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Who’s doing the oil change on YOUR customer’s car?

Joe Marconi
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  • 2 weeks later...
AndersonAuto Community Regular

AndersonAuto

Posted
Posted

We just surveyed April's repair orders, and found we do an oil change on 67.7% of our RO's. That seems about right for the way I market my business. 

I have the cheapest full synthetic oil change around, and market the crap out of it. I do a full synthetic oil change cheaper than Jiffy Lube will do a regular oil change, then I discount it further with a coupon. I do full synthetic so cheap, I don't even offer dino oil any more. I hear all the time that only cheapskates will come to my shop with that sort of marketing, and will bleed me dry. If that's so, how do I have a $513 ARO at 60% GP? 

Our customers (and yours too) see an oil change as a commodity. As far as they know, an oil change is an oil change. It's a lot like gasoline to them. Sure, there are some people who will only put a specific name brand gasoline in their car, but that's not most people. If two gas stations sat side by side, and one had gas priced at 25% more, which one would do a better business? Which gas station would sell more Coke and Potato chips?

Be the service center that sells the commodity for less than the guys down the street, sell more Coke and Potato Chips (and brake jobs) as a result.

  • Like 2
AndersonAuto Community Regular

AndersonAuto

Posted
Posted
3 hours ago, Dan Reichow said:

How cheap is cheap

$47.50 regular price, but most people show up with the $29.95 mailer coupon. If not the mailer, they at least will want the $34.95 coupon from my web site. I rarely sell the oil change at full price.

AndersonAuto Community Regular

AndersonAuto

Posted
Posted

I'll have to look at my oil cost tomorrow, but I do know that it's only 53 cents a quart more than the blend I was buying. That makes the synthetic oil change cost about $2.50 more than the blend oil change was, and I raised the coupon price by ten bucks. I make more money on the coupon oil change, and it's a smoking deal for the customer.

AndersonAuto Community Regular

AndersonAuto

Posted
Posted
10 hours ago, AndersonAuto said:

I'll have to look at my oil cost tomorrow, but I do know that it's only 53 cents a quart more than the blend I was buying. That makes the synthetic oil change cost about $2.50 more than the blend oil change was, and I raised the coupon price by ten bucks. I make more money on the coupon oil change, and it's a smoking deal for the customer.

Straight costs (parts and direct labor only) are $19.40 assuming my lube dude is doing the oil change. GP is then 35% if they're using the coupon with the cheapest price. But GP on the LOF isn't the point. The point is getting the car in to do the inspection and talk about what the car needs besides the oil change.

  • Like 1
HarrytheCarGeek Experienced

HarrytheCarGeek

Posted
Posted
16 minutes ago, AndersonAuto said:

Straight costs (parts and direct labor only) are $19.40 assuming my lube dude is doing the oil change. GP is then 35% if they're using the coupon with the cheapest price. But GP on the LOF isn't the point. The point is getting the car in to do the inspection and talk about what the car needs besides the oil change.

IDK, that seem very low to me. How much are you paying your lube tech, and what is his average hourly production. Not being an ass, but your number seems too low for my area and the ongoing costs to do business here.

AndersonAuto Community Regular

AndersonAuto

Posted
Posted

Oil costs 2.58 a quart. 5 quarts is $12.90. Filters average a couple bucks. Lube dude costs $15 an hour. Figure .3 to do the oil change, that's $4.50.  12.90+2+4.50=19.40  

The lube dude's hourly production is good, but he's new so I don't have great tracking on him yet.

Again, I don't really care if I make a dime on oil changes. I'd do them for free if I had to. Making money on oil changes is not the point of the oil change.

HarrytheCarGeek Experienced

HarrytheCarGeek

Posted
Posted
3 hours ago, AndersonAuto said:

Oil costs 2.58 a quart. 5 quarts is $12.90. Filters average a couple bucks. Lube dude costs $15 an hour. Figure .3 to do the oil change, that's $4.50.  12.90+2+4.50=19.40  

The lube dude's hourly production is good, but he's new so I don't have great tracking on him yet.

