mspecperformance

http://www.ratchetandwrench.com/RatchetWrench/September-2015/Shop-Performance-Survey/092015/?utm_expid=98373964-14.BJVdXqfMTi-aXDnz3YdBRQ.1&utm_referrer=http%3A%2F%2Fwww.ratchetandwrench.com%2F

This month's ratchet and wrench has a cool survey they put together. If you want the comprehensive version you have to pay $69.95. I am a little peeved because I swear it was $24.95 not a week ago when it first appeared.

Anyone buy it? is it worth getting?

RO Writer's tablet system sucks. I saw a demo and it was very unimpressive.

Using Mitchell estimator would make your life a whole lot easier

Mitchells scheduler is not the only thing that drives us crazy. Tech support has not always been seamless and quick books integrator has given us numerous time wasting sessions on the phone solving issues, they have actually told us we should log out of the program half way through the day and log back in to clear memory out, of course that's not always able to be done. The use of the RO write up is not very self explanatory in that I have hired service writers that have used other systems and they struggle with completing all the write up correctly, there are too many hidden fields. For example why is the most important charge - labor rate hidden? There system is OK if you only have 1 hourly rate but many shops have a variable rate depending on the car line, there is no way to change this in Mitchell with out remembering to go to the obscure button ( type) and select the correct rate. What happens is the service writer forgets to look at the type/rate and bills the job out at default whether its a Honda or Mercedes or a Rolls. It would seem to me Mitchell could have a rate list that is set according to car make so the writer did not have to decide what rate to charge.

 

I could go on with issues we have but Mitchell is what we use and we have gotten use to it so its hard to change now but I feel like they never get into the shops and see how it is being used and the issues that are overlooked.

Dave

I haven't had much of a problem navigating through it. I suppose there is a learning curve but there is a learning curve with every shop management software.

Elite does have some testing but I'll let Joe chime in about that. For the record I have yet to put those tests into practice.

I meant the typo is their ARO. I don't believe their ARO can be that low

I believe it to be a typo.

I am still looking for a competent service writer. I interviewed a woman yesterday and hired her on the spot. She did not show up this morning. I called another candidate, he was already hired by an alignment parts sales company. He is getting 50k a year to sell allignment parts!! He would have to increase my sales by 10k a month if I was going to match that paying him 7% of gross sales. I can not find a tech to save my life either. Is there a pay shift going on? do we need to raise prices another 20% to be able to pay peole a competitive salary? The fracking and oil companies take the techs and sales companys are taking the writers. I am getting ready to throw in the towel.

I believe your problem may not be that everyone else is paying their service advisors more but rather you should be making more to be able to compensate competitively.

You may find it valuable to seek some business coaching or join a peer group. It did wonders for me.

If we have the right systems and processes in place, I believe my job as a shop owner is to stay on top of the marketing and ahead of my competition. That is paramount.

I think the challenge will be to get people to download your app. Car Repairs is not like starbucks or dunkin donuts. It is not a service you are using regularly (2-3 times a year and you are doing a good job). There is very very little incentive for people to download your app. I don't know about you but I hate having a whole bunch of apps on my phone that I never touch. I toyed around with the idea of signing up with these services but I do not believe they will see a large ROI. Besides that if the apps are not updated and new phones and OS come out they might become obsolete before you know it. Even if you got a good program going you might be limited on the advancement of said tech company.

From the feedback that I see the problem for most shop owners is finding qualified technicians.

For me it changes all the time LOL. I don't know what my one greatest challenge is as I see improvement that can be made everywhere.

Would need more info and details. What features? How is it going to make you money?

We had a killer first 2 weeks then a big drop off the 3rd week. Came back a bit last week but wasn't what I was hoping. I have to chalk it up to August back to school blues. We were still up tremendously over last year though.

Misery loves company and I feel slightly better than my ASO brethren are experiencing what I am experiencing for this August. Thank goodness its over! I am hoping September will be a killer one.

Hi, Bob K!

 

The guys have given you pretty good answers in my view.

 

For my part, if you mean Average Revenue per Order as ARO, that metric for me does not hold very meaningful value. The reason being that on a weekly and monthly basis my ARO have gone from as low as $180 to $540, and on that peak ARO period I had the lowest profit marging. That left me scratching my head for a few days until I figured it out what happened.

 

As a metric, a low ARO to me signals that the guys may be running through oil changes just to get that service done and are not paying attention to the car's condition, but on the other hand I had months that the ARO was low just to jump up considerable the following months.

 

So like Imcca states, make sure you are running a plan that you have written down and can compare numbers from your metrics. Figure out the gross revenue you expect for the wholes shop, then break it down per bay and then work out the net marging you are looking for, that way from the big picture down to the details you can know what to demand down to the individual techs.

