If Referrals Are Number One…

…then why do so few shop owners put much effort into getting more of them? Ask any group of shop owners what is the best way to get new customers and the number one answer is almost always referrals. Yet, most shops devote the majority of their marketing money and effort to other areas. Shops which have focused on getting more referrals generally report good success. Some shops develop specific rewards programs, others participate in local business groups (some of these are devoted specifically to gaining referrals) while others simply make it a habit to ask for referrals from their existing customers. Ask yourself how you could get more of the type of good referrals that you currently get. Then move some of your marketing budget and effort to doing so. Odds are good that your return on your marketing investment will improve.

Do you Really Want To Know What Your Customers Are Thinking?

All you have to do is ask. They will tell you a lot if you survey them. However, avoid the typical type of survey with multiple choices. Also, a survey requiring written replies will be ignored by many who have good input. You want to make it as effortless and nonthreatening as possible for your customer. Create a survey with open ended questions where the replies can be anything that comes to their mind. Then have a third party perform the survey by phone where all your customer has to do is talk to an unknown voice who he or she will probably never meet. The more replies you get, the better. You will need at least fifty or so to gather solid results. Avoid cherry picking the ones to call and make sure to include customers who have not been to your shop in a year or more. Very few shops perform a survey like this because it is not a small project, but the information that you gather will be invaluable.

Thank You, Thank You, Thank You!

Everyone likes to be thanked and that certainly includes your customers. Always make a point of communicating a sincere thank you to anyone picking up their car. They could have gone to dozens of shops, but they chose you. Next, some type of thank you follow up is in order. It could be an email, regular mail, a phone call or maybe a text message. A common mistake is to think that people get tired of you “bothering them.” There may be a few here and there, but the vast majority who appreciate it offsets that quickly. All that thanking may get old to you as you do it over and over, but your customers only hear it from you once in a while. They know which businesses appreciate them. Keep thanking them and never stop!

This article can be found online at www.AutomotiveManagementNetwork.com. For more management articles and information, click here!

By Tom Ham.

Total Payroll

A profit killer in many shops is excess payroll which occurs for a number of reasons. The amount of payroll required in relation to total sales has gradually decreased over several decades as expenses due to technology and ever increasing government regulations have skyrocketed. Many shops which have been around for a long time are still basing their payroll on old numbers which are too high. Other shops simply have too many people for the amount of sales that they generate. For shops in areas where sales have dropped over the last few years, this is a very common problem. There is the hope that better sales will soon return, but until that occurs the money drain is too great. Other shops are just plain inefficient due to old bad habits, not taking full advantage of new technology and the tendency for many of us in this industry to be less than well organized. While these all come into play to varying degrees at different shops, the biggest cause of excess payroll is pay systems which are insufficiently dependent on incentive. The choice is not either hourly (salary for some) or pure flat rate. There are many options in between. Some type of significant incentive pay system, for everyone…not just techs, is the norm in most profitable shops today. A goal to shoot at for total payroll, meaning all payroll except the owner, is a maximum of 23-26% of total sales. If you are much beyond this, you will generally have a rough time achieving solid profits.

Total Expenses

The range of numbers which I have seen over the years for expenses is staggering. Some shop owners seem to be born with an amazing ability to not overspend while others spend like Congress. Keeping this number in line can indeed be a very boring task, however it becomes less boring when you find that you can often save $1,000 or more with an hour or two of effort. To earn that much in the shop, you have to do about $5,000 (or more) in total sales. An expense hound can significantly “out earn” even the best tech. Every shop wastes money in this area, from a few thousand a year to literally hundreds of thousands. Create a plan to thoroughly track and monitor every line on your expense statement. Here is one quick tip…if your expense statement has less than 100 lines on it (many shops have 30 or so), it will be extremely difficult to accurately watch your expenses. One expense hound I know has 350 lines on her expense statement so she can track literally every dime. A good goal for total expenses is no more than 29-33% of total sales (expenses are defined here as all spending of all types, except the cost of parts and the cost of payroll). The top shops in the profit race tend to do very well here, often achieving numbers much lower than 29%.

Gross Profits

In the previous article, we discussed total gross profit (GP) with the goal being 57-63%. Of course, the recipe includes several ingredients. For the typical shop, here are some good goals: Parts GP 57-63%. Labor GP 67-74%. Tire GP 28-32%. Many shops have a hard time getting good tire GP, although it is not terribly difficult once they make the decision to do so. In recent years, the numbers for both parts GP and labor GP have been gradually increasing in the more successful shops with some consistently hitting parts GP’s in the 55-60% range and labor GP’s in the 75-80% neighborhood.

Cars Per Tech Per Day

Although low car counts have been a common complaint over the last several years, too many cars for the number of techs is still a problem for a lot of shops. While the fear of not having enough cars for the techs to service is often large, the fear of having too many is frequently nonexistent even though it can do severe damage to profitability. To get the most legitimate work out of the cars coming through your bays, three things need to occur. The tech must look over every car thoroughly; no exceptions. The service advisor (SA) must estimate everything that the tech finds; no exceptions. Finally, the SA must inform the customer of everything that was found and estimated; again, no exceptions. When there are too many cars, there is simply insufficient time to do all three things properly. So, the average repair order (RO) tanks as the shop puts through a lot of cars while achieving a weak percentage of potential sales. For the typical shop, 3 to 3.5 cars per tech per day is about the right amount. Less than that can cause techs to be standing around, but much more than that will usually leave large amounts of unsold work on the table; work that some other shop may just do.

Sold Hours vs. Available Hours

This is the comparison of how many hours are sold (or billed) to how many hours that the techs are physically at the shop “punched in” to be available to service cars. When the pay system involves little or no incentive pay, this number is often weak. On the other hand, with a solid incentive pay system in place, the number not only tends to be better, but it also becomes less critical since techs are being compensated primarily for what they actually get done. Inefficient shop operations also makes a good number difficult to hit. One other cause of a weak number here is too few support people for the number of techs. Remember, the main reason that techs produce low numbers is due to the management; not the techs. Better shops generally bill about 80-85% of available tech hours. A solid goal is 95-105%. Basically, if a tech is at the shop 40 hours, you should be able to bill 40 hours if you are running things reasonably well.

Tom Ham and his wife Deb have owned a repair shop in Grand Rapids, MI for over 30 years. They also operate a shop management website with over 7,000 members. Automotive Management Network (www.autoNTWK.com) is described as a place to exchange information about the management of all types of vehicle service facilities, independent auto repair shops, car and truck dealers, franchises, fleets, and body shops. Tom is on the executive board of ASA Michigan and is also an AMI approved instructor.

Intermittent automotive service problems would certainly make the list of things that paralyze or terrify. In fact, it would be safe to say that intermittent automotive service problems are one of the few things capable of terrifying and paralyzing folks on both sides of the service counter. I know they make my stomach turn, especially when that intermittent problem belongs to a “regular” customer.

This particular customer is part of a family of customers: brother, sister, niece, et al, who are the kind of loyal and lifetime clients we all live for. I really do believe they appreciate us almost as much as we appreciate them.

They are more interested in quality and service than they are in price. They are more interested in value than in “quick” fixes or partial repairs. They are all different, naturally. But, they are all similar in the respect that each of them has almost always been normal, reasonable, rational, considerate and caring in all their dealings with us.

Almost always…

There are exceptions to just about every rule and the last couple of days proved to be no exception. You see, the biggest problem with intermittent failures is that while the actual failure itself may not be consistent, the pressure and frustration in the bay and at the service counter is anything but unpredictable. In fact, there are few things more reliable.

This vehicle: a 1993 3/4-ton Suburban, big block, appeared at the shop a few weeks ago with its owner (the sister) and a fairly strange complaint.

Customer Concern: When the vehicle is cold or at normal operating temperature, it runs great. However, on a 100-plus degree day the vehicle will occasionally stall at idle. Verify symptom, if possible, determine cause of concern, estimate cost of repair and advise.

We were off to a great start, all we needed for the vehicle to symptomize was a few days of triple-digit temperature.

There was only one problem…two, actually. First, it didn’t look like it was going to be that hot until next summer and the customer was terrified of the vehicle stalling and dying in traffic, on the freeway, while stopped at traffic light, making a left turn, at night, in the morning, or in the wrong neighborhood, right now.

And, second, when the vehicle wasn’t in danger of stalling, dying and leaving our customer stranded, it ran like a new truck.

We checked the data moving back and forth, to and from the computer with no real results other than the possible exception of idle air control (IAC) motor counts that were slightly elevated. Not a lot, but possibly enough to cause a problem.

We removed the IAC motor to check for coke and carbon, but there was none present. Certainly, not enough of either to cause a problem. So, we checked and adjusted the base throttle position hard stop to spec and rechecked the IAC counts at idle; they dropped right into spec. Great!

We started and ran the Suburban to operating temperature, shut it down and let it sit for 15 minutes, restarted it and ran it up to operating temperature again. Both the idle speed and the IAC counts were good and the vehicle refused to quit.

What do you tell your customer? “Hi, I’ve got some good news and some bad news…”

“Give me the good news first.”

