Joe Marconi

Yes this is a very stimulating topic. This is what this forum is all about; the free exchange of ideas and opinions. Thank you for initiating it.

Now back to the topic. It most certainly is not baiting. I would not resort to that. If you knew me better you would never suggest that.

Maybe, I’m not explaining myself correctly. We explain all the expected charges up front. We never, never, Never, NEVER say we offer a free diagnosis or free analysis. We don’t market it that way or advertise it that way. And with regular customers, the issue never comes up.

Now, let me try to re-visit this again: A customer arrives at the front counter and says: “My check engine light is on, how much to fix it.” Our upfront policy WAS to tell the customer the analysis charges and sell it. We then explained that after the analysis, we would discuss the repair.

The problem with this is that some customers see no value in this because we really do not know what is happening with the car before we do some sort of scan. There is also a fear about the total cost of the job (analysis plus repair). Plus my advisors were spending too much time educating the customers. Most of time they did go for the analysis, but I can tell that some customers had some issues.

So we came up with this strategy. If we feel that there is an issue, we offer the customer a complimentary scan to get a direction where we need to go. We fully explain that depending on what we see with the scan you will be looking at “X” amount for the analysis fee. And after the analysis is done, we will discuss the repair. We have an easier time with this stadegy and the customer feels like we are looking out for his best interest.

We try to see this from the customer’s point of view.

As for you scenario of my customer out of town; this industry is so all over the map, I can be worried about what may happen in that case. We get challenged on procedure every day, because there are no standards.

You propose standards, that’s all well and good, but that will take some doing to accomplish, if it is even possible.

Does this make better sense?

Let me try again to express myself. I am not suggested we offer a free diagnosis. Nor do I want to follow the path of AAMCO by advertising “We’ll check it for Free”. Nothing is for free, we all know that. My entire business model is predicated on honesty and integrity, not bait and switch.

Consider this: How many times has a customer (old or new) come to you with a check engine light and before you rolled the car in the bay you went through an entire presentation on the complexity of the system and all the charges associated with the analysis only to find that the gas cap was loose?

Or, what about a customer that is on her way to work and the check engine light comes on, but really can’t leave the car. Tell me none of you ever scanned the car just to give her peace of mind?

Here is the concept: Explain to the customer that until we access the error codes, we do not have a direction on what tests we need to perform. Offer to the customer the initial scan with the understanding that after that scan is done, we will explain the necessary steps needed to complete the actual diagnosis. We tell them that this scan is not in any way a diagnosis. We actually give them a price range before hand.

I know that there will be those times that the customer will say, thanks for the info and goodbye. But we take that chance every time we try to sell anything.

I feel that this approach helps to comfort the customer. My analysis charges are more than the local dealers in my area. They come to me and pay more because of the value and service we offer.

Ok, I hear you all. I knew this would make heads spin. I don't think I am getting my point across.

I am not suggesting we give anything away, I am suggesting that we change our approach. I treat all customers as if they just spent thousands. Why? Because if I create a customer, that customer will be worth thousands to me in time.

We are a high volume shop (200plus car per week). I get a lot of new customers each day. My sales have up because I learned that in order to keep my bays full I need to see what the customer sees. Their perception is the only reality that matters.

Just think of this: I rather spend the time with the customer selling the DIAG work than trying to defend my charges before I even looked at the car.

That's it...Simple. I have not given anything away...I have in fact increased my DIAG sales with happier customers.

No, think about it. Let the customer see value first. Let them know you are looking out for their best interest. I have to tell you, my advisors are spending less time defending themselves and more time selling DIAG work.

Just think about it. A customer says, "My check Engine Light is on". You tell him that it will be "X" amount to do the analysis. The customer "thinks", you have not even looked at the car yet. All I am saying is that we change our approach.

What if it just a loose gas cap, you never checked the car and they go somehere else. That may look bad for you.

We now say: “Mrs. Jones the check engine light is on because the vehicles’ on-board computer system has detected a fault. Depending on what the fault is, certain tests are going to be needed to accurately diagnose the problem. Let’s do a quick scan on your car’s computer to see what direction we need to go. After the scan I will explain in detail the tests needed and the cost to do those tests.”

