Wheelingauto

That is a difficult question to answer on a national message board. I would suggest first figuring out what your labor rate needs to be so you are profitable to the level you desire. Then I would call local dealers and indys and do a labor rate survey. Be honest, tell them who you are and why your calling. We are trained not to answer the labor rate question but when someone calls and tells me who they are and why they are asking I am usually more than happy to give them the number they are asking for.

We are in Chicago and I suspect overall costs are similar and we are at $120 and looking to go up. I can tell you when we were at $99 I was afraid of the xxx figure so when we decided to do it we went to $114. If your going to do it you might as do it right

I guess the point I am making is I think it is our best interest to fully understand the technology we are faced with. Generic tools only allow partial understanding like using a snap on scanner VS that witech. Huge difference. I know ROI is weak if not non existent, but I have always believed in having the knowledge within my business. I would think it would benefit you to have one or two techs take the time (paid of course) to maintain the tools and passwords, understand the technology and be leaders in the shop when it comes to this.

I could be wrong but I feel there is a difference in using the generic tool vs the oe. And I want that for the top car lines I serve.

Not every tech needs to be proficient at BMW but if you're going to work on them at least one must be familiar with them.

We used Demandforce many years ago in their infancy. They are a customer retention management company. They send out automated reminders, customer e mails as an example newsletters, lost customer cards and recommended service cards. They cultivate reviews and post to the web. They were responsive and did a good job for us but I used them when the posted reviews to Google. When Google changed the rules we stopped using them because we did not use any of the other features. Mitchell CRM, customer link (if they still exist) and several other companies do the same thing.

If you are doing no follow up it will improve things. If you already use one of these companies they will probably not do any better. It is all what I call mid shelf marketing. All automated, no personality and average stuff. Like I said, not bad if you're doing nothing.

15 hours ago, AndersonAuto said:

Not a fantastic day today. I was supposed to be working on my boat, but we had a problem child. Ford E-350 we put a transmission in, the supplier said we had to install the latest flash on the PCM. We recently started using the Drewtech remote programming service and it's been pretty seemless so far. Not today. The truck has a few aftermarket items installed and Drewtech thinks one of them (gps tracking unit or magnet operated antitheft system) may be interfering with the CAN bus. Anyway, after screwing with it all day long, they bricked the computer. Ford dealer says 7-10 days. Ordered a reman, wasn't even close to the right part. Found another reman that will be here in the morning. May or may not be the right one.

This is my most profitable fleet customer's box van. I need this thing to go down the road and soon.

Anderson, sorry to hear about the bad day. There are too many of those. Not to rain on the bad day but this opens up a discussion that needs to be had IMO. From what I have been told, this Drew tech thing is subscription based, does not have full coverage (lines) and does not have full operation (only does ECM's). I think there are 2 problems created by using this resource. First off, it could limit a techs ability to understand the entire workings of the network by plugging in a unit and letting someone else deal with it. If the tech gets to the point of knowing it needs to be reprogrammed and then plugs in the unit and it works (or not in your case) limits the desire/ability to do it all in shop. (I hope that thought makes sense). Kind of like a shop that does brakes but has no idea how ABS functions.

Second, why limit the ability of the shop by using a generic tool like that as opposed to the factory unit. A IDS only costs 1k or so to purchase and a years subscription to Fords tech site is only $850. By doing it all in house it requires tech ability and knowledge and there is less room for error. I would think in a shop your size you would already be equipping it with factory stuff as opposed to the generic.

I would think as shops grow in size and revenues (or specialize if smaller) they would seek out OE solutions to the technological problems we are being faced with. The further behind we fall the more outdated our abilities will become.

13 minutes ago, Joe Marconi said:

Scott,

Trust me, I am not suggesting that booking the next appointment and/or informing customers of needed future work is the cure all to all of our problems.  As a coach for Elite, I get to talk to a lot of shop owners and coaches from around the country.  There are pockets of the country that are doing quite well, other areas are struggling.  The reasons area many.  All that I am suggesting is that as shop owners, we need to be as proactive and positive as possible: Do complete inspections on all vehicles, look at vehicle history and help your customers by mapping out their total,future car care needs. Any effort in the right direction will help.  