“The good news is: We couldn’t find anything serious enough wrong with your vehicle to cause the kind of failure you are experiencing.”

“Great! If that’s the good news, what’s the bad news?”

“The bad news is: We couldn’t find anything serious enough wrong with your vehicle to cause the kind of failure you are experiencing.”

“Where do we go from here?”

Under the circumstances, there was only one ­option: give the Suburban back, let the customer continue to drive it, see if the problem continued while trying to determine if there was anything “remarkable” to ­report beyond triple-digit ambient temperatures.

We shared all of this with our customer, but all she wanted to know was if the vehicle was still going to quit without warning again. Our only answer was: “We’re hoping it will be OK.”

Her response: “But, are you sure?”

Since there is still a lot more of this column left, you’ve probably already figured out that there is more to our story than a simple throttle stop adjustment. The vehicle was returned 11 days later with a continued complaint of a stall and die at idle, but only under extreme temperature conditions. And, not before we were called to task for our failure to isolate and identify what should have been “a simple, yet obvious problem.” More distressing was the assertion that we didn’t seem to understand or care.

I don’t know about you, but I don’t handle that kind of criticism well. Not in person…Not on the telephone…Not ever. I generally manage to maintain my composure, but not without an internal struggle of almost epic proportion.

I have a wife who I care about a great deal.

To say that she is “automotive technology illiterate,” or at the very least “automotive technology impaired,” would be a gross understatement. One of my greatest fears is that she will get stuck someplace because I know that beyond calling me, she would be lost.

I have a daughter who, despite the fact she has spent more time in a shop like yours or mine than a lot of people who have made this a career, understands less about cars and trucks than my wife does.

I have a son who loves cars, driving, and speed and performance. But, it would be safe to say that in his case, the genome responsible for understanding anything mechanical skipped a generation!

To suggest that I don’t understand or appreciate the level of anxiety that automotive problems can generate: especially intermittent automotive problems, is inaccurate if not just plain insensitive.

I “get it”! Everyone here “gets it”! Everyone I know who takes this industry seriously “gets it”! That’s why we all work as hard as we do to ensure the vehicles that leave the shop are repaired right the first time!

I know how good we are at what we do. I know the lengths we will go to in order to duplicate the conditions under which a vehicle might fail. To have someone tell us that we failed to find a “simple, yet obvious problem” when the weather would not cooperate or the vehicle failed to fail, was maddening.

We did what anyone who has been doing this for a lifetime would do. We went back to the beginning and started over.

The first thing we found was a series of erratic IAC motor counts that were all over the board and never consistent with where they were supposed to be. The signal was good, the resulting movement of the idle air control motor was not. We called for authorization.

“Will this ‘fix’ the Suburban?”

“I can’t be sure it will eliminate the stall and die. But, I am sure it will help eliminate an erratic idle problem that could contribute to the stall and die condition and should ensure much better idle quality.”

“But, are you sure?”

Despite the fact we could not guarantee total success, we received authorization to replace the IAC motor, and that we did. The result was stable IAC motor operation and a rock-steady idle.

We forced the vehicle to operate at higher than normal temperatures and began to cycle the Suburban through a series of operational tests. It finally began to symptomize and ultimately died for us. The problem was now repeatable.

We verified the computer was adding both fuel and air. In essence, it was doing whatever it could to keep the vehicle from stalling. But, the engine continued to lose rpm, eventually stalling and dying with symptoms very consistent with the torque converter clutch locking up. We weren’t that lucky; it wasn’t going to be a “simple, yet obvious” transmission problem.

We continued to look at the vehicle, adding equipment as we moved from testing one system to another. Ultimately, we were able to verify a loss of signal from the ignition module to the PCM, which we identified as the ultimate cause of the intermittent stall and die.

We removed the distributor cap and rotor and then the distributor, and this is what we found (see Photo 1). Not only was the module failing intermittently, the pickup was in pieces and the bushing was worn enough to allow the shaft to wobble wildly. When all was said and done, the fact that the vehicle would stall and die intermittently under any condition wasn’t a surprise. What was surprising was the fact that it ran at all!

We called our client and explained what we had uncovered, forwarding the digital images you see here. We told her we were confident we had isolated the problem and that a replacement distributor would put an end to the anxiety associated with never knowing how, when or where the vehicle would fail.

I tried to assure her that this particular problem needn’t remain a problem any longer.

“But, are you sure?”

“As sure as anyone confronted with the same information can be,” was all I could reply.

We called her brother, the patriarch of the family, and explained to him what we had uncovered, also forwarding him the digital images. We received authorization to replace the distributor and to continue testing, if required.

Thankfully, further inspection and testing was not required. The vehicle ran even better than it had ­before — before it started to stall and die without warning — and that was pretty damned good!

We delivered the vehicle and off they went. Two days later the phone rang. It was the Suburban’s owner calling to let us know that the vehicle had never run better. It was smoother, had more power and seemed to be getting better mileage. That sounded like the perfect trifecta in our world. Nevertheless, I couldn’t help myself…

“But, are you sure?”

She laughed and replied, “You bet I am!”

Mitch Schneider is an author for autocarepro news.  You can email Mitch at mitchelljs@mitchsworld.com.

Content provided courtesy of autocarepro: news; providing automotive shop owners, managers and technicians with a website and e-newsletter filled with products, tech tips and automotive news needed to be successful in the marketplace.

By Rick Spahn. What would you say is the most valuable tool in your auto repair shop? If you did not answer your shop management system, then you could be missing out on many opportunities to streamline your business and maximize success.

More than just writing repair orders, shop management systems are the lifeline of auto repair shops. Let’s face it; incorporating a system into your business that addresses your specific needs is critical to the success of your shop, not to mention keeping your stress level as an owner or employee to a minimal level.

When it comes to selecting a system, the options may be overwhelming. Approaching this madness with some method can help to make the selection process a painless one.

There are certainly numerous factors to consider when choosing a shop management system; however, the top five most important factors to take into consideration include the following: Efficiency, Profitability, Customization, Ease of Use, and Cost Effectiveness.

Efficiency

The best gauge for determining the efficiency of a shop management system is to measure how many time-saving features are incorporated into the software. Eliminating “double processes” such as data entry for repeat clients is a great time saving tool, not to mention an immense helper when it comes to eliminating errors on those days when the atmosphere in your shop is “hectic”.

Managing inventory and customer retention are also huge time and money savers which should be examined. Having the ability to track return and core parts can add up to a surprisingly large amount. Just think of what you could do with that new found money not lost to return and core parts…did somebody say vacation?

Statistics have shown time and time again that it is significantly less expensive to retain an existing customer, than to market to a new one. How many people have brought their vehicle into your shop over the years for repair work, but never came back for routine maintenance? By fixing their vehicle, you have certainly earned their trust, so why not ask them to visit your shop for routine maintenance? Selecting a shop management system that manages customer history and allows you to target market those clients can help your shop to build a healthier bottom line. Having this feature built into the system can help to ensure that the marketing pieces being sent are relevant and not junk mail.

It is important to implement a complete system that includes the tools necessary to manage other aspects of your business, such as marketing and inventory. These additional time-saving, organizational, and comprehensive efficiencies are critical to help maintain consistency throughout all aspects of any given repair shop.

Profitability

As mentioned earlier, a repair shop’s lifeline is the shop management system on which it operates. Selecting a shop management system that monitors your shops profitability is essential to staying on top of your business. Your shop management system should also be proactive in building that bottom line by trying to gain additional business from your customers when they check their vehicle into your shop. As any service writer can attest, it is easier to talk to the customer and sell additional recommended services when the customer is scheduling their appointment as opposed to a phone call that is made and causes an interruption to the customer’s day. Just by taking this proactive approach to profitability, by showing a customer that they are due for a service, and selling it to them up-front, can help improve a shop’s profitability and efficiency.

Customization

While all auto repair shops are in the business of fixing and maintaining vehicles, the way in which they conduct business and handle the workload of the shop vary from location to location. With this being said, having the ability to conform a software program to the processes of an individual shop as opposed to a shop having to learn and adapt to the processes of a software program is an important factor to consider when selecting a shop management system.

Ease-of-Use

Even though a shop management system should be complete, comprehensive and capable of handling multiple aspects of your business, the software should not require two PhD’s from MIT to operate. Clean and simple, well-laid out work-flow paths and processes should be part of the system. A shop management system that offers product training and is easy to use and understand is a system that will have a high success rate in an auto repair shop.

Cost Effectiveness

Anyone who has recently been in the market for a new shop management system may have been surprised to learn that pricing for systems is all over the board. From $500 to $15,000 plus, for a single system, there is a wide range of pricing available.

Some things to consider when factoring the cost of a shop management system:

• Do I want to own or lease the system?
• What are the long-term costs associated with a shop management system purchase?

