marconi
    Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
    At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
    I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
    Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
    With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
    Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
  6. Joe Marconi
    You’re out to dinner with a friend. The service was horrible, the meal took forever to get to your table, and it was not what you expected. You get the check, pay the bill, and start heading for the door. At the door is a woman, a staff member, holding it open and saying in a monotone voice, “How was everything?” You pause for a second, look her in the eyes, and reply, “Everything was fine, thank you.”  As you walk to your car, you turn to your friend and say, “That’s the last time I go to that restaurant!”
    It's often said that the kiss of death for any business is what your customers are not telling you. Most people avoid confrontation. If they don’t like the service, the price, or the product, many consumers will not say anything. They would rather leave it alone and move on and try another company.
    Think about your auto repair shop. Think about your customers. How many of your customers, after having a less-than-perfect experience, will not say a word to you or your staff? How many of these customers will come back to you? How many will not?
    It’s important to understand that your customers are not only judging you by comparing you to your competition but also by the combined experiences of all companies and the interactions they come into contact with daily. And most of those experiences are not good. So, it would be in your best interest to create an experience that tells your customers, “We care about you, and we want you back!”
    There are two things to consider regarding customer service and ensuring that you have met your customer’s expectations and created a memorable experience. First, when someone does give you critical feedback or post a negative review, use that feedback to learn and improve. How the customers view their experience may not be aligned with what you believe you have provided, but their opinion is their reality, and that’s all that matters.
    The other thing to consider is having open and honest discussions with your employees, especially service advisors, to understand what excellent customer service is like, and try to look at that experience through the eyes of the consumer. This may not be easy and will take training, but it is essential.
    Remember, it is the customer that ultimately determines what an amazing experience looks like.
  7. Joe Marconi
    No, I have not lost my mind. You and I both know that the oil change business is different today from what it was years ago. If we go back to the 1980s, and up through the 1990s, we judged customer visits by a factor of 4 to 5, which meant that we needed to see a customer at least 4 to 5 times a year, an indicator of customer retention rate and loyalty. Back then customers brought us their vehicles every three to four thousand miles for the traditional oil change. That business model no longer holds true.
    Today, the customer mindset has changed. Plus, oil change mileage intervals are a lot longer. For many, they don’t think about the oil change service the way consumers thought about it years ago. Just look at your customer base. How many customers drive well over the suggested oil change mileage interval?  How many customers wait until the Maintenance Light comes on? Or even worse, the Engine Oil Light! 
    I am not suggesting that you don’t perform oil changes, what I am suggesting is that you take a different approach. First, for those customers who drive well over the oil change mileage interval, it is in the best interest of the customer to educate them on the value of preventive maintenance. Instead of selling an oil change, promote the value of the vehicle’s scheduled maintenance service; for example, a 15k or 45k Service.  This is not new; we all know this concept. Selling a maintenance service will help to ensure that we are doing all we can to protect our customers, promote vehicle safety, and extend the life of our customer’s vehicles. This concept also lowers the overall cost of vehicle ownership over the vehicle's life.
    Lastly, you have the perfect opportunity at vehicle delivery to educate your customers about the importance of preventive maintenance. Review with all customers, the service interval that is due next, and book that service with your customer. If we focus on what is best for our customers, we can’t go wrong.
    I frequently tell shop owners, “Every vehicle in your shop today will need a future service or repair. Make sure that your customers return to you.”
  8. Joe Marconi
    Auto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
    As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
    But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
    Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
    Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
    Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
    The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
  9. Joe Marconi
    While the United Auto Worker’s strike may be over, this won’t be the last time Detroit will hear from the UAW. As a result of the contract agreement, the Big Three (General Motors, Ford, and Stellantis) will now have to find ways to pay for the increases in wages and benefits, which are estimated that it will add $850 to $900 to each vehicle produced.
    Putting politics aside, the effects of this strike are far-reaching, with no clear winner. Here’s a quote from UAW President Shawn Fain, “We wholeheartedly believe that our strike squeezed every last dime out of General Motors.” Can you imagine your technician or service advisor saying that about you after a performance review?