And there is one more thing I want to say; but before I say it, I say this with all sincerity and respect for all my fellow shop owners.  Here it goes: don't look for reasons why business is bad.  Because you will find it.  Yes, the economy plays into it, the current political climate, the weather, the competition, etc.  Don't dwell on it, because it will become contagious and your employees will begin to become negative too.  And before you know it, you will go week after week wondering what happened to business. 

Look at each day as a reason to win.  Look at the positive. Celebrate every win,each sale, no matter how small.  Set goals and talk to each customer in a positive way.  When people ask you how you are doing. Tell them great.

Sorry for going on and on, just trying to help here.  After 37 years of riding the repair shop roller coaster, I know that in tough times, being positive is lot better than being negative. I only wish the very best for each shop owner out there! 

Great post! I often tell parts people who come in here and tell me it's quiet on the street as if to console me when we are a little quiet it's a BS excuse that makes everyone feel a little better. What did I do today to change that is far more important than sitting on my a@@. While there may be less cars in bays there are still cars in every shop. If I can get more of those cars to come here they can console each other it's just slow......

I am not a coach for elite

I agree with Joe. For us, the key was identifying the interval the customer believes, and the n if acceptable tailoring the reminder (phone call for us) to fit that schedule. People are being told many different things when it comes to maintaining their vehicles. Follow the light, wait till it says 20%, every 3 mos 3k even.

intervals are being lengthened and we have to agree and advise our customers. I do not think 5k is too long, I do think once a year is. Whatever, if you send automated reminders every 3 mos, most are being tossed. Figure out what each customer believes and tailor your reminder, next appt to that. It greatly improves the chances of the next visit being to you.

Setting the next appointment has not worked for us BUT identifying (and agreeing on) the next interval has. When we check out the customer we identify the next interval and let them know to expect a call. We then call to remind them of service due and it keeps our bays fuller. When things get too busy we stop calling for a couple of weeks and fall behind a bit and when we get slow we speed things up a bit. We have been doing this for over 5 years so its a bit habitual for us and our customers.

April was our second best month this year and only second by 3k. Car count was up 4% over last April and avg ticket was up $35

I just bought 8 cylinders for $83 each. As someone else said WP is running a special at $99 and Keltners is $125. Sams by us is $110.

we charge $3 an oz.

Supply and demand.

Please dont use the term overpaying or anything like that. It is a judgement of value. Your market requires higher wages than others, simple enough.

I do not come from the bays, my background was from the Towing business and I bought an auto shop. My ex partner was supposed to run the shop but I got dragged into the customer service end. Over the course of a couple of years I quickly learned I have little if any tolerance for dirtbags (price first types) and it seems these are the ones who try to take advantage of every situation. I decided at that point I would do everything I could to keep those types from crossing my threshold.

My marketing implies we are professional and not price driven in any way shape or form. No coupons, specials and price based offers at all. Only pretty pictures and discussion of our expertise and good intentions. Our office is not filled with menu boards or automotive related items, more like a dentists office with local kids artwork on the walls, clean furniture and conveniences for out customers. No point of sale items at all.

My intent is to deter without stating it outright. The best response when someone first absorbs my branding is either that's the place for me or that's NOT the place for me. I'm actually ok with either response. I do not have to win over all consumers to win at this game.

Luckily what I've done has worked. Although I clearly remember the pain of dealing with those types I rarely do anymore and the one or two who slip though the cracks every once in a while no longer dictate our policies. We move on to those who wish to be served and understand quality comes at a reasonable cost.

I welcome the low cost/low end repair facilities or providers, they increase my value.

If you trade in that 6-series you'll have a heck of a start for a fleet.

When we were pen and paper we would add about 10% to every estimate. Since we have just kept our labor rate and the high end for the area as well as keep parts gp a few points higher and do it on every ticket, not just loaners.

