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Joe Marconi

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Blog Entries posted by Joe Marconi

  1. 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.
  2. 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.
  3. 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.”
  5. 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.
  8. Joe Marconi

    Before You Give Pay Raises, Consider This!

    By Joe Marconi,


    Employee Retention
    It appears that no matter where you go these days, repair shops are looking to hire. However, shop owners also don’t want to lose the people they have now. And many of them are considering giving pay raises as a way to retain employees. This is not a bad idea, especially if your pay plans are outdated and not competitive with the current market. However, before you give out pay raises, there are things to consider.
    First, have you done a complete review of your labor and part profit margins to support the raises?  If you are not sure, consult your accountant or business coach. Increases in wages must be in line with what your company can afford.  Adjustments to prices, labor rates, part margins, and production may be needed to finance those pay increases.
    Another important thing to consider is why employees leave in the first place. While money is a factor, especially with high inflation, it’s not the main reason employees quit their jobs. Most people leave their jobs because they are unhappy with their boss or manager.
    To sum up: before you give out pay raises, make sure your company can support the increase in payroll and, equally important, create a workplace environment that gives your employees reasons to stay.
  9. Joe Marconi
    Herb Kelleher, the co-founder of Southwest Airlines, was once asked, “Who’s more important, your customers or your employees? Thinking back on what his mother had taught him, Kelleher responded, “My mother taught me that your employees come first. If you treat them well, then they treat the customers well, and that means your customers come back and your shareholders are happy."
    Shop owners have been taught that the customer is always right and that their needs supersede all other needs. Anyone in business dealing with people every day knows that this paradigm, in reality, doesn’t always hold up.
    In business, you need customers; without them, you don’t have a business. However, without employees, you don’t have a business either. It’s the old “chicken or the egg” question.  
    Here’s my view on this; I agree with Herb Keller that employees come first.  But I take it one step further. You need a team of superstar employees who share your culture and value the team concept. You need people that love what they do and want to help others.  Then, as their leader, you need to treat your employees well. Why? The way you treat your employees is how they will treat your customers.
  10. 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.
  14. 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.
  15. 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.
  17. 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.
  18. 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.  
  19. Joe Marconi
    The summer is in full swing, which means your shop is probably at its busiest. Summer also means it’s vacation season. You’ve probably done a great job scheduling your employee’s vacations, but what about yourself? Are you planning time off too?
    Shop owners are among the hardest-working people on the planet. This is a quality to be admired.  However, everyone needs time away from their businesses to spend with friends and family.
    Balancing work with life is your responsibility to yourself and your family. Your business must never consume your life; it must enrich it. Time goes by too quickly; trust me on this.
    There are also significant advantages to spending time away from your business. You clear your mind of the clutter that occurs from the day-to-day grind, you give your body a chance to recuperate, and most importantly, you’ll build memories with your loved ones.
    When you return to work, you will be more energized, with a fresh outlook on how to move your business forward. Essentially, the right balance between life and work will help you become more effective, making you more successful.
    I’ll leave you with this quote: “No one on their deathbed ever said, I wish I spent more time at work.”
  23. Joe Marconi
    My first step in making the decision to expand the business was to overcome fear. Fear holds people back from achieving their potential. For me, it was the fear of failure and fear of the unknown. This project was doing something that was out of my comfort zone.
     
    For over a year I thought of every excuse NOT to expand the business: Where do I find more techs? How will I afford the new mortgage? Why do I want to start this at my age? Do I really need to do this? Why do I want the additional headaches? Aren’t things fine the way they are now?
     
    The project would involve demolishing and old building and constructing a new one. The new building will add an additional 4 bays and new customer waiting area.
     
    I had multiple meetings with the site engineer asking question after question. Finally he told me, “Joe, you have been going back and forth on this project for over a year, either sh_ _ or get off the pot”. At that moment I decided to go for it.
     
    I guess it’s easier to live in your comfort zone. It’s harder to move forward into the unknown.
     