    While the UAW is taking a victory lap, the Big Three will not just roll over without making key changes. No doubt, we will all pay more for new cars, and perhaps used vehicles too. Plus, even though many car companies don’t have union workers, the consequences of this contract agreement will impact the entire auto industry.
    But, enough about the UAW and The Big Three. Let’s focus on some of the lessons that many large corporations don’t seem to ever learn. At the heart of this strike is the relationship between big corporations and rank-and-file workers. As companies grow, they sometimes lose touch with their employees. All too often, the focus on profits, instead of people, becomes the main driver for decisions, and unfortunately, employees are sometimes used as pawns.
    Let’s be clear, I am not supporting the UAW, the union workers or the Big Three. There are problems on all sides. However, we need to understand that the power of the unions can only happen when management moves in a direction that the employees feel is unstainable. Which is a direct result of poor leadership.
    Here’s the biggest takeaway; as you grow your company, maintain the culture that has laid the groundwork for where you are today. Never forget about the people who come to work with you each day. Continue to create strong relationships with your employees. Continue to treat them with respect and find ways to pay them the salary you would work for and a benefits package you would want. I know everyone reading this knows all this, and in fact, I have more faith in you as a shop owner and your company’s future than I do in the Big Three.
    Perhaps The Big Three should take lessons from Auto Shop Owners!
  10. Joe Marconi
    Nearly every car that leaves your auto repair shop today will need some sort of service or repair in the future. The question is, will your customers take their car back to you? In this blog, I will discuss three simple ways to increase your customer retention rate, which will also increase sales and profits.
    First, ensure that the entire customer experience is amazing; from scheduling the appointment, vehicle write-up, the sales process, and especially car delivery. A poor experience could result in a lost customer. Remember, an amazing customer experience tells the customer, “We want you back!”
    Second, spend time at car delivery reviewing all the work that was done that day. Make the customer feel good about the decisions they made regarding the repairs or services done that day. Discuss all future services, recommendations, and any deferred work. Engage in conversation and always look to build a relationship with your customers.
    Third, and the most important, make sure that your service advisors are informing all customers of their next service appointment, and book that appointment. This step is crucial. As a business coach, I get pushback on this from shop owners and service advisors stating that their customers don’t want to book the next appointment. This is nonsense. Your dentist books your next visit, and so do your pet groomer, your doctor, hairdressers, eye doctors, and HAVAC companies. In fact, I got a reminder call the other day from the company that cleans my fireplace chimney about my October 26th  appointment. So, please, no excuses!
    The bottom line is this. One of the best ways to build a more profitable company is to pay attention to the customers right in front of you every day. Create an amazing experience each time, and make sure you perform the car delivery with such execution that it gives your customers a compelling reason to return to you.
  11. Joe Marconi
    I am going to borrow a quote from billionaire, Warren Buffet, “The best investment you can make is in yourself,” This statement, while simplistic, speaks volumes. A shop owner is much more than a boss, a shop owner is a leader. And leaders are solely responsible for the success of their team. This means that you must work hard and commit to a life of continuous learning and improvement. It also means that if the team fails, a leader must always blame himself or herself for that failure and find ways to improve.
    For your business to flourish, you must invest your time and energy in understanding what your role is in your company. It also means that you must be committed to continually improving your level of competence. This does not mean that every task is your responsibility. However, it does mean that the buck stops with you. If your business is not where it needs to be, or you are looking for increased growth, then it is your obligation to do the hard work and set goals, have the vision, perform the research, and develop the plan to achieve your overall objectives.
    When you invest in yourself to become the best leader and the best businessperson you can be, others around you will feed off your energy and your passion. This sends a strong message to everyone on your team that you have what it takes to bring the company to the next level.
    One last thing, another obligation to your company is assembling the right team of people around you. Once you have the right people, you need to invest in them too. Find what truly motivates them, not what you believe inspires them. Be a coach to your employees and always strive to bring out the best in them. Be strong with your convictions and expectations, build strong relationships with your employees, and don’t be afraid of admitting when you drop the ball.
    While Warren Buffet is best known for making billions of dollars with his investment strategies, I want to believe that this quote has its basis in something that money cannot buy.
  12. Joe Marconi

    Hey Boss, Are You Approachable?