I am telling you, we just started with this approach and with great success. We sell just has many analysis jobs, if not more now. And, we have not changed our pricing.

I feel the same what. It would have been nice to have Farve in the Super Bowl. He is a real warrior.

I say the Colts by 2 touch downs.

I agree totally. I would have serious issue with that part supplier!

But, let me plays devil’s advocate for a minute: We all know that there is no such thing as a "Free Diagnosis". It's either bait or switch type advertising or they are building the DIAG into the price of the job. We do a lot of diagnostic work and get tons of people coming to us for check engine lights and the first thing they ask is…How Much for the Analysis?. For a lot of new customers, it’s always a battle to try to educate them. The time spent is a killer and many say ok, but don't like it. My fear is that we will be perceived as high-priced with all other services and may not have the chance to gain a customer...

So, here is what we are doing as an experiment. When a customer now asks what we charge for a check engine we offer them a complimentary scan to see what direction we need to go and what tests are needed to determine the cause the check engine light. So far, we have had NO issues and actually sell the DIAG time after the initial scan. We have maintained our price structure and eliminated the grief.

What do you think?????

Oh, boy! I hope my wife does not read this...it sounds like my house!

This goes beyond overselling...this is stealing. Plus, it make us all look bad, that's my fear.

Great work Alex, you will be our Internet "Go To" guy.

I noticed on the sign in the picture for the story something I don't think I had ever seen before. The sign says 69.99 PER AXLE. I wonder how many people realize that is each tire not just both front or both rear brakes.

I hope the public differentiates this situation from the rest of the honest, hard working independents. This form of marketing from mass merchandisers needs to stop. I hear of these things all the time.

I have a tire shop around the corner from me that advertises $59.95 brake jobs. When my customer mentions this to me I simply tell them that I REPAIR $59.95 brake jobs.

Let’s hope this is a lesson for national chains. It seems that their business model and code of ethics are not the same as ours.

I,m looking for a new scanner I,m looking at the Snap On Solus Pro any ideals or experences with it what can I exspect to do and not do with it?How would it compare to a OTC Genicisis or Mac mentor?

I have the Snap On Solus, it's a nice tool. You will need to buy different modules for the brands of cars you work on. Another nice scanner we have is the new wirelesss Launch. I do not have any first hand knowledge on the OTC or Mac Mentor.

Do these shops understand what their fixed costs truly are? Some shops do not charge enough because they are working out of buildings that are paid for and their labor rates, low parts mark up, "free diagnosis" is subsidized by not figuring the true market value of the property or the return they should expect from that investment. The costs of real estate, the cost of equipment, the cost of training, the cost of adequate help, i.e. is very high. We started a shop from scratch: bought the land, built the building, purchased the equipment, stocked inventory, hired help, placed yellow pages ads before we opened, paid franchise fees, etc. etc. That experience is a true eye opener as to the costs associated with this business. If we do good work we should be proud of what we do and charge enough for an adequate return on our investments.

Gonzo, you hit the nail right on the head! We as independents need to keep the dialogue going. That’s what AutoShopOwner is all about. I thank YOU for your contribution.

Understanding the true cost of doing business is precisely the reason why we need to charge for analysis work. The problem is that I don’t think enough shop owners have taken the time and calculated a budget or a have done a CODBA (Cost of doing business analysis). Once you do the math, you know exactly what you need to make per job, per week, per day, per minute. That’s a real eye opener.

Then you have the other side of the coin with some national mass merchandisers that offer that phony baloney free analysis. This is a form a marketing that prays on people’s emotion just to get masses of customer through the doors.

This problem is complicated and we as independents need to stick together on this one.

I just had to update one of my scanners... Mastertech... new software, new scanner, new cables... $4500. later... wonderful... oh yea, I'm going to do this for free.... uhuh... sure... just come on by... I like spending money and getting nothing in return.... NOT!

 

thanx for the input.... glad to see I'm not alone on this. that article is several years old.. still holds true today...

