Joe Marconi

The quality shops need to hang in there...and they will. I have been through many cycles in my 35 years in the auto business and this one is BAD. But we will indure and only come out stronger.

Welcome aboard, great to have you part of AutoShopOwner.com. This industry needs a coalition of dedicated people to unite and help increase our impact in the automotive market. It’s a tough economy and with all segments of the auto repair industry fighting for a slice of the auto service pie, it will only get tougher.

Looking forward to sharing and exchanging ideas.

Joe Marconi

www.AutoSopOwner.com

www.osceolagarage.com

Like I always said, no one can beat the service you get from the independent shops in this country!

Thanks for video.

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The comment about management trainers preaching raising prices is true. In an effort to offset poor productivity, many of us were told to raise prices. The reality is that most shops (at least in my area of the country) were 2 or 3 bay shops. With a shop that size, productivity is difficult to increase. Added to the fact that you cannot always be convenient to the customer. If you bays are full in a small shop and a customer walks in for an oil change, you can’t do it. This is bad buisness.

I think this trend of maintaining competitive pricing combined with the chronic poor productivity for small shops will make a deadly combination. Small shops will continue to fold.

I think larger shops will have an easier time in the future. Their size allows them to be more convenient to the customer. We have a six bay facility and are in the process of adding 4 more bays. We have gone to a “Just say yes” policy. We let the customer tell us when they want to bring their car in, we don’t tell them. This is also contradictory to what we were taught in the past. But for us it has been our salvation.

Tom, I have a problem with this. GP does not always equate to profit dollars. And just because the shop down the block charges $45.00 for an alignment does not mean I need to be in his ballpark. He may not have done the math and arrived at his price because he assumes this should be the price.

Getting back to GP. When brake rotors were $50.00 two years and we charged $100.00, we made $50.00.

When brake rotors came down to $25.00 and we charged $50.00, we made $25.00 LESS money.

But the GP stayed the same. My bills are paid with Dollars not GP.

Personally, I focus on each job.

You thoughts???

It’s early Monday morning and you watch as a customer rolls into your driveway with the tail pipe hanging and dragging along the ground. The repair? Obvious. Based on years of experience, you or your service advisor begins the mental process of generating an estimate and repair remedy even before the vehicle stops moving. As the customer walks through the door there is an almost mutual agreement that the exhaust needs to be repaired or replaced and that money will exchange hands. After a price is agreed upon, the repair is done and the customer is back on the road.

The beauty of this type of repair is that it is tangible and mechanical in nature. Something is broke and the customer can clearly see that. Selling this type of repair is relatively easy.

But what happens when a customer arrives and says, “ My check engine light has been on for a few days, but the car runs great.” How do you or how should you proceed? Unlike the dragging tail pipe, this repair is intangible. Your customer may have a tough time understanding that a problem actually exists.

This is where many service advisors and shop owners struggle. Unlike the exhaust problem, selling diagnostic testing is not something that is easily accepted by customers when no apparent problems are occurring.

Trouble shooting check engine lights can be an unprofitable nightmare if you’re not charging correctly. It is crucial not to give away diagnostic labor. The costs related to solving complicated on-board computer problems are just too high. But in order to sell diagnostic labor you need to understand human emotions.

The one emotion you have on your side is that sense of the unknown. The feeling that although nothing is evident, there still may be problem. And even for the untrained eye, the check engine warning light has to mean something. You need to act on this emotion.

This is where you knowledge of the on board computer system comes into play. At this point you need to explain in detail the purpose of the check engine light and why the computer system turns on the light to alert the driver. You also need to explain the series of tests that will be performed in order to pinpoint the reason why the computer turned on the check engine light. It’s equally important to inform the customer that even though there may be no noticeable perfromace issues, a problem still exists.

Now comes the key part of the process. Sell the diagnostic labor before the car is taken into the bay. After explaining in detail the process from analysis to repair, inform the customer the charge for the diagnostic testing. You need to separate the analysis from the actual repair. Trying to sell the diagnostic charges with the repair after the car has been analyzed will back fire. Be up front with the customer. I have found that a full explanation of the testing process reducing problems later. It also pre-qualifies the customer. If the customer objects paying for diagnostic labor he will also have a hard time accepting paying for the repair. By the way, don’t bother telling the customer what it costs for overhead, technician salary, equipment, tools, rags, information and training. The customer has no interest in what it cost YOU to be in business and cannot relate to this. Their concern is their car; this is where your focus needs to be.