Again, I don't really care if I make a dime on oil changes. I'd do them for free if I had to. Making money on oil changes is not the point of the oil change.

Let's agree to disagree. The game is truly simple, if all you did were oil changes at your current practices, how long could you stay in business? I have no more to say.

AndersonAuto Community Regular

AndersonAuto

Posted
Posted
On 6/2/2017 at 3:50 PM, HarrytheCarGeek said:

Let's agree to disagree. The game is truly simple, if all you did were oil changes at your current practices, how long could you stay in business? I have no more to say.

If all I did were oil changes, I'd be in the oil change business. I'm not.

The game truly is simple. Get the customer in the door by just about any means possible, do a quality inspection, and present them with the findings. You can't do that if you aren't getting the car in the door, and the easiest way to get the car in the door is by enticing them with a great deal on the most basic of maintenance needs. 
 

jfuhrmad Enthusiast

jfuhrmad

Posted
Posted

So, for those of you not using cheap oil changes, how do you get new customers?  Are you on busy streets?  Do you have strong SEO?  What other options are out there for systematically growing your auto repair business?  Just from a pure numbers perspective it seems like AndersonAuto is making the cheap oil changes work.

  • Like 1
jfuhrmad Enthusiast

jfuhrmad

Posted
Posted

So, the root of my question relates to a system for gathering new customers.  Starbucks has one advantage we don't: addictive caffeine.  You either have a system that you know about, have a system you don't know about or you don't have a system.  So back to my question, what other systems are out there that are effective?  I suspect that being on a very busy street could qualify for this but I'm on the back side of town, so drive by traffic hasn't really worked for me.

Wheelingauto Collaborator

Wheelingauto

Posted
Posted
2 hours ago, jfuhrmad said:

 Starbucks has one advantage we don't: addictive caffeine.

But that's not what gets the customer thru the front door the first time or what gets them to try coffee in the first place.

Discounting IMO is a fairly unimaginative way to attract new customers. It is easy, it is effective but comes with baggage that I dont wish to deal with. That being said, I would ask the following:

What are your shops unique competitive advantages?

If you were in Anderson's market, what would you claim to do or do that would make you a better choice? ( I pick on Anderson because he states cheap oil changes is the way to bring in new customers)

If It were me, a first class web site with customer reviews is a must. People need to look you up and "see" you online. What they see online needs to directly correlate with what they get in person.

For me, we have all ASE certified Master Technicians, we use factory scan tools and factory information systems to service your car. We are the experts who can fix what others cant. We have a fleet of 26 loaner cars we freely offer for any type of service. We back all of that up with a nationwide 36 month 36,000 mile warranty. We have a sparkling clean waiting room for your convenience (if waiting). We take care of factory warranty and recalls for our customers. We do whatever we can to make it convenient to do business with us.

Now, how to get the message out? Website #1. Optimize it and set up a pay per click campaign but dont compete for the common searches (oil change, alignment and tires come to mind). Join the local chamber and get out there and kiss babies and shake hands. Get involved in community events, donate time and effort, it will get the best results. Direct mail is quickly loosing it's effect here in the city but I would try it in the smaller markets. In everything you do talk about quality, convenience and expertise. In all polls those are the things that matter to people. When you make price the most compelling thing it becomes the most important which tends to commodify what we do. (oil changes). We wash every car we service, makes people feel good about their car.

Put all the focus on what you do well, better than anyone else (then do it!)

Hope this at least gives you somewhere to start.

 

 

 

  • Like 3
AndersonAuto Community Regular

AndersonAuto

Posted
Posted

I recently started doing a better job with contacting the customer after the sale. We used to call everyone about 3 days out, but as we grew it got to be a burden placing 400+ phone calls a month for follow up. Our goal in these calls was to be as unobtrusive as possible, so we made an effort to call the home phone number during the day and leaving a message. Unfortunately most people now use cell phones only, so that plan doesn't work anymore.

