Joe Marconi

We judge our shop's production by car counts and billable labor hours. But isn't this dependent on the ability of the Service Advisor to get write-ups done, cars dispatched, make sales, handle phone calls, walk-ins, etc.? If the service advisor's load increases, doesn't this affect overall shop production?

This makes so much sense, and should be read by every shop owner. Great outline and explanation! And you are right, I have started another post about Service Advisors being too swamped these days! Thanks!

Do you mean that you are over-booked and cannot handle any more work, no potential? What about tech production? Need a little more information.

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.”

As always, thank you Carm for the opportunity! It was amazing and a lot of fun! And THANK YOU for what you do for the industry. Your efforts have made a positive difference in the automotive aftermarket! Keep it going in '24! Happy New Year!

Good point, in your business model there are not well-known parts, therefore those prices are not price-sensitive. Good point!

I think the past few years have told us that consumers, in general, want their cars repaired and serviced with a high degree of quality, a fair price, and a good experience. Let's face it, labor rates have gone up a lot for many shops around the country, but with little pushback from loyal customers. But, is this a complete picture? I am not sure, while labor is more accepted in the mind of the consumer, aren't part prices still an issue since it's easily researched, such as on Google, Amazon, Rock Auto, etc.?

I want to wish all our members the very best during the holiday season, and the very best in the New Year! What you do every day is essential to the lifeblood of our country. You keep America moving, and you should be proud!

I recently spoke to a shop owner who told me his techs give him pushback on performing the multipoint inspection (MPI). After a few questions, I think I revealed the REAL problem. His techs are paid Flat-Rate, and not being compensated to do the MPI. When on flat rate, every minute means earned pay. However, is it a flat rate issue or a culture and leadership problem? Or the wrong employees? I realize that time must be compensated on that type of pay system, but what about the customer and their safety?

Many shop owners are saying that the great business increase we experienced in the past few years is fading. I don't think so. Are things stabilizing? Probably. But we are in very good times, with great opportunity. Many shops finally raised their labor and prices that can earn them a decent profit, the average age of a car is around 12 to 13 years old and still rising. I can't speak for everyone, but would like to hear your thoughts on the state of the Auto Repair Shops from your perspective.

Good points, and perspective! And thanks for the link!

Gerald, I agree with your assessment. Specialization is the key, and we need to assess the strengths of our employees and provide training in those areas. A shop's business model will dictate the competencies needed to provide top-level service/repairs to their customer base. One more thing to add to this discussion; top pay or A-rated pay cannot be reserved for the "traditional" definition. Please note that flat rate pay is not the norm in many states, such as New York. Rethinking pay scales is also inevitable. Looking forward to Vision 2024!

Too many shop owners spend too much time on new customer acquisition. While this is important, they sometimes forget about the customer right in front of them. Retention is your key marketing strategy. Great topic SMP! As always, great podcast!

When I started as a young auto technician in the mid 1970s, working in a general automotive repair shop was a lot simpler. After all, we mostly worked on GM, Ford and Chryslers, and most of the work was mechanical. Fast forward to today, can the General Repair shop model still work? Today's techs who work in general repair shops have to bounce from Toyota, to Honda, to Nissan to GM to BMW, to Hybrids, and on and on. And then switch gears to a Ford pickup diesel. Techs also need a working knowledge in, electrical, on board computer and driveability issues a wide variety of car makes and models. And what about the training needed and the tools/equipment need to service and repair a wide range of worldwide car models? If you are a general repair shop, I would like to learn more about how you are adjusting to the challenges of running a general repair shop.

This is such an important topic these days. Since COVID and the recent inflation, many shops are finally aware that labor, pricing, and understanding their numbers is key to running a successful business. Another must-listen/watch Carm podcast!

I was never a fan of loaner cars. With car counts 100 plus each week, we would need a fleet of cars. However, many shop owners rave how great their loaner car program is. I guess it is an individual choice. For me, I set up deals with the local Enterprise and Hertz for discounted rates, and that worked great for me. In my area, Uber and Lyft are not that easy to get at times, not yet anyway. I also used local taxi service. And, we also had a shuttle van for local rides.

You make a great point!

To all ASO members, I want to take this time to thank you, our members, for making Auto Shop Owner the go to online forum for automotive aftermarket repair shop owners. There is a wealth of information withing these virtual pages and more to come in the future. From Alex and I, we want to wish you the very best this Thanksgiving Holiday!

This is a topic that is often discussed and heavily debated. The fact is that these days the average consumer does not think about auto repairs or preventive maintenance as they did 20 to 30 years ago. Plus, back then cars broke down a lot! Today, we need to be proactive about setting the customer's appointment. Too many shops spend a lot of money to get NEW customers, when they HAVE customers right in front of them everyday. Why not bring them back? Do you have a process that books your customer's next appointment? Yes, of why not?

I know as well as you, the difficulties and the challenges of running an auto repair shop. I lived that life for 41 years, and now work to help other shop owners as a coach. Even with all the responsibilities and duties of a shop owner, perhaps one that is overlooked is taking care of yourself. Take time this Thanksgiving holiday to spend time with family and friends. Maybe do something that you really enjoy, away from the business. Additionally, focus on what you have, not what you don't have. Show appreciation for the people who work with you too. We all need a mental and physical break from time to time. It helps to declutter our minds and reenergize our bodies, and pays off in the long run too! Happy Thanksgiving to all!

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.

Wow, I guess it's important to have on ongoing marketing plan not matter what a shop is doing regarding advertising and marketing. And yes, Google ad words as changed a lot. Organic SEO for most shops is perhaps better, it just take time to develop, but it's more lasting. Thanks for the info!

How long would it take to ramp up the advertising? In other words, how long did it take to get the results you were looking for?

I was speaking to a fellow shop owner recently. When I asked how was business, he replied, "Ok, I guess, a little slower than normal." I followed up with another question, "Have car counts slipped?" He replied, 'Funny you should ask, car counts are good, in fact, very steady. It's sales that are off." As a business coach, I see this all too often. Complacency can set in when the good times are perceived as the norm and likely to continue, and the staff, particularly service advisors, don't stick to the sales process. The bottom line is this: All auto repair shops go through ups and downs. The best way to smooth out the highs and lows is to stick with the sales process, create that amazing customer experience, perform the vehicle multipoint inspections on all cars, and perform the car delivery process properly by informing customers of future needed service and book the next appointment. Follow this process, don't let complacency become your repair shop's norm.

Wow, this would make a great TV show! It's also great information for other shop owners to be aware and mindful of how some people will cross the line of ethics and break the law. Thanks for sharing, Frank!