It is my mission to make AutoShopOwner the "Go To" online forums to voice your opinions, share war stories, knowledge and ideas. We can make a difference if we learn that collectively we are a powerful coalition.

Getting back to Diagnostics charges, I believe that if we don’t stick together and charge a decent price for analysis work, it will greatly affect our ability to reinvest in future technology. My shop has a least 6 scanners (I lost count) and every time I turn around I’m buying an update.

When I hear that there are shops that are afraid to charge diagnostic charges or remove the charge if they get the work, it makes me crazy.

We are all in the same boat; we don’t work for free and need to earn a profit. We owe to our families, employees and to ourselves.

I am pleased that the Colts are in the Super Bowl and New Orleans. I was rooting for Favre aand he should have been there but NO fans have suffered for a long time so I am happy for them. My greatest joy is that there are Steelers, Patriots, or Cowboys. No offense to anyone who roots for those teams but those are teams that I am not fond of.

I felt bad for Farve. He got beat up pretty bad, but hung in there. He is one tough SOB. They should have won that game.

The program is quite simple. I registered my shop through their auto shop registration protal and selected the subscription option I lied. I subscribed to their premium option which give more flexibility and visibility. As they are offering free one month along with 30 days money back warranty, basically you can try their website for 2 months!

Thanks, I think I will check this out.

I wonder how many shops use it for their "lost leader" kinda like the cheap oil changes. They figure if they can get the car through the door, they will make money. Not a bad idea if your tech is paid by the hour but sucks for the tech if he is being paid flatrate. How good are they doing that diagnostic for free?

Using diagnostic work as a lost leader is a business killer. It cheapens the entire process. As far as gioving it away, they don't. It's more of a bait and switch. If you go to the AAMCO site you will see that the Scan is free, that's it. All other testing is priced accordingly.

I like to build my customer base. I don't like marketing that gets people thru the door because of a coupon.

You have great posts, I am enjoying the conversation.

Good point Joe, maintenance, mainetenance, maintenance.... too bad that's usually the first thing people will put on the back burner when the economy drops. My shop, which is primarily an electrical repair shop takes in more diagnostic work than it does maintenance work. I guess that's why I'm so "up" on the intitial diagnostic charge... That's my bread and butter.

I figure it out and the customer takes it back to their "regular" mechanic to have the work done. Happens everyday.

But I totally agree... the service industry has totally changed from when I started... there needs to be changes... and discussing the "possibilities" in a forum such as this is not only good therapy.... but good sense.

Hope it is making everyone think about the service industry and the possibilities of the future of the business.

You are in a tough position. Is there any chance to increase service/repair and maintenance work?

I am glad that you see the power of AutoShopOwner.

I'm in total agreement Joe, It's not the fact that there should be a "standard' fee... I think there should be... But.. your right ---- the forces against the evolution to the respectablity for the industry and not be considered "just a grease monkey" is probably way past my lifetime to resolve.

My entire point was to make a point.... and I think you see the issue at hand.... The guys (like myself) that are barely hanging on is no different than some private practice doctors barely hanging in there... however, they have that sheep skin that allows them to charge for nonsense. You know, it would be a total different thing if it was ... as we talked about on the phone.... IF...a big IF... educated people were the norm in the repair industry and not the so called high school drop out... that ends up running a repair shop. Some day, I don't know when... maybe after I'm long gone... the industy may see the need in handing out "sheep skins" to the techs..., but by then they automobile will probably float down the highway, and defy gravity.... so in a nut shell... it ain't going to change.... but we can dream... LOL

The automotive service and repair has changed in the past 20 years to a point that it's almost unrecognizable. You know as well as I do that we need to shift to business model based on maintenance service , not waiting for repairs. Complicated diag work is not where your profit dollars come from. Maintenance and service is.

Pretty much...and lot's of coffee...

 

Added one more:

 

16. Synchronize FaceBook Account- Added the ability to sync your FB account to Autoshopowner. Go Here

We are lucky to have you Alex, that's a big task for one weekend.