    By Joe Marconi,


    Management
    My son is not in the automotive industry. He is in the commercial real estate business. However, the workplace problems are the same. Recently, his frustration with the heads of the company reached an all-time high. When I asked him why he doesn’t speak up and let the leadership know how he is feeling, he responded, “Anyone who has voiced concerns or issues has been viewed as weak and incapable of doing their job. I don’t want to be viewed like that.” This is an example of a toxic work environment.
    If you are a shop owner, you are a leader. And leaders must be approachable. That means that you are willing to hear the concerns of others and have them express themselves. It also means that while you may not agree with someone’s perspective on an issue, it is their perspective, and that viewpoint needs to be recognized and respected.
    Make it known that you want to hear the opinions of others. Literally, ask for input from others. And thank those that speak up. Now, I am not saying that you need to act on every concern or opinion. That would not be realistic. But just listening may be enough. And you never know, someone in your company may have an idea that you never thought about and even improve your business.
  13. Joe Marconi
    “Leave your problems at home” is a common expression. The thinking behind it is that if you are having a problem at home, it will affect your performance at work. So, change gears when you get to work and put the problem out of your mind.
    However, can people just shut it off?  Can they leave their problems at home?  Consider this example; your technician and his wife have a very sick child who is getting worse. Their doctor is concerned and wants to refer the child to a specialist, fearing that something is seriously wrong. In this situation, do you truly expect your technician to shut it off, and simply put it out of his mind?
    Problems at home are part of life. As a shop owner, you need to be more understanding and have empathy. You also need to build a solid relationship with your employees that allows them to approach you in times of need or crisis. This is a key component to building the right culture with high morale.
    Here’s another scenario to think about: Let’s say your service advisor is overwhelmed at work. She is having a hard time keeping up with all the work and reaching the point of burnout. In addition, she works with a problem technician that is always complaining about something. Do you think this service advisor can shut off her work problems and not bring them home?
    The bottom line is this; as shop owners, you need to reach your employees on an emotional level. Yes, you are running a business and you have your own set of issues and problems. I get that. But your success is directly related to the success of the people around you. That means that everyone must feel that they are people first, employees second.
    The next time you see something off with one of your employees, don’t assume the worst. Pull them aside, show them you care, and ask if there is anything they need and if there is something that you can do to help.
  14. Joe Marconi
    I was taught a valuable lesson in pricing back in the 1980s by a fellow shop owner. Tom (not his real name) owned a five-bay independent auto repair shop. We met in a training class and became instant friends. The discussion of labor rates and pricing came up often, and his opinion was spot on.  He would tell me, “Joe, we will never get paid what we deserve until we put a higher value on what we do.”
    This leads me to the reason for this blog: The mindset that auto repair shops should price themselves lower than new car dealerships, is a myth. Tom would emphasize, “Look at your expenses, your payroll, the benefits you give to your customers, and don’t forget your payroll and company profit. Then, do the math and set your prices.” What influenced me was not only his forward-thinking but the fact that he would call the local dealers, to make sure his labor rate was ABOVE theirs!
    Positioning your prices lower than the dealer just because you are an independent auto repair shop is selling yourself short. Your labor rate and prices should be determined by you, factoring in your overhead operating expenses, payroll, financial goals, the amount of net profit you desire, and the value you provide to your customers.
    Another thing: don’t be everything to everyone. Understand your key profile customers and build your marketing plan around them. Cater to those who are loyal to you.
    Here’s the bottom line with pricing: sell value, not parts and labor. When the value increases, the price fades as an issue. 
  15. Joe Marconi
    I am a firm believer in providing employees with a competitive wage and the opportunity to earn more through incentives. However, any additional incentive bonus must pay for itself. That means any additional incentive compensation must not eat into company profits. While we typically look at payroll as an expense, everyone in your company must be productive enough to support their compensation plan. This is especially true with service advisors.
    Too often, shop owners don’t properly establish sales and gross profit goals. What occurs then is that the incentive pay, which is above the base pay, reduces overall gross profit, which decreases net profit.