Repair shop owners should be aware of what exactly they are purchasing. While systems that are purchased may initially have a higher price tag, is the extra dollar amount worth it in the end? Take into consideration why you opened an auto repair shop in the first place. Aside from your love of tinkering with the mechanics of cars and a garage full of great toys, you were probably lured into the business because it presents a great opportunity for a nice retirement when you choose to sell your business. Think of how much more valuable your business would be if you had an established shop management system in place with a detailed customer base to sell along with that business. With that in mind, be aware that some shop management programs are leased and cannot be sold with the business. This being said, do you really want to make payments on a system that you will never actually own?

Additionally, it is important to figure into the equation the “add-ons” that are associated with the system. Some features that you may select as a shop owner, are not always part of the core package of a shop management system you maybe looking at. Asking the right questions when in the decision making stage of your purchase can help to avoid “surprise” monthly fees associated with operating your system.

In conclusion, have an open mind when looking for a system. Don’t fall into the trap of comparing the data entry processes of your current system with new systems you may be looking at. Remember, the perfect time to make changes for your shop so that it will run the way you envisioned is when you are selecting your shop management system. This is a great time to change things about your shop and to apply the goals you have envisioned. Start with the end in mind. Where to you envision your shop in the future? What are your goals for the shop? What is it about your shop now that you want to change? These are the questions to answer and using the right shop management “tool” will help you get there.

Rick Spahn is a former ASE-certified technician and owned an auto repair shop in the Chicago area for 13 years. He founded Pace Software in 1988. With the help of talented software developers and input from many shop owners, the program evolved into the YES Management System. He takes great pride in knowing that our software has helped hundreds of shop owners improve their quality of life and achieve their business goals. Contact Spahn by email at rick@pacecomputer.com, or by phone at 1-800-336-1615.

By George Witt. I remember my first job as a Service Advisor in a dealership, before shop management computer systems.  The training was intensive— “Here’s your clip board, there’s your work area, the doors open at 7am.”   It was “Lightning Bolt Training” at it’s finest.

The customers were lined up before we opened and they poured into the Service Department in an overwhelming, steady stream until 9am.  It was 2 hours of the most stressful work I could imagine.  We did take appointments, but only used the appointment system to fill up the day and fill it up, we did.  We were sold out of time when we opened and that’s how it worked.  Cars were routinely held over or rescheduled for more work.  It was zoo, but that was how it was done.  Too often, that’s how it’s still done.

Before we can train our Front Counter Staff, we have to have good systems in place for them to learn and use.  Good systems and procedures should be designed to make it harder to mess up the job than to do it right.

For example, job codes in the computer system should be intuitive.  All things having to do with brakes, for example, should start with a “B”.  Well, duh!  If you don’t know what the correct operation is for front brake pad replacement, hit “B” and search the drop-down menu to find “BPF” or “Brake Pads, Front”.  Oh, your system shows that as “Front Brake Pads”.  You’ve got some work to do…

Job kits should be the same way, easy to find in a few seconds.  This is the fastest way to have a novice producing accurate, complete estimates in a short time.

The shop management software should have a display showing hours available to sell and hours sold prominently on the screen where it’s easy to see, so the shop can be properly loaded easily by anyone.

A shop’s front office should be set up in such a way as to enable the shop to hire someone who knows nothing about cars and have them functioning comfortably as a Service Advisor within 2 weeks.  It may sound far-fetched, but it’s not.

In fact, failure to do this results in training the front counter staff for months, just to get things to flow right.  In reality, this makes the job too difficult and stressful.  There are too many things to remember and too many little things to forget.  There’s no reason to be the kid who had training wheels on their bike for years.

In the book, “Good to Great”, it was said that the most successful CEOs had “all the right people on the bus, all the wrong people off the bus and all the people in the right seats…”

In order to have all the right people in the right seats, we have to determine what skills are the most important for each job.  A parts person needs to be very detail-oriented and they’re not the person you want in contact with your customers all day.  A Service Advisor needs to be very people-oriented and that kind of person isn’t always a good technical person.  I disagree with the idea that you put a technician on the front counter.  I want a Service Advisor who loves working with people all day long and I don’t care if they know much about cars or not.  I want them to enjoy building relationships with customers and helping them solve their transportation problems.  I want that customer to ask for them by name the next time they call.

It’s been my experience that the techs will do a better job of writing out what the car needs and why if you have a good salesperson on the front counter who doesn’t have good technical skills.  My techs have flat out told me that they go out of their way to give the SA a good sales presentation.  They know that, if they do, the work will get sold.

My customers have commented on “how knowledgeable our front counter staff is” about cars.  It’s very seldom that any customer has technical questions that need an in-depth technical explanation.  When that happens, we get the tech to explain the job to the customer.

What this boils down to is simple.  If the Service Advisor establishes credibility with the customer and sells them on the idea that they will be their ally and will work on their side, very little selling is actually necessary.  The SA simply explains what all is found on the car, prioritizes it for the customer and asks what they’d like to do about it.  It’s all about trust.  The customer trusts the Service Advisor, who in turn trusts the techs.

In the beginning, training the Service Advisor consists of learning how the shop’s systems and procedures work and that shouldn’t take long with the support of other workers.

The next part takes longer and involves more skills.  I developed a Service Advisor class and the book is fully written out and covers 36 pages of basic skills, from handling the price-shopper phone call to dealing with Sam Ting (you know, “Uh, car do Sam Ting, now you fix, I no pay!!”) to people who want to bring their own parts and everything in between.  There are many classes like this offered.  The trick isn’t just to sit through it once.

Mastery of the material starts with that, but then continues with taking a page or 2 a week and working on mastering those things and then going on to more material until every last thing in the book has been mastered.  This may take months and the speed varies with the worker.  This is probably where most front counter training begins to break down, as I don’t believe most shops carry training out this far in this much detail.

OK, so now we have a completely trained front counter person.  Right?  Right?   Uh, no.

One of the most important jobs of the front counter is to properly load the shop daily and I think that takes another separate class in order to really understand how to do it.  So, now we put them through a class on “Workflow, Scheduling”, following the same training regimen.  This should go much faster, because there are fewer things to master and they’re generally easier to do.  Now, we’re trained, right?  Not yet.

If the front counter staff doesn’t really understand the value of a technician’s time, they can’t do a good job of supporting the techs and getting them the parts and approvals they need in timely fashion, so production and sales will suffer.   Therefore, they next need to take training on “Technician Time Management”.

Where I’m going here is simpler than you might believe.  In order to really function as a front counter staff should, they all need to have management training in many different areas.  Their performance is directly related to how well they understand the overall workings of the shop.  The better they understand the underlying management theories behind all those little things they are called upon to do, the better job they can do for the shop.

In short, they need to earn the Automotive Management Institute’s (AMI) Specialized Degree of “Automotive Manager, Service Advisor” for mechanical shops and “Collision Manager, Estimator” for collision shops.

The AMI Board recognized years ago that, in order for a shop to really function well, every job position in the shop needed some management training.  The Board spent over 2 years detailing which courses were needed by every position in both mechanical and collision shops and went further to determine the exact minimum content of each course.

The result is the new Specialized Degree program, which you can view in more detail on the AMI website:  www.amionline.org

I guarantee you that when your staff all earn their respective degrees, your shop will be as close to “cruise control” as it can be.

Selection—skill sets

Systems—job codes—job kits—estimates

Organization—procedures for paper flow, dispatch of work, parts procurement, customer flow

Finally, training the staff….

Check out George’s training programs click here.

George Witt is the owner of George Witt Service, a Honda and Acura repair shop. He is an ASE certified Master Technician and service advisor, an AMI Accredited Manager, and an AMI Approved Instructor. He has presented management training classes to thousands of shop owners from coast to coast.

I arrived at the store and saw a sales person straightening up stock. I approached and stood nearby. No response from the person, who then moved away from me to another shelf to straighten a few more things. OK, didn’t see me, so I walked casually over to the area and again stood waiting for any sign of recognition. It seemed now this person was flat avoiding me, so I scanned the store and saw the rack with my coat on it.

As I approached that rack, I was greeted by a sales person who offered to help. I told her I was looking for the warmest coat they had in the store. I showed interest in my coat and she gave me the sales pitch. “This one has an 850 down rating”, she proclaimed. When asked what that meant, she had no idea and after further questioning from me, she became a little frustrated and told me that the coat “wasn’t rated” for the cold. After further questioning, I found out that only meant it hadn’t been formally tested, while other coats in the store had.

I tried one of them on and it was so long and my arms so short, I had to pull the zipper up to get it started and this wrinkled the zipper enough that I couldn’t get it started easily. I took the coat off and said I couldn’t wear one with that difficult of a zipper. She hung up the coat, straightened it out and effortlessly put the zipper together and zipped it out, then turned and look at me. She was showing me what an idiot I was.

After trying to convince me that other coats were better, I still liked the first one best and finally left the store in frustration. I told myself I wasn’t going to pay sticker when I knew they have things on sale all the time. I had gone from a “customer who recognized value and was more than willing to pay for it” to a “bottom-feeding price shopper”.