Joe, I am sorry that your Jets lost but I am glad the Colts won (I am in Indiana after all). The Jets played well but Manning was just too much in the end. My prediction now is the Colts will win the Super Bowl. The vikings should have won but how can you with 5 turn overs.

Jet fans are too used to dissapointment, but I was really praying this year. With a rookie QB and Coach it would have been hard. Manning is just too good. He picked apart the Jets like they were a high school team.

The Colts should go all the way.

While I am in agreement with what you say, what you are proposing will be difficult. Our industry is filled with shop owners that are just hanging on for their lives. Many do not understand how giving away valuable diagnostic labor is hurting not only their business, but the entire repair industry. Then we need to consider the mass merchandisers like AAMCO and AutoZone that offer their so-called “free” check engine light check, which we know is baloney. We are fighting forces that may not ever be in flux.

I too would not be in business if I did not charge a diagnostic labor charge (notice I never mention time). I equate diagnostic labor charges the way a doctor or hospital charges for certain tests. Your doctor never says you need an x-ray which will take 15 minutes and you also need blood works that takes 30 minutes. No, he just orders the tests and you pay for what the tests are worth. We are too caught up on thinking time and selling time that we have forgotten what the job is worth. I tell my service advisors; “An hour of brain surgery is worth more than an hour of cutting a lawn”. It’s not about time; it’s about what the job is worth.

We have two issues to deal with, the public perception of our industry and the lack of salesmanship at the front counters of most auto repair facilities.

Think about this; Most service advisors have no trouble selling a hour of labor to replace front brakes and rotors on a Honda Civic that takes about 20 minutes but struggle with selling 1 hour for a diagnostic analysis that usually takes anywhere from an hour to two hours. Right?

Anyway, I enjoyed reading your article. Great points, keep them coming!

This is an article I wrote several years ago for a trade magazine.... I think it's still true today... Love to hear your comments.

 

Diagnostics fee or not

 

This has been an issue since day one. Should we charge to diagnose the car or should the estimate be free. Let’s define an estimate first.

 

What is an estimate?

An estimate is a list of all the parts and labor involved in making a repair. With the possibilities of adding supplements to the original estimate if other work is deemed necessary after the initial work has started.

Ok that’s an estimate, or is it…? Let’s try this again.

 

What is an estimate?

It’s a guess……. With the chance that I might get it right but more than likely the final bill will be different than what was original “estimated” at.

Hmm, the two definitions are different but at the same time mean the same thing… What about the diagnostic side? Ok, how about that… that diagnostic thing.

 

What is a diagnostic?

It is the process in which a technician is able to determine the cause or failure of a piece of equipment, vehicle, or appliance.

Did ya get that? … One more time …

 

What is a diagnostic?

It is the process used to determine the root cause of a given mechanical or electrical problem that has become an issue with a vehicle, appliance or piece of equipment.

Sounds the same doesn’t it…. hmm, maybe we are getting to the real issue… MONEY

 

The diagnostics may take some time, may even require a few sophisticated scanners, wiring diagrams, and tools. Time is money as we all know, of course, knowledge, expertise and experience is a commodity that should always be respected no matter what field you are in. A service charge for such “diagnostics” is essential in the continuing financial stability of a shop or for that matter… any service oriented business.

Once the diagnostics has been completed an “estimate” can then be given to the customer for their approval. This should also be noted that if a “diagnostics” is preformed and the problem turns out to be “intermittent” or none exciting a fee still applies. The time has already been spent to figure out that there was nothing wrong. That brings up another touchy issue. For some reason the customer feels cheated if you charge for nothing found… now wait a minute, how was it determined that nothing was wrong… ah…the diagnostics lead to that result. Then the problem isn’t the problem anymore, it’s the time spent looking for the problem that is the problem. To ease the customer’s woes you could always give them a time table for future re-evaluations. (30 days is a good round number) Note; It wouldn’t be the first time I have diagnosed a car for a customer only to find out that their complaint is from lack of understanding of their vehicle or dare I say… their just another fruit basket behind the wheel.