Elite runs 20 groups and in my opinion have the best facilitator in Jim Murphy. You can reach him and discuss @509-768-7875. He used to be with RL O'Connor who still runs 20 groups as well. I have heard their new facilitators are good as well. I would stay away from DSP since they use tire store model benchmarks which are much different and far less profitable than the other 2.

Just now, AndersonAuto said:

That's a lot of loaners. I'm impressed. Obviously it's working for you much better than it did for me.

I never shy away from spending money if I can put a number on the ROI. I'm not sure how you do that with a loaner fleet. The expense side is easy enough, but how do you put a number on the additional sales attributed to the loaners?

If you want to fill the other side of your shop start introducing loaners and advertise them. Give them out freely and closed sales will follow.

I dont know that you can directly account for what they do for you but you always speak about what you did to grow your business (cheap oil change) and I can say my business has grown from 2k sq feet and 800k in sales to 12,500 sq feet and 2.4 mil in sales in the last 15 years. I can also say when I was in RLO and subsequent 20 groups I was always praised for my consistency in hitting at or above benchmarks in gp numbers. I attribute part of that to the convenience of loaners.

In addition It allows for much greater efficiency, I can manage a greater car count with less people when I have loaners. People dont get as upset when a deadline is missed when they have wheels. Example: Mr Smith NEEDS that 4 wheel brake job today but you already promised Mrs Jones her car would be done today. Call Mrs Jones and ask if it would be ok to keep her car one more day and she's probably fine as long as shes got wheels. It gives you greater flexibility and with that you can knock out more work.

One more thing that is very important. Loaner cars are a huge thing when it comes to convenience. You can and must get paid for it in increased margins. When we first started we were still using paper and pen so we would manually add 10% to the estimate and no one balked. When we went to computers it has allowed us to push the GP's up.

1 hour ago, tyrguy said:

Lastly, where do you keep that many cars. I have 50 parking places which is a lot, but that would take up half of them.

I only have 50 -60 parking spots myself. But for every car that is out I have a customers car....so usually I like it a whole lot when all 26 are out. We do have a young man who washes cars for us and part of his job is jockeying cars from front to back and vice versa

55 minutes ago, tyrguy said:

26 car loaner fleet!! Wow!! That has to be a major expense. When looking into doing a few loaners it seemed like the insurance would be at least a $100 a month a car. That plus upkeep seems like it would add  at least $4k a month in expenses. BTW, i am really considering doing this and am thinking about leasing a few econoboxs to do it. I like the idea of a new vehicle for dependability and low upkeep.

Over the years I have fixed up customer cars who did not want to make the investment themselves. Picked up cars for a couple of hundred and fixed them up. Last year I went out and bought 3 brand new Ford Focuses, this year  I bought 4 lightly used cars. My fleet has become considerably newer and nicer over the last 5 years but I dont think you can put a guy driving a 100k SL into a POS old Ford Taurus.

I have 5 Camrys, 1 Corolla, 1 Lexus ES300, 3 focuses, 3 fusions, 2 lincoln MKZ's, 1 POS Taurus, 1 POS Jetta, a Ford Edge, Subaru Outback, Honda Civic, Fit and Accord.Kia Soul, Ford C-Max hybrid, Pontiac GP and Ford Ranger.

We also have a Box Truck loaner, Honda Element as a shuttle, my personal pick up and MB convert on our policy. Almost all have full coverage and we own them all fully. We pay on average $600 a year per car so thats 18k per year.

Auto Owners is our insurance company and I hear Zurich is pretty good with loaners too.

I would not lease because they will get dented and dinged and you will not be able to keep up with it. On top of that remember they are tools. About 6 years ago I added 4 newer cars one being a 2010 Focus with 10k miles on it. The first person to drive it kissed something and took a wee bit of paint off the corner of the bumper. My Service Manager at the time got all heated about it...it happens.....its a tool.....and you aren't going to alienate a good customer over a ding or something small.

One last thing. When its slow, it just means each one of us has less cars to fix. There are still cars in each shop so you just have to figure out how to get the cars from your competitors shops into yours and then you'll be busy and they'll be making excuses!