Keep the customer in the loop. Inform the customer that after the tests are completed, you will review the test results and be in a better position to explain what repair is needed. Also, if needed you will call first to explain any additional tests and any costs.

I am not suggesting that this process will solve all the problems when selling diagnostic labor. It takes well-trained technicians following a comprehensive outline of tests. Plus there are other factors involved; intermittent problems, lack of information, not having the correct scan tool program update, etc. The important thing to remember is that you need to have a plan. Review you current procedure and insure that both you and customer are both being compensated fairly.

Are you saying that many of the good shops will dissapear, which will leave the door open for backyard shops to arise to power all due to the economy?????

Isn't this the time where the better shops who know how to plan will win out?

I hate to sound like a broken record…but THIS time I truly believe that only the strong will survive. Shops that are on the fence financially and do not have the business skills to weather this economic storm will not be able to ride it out. Many shops will come out this weakened and battered. Many will be gone.

I recently read a survey in a trade magazine showing the average national price on 4-wheel alignments. The survey contained mostly tire shops. What I surprised (and disappointed) to see was how low priced some shops charged for the average 4-wheel alignment. In some cases as low as $49.99. Don’t we give enough away? We all know that an alignment system with a rack can cost upwards of $50,000.

It’s funny, with bodywork, the insurance companies will either pay us a menu price or give us the time from a recognized published labor guide, which for some cars exceed 1.5 hours. Even at a labor rate of $70.00, a labor time of 1.5 is $105.00. Is the alignment service just another commodity doomed to be priced low such as the common oil change?

Thanks for the tip.

A word of thanks for the great info!

There appears to be a push from many franchise institutions such as Midas, Mineke and others urging independents to become franchises. With the economic climate the way it is these days, are there any shop owners out there that may be considering this option?

Tom, as a graduate of AMI I can attest to the fact that this training is vital to the success of the independent shops across the country. Management training often takes second place to technical training. It should be the other way around for shop owners, managers and service advisors.

Joe Marconi

People will no doubt changes their driving habits, but only so far. Most people who live in suburban areas with no mass transit must get to work. They may give up that weekend trip or plan errands better, but they will use their car. Many of my customers have purchased smaller cars and parked their pickups and SUV in the driveway. We also need to be concerned about the winter months. People will adjust their budgets accordingly. People in the northern areas have to eat, keep warm and get to work. They will have to cut some luxuries out of their lives, at least for now.

Miles driven per motorist has been on the decline due to the rise in fuel. Because of this car counts are down across the country. This probably hurts the Goodyear accounts and other similiar stores that rely on a high car count to remain in business.

Not that I am aware. I read in one of the trade magazines that the stores that will be closing are company stores that are just not profitable.

We are seeing more and more Volvos comming to our shop. We have many scanners, including the Launch but find it hard to access all the modules. We heard of the Vedis but would like to hear from Volvo techs out there. Is the Vedis my answer? Or is there another scanner I need to look into. I do not want to turn away work to the dealer.

Help would be appreciated.

Joe M

What we are going to see (and probalny seeing now) is survial of the fittest. The weak shops will close, they will not be able to compete. This, in the long run, will be good for the shops that remain.

Let's not forget that the economy goes in cycles and right now we are in a serious down turn. People react to both postive news and negative news. It will be tough to get through this period, but we will endure.

What kind of an impact do you see this will have to the aftermarket???

Thanks for those positve comments. Part of reason I decided to expand was to increase market share in my area. As general repair/service shops, we need to increase our data base, from which to draw upon.

Stayed tuned for more updates as the project continues,

Joe

Do you think people are relunctant to spend out of fear or becuase they are suffering financially?

We have tried back to school specials with little sucess. It appears that those who are concerned about the condition of thier cars before heading back to school bring their cars in anyway.

It's survial of the fittest. In these changing times, the cream of the crop will rise and become the champions.