Joe Marconi

I listened to this podcast with a lot of emotions. Collin Draker's perceptive as a technician should be required listening for all auto shop owners.  The issues he brings up about the work environment and the auto industry are a real. 

With that said, there are many shop owners that are making a big difference, especially in the area of culture and the workplace, but we need to go further. 

Shop Owners: Take the time to listen to this podcast! 

10 hours ago, southendautocare said:

Been using it 2-3 years, most commonly on jobs we know might be challenge with the owner or insurance company. Many don't come in as a result of the quote. The ones that do, approximately 50% more gross profit dollars on those jobs. 

Great feedback, and great strategy! Thanks for sharing. 

1 hour ago, southendautocare said:

Great subject and thoughts!

*Oil changes= most every shop I know does an included complete digital inspection these days.  It's much an expected "complimentary" thing to most customers, including those who go to dealers. Dealers around my area have the greatest prices and convenience with no appointments necessary for the most part. Even though oil change services are finally going up in price noticably, it would be more challenging to charge and justify to customer the reasons why we might charge more for a created "service". They might even agree, but they would rather spend less money. I think most of us would, too (especially if we fairly relate it to some other non automotive professional service we might use).   Sometimes we recommend a "6 month inspection" , separate from an oil change, mainly to check the battery, wipers, tires, lights. Many times on vehicles which have low annual mileage accumulated. Battery is the biggest concern usually.

*Transmission oil changes= I often wonder how much difference it really makes in longevity of many vehicles' transmissions; it seems like some designs just inherently have issues no matter what, and some last forever if you never change the fluid. Some shops will not risk changing fluid if it is dark, with fear a perfectly good working transmission will develop an issue after service, and the vehicle all of a sudden becomes an undrivable "mechanical total loss". Most of us have seen that happen.

I like the six months inspection. Before I sold my business, I began a Pit Stop Service, where customers were scheduled every 6 months for a basic inspection. Unfortunately, the plan was implemented just before I sold the business, and without much data on it success. 

1 hour ago, southendautocare said:

We have about 8 different labor matrix's.  We are more and more introducing previously unthinkable labor rates, mixed with little to no parts mark up (that's our "matrix!") . Sometimes we charge a little below our cost on parts, and adjust the labor rate accordingly!  We arrive at the same profit dollars per job, and it is more of a challenge. We do this mainly to avoid the parts "mark up" challenge with extended warranties, as well as customers.  I think a more important number than "gross profit" for the job, is having a gross dollar profit goal per technician hour spent on job.  Hard to achieve on oil changes, and certain jobs, but can make a drastic improvement in bottom line on "no or few parts" jobs, long diagnostic jobs, etc.  Hardest challenge is changing the thinking with service advisors to implement this.  Change is usually hard, but can help alot. 

 

Great strategy!  Question, How long have you been using this strategy, and how has it made a difference in overall GP dollars? 

Source: Feature in Ratchet and Wrench Magazine https://www.ratchetandwrench.com/magazine

Vehicle Delivery Process: The First Step to Your Next Sale

Every fall I have my chimney cleaned. For years, I would search for a reputable local company. Then, 10 years ago, I met Mike at AAA Chimney, and he became my go-to guy. Each year, Mike returns and earns my trust over and over. You may wonder if it's because he cleans my fireplace better than anyone else or if it's the price. While those are reasonable questions, the real reason why he gets my business year after year is simple: Before he leaves my home, Mike takes the time to review exactly what he did, gives me tips on how to best care for my fireplace and then he books the next appointment for the following year. In essence, he performs what we know as a vehicle delivery process, or in Mike’s case, a chimney cleaning delivery process.  

Performing a comprehensive vehicle delivery process and booking the next appointment in our industry is nothing new. Many shops have been doing it for decades. However, there are still many repair shops that have not adopted this goldmine strategy. The vehicle delivery process helps to create that memorable experience that gives the customer a compelling reason to return. When combined with scheduling the next appointment, your repair shop stays branded in your customers’ minds, improving customer retention and helping to ensure future sales.  

The auto repair business today is not like it was. Even 10 years ago we would measure customer retention with a factor of four, meaning that customers visited your repair shop about four times a year for routine services. Today, unless there’s a breakdown or a warning light, you’re lucky to see your typical customer once a year for routine service. Consumers these days don’t have the same sense of urgency regarding vehicle maintenance as they once did. Just think about all those customers who have traveled over 15,000 miles in their vehicles since their last oil change. This trend has been slowly creeping up for the past 15 years, if not longer.   

Unless you're fortunate enough to be in a heavily populated area with no competition, and car counts are never a problem, you will benefit from a well-defined vehicle delivery process; a customer touch point that brings the entire customer experience full circle. Vehicle delivery is never a transaction. It is an opportunity to keep building the relationship. It’s also essential that your service staff discusses and books the next appointment. Everyone reading this knows that booking the next appointment is a strategy being done by dentists, doctors, hairdressers, nail salons, eye doctors, pet groomers, and yes, even Mike at AAA Chimney.  