The latest fix to that is to send text messages. We use an automated service for this. Customers seem to appreciate the follow up, and appreciate that we didn't interrupt them doing it. Unlike an email, no one ignores the text message. We get replies to most text messages within a few minutes of sending them, so it's something we do have to actively manage. If someone asks a question or has a problem, they expect a response fairly fast. Fortunately, I've got Patrick to help manage the near constant stream of text messages.

Wheelingauto Collaborator

Wheelingauto

Posted
Posted
3 hours ago, JustTheBest said:

I felt compelled to "chime in" on this topic again because of where the discussion is going. It seems to me that in a lot of ways, shop owners "miss the point". 

What's the point? The point is that no matter how good you are - how honest a shop you run - or how much you've spent on tools, equipment and scanners - you still can NOT do anything to a car unless it's in your shop. 

This was actually stated above by Anderson Automotive when he said... "The game truly is simple. Get the customer in the door by just about any means possible, do a quality inspection, and present them with the findings. "

BINGO! Get the customer in. 

 

I feel compelled to chime in as well.......

There are a lot of different people out there. You state GET THE CUSTOMER THRU THE DOOR......how do you keep the consumer out? As the self proclaimed car count fixer getting car count as you have learned is fairly easy. Getting quality car count not so much. While you appear to be an advisor, I have run a repair shop for the last 30 years. In my early days I spent a lot of time and energy sorting thru consumers with unreasonable expectations. While easy for you to say get cars thru the door, when you spend a lot of time and energy for someone who does not appreciate it or value it it reduces GREATLY the time and energy needed to deal with customers properly.

So imagine if you will a batting cage. Each ball represents a customer/car. a large % of them are off target but if you dont swing you can "hit" them. So you spend all day swinging at balls and occasionally one crosses the plate. It catches you off guard and you cant focus on it quickly enough or completely enough and you foul it off. Sure, you may occasionally hit a single or double but I would bet more than not you foul it off because you were trained by all the ones that did not cross the plate, but you swung at them anyhow. If you were to slow things down, dial in the machine to only pitch over the plate how many home runs would you hit?

 

Now, understand the example you use above states we are all large retail corporations whos value lies in pricing (walmart, costco, and Target) and the reality is we are mostly small, individually owned automotive SERVICE centers. Our true value is in TRUST, EXPERTISE and CONVENIENCE. Price is not a primary concern for our CUSTOMERS, yes we need to be competitive but we should focus on value, not price. We dont need a ton of opportunity, just enough over the plate to hit home runs.

All the other things you've suggested are retention items that do not get cars in the door the first time. Each suggestion you have made is critical in keeping in touch with you customer and showing them you care about THEM. Once you have made this connection you can stop trying to get them in with price...it no longer matters. They will then chirp loudly about how wonderful you are and the friends they send in are coming in for the same treatment, not a cheap oil change. This approach vs the suggested one is much easier to manage and far less stressful IMO.

Just another viewpoint of the game.

AndersonAuto Community Regular

AndersonAuto

Posted
Posted
33 minutes ago, Wheelingauto said:

we should focus on value

A full synthetic oil change for under $30 is a heck of a value. 😉

There are a lot of different business models that can work. Your method is effective for you, and mine is effective for me. Nothing wrong with either.

A lot of it depends on your demographic. I happen to have a really good demographic that most shops would envy. The local demo has money, but not so much that they buy new cars on a whim. There are a lot of stay at home moms that actively look for bargains so they can make a single income stretch a little further, but at the same time they know that they can't trust their vehicle to just anyone. This is where being super competitive on the commodities like an oil change come in. Lure them in with the oil change, then impress them with the great facility and staff. Steady car count and good ARO have been the result. Because of my demographics and the kind of operation we run, we get very few of the "problem" customers that most people associate with bargain hunters.

Like I said in another thread, who cares if you get rich by serving people looking for a discount oil change? You're still rich, right?

  • Like 2
Wheelingauto Collaborator

Wheelingauto

Posted
Posted

I have always argued there is more than one successful business model and thats why I chirp about mine as much as you do yours. We both run successful operations and large ones. I just dont want someone who runs a smaller operation who might be struggling to think the only way out is discounting and maximizing car count. Too many shops think car count is the answer and most of the time it is not. But its the easiest thing to fix.