I went to a large sporting goods store and was cheerfully greeted by 2 men in front of the men’s coat department. I told them I wanted the warmest coat in the store and they took me back and introduced me to Melissa. Melissa was as bubbly and cheerful as you can get and was clearly delighted to see me. After a few questions, she asked me what I wore next to my skin when I put on a coat. When I told her a cotton tee shirt, she said that was part of the problem. I needed a super duper shirt that would wick away the moisture. She said I needed that, a fleece intermediate liner and an outer coat. She finally pulled out a red (my favorite color) North Face coat that looked fabulous. It was $20 less than the red Eddie Bauer coat I’d been looking at.

She continued to bombard me with in-depth product knowledge on everything from coats to gloves to hats and on and on. She was very personable and enthusiastic and it was just fun to be around her. When I remarked about her knowledge, she said she’d been sent to a “cold weather” school for special training and was now a cold-weather expert. She really was. When she got done with me, she’d sold me the long-johns, liner, coat, special gloves and a really cool hat, to the tune of nearly double what I’d have spent on the first coat (and not one single thing was on sale or marked down—she got full sticker out of me!).

I had the pleasure of dealing with a well-trained, highly knowledgeable sales person who cared about her customers. Not only did she get full price out of me, she made me feel great about it and, believe me, the next time I need anything in her area of expertise, I’ll gladly search her out. She made me feel great about giving her all the money in my wallet (grin).

What’s the difference? Both stores had premium merchandise, the best there is and not a single piece of cheap stuff. Both stores had ample inventory, both had attractive displays and easy to navigate layouts. Both stores had nice signage and great “curb appeal”. Both stores had great reputations for being a quality place to shop.

The difference was, one store hired low-paid, low-trained clerks and was clearly saving money on payroll. The other had well-paid, highly qualified people that had been to great training, both for sales and for product knowledge.

So, what’s this got to do with an auto service business? Just about everything. You put the people from the first store on your front counter and all the people in your town will become “bottom-feeding price shoppers” who just don’t appreciate quality work. It happened to me and it was purely a reaction to the way I was treated. It was clear to them that I was a pain in the rear and they let me know it. In the future, they might allow me to come in and quietly select what I need or take what they give me, but if I want any more than that, I should stay home.

Now, put Melissa on your front counter and watch all the customers come around in attitude and open up their wallets. Sales will soar, problems will evaporate and order will be restored.

If you’re the shop owner and you tend to see the customer as an adversary or dread when certain people come in, perhaps you should consider finding, hiring and training a Melissa. You either love working with people or you don’t and you can’t fake it.

If you think you’re in the car business, you just don’t understand retail. You’re not a shop owner, you’re a business owner. The business must cater to those who have needs and the means to pay to solve those needs. In order to get the money, we must first please the customer.

Here are some important tips:
1. When the phone is answered, it must be done in a way that brightens people’s day. Make them feel better just because you answered. Just like dogs can “smell fear”, people can smell a fake a mile away.
2. When the door opens, somebody has to be delighted that people are here. They’re bringing your grocery money and you need to act like it. Whoever feeds the dog earns the dog’s trust and the dog goes nuts when you come home because they’re so glad to see you. Why can’t you be smarter than your dog?
3. You need to furnish your customers with great information on how to take care of their cars and avoid car trouble. In addition, when the car’s broke, you need to provide them with simple, short explanations of what it needs and how bad it needs it. Does it have to be fixed today, or can the expense be deferred a while?
4. Show a little humor and enjoy the company of your customers. They’re your friends and if you treat them with the respect that comes with friendship, they’ll treat you the same way.

If you want real referrals, customer loyalty and less price-shoppers, this is how it gets that way.

Check out George’s training programs click here.

George Witt is the owner of George Witt Service, a Honda and Acura repair shop. He is an ASE certified Master Technician and service advisor, an AMI Accredited Manager, and an AMI Approved Instructor. He has presented management training classes to thousands of shop owners from coast to coast.

By George Witt, AAM. There are some who will argue that there is a Great Division now forming in our Industry between the shops who don’t attend training, don’t buy tooling and don’t stay current in the business and those shops who do. They say that the untrained shops will finally fade away, unable to perform the most basic repairs. The trained shops will survive and prosper. The day of reckoning has finally arrived, they conclude. 

Well, I’ve been hearing this same chorus for decades and, so far, nothing’s really changed in our Industry. However, current economic conditions have now led me to a new belief, that there is a “Great Divide” coming. A Great Divide between those shops who can survive by adapting to the new market place and those who can’t or won’t.

First off, let’s cover the first point—shops that can fix cars will prosper. Just because you can fix a car doesn’t mean you can get people to come in and pay for it. The old days of hanging out a sign and having cars fill your bays are over for most of us. It’s been proven over and over that a good front counter can overcome the worst back end shop. However, the best shop operation can’t overcome a hostile front counter. People just don’t buy from people they don’t like. So, we have to focus on the front counter operation as the key to our survival.

Next, we have to look at our Industry business model and realize that we’re one of the few industries whose way of doing business is pretty much unchanged for decades. Sometimes the changes required of an industry are so subtle, they are missed by many. Right after World War II, grocery stores were all over the place, since most people had to be able to walk to them. Mom and Pop had little stores about the size of today’s convenience stores. In the 50’s came the dawn of the “supermarket”, which offered much bigger stores, lower prices and a much greater variety of products. They quickly swept the market and Mom and Pop were all gone within 10 years. The grocery stores had regular 9 to 5 hours, just like Mom and Pop. In the 60’s, somebody had the brilliant idea of little “convenience stores” with long hours, so you could get bread and milk after hours. They put in gas pumps to drive more traffic to the stores and focused on high profit items like pop and chips and thrived. There are convenience stores all over the place now.

Just think if Mom and Pop had just slightly converted their business model, put in gas pumps and extended hours. They could rule the world today.

But, I digress. The key to survival today is to be flexible, adaptable and work smart. The mass of car dealership closings has opened up a whole new array of potential customers for us. These are people accustomed to paying for car service and getting the car fixed. This potential benefit is offset by the number of good techs suddenly unemployed, some of whom will take up operations in the back yard. Suddenly, we have a new generation of “Back Yard Bobs” to compete with us, who can fix cars. Well, with every asset comes some liability.

The first thing we need to have to survive is an understanding that we’re not shop owners, we’re business owners. We have a business and we happen to fix cars. In one sense, business is more important than cars. It doesn’t matter if we can fix the car or not if we can’t generate the revenue to make the business model work.

The key to business survival is vision and belief. If you can’t see yourself as successful, it’s going to be difficult to be successful, since you lack the belief to carry it out.

So, your first objective is to either change your thinking or reinforce it, as the case may be. Visit any book store and go to the self-help section. Start looking at motivational books. Pick them up and open to any page. Read a few paragraphs and see if it charges you up. If it doesn’t, keep looking and if it does, buy the book. The idea is not to read the book, it’s to use the book to get into a positive frame of mind. Reading a few pages every morning can get you excited about the day and positive about progress. This is necessary as the shop owner or manager sets the tone for the rest of the team. Negative leadership gets negative results and positive leadership can bring out the best in people. Lead from the positive side.

Next, consider how you and your team dresses. If you have sharp uniforms for your crew, good for you. If not, you have a new objective, especially if your crew looks like they just got off a pirate ship…

Far too many of us wear tool company T-shirts and hats when off work. This can cause us to feel out of place in some social settings and make us think we’re not getting the respect we deserve in our community.

Buy some nice clothes to wear socially. You don’t have to buy a lot, but nice clothes can make it easier to maintain a positive self image. Remember, you’re now a successful business owner (not just a mechanic or shop owner).

OK, you’re now thinking about positive success and looking like it. It’s time to act like it. See how your shop fits into the new American value system. We’re making a change from “conspicuous consumption” as an admirable trait to being practical and making things last. It would appear that the latest bubble to burst is the “car bubble”. It’s not likely that people will begin to buy new cars at rates previously enjoyed by the car companies. The current economy has many people very reluctant to borrow money, particularly for a depreciating asset like a car. This means that maintaining the car they have will become more important to many people.

It’s very important that you have a good maintenance system to keep the car reliable and that this system is very value oriented and cost effective for the customer. In other words, the money they spend should yield good results, not just produce sales for your shop. You must review the maintenance history on every car every time, or you won’t deliver the value that these people want.

It may be desirable to create several levels of service or quality that people can choose from, in order for your shop to appear to be price-competitive on many of the things people call and ask prices about. We’ve have very good luck at our shop in offering 3 levels of oil changes, with the difference being the quality of the motor oil. Many of our customers are now spending more on oil changes than before and opting for better motor oil. Simply offering a low price on many of these items will be enough to satisfy most customers. They may not ever buy the low end, but knowing you have it will be enough for them.

We’ve tripled our tire sales by presenting people with a choice of 5 or more different tires so they can choose the one that fits their needs the best. This seems to have ended the price-shopping we use to get when we just told them how much a set of tires would be. We instead get them thinking about which tire they should choose and having choices causes them to feel like they’re getting better value.

Finally, you must continue to market aggressively. This may not mean spending a lot of money, but it does mean you’ll have to work for business. One shop owner got tired of standing around for 2 weeks and started calling his customers to see if he could get them to make an appointment. It worked so well he got almost a week behind.