 

Now I’m not in favor of a free diagnostics (if you couldn’t tell already) and I’m not too fond of the free estimate. If there is any “man hours” that are part of any job a “man” wants paid. If that “man” is working on a commission basis, I can assure you that he is going to rush through the “estimate” in order to get to the real money end of the job.

However a diagnostic is a totally different thing, I don’t think I could have made a living without charging for the time it takes to figure out some of the strange pr oblems I’ve encountered over the years. Some things were easy to diagnose, some took hours. But I believe it’s the standardization of a diagnostic charge that would make things a lot easier for the customers to understand the complexities of today’s problem evaluations.

If a tech couldn’t figure out a problem in a reasonable length of time … say an hour… then it’s quite possible the shop is going to be losing money if they kept him on that job. The next best thing would be to move him off that job. Put another tech on who might be able to figure out the problem in a reasonable amount of time. Of course, the shop is already behind the 8 ball, since the first tech didn’t get the job done, but in the long run… it will get done, there will be an estimate for the customer explaining the repairs needed.

 

I don’t know which is more of a problem, the shops out there not willing to charge for estimating… Oops I mean diagnostic time… or the customer who doesn’t feel that it’s a necessary part of the process. Then again, these are not yesterday’s cars.

It’s about time there were some standards that everyone in the industry had to go by, be it from the independent side or the dealer side. Regulation or self imposed limits as to how much can be charged across the board for various levels of diagnostics. Not to say diagnosing a bad ball joint is easier than a battery drain, no, not at all. Each field in the industry would have to come up with a balanced set of standards that those involved could agree was a fair price for that type of service. If all the independent shops charge the same fees in a demographic area it would lead to a more even playing field for the customer. Maybe, we should think about using a different term rather than “independent”… we can be independent in ownership, style, quality, etc… but put the customer’s concerns up front. If I wasn’t in the business and didn’t know where to take my car I would really would like to know that I’m getting quality work done at a fair price at any shop I went to. If there was a way to put an end to the “I can get it done cheaper down the street” escapades… my drive home would be a whole lot more pleasant than in the past. .

 

If that didn’t happen it then only comes down to a question of where to have the vehicle repaired at. Everyone has their favorite doctor, dentist, or restaurant. Which is probably based on location, atmosphere, or “ya just like that particular place”. Price is always an issue, and probably always will be. If you’re not getting the job done right at the shop of your choice… choose another one. How many times a day does your phone ring because you have some “price shopper” who is never coming to your shop because your price is higher than the last shop they called… even though they were referred by a friend to call you.

Maybe we should focus on better instructional classes, more information, and true manufacturer level scanners available to the independent side of the business. Sometimes too much effort is put on the “Be nice to the customer”, or the preverbal “Customer is always right” routine. The old saying; “If the customer knew what was wrong they would have fixed it themselves” still holds true today. But I’m talking about telling them what’s wrong with the vehicle, not how to fix it. With the advent of the computer age upon us the car has become a rolling updateable, flash reprogramming software jungle of information. The cost of these specialized scanners puts them out of the range of most consumers, and a lot of small shops, which, in some ways, also places the shade tree mechanic on the endangered species list.

 

I can’t tell you how many times I’ve heard the same line from a customer’s after I have diagnosed a problem. “Well, I could have done that myself, I would have looked there for the problem if I had the time, and I don’t know why you’re charging me for something so simple. You should give a break on the price because it was so simple. “Hey, I’m a regular customer I should be getting a discount.” My usual answer is… “So if you knew what was wrong, why did you bring it to me to figure it out?” And, I’m not sure that other professional people you deal with such as a doctor, dentist, or the grocer…etc… is going to give you a discount just because you shop with them on a regular basis.

Common sense, the largest lacking component in all of these situations… In my opinion, once common sense is removed from the conversation “stupid” takes its place. I wonder if I could estimate how many times this has happened… maybe so… but I better think about diagnosing it first…

That's great sound advise!

Can you go into a little detail on how the program works?

Wow, I like that!

I'm the opposite. My company is registered as a S Corp, but my property is another company, which is a LLC.

You should talk to your lawyer and accountant to see which is best for you.