  • Like 1
Wheelingauto Collaborator

Wheelingauto

Posted
Posted
8 hours ago, JustTheBest said:

When I used the example of Walmart, Target and Costco, the intention was only to show that you probably "split" your business too - so why would you expect your customers don't? I'm sure you can provide all the services - but they still "shop" at other shops. It's a fact. 

 

Simply put, I and others may split our retail commodity purchases between different stores for whatever reasons, I do not split up my "purchases" from service providers such as my landscaper, painter, dentist, contractors etc. We are in the automotive SERVICE business. We need to realize this is the position we are capable of being in (USP, Unique selling point) and should focus on this position rather than attempt to compete on commodity.

HarrytheCarGeek Experienced

HarrytheCarGeek

Posted
Posted

I haven't found a single system that works. I have tried so many things, one of them was cheap oil changes that brought me more grief than a curse upon my head. The value I received from the bottom feeders that cheap oil changes brought me was developing a thick skin.

What are we doing now, that works? Social media, paper mail newsletters, billboards, email-newsletter articles, clinics, and participation on local events. Word of mouth comes through excellent customer service, and customized pricing. Without taking rents into account, our marketing budget runs between 6 to 8% of gross sales for the average six bay/lift shop.

Could I spend less on marketing? Yes, but then I would go back to the seesaw of feast or famine work flow.

HarrytheCarGeek Experienced

HarrytheCarGeek

Posted
Posted

I think every serious shop owner knows that marketing the business is an essential thing to do and requires work in it self. What most would like to avoid is the learning curve and the waste money on things that do not work or produce a sustainable result.

 

HarrytheCarGeek Experienced

HarrytheCarGeek

Posted
Posted
4 hours ago, xrac said:

What a great thread this has become. Definitely conversation and ideas that all shop owners should read. 

Because this is exactly what business owners should be talking about the business side of the trade.

Also, this is the side that mechanics that become business owners need to know, yet they shy away from it because it's perceived as superfluous.

Case in point, and to illustrate, most don't understand numbers.   If you ask them how much is a million, they would look at you puzzled. Instead of saying 1,000 x 1,000 or 100 x 10,000, etc. Or if you ask them what's half of 3/8 they couldn't tell you it's 3/16.

So, what is so important about the numbers? Well, how would you know what is the maximum possible output of your shop if you have no baseline knowledge, how could you quantify your efficiency rate? What would be the point of investing another 2% of of gross revenue into marketing when you couldn't take care of the additional customers.

I agree with you, great thread indeed.

Dan Reichow Contributor

Dan Reichow

Posted
Posted

Like Matthew Lee Stated - Costco / and Others lock you into a Club pre purchase to have the ability to shop and or use their services , We went to all Synthetic oils - no conventional or Semisynthetic  oils .

With This said we offer Two ways for oil changes - We give Client a buy four get fifth Free - Or Prepaid Card --    5 For  ?. You do your math where it needs to be. Guess what You will see them Five Times and have extra Revenue ahead of time.    

AndersonAuto Community Regular

AndersonAuto

Posted
Posted

There was once a guy who ran a Honda shop in Nebraska who put out an auto shop marketing booklet. I'll never forget the first 3 steps to auto shop marketing in that booklet.

1. Soap
2. Paint
3. Light

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Toolbox is Last to Leave, First is the Heart
      By Joe Marconi in Joe's Blog
         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.