Your customers may be out of time, they may be concerned about conserving money, or both. You’ll have to reach them through service reminders, postcards, Newsletters or phone. Stay in touch and educate them about their cars and the importance of regular maintenance.

Hold Car Classes for Women or educational seminars on how to get better fuel mileage or the future of energy. Promoting an event is far different than asking for money and might be a better way to get referral business.

Talk to your better customers about their thoughts and needs and be prepared to adjust your shop operations to fit them. Obsess over details and deliver what they want.

Many of those dealership customers who said the dealer was too expensive weren’t complaining about the price as much as about how they felt when they left. You might even charge more and deliver better personalized service, causing them to comment on how much less you charge than the dealer. I’ve actually heard these comments before in some cases.

In summary, we must think successfully, dress like it and act like it. We have to be flexible and ready to adapt as needed in our own market.

GM and Chrysler should prove to us all that, in business, it’s not the big that eat the small. It’s the fast that eat the slow.

Check out George’s training programs click here.

George Witt is the owner of George Witt Service, a Honda and Acura repair shop. He is an ASE certified Master Technician and service advisor, an AMI Accredited Manager, and an AMI Approved Instructor. He has presented management training classes to thousands of shop owners from coast to coast.

By George Witt.

Traditionally, many shop owners are ill-trained to deal with this, so when things come up, they bite their tongue and stick the problem in a bag. This continues until the bag is so full, it explodes and an unpleasant scenario unfolds. People who behave this way are called “baggers”. They’re always sticking problems in a bag.

Ken Blanchard, author of the “One Minute Manager” calls this management style, the “leave alone—zap” method. Workers are left alone until they finally do something bad enough they get zapped. They aren’t praised for doing good things; they’re only zapped when they do bad things. Therefore, if you haven’t heard from management in a while, you must be doing OK. After all, if you didn’t get zapped, you must not have done anything too bad, right?

Psychologists will tell you behavior-modification training isn’t that difficult. The best punishment must have 3 qualities: it’s immediate, it’s consistent and related to the crime.

Consider the infant who is always learning. One of the first things a child learns is the meaning of the word “hot”. Whenever a child touches something that’s too hot, what happens? They get burned. Do the burns show up 3 months later? No. Do they sometimes get burned and sometimes not? No. The resultant burn is most certainly related to the crime. The hot surface ALWAYS produces the same punishment: it’s immediate, consistent and related to the crime. That’s why almost every child knows and respects the word “hot”.

Now, before we get too carried away with the punishment phase of this, let’s consider that the ratio of “pats-on-the-back” to “kicks-in-the-butt” should be roughly 5 to 1. In other words, workers should be praised for doing a good job when they do it.

OK, let’s say there’s some behavior going on that you need to modify. It only involves one worker. DON’T take them to your office; you go to their work area. The first conversation is best held on “their turf”. Tell them you’re in a pinch and need their help. For one reason or another, a certain behavior pattern has developed and you need their help to correct it. Explain calmly what they’re doing. Explain why this isn’t acceptable behavior. Explain what you expect them to do and ask them if they can do it. It’s very important that all conversation address itself ONLY to the behavior itself, not to the worker personally. Whatever you do, stay calm and don’t raise your voice. Don’t threaten them with their job.

It’s basically “you’ve been doing this and I need you to do that” type of conversation. Finish it up with a positive reinforcement of them as a person. Phrases like, “you’re better than to behave like this, this isn’t like you” and “I know this is no big deal for you to correct” can be appropriate. “I have confidence in you and I believe in you” can also be powerful motivators.

Our goal when we’re all done is for the worker to focus their thoughts on what they’ve done, NOT on “how they were treated”. Abusive language on the part of management only breeds resentment and that won’t change behavior, it only makes it worse.

Write up a summary of what you talked about and date it. Put it in their file. This is documentation of a “verbal warning”.

Next, we need to watch carefully for evidence of new behavior and to compliment it as soon as it happens. “Thanks for doing that” are great words to hear. Positive reinforcement is a must. In most cases, that’s all there is. Problem solved.

If not, a second verbal warning might be in order, similar to the first. Check and see if the correct behavior is addressed in the job description. If it isn’t, it’s time to update the job description. Print 2 copies of the new job description (or bring 2 copies of the existing description). Bring them with you to the second verbal session. In the second, make reference to the date of the first. “We talked about this last Tuesday…..” Again, be firm and explain that there is no compromise on this issue, it must be addressed and corrected. Be sure you tell them you feel they’ve let you down and you’re disappointed about it. Hand them a copy of the updated (or original) job description. Read over the important part with them. Again, finish it up with positive affirmation. Write up another summary and put it in the file.

If these steps don’t work, write up a “Written Warning” documenting the dates of the verbal warnings and summary of what they were about. I generally do written warnings in my office, with no interruptions. Carefully outline what is expected and what is unacceptable. The job description must be cited and attached. Include a line for your signature and 2 places for the worker to sign. The first says, “I agree with the above statements” and a place for them to sign. The second says “I disagree with the above statements for the following reasons” and a place for them to sign and room for them to write underneath. They must then either agree or explain in writing why they disagree.

There should be 2 copies, one for each of you. Give the worker his copy. Tell them that if this fixes it, this document will be destroyed and off their record in a year. Again, it’s important that you follow this up with praise for the new behavior if it occurs.

If the behavior isn’t corrected by now, you have a decision to make. If it’s really important, you may have to let the worker go. If that becomes necessary, write up another “Final Written Warning”. Cite dates of previous verbal warnings, the date of the previous written warning and the behavior in detail.

Explain that this continued behavior may result in termination if it’s not corrected. Again, have the 2 places for them to sign. It’s best to have another supervisor or someone you trust sit in on the session as a witness. Explain to the worker why the third party is present and that the witness is not a participant, only a witness.

Go over this one more time. Explain that this simply cannot continue and must be addressed. Finish with a positive affirmation. Get the signature.

After that, it’s “SEE YA” if it’s not fixed. You have all the ducks lined up; you’ve given them every chance you could reasonably be expected to.

Don’t let the inmates run the asylum. It’s YOUR business, your money and your butt on the line, not theirs. If it’s gone this far, you’re better off without them.
This generally helps the overall morale of the group. Never discuss that worker’s situation with others. It could get you in trouble and isn’t necessary. Everybody already knows what’s going on.

Depending on the behavior, this doesn’t have to take months. This could all be done in 4 days or less.

I had a problem with work quality with one of my guys a while back. Apparently, he was going through some personal issues at the time and never did tell me what they were. We finally had to do a written warning. That fixed it. The other day, he caught me at his tool box, whipped out his copy of the written warning and said proudly, “You said if I went a year, this would drop off my record”.

I grabbed his copy and agreed. “Come with me” I said. We walked straight into the office, I stuck it in the paper shredder and as it was being shredded, I waved at the disappearing paper and said, “Bye-bye”.

I turned and shook his hand and thanked him. It was a bonding moment for both of us. This stuff works if done right and this is one way I know to do it right.

Children are most comfortable when they know the rules and the rules are enforced. So do adults. It’s your job as manager to see that all rules are enforced and that those who do obey the rules are rewarded.

Just remember the “hot” rule: immediate, consistent and related to the offense. Works every time.

Check out George’s training programs click here.

George Witt is the owner of George Witt Service, a Honda and Acura repair shop. He is an ASE certified Master Technician and service advisor, an AMI Accredited Manager, and an AMI Approved Instructor. He has presented management training classes to thousands of shop owners from coast to coast.

Auto Repair Shop Social Networking Gone Wrong

When Sears Auto in Savannah, Georgia put a new set of tires on comedian Ron White’s van, and forgot to replace the lug nuts on one of the wheels, they had no idea of the long term damage it would inflict on their reputation. And how they responded to the incident and Ron “spinning into a dimension of pissed off he had never been in his life” may have cost them more than they ever imagined! Rumor has it that when he threatened to sue them, after what he thought was an inadequate compensation offer, Sears agreed to Ron using the indecent in his comedy act if he dropped the law suit. I bet they regret that decision.

WARNING: This video is hilarious, but includes frequent FOUL LANGUAGE. Click Here

Everybody Counts

Obviously the Sears representative who made the decision to brush this incident off had no idea of the power of social networking, celebrity status, television syndication, CD sales, or YouTube videos. I suppose they thought this guy would take his anger and dirty little story, tell a few people, and quickly disappear. An inexpensive way to avoid having their name dragged through the courts. Boy were they wrong! Somebody didn’t do their homework before that negotiation.

Celebrity Power

Ron White is a very well known guy in stand-up comedy and his “Tire Guy at Sears” routine is extremely popular. Sold out live shows, TV specials, syndicated broadcasts on the major networks and satellite TV to list some of the media exposure he gets. I’m sure hundreds of thousands of people have heard about his bad experience at Sears. And will continue to for a long time yet. At last count over 135,000 people have watched this copy of his “Tire Guy at Sears” skit on YouTube alone!