    Here are a few guidelines when considering a pay plan for service advisors. First, you need to know your breakeven and calculate it at least twice a year. Remember breakeven is never a goal, it’s just the sales number your company must attain BEFOFE it makes any profit. Next, you need to establish sales and net profit goals above breakeven.  Many shops shoot for a 20% net profit, so you need to determine your desired labor and part gross profit. If you don’t know how to calculate your breakeven or gross profit, please reach out for help from your accountant or a business coach.
    After that, you need to establish minimum sales and gross profit goals that must be achieved consistently before any incentive is to be paid.  In other words, if you determine that achieving a 20% net profit requires on average $30,000 in sales per week with an overall gross profit of $20,000 per week, then that becomes your minimum required weekly goal that must be maintained by your service advisor team every week.
    This is important because you don’t want three weeks where your sales and gross profit were below your goals, and pay an incentive bonus in the fourth week, just because your service advisors had one good week. Additional pay incentives can only be paid when the company is consistent in achieving its required sales, gross profit, and net profit.  One thing, if the goal is too high and perceived as unattainable, your service advisors will give up. Lowering the bar in some cases may be needed, just have a plan in place to incrementally raise the bar to ultimately achieve your desired financial goals.  Please also note that for you to have a consistently profitable business requires a healthy work environment, training programs, systems, processes, and of course a great technician team. 
    One last thing, the service advisor’s base pay must meet the individual’s basic needs in life. And as I said earlier, incentive pay is the opportunity to earn more. However, they must consistently produce, after all, incentive pay should be earned, and never an entitlement.  
  16. Joe Marconi
    A recent study, done by Harvard Business School, concluded that the real problem with attracting and retaining employees has more to do with the workplace environment, not pay or benefits. While the study did find that an adequate pay plan and offering an attractive benefits package did help with recruiting and retention, it’s not enough to satisfy the needs of employees, especially those of front-line workers.
    The study also stated that in 2021, many companies were convinced that giving raises, sign-on bonuses, and other perks would solve the worker shortage problem and prevent people from quitting. However, this strategy did not work. So, what does work regarding attracting quality people and keeping them employed?
    Essentially, it all comes down to the culture of your company.  Management: do all it can to consider the individual needs of your employees. Your employees want to feel that they have a voice, that their opinion counts, and that their role in your company is both respected and recognized. Yes, pay and a great benefits package will go a long way toward making your employees feel secure, but that’s only financial security. People want more than money.
    To attract and keep top talent requires creating a company that people feel proud to work for. You need to reach the hearts and minds of your employees. Become a leader that people are enthusiastic about working for. You want your employees bragging to their friends and family that your shop is a great place to work!
    Step one to attracting and retaining quality employees: Create an amazing workplace environment for your employees!  Trust me, happy employees make happy shop owners too!
  17. Joe Marconi
    Have I got your attention? Great.
    Let me start by saying that I believe in giving praise when deserved and letting employees know when they dropped the ball. However, the truth is that no one enjoys being reprimanded or told they messed up.  
    The question is, what is the appropriate balance between the right amount of praise and the right amount of critical feedback? According to studies done by Harvard Business School, the ratio of praise to critical feedback should be about 6:1 – Six praises for every critical feedback. I am not sure if I agree with that.
    From personal experience, I would recommend a lot more praise. The exact ratio doesn’t matter. What’s important is that before you consider giving critical feedback, ensure you have given that employee a lot of recent praise. If not, whatever you are trying to get through to an employee, will fall on deaf ears.
    When you do have to give critical feedback, remember a few things:
    Focus on the issue or behavior; never attack the person, and remain calm in your actions and words Ask the employee for feedback, their side of the story Speak to the employee in private Address the issue soon after it happens; never wait Don’t rely on second-hand information; it’s always better if you have experienced the situation yourself that you want to correct Have an open discussion and find things that both of you can agree upon Have an action plan moving forward that the employee can take ownership of Use the experience as a learning tool Make sure you bring up positive attributes about them Remember, you don’t want the employee to be angry or upset with you; you want them to reflect on the situation and what can be improved. One last thing. Everyone makes mistakes. We need to be mindful of this.
  18. Joe Marconi
    Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
    The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
    Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
    And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.  
    Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
  19. Joe Marconi

    5 Reasons for Low Shop Production

    By Joe Marconi,


    Management
    Typically, when productivity suffers, the shop owner or manager directs their attention to the technicians. Are they doing all they can do to maintain high billable hours? Are they as efficient as they can be?  Is there time being wasted throughout the technician’s day? 
    All these reasons factor into production problems, but before we point fingers at the technicians, let’s consider a few other factors.
    Are estimates being written properly? Are labor testing and inspections being billed out correctly? Are you charging enough for testing and inspecting, especially for highly specialized electrical, on-board computer issues, and other complex drivability work?  Is there a clear workflow process everyone follows that details every step from the write-up to vehicle delivery? Do you track comebacks, and is that affecting production?  Is the shop layout not conducive to high production? For example, is it unorganized, where shop tools, technical information, and equipment are not easily accessible to every technician?  Are you charging the correct labor rate and allowing for variables such as rust, vehicle age, and the fact that most labor guides are wrong? Also, is there effective communication between the tech and the service advisor to ensure that extra labor time is accounted for and billed to the customer? These are a few of the top reasons for low productivity problems. There are others, but the main point is to look at the entire operation. Productivity is a team effort.  Blaming the techs or other staff members does not get to the root cause in most cases.
    Maintaining adequate production levels is the responsibility of management to create the processes that will lead to high production while holding everyone accountable. 
  20. Joe Marconi
    As shop owners, we get consumed with the day-to-day routine of running our businesses. When we are young, we think we have all the time in the world to plan for our futures.  When we hit middle age, we think about our end game, but too few of us do something about it. And when we reach retirement age, we wonder if we did all the right things to prepare for life after owning an auto repair shop.
    The reality is that life can throw you a curve ball at any age. This means you need to prepare today. You have responsibilities to yourself, your family, your loved ones, and those you employ.
    Ask yourself, “What if something happens to me today that would force me to retire? Would I have everything in order so my family would be protected?  Would my business survive without me not being there?”
    No matter what stage you are in your business career, my advice is to do this: Set up a series of meetings with a financial advisor, your accountant, an attorney, and an insurance agent. And your business coach, if you have one. Tell them that you are concerned about your eventual exit from the business and to plan for the unexpected. They will help you to get all your priorities in order.  
    Remember, when it comes to life’s curve balls, age does not matter.
  21. Joe Marconi
    For automotive shop owners, tax planning is an ongoing process. You should meet with your accountant at least once a quarter to review your financials, expenses, major purchases, cash reserve, payroll, etc., and make needed course corrections.
    Below is a general list of tasks that should be done by the end of the year to prepare for tax season, which is right around the corner.
    Schedule a meeting with your accountant and ask if any information, reports, or documents are specific to your business. Update your inventory and run a report for December 31. Review your and your employee’s retirement accounts; fund them if needed before the end of the year. Purchase equipment, vehicles, etc., to reduce taxes ONLY after discussing with your accountant and coach. Check your accounts/receivables and print a report with a closing date of December 31. Prepare a list of any uncollectable debt for your accountant. Prepare your accounts/payables. Determine which bills will be paid in the current year. Ensure that all loan interest income and expense is properly itemized on your P/L. Ensure that all major equipment purchases are properly itemized on your balance sheet. Prepare any investment dividends documents. You may need to wait until January to obtain these documents. Make sure you have all receipts and records for any capital improvements or leasehold improvements made this year. Contact your attorney for any required corporate meetings, filings, etc. Discuss with your accountant how to payout any end-of-year employee or corporate officer bonuses. Ensure that all payroll information and worker’s compensation information are correct. Remember, preparing now may save you from paying too much in taxes and will relieve stress from your life.
  22. Joe Marconi
    There are many things to consider when creating a marketing plan. Among them are establishing a budget, what forms of media should be used, and whether traditional advertising, such as TV, radio, and print, is still relevant.  And of course, how much should be allocated to social media and digital advertising?
    All the above are essentials to any marketing plan. However, the first step is ensuring that you have a healthy workplace and that your employees understand your company’s culture and the overall mission and vision. 