18 minutes ago, xrac said:

I think the effect of Obama Care is slowing business down.  Premiums are up across the board. Mine are personally up over 20% from last year. Some people are having to pay back subsidies that they claim earlier but didn't deserve. Some are paying penalties.  All of this affects discretionary income and they have to cut somewhere.  These affects along with tax time definitely drags business down. 

Auto repair is not discretionary income. It is necessary if we are to have our freedom to move about.

That being said I hate to create excuses when we are slow. I have been in business for 30 years and there have always been ebbs and flows in this business. That being said my business has very rarely gone backwards ( maybe 4 years out of 30) and has always grown. I no longer freak out when it is slow I usually find a project for us to do while we wait for things to pick up. When starting a project it almost always picks up before we finish.

I have also learned when we are busy to not get caught up in the moment and keep my owners duties at hand and have plans in place to keep that next slow period as brief as possible.

1 hour ago, AndersonAuto said:

What's your loaner car policy, and do you have a written loaner agreement for the customer you'd like to share?

I used to do loaner cars, but I never had a strong policy or written agreement for the customer to sign. As a result I ended up with a number of customers who thought it was OK to take a loaner out for a coupon oil change, and bring it back out of gas. After the second time my Cadillac came back needing a new front clip, I'd had enough and bought a shuttle car. Now if someone really needs a loaner, I'm happy to drive them to enterprise or hertz and get them a great rate that I've negotiated with them.

I know they can be done successfully, but in the chaos of rapid growth, it was something I never did correctly.

We started using loaners as a closing tool. When presenting larger repair tickets the question would usually arise, when can this be done by which we would then offer the use of a car. At that time we had only a few cars. That quickly grew into people requesting the use of a loaner while their car was in the shop and the ones requesting it were the ones who popped for the big ticket last time so how can you say no? Our loaner fleet quickly grew to it's current size of 26. If it's not common in your market it will quickly differentiate you from the other shops. In our area everyone now offers them but we were the first and by far have the most.

I do not believe in making it difficult to do business with us. Therefore, I will give you a loner for anything including an oil change or tire repair. I also believe that discounting/cheap will sometimes bring in undesirable types and since I do none of that you will have to figure out that one on your own.

Written policy will not change those who feel it's ok to take advantage of a situation. Typically we will ask upon return if they filled it back up (all loaners leave full) and if they didn''t we will ask that they do. Inevitably someone will walk in at the last minute who didn't have time and we will charge them a few bucks. Other times we will just smile and tell them not to worry about it and just note it in the management system for the next visit. Pick and choose your battles carefully.

Form 1 is our insurance waiver and we have people fill it out the first time and provide proof of insurance and a D/L. Form 2 is the one they fill out every time they take a car and its basically to remind them not to smoke and to fill it up. Again, I have had many cars totaled and we have always been made whole.

Loaner car agreement (daily).doc

Loaner Car Agreement word.doc

http://www.bizchair.com/

Sorry, I can be a smart a$$ at times. I guess I'm a little tired of hearing about cheap oil changes.

Not that is should make you feel better but I have heard from my account rep at world pac the slow start to 2017 is not regional. My trans guy says everyone in the area is slow as heck. It has felt slow around here and we have not had any winter to speak of but the numbers show differently.  Although not setting the word on fire we are up 4% Feb/march this year over last.

Having been doing this for so many years I dont really sweat the slow times anymore. Give us time to maintain the loaner fleet and spruce the shop up a bit. It'll pop....

You should try cheap oil changes.........

On 3/28/2017 at 3:38 PM, AndersonAuto said:

If cheap oil changes weren't good for business, you either didn't have the facility to service them, or you were doing it wrong.

Anderson, I have read this entire thread and it appears like you've been a very good student. Unfortunately I feel you are also quite arrogant in thinking you are the authority in auto repair management.

I realize the written word can sometimes be misconstrued but sometimes the things you write allow no other plans to be successful. Your way or the highway. You have a lot of reason to be proud and strut your stuff but when you do it I wish you would recognize there are other as successful if not more successful business models out there. You are also not the first person to be part of a 20 group, they have existed much longer then your business.