Big Mistake

Where did Sears go wrong? The root of the problem is the lack of a corporate policy or, better, a mission statement that guides employees in situations like this. At the scene it goes back to moments shortly after the service failure happened. There was no question Sears was responsible. They should have accepted it and gone into damage control mode. The manager should have done everything possible to make amends to Mr. White. Accepted full responsibility, offered to handle the situation: all repairs to his vehicle, compensation for any expenses for inconvenience – vehicle rental, travel disruption, accommodation, food, etcetera. In the long run they could have rescued this service failure and may have even got some positive spin from Ron if they truly impressed him. Instead they have a PR black cloud that will haunt them forever.

Disaster Plan

Have you though out a rescue plan for the inevitable service failure? Or are you going to take your chances in the social networking court of public opinion.

Cheers,
Doug

This article was written by Doug Fentimen as a blog post on his Automotive Service Internet Marketing Website robertmaxim.com

About the author:
Doug Fentiman is an authority on auto repair shop website marketing and founder of Robert Maxim International. Robert Maxim provides an inexpensive, easy to use website based marketing system that is designed from the ground up for automotive service and repair shops. We help shop owners build profitable businesses from lasting relationships with quality customers.

A Trip to the Local Repair Facility

If you ask a woman about her favorite places to shop, I don’t think you will find that getting repairs done on her car is anywhere near the top of the list. This is the primary indicator that shop owners don’t know how to sell a product or handle people. There is a technology to selling a product and to handling people. If most shop owners were properly trained and understood the basics of dealing with people, then women would not complain that going to get their cars repaired is like a trip to the dentist.

Moving Too Fast

Let’s take a typical situation of a woman having to take her car to a repair facility. A good example is the wife of a friend of mine. She needed some work done on a little sports car she loved. She took the car into a local repair facility and got the car checked out. The shop did a complete inspection of her car and told her that she needed about $1100.00 worth of work. She had the work done, but told my wife that she would never take her car there again and she would never recommend that shop to anyone.

What happened!?! The shop moved too fast. They didn’t bother to make her a customer first, instead they went for the big sale. There was a very well known shop in Texas that used to do a complete inspection on a car and then sell the first time customer anything and everything they could. Everyone raved about how successful this shop was and it was touted as an example.

But if you kept statistics on the first time customer becoming a repeat customer, it would not have been very high. The rule is good customers don’t complain, they just don’t come back.

Making Them a Customer First

I visited a shop in Portland and watched how they handled their customers. They had a reputation of having a lot of women customers and were doing extremely well. What I found in watching them was that every person who drove up to the shop was made a customer first.

How do you make them a customer first? You find out exactly what they want and expect in terms of a repair facility. What kind of customer are they? What speed do they move at? How knowledgeable are they about cars? How much explanation do they want about what they need? Taking the time to understand what the customer really needs and wants is the first step to being able to give it to them.

Customer Speed

There are 4 kinds of customers in terms of speed.
1. The High Speed Customer
2. The Normal Customer
3. The Slow Customer
4. Not Your Customer

The High Speed Customer

The high speed customer is confident and moves very quickly. They know what they want. The key indicator is that they usually want their car in tip top shape. They don’t want problems. They got money, but not enough time. They are in a hurry. So they want everything checked and fixed. These are very good customers and are not the normal. They want it done right.

But the primary indicator is that they will tell you up front, without asking, that they want everything checked completely. A good example of this is the customer going on a trip and they bring their car in to make sure everything is in top-notch shape and tell you to do a complete check up.

Normal Customers

The normal speed for customers is a little more conservative. They don’t necessarily believe everything and it usually takes 2 or 3 visits before they become comfortable and start to trust you.

If you go too quickly for them, they will never say anything, but they will not come back. But even worse than that, they will tell others not to take their cars to you. So doing a complete inspection the first time you see them and then trying to sell them the works is an absolute bozo nozo. It is a fatal mistake to go too fast and try to sell too much.

Slow Customers

You get a few customers that are very slow and it will take a lot of time and effort to gain their trust and develop a relationship. These guys will only buy what they absolutely have to have. They often seem to be quiet and it can be hard to get them to talk to you. Normally, they are not outwardly friendly. One could say they were a little “tight” or “tense” when they came in.

Your repeat customers are more open and friendly and will listen to you and your recommendations as long as they trust you and do not feel that you are trying to oversell them.

Not Your Customer

Unfortunately, some shop owners fail to recognize that not everyone that comes into their shop is really going to be a customer. Once the owner clearly defines who and what type of customer he wants, he will be able to recognize the customer that he doesn’t want.

Indicators

1. They only want the special done. If it is going to cost more, then don’t do it.
2. They are never happy. If you go out of your way to do something extra, they could care less and are afraid you are going to charge them for it.
3. They never say thank you. Again, no matter how well you treat them, they never say good things about anything.
4. They are super critical. When they pick up the car, they meticulously walk around the car and check everything.
5. When they drive in the driveway. You instantly recognize their car and start to get the hives!!

There are many important abilities and skills needed to be a successful salesman. One of the major ones is learning the speed of your customer. Remember, women tend to move a little slower, so you really have to be careful with this. The reward for handling women right is the fact that they will come back over and over with tremendous loyalty and refer you to others. But of course, that is true with any good customer.

Wishing you Success!

Mike Lee

Mike Lee has been working in the auto repair industry for over thirty years, successfully managing some of the largest independent transmission shops on the West Coast. He is currently the CEO of MANAGEMENT SUCCESS!, a company that specializes in training and consulting the independent automotive repair shop owner. Mike tours the country as an educational speaker and writes numerous columns and articles for trade publications.
Additional articles by Mike Lee can be read online at Shop Management Solutions.

One thing we frequently overlook when writing a repair order with one of the above complaints is identifying what the customer really wants. What? They want the leak fixed, you nimrod! Not always.

I remember a recent repair order on an old Camry reporting leaks. By the time my guys got done identifying all the leaks in the thing, the estimate was over $3500! Hey, there’s a sure sale….not. It was a kid’s car and Dad was none too receptive to the whole idea, to the point of dropping us as a service provider.

Whenever anyone wants me to “check it for a leak”, my first question is: “Are you most concerned about the car or your $126,000 hand-laid Italian marble garage floor?” This is a key element—what does the customer really want? If they have a nice house in a nice neighborhood and want to park their car in the driveway and not have to file an Environmental Impact statement with the EPA over the lengthening stains (heading toward the curb) on the concrete, then we need to be thorough in our analysis. Most people don’t care so much about that as they do wanting to be sure there’s not something serious going on with the car.

I’m generally pretty hesitant to take on oil leak repairs on older cars, because it can be a potential snake pit. Too many techs want to blow off the customer with the standard, “pull the engine and do a complete re-seal”, figuring the cost of that will shut them up and let them get on to better paying (and less risky) work.

Many years ago, I was a Service Adviser at an Oldsmobile dealership and the guys were diligent at reporting everything they found. “The oil pan gasket is seeping” came the report. “Well, we’d better fix it” was the reply. This set us up for nightmarish followups. Older cars seep and leak a lot and once you’ve fixed any leaks, Sam Ting is sure to be calling frequently. “Uh, car do sam ting—now you fix, I no pay!!”

The first thing I do when discussing oil leaks is to tell customers that older cars have earned the right to leak a little. Most minor oil leaks are really no big deal. So what if the pan gasket has a slight leak? It just doesn’t affect the safe operation of the car.

But I digress. Let’s go back to the leaking Camry and the mad Dad. My SA was already in over his head with a mad customer over our analysis and, furthermore, Dad wanted to know why he hadn’t been told about these leaks on previous visits.

I got on the phone with Dad and asked him about the car and what he expected the car to do (get Jr. to class and back, never going out of town or be the main transportation on the trip over the Continental Divide, across Death Valley and on to the Redwood Forest with a family of small children).

He said it was his kid’s car and needed to get him to school. I asked if oil spots on the pavement was any big deal. “Not really”, came the reply.

OK, this is easier now, I’ll call you back. I told my guys to identify the critical leaks and the source was traced to an oil pressure sending unit. Now, I’ve got a sale I can make, I did easily and Dad was now happy.

I like to separate leaks into several categories; seeping leaks and pressure leaks. Seeping leaks are gaskets and seals and pressure leaks are oil pumps, filter adapters and oil pressure senders. Pressure leaks are best fixed promptly, because they’re under pressure and, if they “let go”, the results can be disastrous. Easy sale.

Next, we have to further refine seepage leaks. First and foremost is the question: Will I run out of fluid? Power steering leaks are fairly easy to quantify if you regularly service the car. Is it out of power steering fluid? How low is it? I tell people they can buy a lot of power steering fluid for the cost of a rack with a small leak and they really appreciate that. In fact, my best selling techniques have been telling people what they DON’T need to fix. If you don’t have to add power steering fluid between oil changes, a good case can be made that the car isn’t really broke (that bad).

After that, will the leak affect the operation of the car? A power steering leak on the suction side can cause foaming of the fluid in cold weather and render the steering assist useless or impair it substantially. In addition, the foaming fluid can even cause the reservoir to overflow (with foam) and blow out more fluid. This leak should probably be fixed. Easy enough.