    In future entries I will outline “The Plan” for the new building.
     
    Stay tuned!
  24. Joe Marconi
    This past April 25th, 2010 marks the first full year since opening our new facility. As many of you may know, we built an additional 4-bay shop which offers while you wait service and welcome walk-ins. This new shop features basic services, maintenance work, tires, brakes, accessories, oil changes, state inspections and other minor services and repairs. It also serves as a feeder for more complicated work and diagnostic work, which is sent to our existing 6–bay repair facility. This business model, for those shops large enough to accommodate it, is the future.
     
    The lessons learned this past year have been both positive and negative. With all the planning we did for the years and months leading up to the opening of our new facility, nothing is like real-life. Our projections and prayers came to be, adding some 60 to 80 more per week to our workload. I still say that a healthy car count equates to opportunity, however control is crucial in effectively managing the increase.
     
    First, the successes: The image and look of the brand new facility increased our visibility in the market and made us shine in our community, creating a draw for many first-time customers. Consumers and businesses in the area took notice of our growth; many questioned how we grew in a time when most businesses were feeling the effects of the recession. Our marketing and advertising programs worked and added a steady stream of new customers on a daily basis. Sales increased, car counts went up and the rate of new customers also grew. The new shop was featured in many local publications, which help to brand our new business model. The increase in sales and income is paying the expenses and we are running in the black. A lot of our one-time expenses incurred are being paid down on time and as these expenses get paid in full, will add to our bottom line as profit.
     
    Now, some of the failures: The sudden increase in car counts caused workflow issues at times, which resulted in mistakes and comebacks. Our quality control system was not being followed consistently, which added to our problems. Mistakes that should have been noticed slipped past and customer satisfaction slipped also. Our process was and always has been to review all work order before the job is started, maintain communication with the tech during the job and review the work and any up sells with the tech after completion. Also, all vehicles go through a quality control check list before the car is delivered back to the customer. In our effort to maintain the increased workflow, short cuts were taken and quality suffered. Shop morale began to fade and stress among staff members grew more and more apparent. The work conditions in the shop and the demands we were making on everyone were taking their toll which on added to the ever-growing series of problems. Something needed to be done…and fast!
     
    Last October I held two strategic meetings, one with the technicians and the other with my service advisors and office personnel. I simply told them not to hold back and tell me was not working, tell me what they don’t like and tell me what we need to change and how. This proved to be a valuable and eye-awaking experience. Out of these meeting came solutions and ideas that allowed us to tweak our processes and get control over the workflow issues. Our main goal: Creating solutions to solve workflow issues, reduce comebacks, improve morale and customer service.
     
    So, based on the suggestions and ideas from all staff members, I created a revised work flow process with new scheduling requirements and quality control systems. I held a general meeting with the entire staff and unveiled the new plan.
     
    The new plan outlined a more balanced schedule which limited the amount of diagnostic work and big repair jobs for our 6-bay repair shop. This will leave room for up sells and additional work sold from our new facility. We limited the amount of scheduled while-you-wait customers and spread out the work more evenly throughout the week. We gave customers options which were more in line with our schedule. The plan also included the addition of another service advisor, another technician and one more lube/tire tech. The added support staff was the number one concern from both the technicians and service personnel. We rewrote our workflow process to include more safety and quality control checks which made it easier to process the cars and paper work.
     
    It took us a full six months to implement the new plan and we stumbled a few times and fully expect to stumble again, but things are definitely better and shop moral is back to where it was.
     
    No company can grow and expect to be problem free. You learn more from failure sometimes than from you accomplishments. We pushed the envelope last year and luckily we were able to see the negative effects in time. Growth is a good thing, businesses need to grow. But growth needs to be managed properly and the lessons we have learned will help us to continue to grow.
     
    Growth and change are two of the same, and the pain and uncertainty associated with it is what people fear the most. No gain can be accomplished without change and growth, and if we fail at times…. well, that’s ok too.









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