Booking the next appointment is not limited to oil change services either. Just consider all those recommendations you make on just about every car you service each day. Why not create a process that helps to fill up your calendar with profitable future services needed by your existing customers? Don’t rely solely on your CRM program either. The impact of an engaging vehicle delivery process is powerful.  

Every customer that leaves your shop today will need future services and repairs. The question is: Where will they go? Make your vehicle delivery process your first step to your next sale.  

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13 hours ago, Transmission Repair said:

I forgot to mention we also have automatic transmissions malfunctioning and the owner thinks a transmission service will fix it.  That is a perfect set up for the infamous "Ever since..." line of bullshit, especially in older vehicles with customers who have no money.  We pass on those jobs and refer them to our competition.   Sorry, I forgot to mention that.

All great points, and also interesting to hear from your perceptive. 

51 minutes ago, Transmission Repair said:

Being a retired transmission shop owner, I can relate to this topic from my viewpoint.  Namely, transmission fluid & filter changes, which I actively encourage.  Some transmission shops use them as a "loss leader", while we do not.  Much like engine oil changes of the days long gone, a lot has changed with transmission service jobs, too.  Lifetime fluid, no traditional dipsticks, and a lot more are among the recent changes.  The price of a transmission service has gone through the roof, especially on European units.

But much like engine oil changes, a transmission service gives us the opportunity to inspect the entire vehicle and drivetrain.  Leaking seals, broken CV boots, and bad U-joints are only the tip of the iceberg.  Human nature being what it is, customers rarely think about a transmission service unless they perceive something is not right.  There's about a 50/50 chance a transmission service will turn into major transmission work because of human nature.  Who thinks of a transmission service without some impetus?

I agree with Joe in that an oil change/service job is really an inspection opportunity.

Great post relating traditional auto repair and service to the transmission business. In your opinion, did those customers that understood maintenance have less breakdowns with respect to transmission failures?  Or do some models have have an inherent problem? Or a combination? 

A must see for all business owners and leaders!  An important lesson that will improve our lives and the people around us. 

Time management is a shop owner's responsibility. Too often, you are doing too much. You are spread too thin. I get it, and I understand it. I was a shop owner for 41 years. And being sucked into the role of fireman was a daily ritual. 

However, if you are putting out fires day after day, you are not building your business. Why? Because you are taking care of the immediate needs, the things that are urgent and happing right now. 

To build a more profitable business and a better future, you need to live in the future. And that means working on things that will have a greater impact in the future, such as recruiting when you don't need to, working on your marketing plan, creating a budget, and setting the goals of the company. 

Allocate time each day, even if it's only a hour or so, to work ON the business, and not IN it.  Build the processes and procedures that gets the team on the same page. Teach and mentor, as opposed to doing it all yourself. Learn to delegate tasks that you don't need to do.

A wise man once told me, "You, the shop owner, should only do the tasks that only you can do. Everything else should be delegated to others." 

Way back in the 1980s and most of the 1990s, we would base our business by the frequency of customer visits, usually 4 to 5 times a year. Those visits were mostly Oil Changes. Today, you are lucky to have customer that even THINK about doing an oil change.  Most customer wait for the maintenance light to come on, and some wait until the OIL LIGHT comes on!

Plus the miles driven has gone from 3 to 4,000 miles to well over 10,000 miles for the average oil change interval. 

With all that is changing, including the consumer's lack of understanding proper vehicle maintenance, isn't it better to sell a complete service, rather than just an oil change?  Let your customer know that we are going to inspect the entire car, bumper to bumper, filters, etc., everything. 

And charge accordingly.  Your thoughts and comments? 

A shop owner friend of mine was concerned that a tech candidate did not have a resume. This tech reached out to this shop owner from a social media ad. Also, this tech has been working at a dealership for 10 years, and now wants to make a move. 

So, should we require a resume for every situation? 

On 8/10/2023 at 7:42 AM, champtires said:

Well, we've become one of the largest seller of premium, brand name used tires in the country. Unforeseen issues always pop up when you start a business. 

It would be interesting for you to give us periodic updates, this is an interesting topic.

Wow, great advise.  And detailed nicely!

2 minutes ago, champtires said:

Not all used tire sellers are created equally, so it is important to buy from a reputable company. Champtires has been selling used tires to drivers across the U.S. since 2009. Our customers trust us to deliver high-quality, inspected tires at the lowest prices. Tires that do not meet our high standards are not sold. 

Have you had great success? Any issues that were unforeseen?  And where do you obtain the used tires to resell? 

While I agree that many tires with life left on them do end up being discarded, how can we as an industry verify that the used tires we plan on installing on a customer's vehicle are safe and reliable?

As a shop owner for 41 years, I am not a fan of selling used tires.  The biggest reason?  It goes back to my question above. The liability question is also concerning.

If there was a way to inspect and certify a used tire, then I would look into it. One last thing, "environmentally conscious" is a good think, but we need to consider the human safety aspect too. 