Next, will the leaking fluid cause other damage that will cost more to fix now than later or cause a fire? Timing belt seals, severe valve cover gasket leaks, or leakage that’s damaging a coolant hose are good examples. These do need to be fixed and the case to do so is easily made. Another easy sale.

So, what’s left? Seepage leaks and judgment calls. One of my standards is the underside of the car. If the entire underside is coated with oil and drops of oil hang off the muffler in the rear of the car, we need to fix it.

If, on the other hand, the underside is dry, then maybe it isn’t so urgent. In fact, when showing a customer who has a leak concern their car on a hoist, I look for drops of oil hanging. If I can’t find any, I can build an easy case that there really isn’t a lot to be concerned about.

I think it’s every bit as important to know when NOT to repair a car as when it IS important to repair it. Once we’ve “fixed all the leaks”, we may have set ourselves up for a relationship we’re not eager to embrace, if you get my drift.

Finally, let’s look at an oil leak job we may not even want at all—the dreaded rear main seal. This is the ultimate high-risk, low reward deal. The labor is nearly all the bill, the parts are next to nothing in comparison. The risk is extremely high and the potential gross profit very low. This is much like finding a mushroom when hiking in the woods—might look good, but do we really want to risk it?

We all know that a rough crankshaft, worn rear main bearing or other potential snakepits might await on this job. So, my advice is to be very careful when taking in this job and bid it super high in case you have to re-do it twice. You have to build that risk factor into the job. If they go shopping to see if they can “beat your price”, hope they do and breathe a sigh of relief. If they don’t, you’ve got the extra dough to smile and re-do it if you have to. This is not a job you really want to get into a custody battle over.

So, to wrap it all up—Always ask the customer what’s important to them. Do they want a clean floor or to just know the car is OK? Do they really want to fix the noise or do they just want to know it’s not something serious? Once we know for sure what the customer really wants, it’s much easier to meet the customer’s expectations and that’s the definition of a successful repair visit.

Now, in the case of noises, it’s a little hard to tell them it’s nothing to worry about if we don’t really know what it is. I think it’s very important to get a real good idea what the noise really is. Loose and worn sway bar bushings make noise, but hardly affect the safe operation of the car. Creaking ball joints are signs of impending doom. These just aren’t interchangeable on the importance scale and should be addressed as such.

If you can be thorough, professional and give the customer enough information to make a good decision to achieve their goals, you have a winning relationship that’s likely to endure over time.

Remember, “It’s our job to give our customers enough information so they can make the decisions that are appropriate for them at this time”. Everyone’s different and there are no universal right answers. Let each person make their own call and help them make good ones.

I frequently tell my own customers that I never worry much about how much I sell them on any one visit, I’m after all their money forever and, if I do my job right, I’ll get it all eventually. I want to be their trusted mechanic for a long time.

So far, it’s worked like a charm.

Check out George’s training programs click here.

This Article was reprinted with permission from Automotive Management Network’s forum. For more information about Automotive Management Network, click here.

George Witt is the owner of George Witt Service, a Honda and Acura repair shop. He is an ASE certified Master Technician and service advisor, an AMI Accredited Manager, and an AMI Approved Instructor. He has presented management training classes to thousands of shop owners from coast to coast.

By Tom Ham. If we take a look at a shop that survives slow times and another shop that closes its doors we will find the difference is typically in several key numbers. And, contrary to what many believe, those numbers are primarily due to the choices and the decisions of the shop owner. They may not be easy ones to make, but for most shops they are doable. Some choose to survive and others decide not to do so. Let’s take a look at a few of those key numbers so you can begin to create a roadmap for keeping your shop in good financial condition.

Total Spending:
If you spend like the government, or for that matter, like many Americans do, you may as well call an auction company today to get the closing process going. Money is serious stuff. Unfortunately, too many shop owners are focused more on fixing cars than they are at handling their money well. Just think of it; a relatively small shop today has a lot of money going through its hands. That amount is usually hundreds of thousands, or even millions of dollars. It would seem one could retain enough of that to survive, right? Your total spending, on everything except your salary and the net profit of the business, should not exceed seventy to eighty percent of your total sales. If it does, and business gets soft, you will be struggling at best.

Total gross profit:
Shops should not charge too much, nor should they charge to little. When shops close, the latter is often the issue. This problem becomes even bigger in a weak economy since the temptation is to discount excessively, reduce prices, and give things away. When going Christmas shopping at the mall recently, you soon found that many stores were discounting heavily to keep the sales numbers as high as possible. Yet, for many stores, sales still dropped. Not all stores took that approach. At least one well known clothing retailer stated that they were not going to play the discounting game, even though their sales were down over twenty-five percent. Instead, they were going to focus on excellent service and cost reductions. They intended to at least make decent money on the sales that they could generate. The total shop gross profit target, for all sales of all types, needs to be in the fifty-seven to sixty-three percent range. You should track the trend of this number weekly, monthly, quarterly, and annually to prevent you from winding up working all day just to trade dollars with little or nothing left for you.

Repair and maintenance found per car:
This is an extremely critical number that very few shops know, much less track. It is simply the total of everything that the tech found when he looked the car over. You estimate every single thing he found, right? If not, this is good time to start. Once you do so, then simply add up everything that is estimated and divide by the number of cars serviced to determine your average found per car. For the typical shop $500 to $600 is a very reasonable goal. Odds are that if you did an inspection with a fine tooth comb on ten cars in your parking lot tomorrow, you would come up with at least $10,000 in repair and maintenance. A reasonable inspection of every car in your shop should easily identify half or a bit more of that amount. If you ever wonder why your average RO always seems too low, this is one of the reasons. We sure can’t sell what we don’t find. And, if we don’t look, we won’t find it.

Oil change rate:
Of the cars in your shop during a normal week, how many receive an oil change? A common answer is: “As few as possible!” Unfortunately, that approach can be deadly today. We all know that an oil change, which might be better called regular factory scheduled maintenance, is the most frequent service that your customer has performed. It even comes with an advertisement for your shop nicely placed on the windshield! You want your customer and his or her car trained to go to one place for every type of service they may ever need. Nothing increases that frequency better than you doing all of their oil changes. If you consider every car in your shop that has an oil change due or overdue or due soon, odds are that it will exceed fifty percent. Your goal for oil changes performed should be in the forty to fifty percent range. It is likely the easiest service in the world to sell, so it mainly becomes a matter of simply asking for the job.

New Customers:
Quite a few of your current customers are going to vanish during the next year. Job changes, health issues, finances, and moving are just a few of the causes. You can’t change those things. Also, assuming that you are doing a great job of getting your current customer’s cars in good shape, those cars will need less service in the near term. Studies have shown that for you to grow, or at least stay even, you need to have at least twenty percent of your RO’s to be first time customers. Twenty-five percent is a good target number if you want to grow your business. Far too many shops are at ten percent or even less. This number is an excellent crystal ball for seeing into your future and knowing how busy you are likely to be six months from now. Make sure that you track the number of new customers monthly and monitor the trend.

Employees — Techs vs. Non Techs:
Many shop owners believe that if an employee is not turning a wrench, their value is significantly less than a tech. Nothing could be further from the truth. Today, shops need great salesmen (or saleswomen)! There is no product or service that moves in this world without some kind of salesperson. Remove them and the whole economy stops. Whether you admit it or not, you have a sales staff. You may not call them that, but that’s exactly what they are. Techs have no cars to fix without someone making those sales. Far too may shops have an incorrect ratio of techs vs. non techs. One to one is about the right number for most shops. Some of those non techs will be sales staff (service advisors), others will be in the office, and others will perform a variety of necessary tasks. In most cases, a shop with three employees in the front and three techs in the back will have greater sales and profits than a shop with two employees in front and four techs in the shop. When considering staff changes, make sure you do not get this number lopsided, or you will have techs turning in low numbers of produced hours. While techs are certainly important, your biggest guns are at the front counter.

This article was reprinted with permission from Garage Key Magazine.

Tom Ham is the owner of Ham’s Automotive in Grand Rapids, Michigan and a certified Automotive Management Institute instructor. Tom also serves as the President of Ham’s Management System; is the State Region 3 Mechanical Director for ASA Michigan and actively involved in the industry. Tom encourages owners to join in forum discussions about these and many other management issues with over 5,000 of your peers – membership is free. Tom also encourages you to visit for his schedule of classes offered in the Michigan area.  Click here to visit his website.

By Team AVI. How to climb to the top while you are at the bottom.  On a daily basis we hear the words “how can I afford training if I can barely afford payroll?” Although this year was predicted to be a good year for automotive repair shops, car counts are still low and you can hear a pin drop in many service bays across the country. There is an end in sight, however, as business has begun slowly picking up over the last couple of months for many repair shops that we do business with.

During times like these, shop owners are holding on to every bit of cash flow they have and slashing their advertising and training budgets, which is leading to the demise of many of them. You cannot survive any longer by competing on price with the large repair shop chains and discounters. Do not let hesitation and fear of the unknown get in the way when this is the perfect time to improve the service your shop can offer. Right now, many shops are in the best position they have ever been in to take their business to the next level, yet they do not realize the opportunity.