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      I am new in business. Need advice to increase profits.
      By Zenoo
      Hi my name is Zenas and I am 26 years old from Alberta, Canada. I started my own automotive repair shop in December 2023. After running it for 1 year I made a little bit of profit. I needed some advice on how I could increase it. Its a 3 bay shop with two 2 post hoists and one 4 post hoist with alignment. I am the only mechanic in the shop as I can't afford to hire anyone at this point. I am charging about $120 per hour for the labor and very minimal mark up on parts. The shop had no customer base when I got it so it took me sometime to build returning customers. If I try to increase the prices on parts the customers run away. Seems like they are calling around the city and going to the cheapest person. My monthly over head cost is about $7000. Whatever I make in a month goes back into next month's rent. Any advices on how to manage this properly from other shop owners?
    • carmcapriotto
      Making Great First Impressions [E137] - The Auto Repair Marketing Podcast
      By carmcapriotto
      Thank you to our friends at RepairPal for providing you this episode. RepairPal’s Certified
      Network of shops are trusted by millions of customers each month. Learn more at
      RepairPal.com/shops
      Are you ready to convert clients to members? App fueled specializes in creating custom apps tailored specifically for auto repair businesses. Build client loyalty. Get started today with your own customer loyalty app. Visit Appfueled.com
      Are your customers getting the right first impression of your shop? In this episode, Brian and Kim Walker explore how to make every touchpoint count, from your website and Google Business Profile to your waiting area and phone calls.
      With personal stories and practical tips, they’ll guide you through the customer journey, sharing ways to improve everything from cleanliness to communication. You’ll even hear about Kim’s checklist for first impressions and why small details—like a fresh-smelling lobby or updated photos—make a big impact.
      Get ready to see your shop through fresh eyes and take steps to leave a lasting impression. Tune in now!
      Thank you to our friends at RepairPal for providing you this episode. RepairPal will help you
      grow your auto business and you can learn more at RepairPal.com/shops. 
      Are you ready to convert clients to members? App fueled specializes in creating custom apps tailored specifically for auto repair businesses. Build client loyalty. Get started today with your own customer loyalty app. Visit Appfueled.com
      Lagniappe (Books, Links, Other Podcasts, etc)
      https://www.autoops.com/ - Online Scheduling for Auto Shops
      https://shopmarketingpros.com/ep-131-branding-your-shop-as-a-concierge-auto-repair-shop/ - Branding Your Shop As A Concierge Auto Repair Shop
      https://shopmarketingpros.com/ep-108-part-4-a-service-advisors-take-on-customer-retention-with-michael-doherty/ - Part 4 – A Service Advisor’s Take on Customer Retention with Michael Doherty
      https://remarkable.com/ - Remarkable notebook
      Show Notes with Time Stamps
      Introduction to the Podcast (00:00:01)  The podcast episode begins with an introduction to the Auto Repair Marketing Podcast.   Welcome and Topic Introduction (00:00:10)  Brian Walker welcomes listeners and introduces the topic of making great first impressions in auto repair.  Secret Shopper Concept (00:01:03)  Kim discusses the idea of offering secret shopper services to evaluate first impressions in auto repair shops.   Frog in Boiling Water Analogy (00:01:20)  Brian uses an analogy about a frog in boiling water to illustrate how business owners can overlook issues.   Personal Experience with Shop Cleanliness (00:02:26)  Kim shares a personal story about noticing cleanliness issues in her shop after sitting on the floor.   Origin of the Episode's Topic (00:03:13)  Kim explains that the episode's topic originated from a class she taught about hosting events in auto repair shops.   Creating a First Impression Checklist (00:04:08)  Kim mentions her intention to create a first impression checklist based on customer journey insights.   Importance of Online Presence (00:04:51)  Discussion shifts to how potential customers first experience a business online, including websites and Google profiles.   The Grunt Test (00:06:39)  Brian explains the "grunt test," where a stranger should easily understand what a website is about.   Evaluating Website Impressions (00:08:04)  Kim emphasizes the importance of assessing what feelings a website evokes in potential clients.   Social Media's Role in First Impressions (00:10:12)  The conversation covers how social media contributes to first impressions and customer perceptions.   