I realize I am new to this board (as far as participation) and maybe I am out of line but all I see is preaching from you that the way you do things is the ONLY way, and I am here to say it's not.

The statement above is what I am referencing, I have a similar sized shop, smaller staff, more sales and better net profits than what you've shared. I do no discounting of any sort, I have no menu based pricing (not even an oil change) and our business continues to grow without the headaches associated with discounting.

As far as accounting while I agree with your statement, I went to a seminar by Bosch a couple of weeks ago and the trainer was begging people to expense the cost of labor and not include it in COGS. So there are some out there teaching the opposite of RLO.

Some of the reasoning above has validity, but I dont usually like to rely on excuses when my business is not performing like I expect. I guess it's always been comforting to call the parts stores and ask hows everyone else doing but my bank has never accepted that as a reason for slow payment. (I am actually debt free but its a good metaphor).

Anyhow, most of the surveys conducted asking car owners the reasons for selecting a vendor, the top 3 things (not necessarily in order) are trust, expertise and convenience. Price always showed up 4th or 5th on the list. Some shop owners insist offers are the best way to get opportunities (cars on racks) but it has been my experience when you put price first you get price conscious customers. Now, I would agree that you have a lot of untapped potential in a tire database where they go elsewhere for service.

Other surveys done are people tend (77%) to buy tires from the first person (shop) who tells them they are needed. 72% of people get their cars serviced where they buy their tires. So if the above surveys are accurate I would focus on marketing to my existing database and tell them how good we are. I would be talking about my master techs and our ability to solve the difficult problems others cant. In my opinion tire stores are not known for expertise. Trust takes time to build and things like warranty, not over selling or being pushy, offer the customers sound solid advise and most of the time they will buy anyway. This also is a part of why I don't like price based offers. If you sell something that is at aor below cost it requires you to find and sell something in order to make a profit. This is a conflict of interest and just because it happens everyday in many [places does not means it has to happen in yours.

Convenience: How can you make it more convenience for you customers to do business with you. For me it was to offer shuttle service, loaner cars and pick up and delivery. As others have said if you increase your shop hours by 20% it might make it more convenient. Like you I do not want my guys to work crazy hours or have multiple shits so I try to focus on efficiency and billing out as many hours as possible within the time frame we work. Not work more hours and be less efficient or equally efficient.

I would say the one best tool we have ever implemented (other than internal processes)that grew our business was loaner cars. Far and above any other thing. Add another $5 per hour to your labor rate and give them out freely to service customers.

2 hours ago, xrac said:

My problem seems to be not enough bays, too many big jobs, technicians too inefficient, etc. to take advantage of an increase in car count.  Or maybe the problem is just my management ability.  A couple of times I have staffed up and was ready to try to move our business beyond $1,000,000 but both times my help situation subsequently imploded.  The last two years I have found it extremely difficult to find good people even hiring some I didn't really want to due to having to have somebody.  

One of the biggest challenges we have in this industry is finding qualified help. What is a highly qualified, efficient tech worth? Most management gurus say put them on flat rate and they earn what they earn. Yes if they become plumbers they spend a fraction of their own money on tools and equipment and are guaranteed great pay for every hour they are on the clock. If your a tech at an average shop your pay is affected if the owner does not know how to market, does not charge correctly or makes you pay because he gives something away. Its a crappy system and we loose quality people every year because of it.

We have relied on flat rate for too many years to cover up our inability to manage and correctly operate a business. In addition, we do not properly value what we do and charge accordingly. We knowingly sell stuff at cost to try to get opportunities to sell something to try to make a profit or we attempt to compete at the bottom of the spectrum.

One of the exercises you should go thru is figure out your current capacity and potential capacity. Your focus needs to be on tech efficiency and effective labor rate. Most of the time we do not need more techs, we need to keep our techs producing at full rate and not performing other tasks. Them ore money we can capture without adding capacity the more we can pay the better the quality.