In past recessions there have been companies who have gone from good to great by increasing their marketing spending while other companies reign in expenses and cut back on advertising. Several studies have shown that companies who continue spending on marketing and advertising during recessions perform considerably better than those who slash their budgets and reduce spending. When the market is flooded with advertising messages, it is hard to separate your shop from the competition. Right now you could achieve greater success at differentiating your shop from the rest of the herd.

It has been proven time and time again in customer service indexes that consumers prefer service from independent shops than dealers and chains. In a 2009 consumer reports study involving 349,000 vehicle owners, more were very satisfied with independent service (75 percent) versus dealerships (57 percent). This is an edge that independent shops have over dealers and chains that you could be taking advantage of, given the level of service you provide. This is because you have the ability to take better care of your customers and build more trust than dealers and chains ever could. However, when most independent shops advertise, they are not promoting their greatest asset and therefore targeting the wrong customer.

Most shops advertise discount offers or gimmicks to drive anyone and everyone into their shop. The customers that this tends to attract are price shoppers, who have questionable loyalty. Your ideal target is the value customer who will keep coming to YOUR shop for maintenance and major repairs. Once you provide a level of service that exceeds their expectations, this customer will also generate word of mouth marketing for your shop, which is one of the most effective forms of advertising, and it is FREE! Right now is the perfect time to sit down and analyze your business, what you currently offer that is different from other shops, as well as opportunities to improve your service offering. By taking the time to look at your business model and planning ahead while car counts are low, you are preparing your shop for an increase in profits when the downturn ends.

Take a look at your current car count and how many of those customers are non-loyal, no-value customers. If you find that a good portion of your clientele are first time maintenance customers who do not return, or only come to you for maintenance, then you may not be advertising the right message. You can slash your car count and still increase your profits. Now is the time to increase your advertising spending and promote a different image for your shop.

Keep in mind that during times your shop is busy, you do not have time to analyze your business, train your technicians, improve the image of your shop or prepare for the influx of cars during other busy times. If you have the time right now, use it. Make a thorough analysis of your current business and marketing plan and initiate improvements where they are needed. Perhaps you need to create an entirely new marketing plan and SWOT analysis, identifying new strengths, weaknesses, opportunities, and threats.

Recessions are also a perfect time to train your techs, so that when the cars start rolling in, they will be prepared to offer higher quality service and a greater range of services than your shop offered prior to the slowdown. Think of certain market segments that your shop is currently turning away such as hybrids, diesels or imports. Offering a wider range of services is another way to differentiate your shop from the competition. Whether you send your techs to live training seminars or purchase in-house training for your shop, it will result in opportunities for higher profit margins. Cross training within your shop is also a great way to help the less experienced techs learn from the veterans in your shop.

This is also a good time to improve your shop’s overall image and give it a facelift. Let your techs paint the exterior and interior, do some spring cleaning, update the landscaping, and fix-up the building to beautify your shop. When it comes to business success, image is everything. The look of your facility and staff is just as important as the service you offer. Your customers form an expectation based on your image before they even pick up the phone or step through your door. For another tip, you can also improve your image within the community by getting involved in charity events and organizations that are important to your neighbors. You do not have to donate loads of money to charity; you could simply get involved in local charity walks, food drives, Habitat for Humanity, children’s organizations or other groups that could put your shop in a positive light with the local press.

All of this will translate to personal and team growth, an increase in morale, and higher profits when business picks up. When cars start lining up in your bays, your shop will be ready. Most importantly, only do what your budget allows and hang in there!

Check out some ofAVI’s shop management training videos at www.auto-video.com

By Charlie Fewell. Profitable companies enjoy high levels of customer retention and are joined at the hip with the people with whom they do business. These companies measure the quality of their relationships at every point of interaction. I suggest customer comfort and connectedness is measured in momentos – momentos muy simpatico

The word simpatico does not translate perfectly into English. The closest we would come is with the word empathy. But simpatico has the added flavor of the interconnectedness or the importance of understanding and appreciating the other person’s perspective. The entire phrase means creating a very empathetic moment. The goal is to create muy simpatico momentos at every point of interaction where all the representatives of your organization are interfacing with every customer. If these moments can be maximized, the value of the interaction will deepen the relationship in a way that results in repeat business, referrals, and the development of customers for life.

Research indicates one powerful behavior that can create customer comfort and connectedness is a friendly greeting. Have you noticed how many companies use a “greeter” at the door? In customer feedback surveys, a friendly greeting is ranked high in importance. It is even better if the customer is greeted by name.

How you communicate, verbally and non-verbally, is very important in conveying a sense of importance and recognition to customers. They want to be understood, and be recognized as important to you and your business. How you listen and use feedback can increase customer comfort and connectedness. One thing that can set you apart from others is you ability to “listen to understand.” Most people only listen to prepare a response. Most of the time, others with whom you are communicating can recognize the difference. It can even be offensive.

Another way to create customer comfort is to perform consistently. Customers don’t like a different process every time they purchase. Think about going to the grocery store to buy food. Would you be frustrated if they moved products around continuously and every time you shopped you had to search for what you wanted to purchase? We are more comfortable when we know what to expect.

Employee turnover can contribute to uncomfortable feelings with customers. If there are new faces every time customers try to conduct business with you, they can feel detached and unable to connect with you. Many customers need to connect to feel comfortable and be willing to refer others. This makes it even more important to retain your best team members.

In a highly competitive environment you’ve got to be the best and you’ve got to be quick. In order to be truly successful you must become proficient with the skill of empathy, and create momentos muy simpatico with your customers.

About the author:

For 33 years Charlie Fewell, President of Charlie Fewell & Associates, Inc., has been consulting, coaching and speaking on relationship building, leadership and business planning. He created the “Revolt and Reinvent” small business growth strategy and today his clients range from small businesses to Fortune 100 companies.
© 2009 Charlie Fewell & Associates, Inc. www.charliefewell.com

By George Witt. Yellow pages, direct mail, newspaper, coupon book or Newsletter? Many shop owners agonize over the best way to bring business to their shops. Heaven knows, a ton of money can be mowed through in a short period of time seeking the answer.
At best, we may get some good short-term business. At worst, we may draw in a whole bunch of undesirables and make us wish we could just take a job selling shoes.
Perhaps we focus too much on which medium we are going to use, when in reality, we should concentrate on the message itself.
Case in point—ASA of Nebraska. I spent 2 years mailing to shop owners in Lincoln to get them to come to our monthly shop association meetings without much success.
The MESSAGE was: “We’d like you to come to our meetings and maybe join our organization”.
I was working an owner on the phone one day and he had a time conflict with the meetings. I asked him if he’d join if we just sent him a written summary of the activities.
“Sure!”, he replied.
It hit me then that I was asking for people’s most precious commodity—time. I took a lunch hour and hit 5 random shops with one question—would you join us if we just mailed to you? 3 of 5 quickly replied in the affirmative. I slapped my forehead in amazement.
I then changed the MESSAGE. It now read, “You don’t have to fill out any forms, you don’t have to attend any stupid meetings, we just want your damn money”.
This is really exactly what it said.
We’ve gone from 12 members last January to over 50 members statewide in less than 8 months.
It’s very important to note that the mailers themselves have nearly an identical look. It’s still the same direct mail piece I used for 2 years with limited success. The MESSAGE has changed only slightly. We still want them to join. Where we’d been asking for significant time, now we’re just asking for 3 minutes to write a small check.
I believe, too many times, improperly aimed shop marketing attracts customers we don’t really want, anyway. The lowball oil change offer attracts a lowball customer.
Duh. We’ve spent money to make ourselves nuts. I believe we can do that for free.
Ask 100 of your best customers a simple question. “What do you like best about coming to our shop?” Listen to what they say, write it down yourself and stick it in a mayonnaise jar.
My customers said, “You treat me like a friend, I can trust you and the service is great”. That’s the message I now use. That doesn’t seem to draw too many wackos.
Do your surveys, Grasshopper. Forget the medium and focus on the message.
Use your marketing money to make yourself happy. Aim at a specific customer profile and offer what they seek in auto service. It isn’t that hard

About the author

George started out as a mechanic in a gas station over 30 years ago. He now owns and manages his own repair shop, George Witt Service, Inc. which specializes in Honda, Acura, Toyota and Lexus cars. He holds the following ASE Certifications: Master Auto Technician, Advanced Engine Driveability and Service Consultant. He’s earned the Degree of Accredited Automotive Manager from the Automotive Management Institute (AMI). He wrote a book entitled “Shop Marketing” that’s had over 15,000 copies distributed by ALLDATA

Check out some of George’s training videos at www.auto-video.com

LBT-109($100.00) The Manager Everyone Wants
Using real-world techniques, George will enable you to gain excellent people skills that will directly increase your profit margins and make life as a shop owner more rewarding. 1-1/4 hours viewing time, 2 manuals. Essential forms to customize.
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