40 minutes ago, Gary Childs said:

Total waste of your time. They only pay 150 bucks here and some take a long time to install. I did them for about 3 years then got out of it. Plus most people that have them only come for that stuff and nothing else. DONT DO IT!!!! 

 

Summed it up with perfection!

As mentioned earlier, my experience was not good. First, the clientele that it attracted did not fit our profile, and many were not even from our area.  The rate for installation, repairs, and removal was set by the company.  My techs did not like doing the work, and my service advisors had many challenges, as Bantar pointed out. Those people that needed the install came in already angry about it.  And none of customer became regular customers.  

On 8/6/2023 at 7:55 PM, Obsidian Motors said:

Curious to know if anyone has experience with installing state mandated breathalyzers at their facilities? Was it worth it financially? After one DUI my state has a requirement that the device must be installed in the offender's vehicle and I'm wondering if this is something worth pursuing in terms of offering that service and registering with companies already certified with the DMV. Thanks in advance for any info.

I tried it, it was a horror show. In my opinion, not worth it. There are so many other ways to attract and retain your core, key, profile customers. 

1 hour ago, xrac said:

I think as owners and managers we have to not only approach things from a profitability standpoint but also an employee welfare standpoint.  Having an intact happy family helps create more productive happy employees.  Our decisions need to try to find a balnce between all interests.  When is an employee with small children going to be able to take a family vacation other than when school is not in session?

   

So, what you are saying is that happy employees will produce more, be more engaged, which benefits both the employee and the company.  Make sense!

I am hearing more and more about shops using a Labor Matrix to increase labor profit. 

I have been a long time proponent and have used different labor tiers. For example, we worked on passenger vehicles and heavy trucks. The labor rate was higher for an F500 Dump Truck than it was for a Honda Civic.

The labor matrix is a different, it allows your business system to factor in more hours for either longer jobs, vehicles over 20 years old, or any other criteria you decide. For example, if the labor for a job is 8 hours, that job may be billed with an additional 10%, making the job 8.8 hours, not 8.

I would like to hear from shop owners using this strategy and tell about the impact on their labor profit. 

18 hours ago, Obsidian Motors said:

There are three new and used tire businesses within a one mile radius of us. Two are directly across the street. We have an account with one of the tire shops but don't sell many tires. I do wonder if we would sell more if we pointed out any low tread during inspections, but we don't get many requests for tires at all.

You will absolutely sell more tires by taking photos and documenting tread depth during the vehicle inspection process. And also by training your staff to discuss tire safety with your customers. If you want to sell more tires, do a little research in the tools and equipment needed, staff training and speak to tire reps at different companies. 

In the 1980s I would send all my tire business away. In the 1990s, when I expanded my business, I added tires to my list of services.  I did not compete with the tire stores, that wasn't my goal.  It was a way to keep my customers in my shop and provide a service to my customers. 

14 hours ago, xrac said:

Employee vacations during peak seasons is tough.  However, when employees have children who are still in school or spouses who work places with mandatory summer shutdown it is not fair for them not to be able to take vacations with their families.  I do not like it but we let employees take vacations whenever they want as long as they clear it far enough ahead.  We just lived through being without one of our techs for two weeks since he is in the National Guard and they have two weeks camp every summer.  

You bring up excellent points, especially these days.  As shop owners, should we find ways to improve sales and profits throughout the year, rather than relying on past history to determine the good times of the year and the slow times? 

14 hours ago, Mike the Mechanic said:

My first boss was very Victorian in his employment practices. It was assholes and elbows at 8 am. It was the same at the end of the day. Last 15minutes you stopped and put your stuff away and grabbed a broom or mop.

That being said everyone in my operation is on time or early.......that is our culture. I have 3 employees that have different starting times as the have family needs to get kids to school. That time is scheduled and they are reliably there when they say the will be.

If someone is 2 hours late I am not worried about the $50 bucks he looses, I am cranked about the $400 lost opportunity. Most of my staff is flat rate and they are motivated and conscientious.

You affirm what I am trying to bring up. I don't think that it's too over the top when an employer insists on having all employees arrive on time. 

You worked it out in your shop and are flexible with your employees to meet their. particular needs.  I get that. Today's world is different that 40 years ago. 

I just don't want to see a slippery slope where they may be other "reasons" to come to work at a different time. 

12 hours ago, weighit said:

I had my shop in a smaller town outside of Detroit, and had 5 guys. I shut the shop for my vacation the last two weeks of Aug and first week of Sept. I paid the guys by check in the mail 40 hours pay every Friday while we shut. That was my vacation, they got 2 weeks vacation on their anniversary and could take it when they wanted. Or, just not take that time and get the pay. Since we shut for those 3 weeks in the summer most never took any other time off and collected the money. We were very busy all the time and if I didn't take the time I wanted we would be working all year. Thats how we worked time off.

You bring up a good point about being busy all year-round.  Do you think that shops that are more seasonal, with slow times, need to worry more about losing employees to vacations?