    We all know that happy employees create happy customers. No form of advertising can overcome a toxic workplace with unhappy employees. If your employees are not creating an amazing customer experience, your marketing plan will not work.
    Advertising and marketing may bring in customers, but the people in your company creating an amazing customer experience will be the most important component of your marketing plan.  It’s the customer experience that sells work and gives the customer a reason to return. 
    Creating an amazing employee experience, which creates an amazing customer experience, is also the most cost-effective part of your marketing plan. In fact, it cost next to nothing.
  23. Joe Marconi
    The strategies outlined in this blog reflect real-world strategies I have learned and used in my 41 years as an auto shop owner. I also use these strategies when helping clients as a business development coach. 
    While running a successful auto repair shop today has many components, the list below contains the top 9 strategies I believe every auto shop owner should consider when looking for ways to improve their bottom-line profit. 
    Ten Ways to Improve Your Bottom Line:
    Hire the best people and have enough staff. You will have a much easier time achieving success when you’re surrounded by the right people. Calculate your correct labor rate and adjust that labor rate every quarter. Charge a higher labor rate for jobs that do not include any parts, such as electrical testing, check engine lights, onboard computer issues, and drivability problems. The missing part profit must be made up somewhere. Review and refine your checklists and procedures to improve overall efficiency. Make sure all your equipment is working correctly and that you have the equipment and tools needed for the vehicles you service and repair. Make sure your part margins allow for a respectable gross profit.   Make sure your inventory is up to date, with up-to-date pricing, and you don’t have too much stock sitting on the shelf. Make sure you have a process to get the proper credit for part cores, returned parts, and defective parts. Invest in ongoing training for all employees. BONUS TIP: Speak to your accountant and business coach about tax planning strategies. But do not wait until tax season. Tax planning should be done throughout the year.
    I hope you found this information helpful.
  24. Joe Marconi

    Why Your Employees May be Looking to Quit

    By Joe Marconi,


    Employee Retention
    I don’t think there’s an auto repair shop in the country these days not looking to hire. At the top of the list is finding qualified technicians. However, while auto repair shop owners may be on the hunt for new workers, they shouldn’t forget the people they employ now.
    A recent Gallup poll found that while job seekers consider pay compensation and benefits package their primary consideration, it isn’t why many employees feel disengaged at work and may be looking to quit.
    A recent Gallup poll revealed these three main reasons why employees are disengaged at work:
    Not seeing opportunities for development Not feeling connected to the company’s purpose Not having strong relationships at work Shop owners, study the above bullet points and think about what you can do to get ahead of any employee who feels disengaged at work and may be looking over the fence for greener grass. Create a work environment where people feel wanted, praised, and recognized for their work. 
    Make sure your employees feel connected to the company’s goals, vision, purpose, and mission.  Lastly, build a career path for your employees that combines the needs of the business with the future goals of the individual.
    What it comes down to is culture.  A strong workplace environment with high morale and the right culture will send a strong message to your employees and go a long way in helping to retain key employees.  
  25. Joe Marconi
    Contrary to what many people believe, having a perfect 5-star Google review rating is not something a business should expect to achieve. After all, no company is perfect. And Google realizes this too.
    There’s no denying that consumers look at online reviews and base part of their buying decision on these reviews.  A great online review rating on Google is essential to draw traffic to your website and your business.  However, it’s better to have a mix of great and not-so-great reviews.
    To consumers, a perfect 5-star rating looks suspicious; they expect some negative feedback.  While most business owners get distraught over a negative review, how a business responds to the review is what’s most important.
    For automotive repair shops, a rating of 4.4 to 4.8 is probably what you should strive for. I am not suggesting that you don’t provide world-class service and quality repairs.  However, the reality is that you are not going to please everyone.
    Another thing to consider is that negative reviews don’t hurt a business as badly as we think. Rather than worrying about negative reviews, shop owners need to focus on engaging and replying to all customers who leave reviews, which tells your customers, and Google, that you care about what your customers are saying. Responding to all reviews will also help your search engine ranking.
    The next time you get a negative review, remember that you will never please everyone. Use the negative feedback as an opportunity to learn from the feedback and positively promote your business.

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