Content Strategy and Audience Alignment (00:12:08)  Brian shares a client's unconventional marketing strategy and the importance of aligning content with audience expectations.   Google Business Profile Importance (00:12:59)  Kim highlights the significance of maintaining an accurate and complete Google Business Profile for attracting customers.   Customer Experience in a Hurry (00:14:01)  Kim discusses how potential customers often search for auto repair services quickly, emphasizing the need for accurate information. Improving Waiting Area Appearance (00:15:02)  Discusses the importance of updating photos of the waiting area to enhance customer impressions. The Importance of Phone Etiquette (00:15:38)  Emphasizes listening to phone calls to ensure service advisors are friendly and professional. First Impressions Over the Phone (00:16:38)  Highlights how the tone and manner of answering calls can significantly impact first impressions. Customer Experience During Calls (00:17:18)  Explores the importance of a welcoming greeting and attentive service during phone interactions. Listening to Recorded Calls (00:19:22)  Encourages shop owners to review recorded calls to improve customer service quality. Customer Experience in Shops (00:21:36)  Discusses a personal anecdote about poor customer service and its impact on first impressions. Evaluating Online Scheduling Experience (00:24:26)  Stresses the importance of user-friendly online scheduling systems for customer satisfaction. Drive-By Assessment of Shop Appearance (00:26:23)  Encourages shop owners to evaluate their business from a customer's perspective for first impressions. Parking Lot and Vehicle Presentation (00:27:27)  Discusses the significance of a tidy parking lot and appropriate vehicles for attracting customers. Signage and Branding Consistency (00:29:03)  Highlights the importance of maintaining updated and clear signage to reflect the brand accurately. The Story of the Old Shop (00:29:52)  Brian shares a humorous anecdote about visiting an old shop and its rundown appearance. The Importance of Cleanliness (00:30:46)  Discussion about how exterior cleanliness impacts first impressions in auto repair shops. Creating a Welcoming Atmosphere (00:31:27)  Kim emphasizes the significance of the waiting area’s atmosphere and sensory experiences for customers. Sensory Experiences Matter (00:31:47)  Exploration of how smell and touch affect customers' perceptions in an auto repair shop. Comparing Experiences (00:34:29)  Kim discusses how customers compare their experiences to other businesses like Chick-fil-A. Details Matter (00:35:28)  Highlighting the importance of small details in creating a positive customer experience. Creating a Family-Friendly Environment (00:36:55)  Discussion on accommodating families and making kids feel welcome in the shop. Comfort in the Waiting Area (00:38:39)  Brian stresses the need for comfortable seating and a welcoming environment for customers. Responsibility for Cleanliness (00:39:23)  Discussion on who is responsible for maintaining cleanliness in the shop. Bathroom Cleanliness (00:40:20)  A personal story about the poor state of a customer-facing bathroom and its impact. Thoughtful Amenities (00:41:24)  Kim talks about providing thoughtful amenities for female customers in the bathroom. Impression of Cleanliness (00:43:19)  Discussion on the importance of maintaining high standards of cleanliness in customer-facing areas. Shop Area Cleanliness (00:44:11)  Importance of maintaining a bright, clean, and organized shop environment for clients and staff. Efficient Shop Layout (00:45:02)  Discusses the necessity of an efficient layout to enhance workflow and client experience. Client Interaction (00:46:05)  Emphasizes tailoring conversations with clients based on their vehicle ownership goals. Permission for Inspections (00:47:58)  Importance of asking for permission to perform inspections to enhance client trust and experience. Client Follow-Up (00:48:59)  Discusses the significance of following up with clients post-service to ensure satisfaction. Team Appearance (00:49:48)  Highlights how professional attire of staff can impact first impressions on clients. Importance of First Impressions (00:50:45)  Stresses that consistent positive impressions lead to long-term client relationships and referrals. Final Thoughts and Checklist (00:50:46)  Introduction of a PDF checklist for staff to enhance awareness of shop cleanliness and organization.
      How To Get In Touch
      Group - Auto Repair Marketing Mastermind
      Website - shopmarketingpros.com 
      Facebook - facebook.com/shopmarketingpros 
      Get the Book - shopmarketingpros.com/book
      Instagram - @shopmarketingpros 
      Questions/Ideas - [email protected]
      Click to go to the Podcast on Remarkable Results Radio


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