 

I have a shop where one tech runs two bays and is consistently the highest profit center I have, it seems to me that he runs his own business within my business (what I mean by this is that he is happy to be a mechanic and loves to leave the administrative and overhead to us, while all he takes care of fixing the cars and recommending to sell whatever the customer's car will need to stay reliable, he has been with me over 10 years and appears to be happy to keep working with me).

ARO should mean Average Repair Order. The gross sale for services rendered for a particular car or ticket or Repair Order.

If your ARO is low you have to look at a lot of different factors. There are so many but I will just highlight a few that make the most immediate impact for me.

1. Are you charging correctly for labor? Are you charging book time? Are you adding a multiple or do you have a labor matrix?

2. What are your Gross Profit Margins on parts? Are you getting enough for the parts you are selling?

3. Are your techs on flat or salary? Do they have incentives to perform a proper inspection so your service advisors have a quality list of repairs to up sell? are your service advisors qualified to sell and do you have a sales process?

If I was to generalize 3 big areas these are the ones I would say would have the biggest impact on your ARO. In a nut shell, charge properly, raise your prices to get better margins, have the right systems in place to sell the work.

Bolt On Technology has been working wonders for us. I would say we are pretty Pro at using it has been a game changer. PM if you need any advise.

I believe I will be taking a policy with Zurich soon, id love to hear what the outcome is if that is the case.

Oh, by the way, group - I've used this incident as the motivation to change our policy on using customer-supplied parts. When making this decision early on, I took the time to research the name, location, and phone number of every brick & mortar auto repair shop with a shingle hanging outside their door. I expanded my search to a radius around my shop of a distance of nearly 20 miles.

 

The purpose of my reasearch? To present each of my competitors with a situation whereby I knew what I wanted done on my car, I bought the part I wanted installed, only to determine that I really don't have the time to do it myself, and wanted to know if they would install my part for me, at my request.

 

70% of those called indicated that they would, in fact, install a customer supplied part, and most even went so far as to say that there would be no additional charge of any sort to do so.

 

(Previously, any customer allowing US to supply the parts was automatically entitled to receive our "Discount Labor Rate", which was in fact, the labor rate I wanted to charge all along. Those bringing me their own parts to install were quoted our "Standard Labor Rate", which was 20% higher.

 

Nevertheless...I'm happy to be one of the 330% now that cares enough about the people I serve to NOT let them make the mistake of paying for service where they're not protected vy any warranty whatsoever, and they end up paying more for the labor.

 

My shop. My labor. My parts. My warranty. My reputation.

 

So far...we haven't lost a single job over it.

You will lose jobs over it however the great majority of the jobs are going to be the customers you don't want regardless.

 

Do you use SSF at all?

i have an account with them with the intention of giving them some business. However them being on the West coast and me on the east it becomes hard with the shipping charges and such. Nice looking site and lots of inventory. I like the ethos of the company as well, seems like they are much more customer centric

I have thought of this before however how do you prevent getting involved with a bad customer? I am assuming of course you are filtering as well as you can by the reviews they leave however I am thinking there still may be something things you cant avoid like the customer that no one can make happy type.

I guess being mostly German cars you are at a disadvantage for parts...I didn't think about that.

 

On a different note. how do you like worldpac. we are thinking about using them for our import parts. are they reasonably priced.....I will tell they seem as if they could care less if we sign up with them or not.

They definitely value you us as customers however there arent very many freebies from them even though they are the biggest importer of european parts. I would say if you have a warehouse that can actually perform daily deliveries its definitely a good supplier to have. They have a lot of OE parts that are hard to come by. If you need to have parts shipped to you I would look into SSF based in california or Northside Imports

stow, do you have a website?

you would be surprised. I have 2 options for my go to parts which is Northside Imports and WorldPac. Both give me nothing. WorldPac starting giving me SOME freebies but to get them to agree to any type of warranty claim payouts would be a dream. They won't even fix my delivery route. I am in between 2 warehouses and 1 of them is about a 15 minute drive. I explain to them that they are losing out on 20k in sales a month. Falls on def ears.

Here too...We use mostly aftermarket parts across the board and have a fairly low part failure. on top of that we make sure that who ever our main vendors are pay the complete labor dollars that we charge to the customer. for instance....if we replace a wheel bearing for $275 labor price...we make sure I vendor credits us for the part and pays the full $275 in labor cost.

We who run our independent repair shops have only our reputation....so IF we have parts failure comeback, we pay for a rental, give free oil changes for inconveniences and so on..that can easily cost more than the $65-$100 labor rate... so we say, if the vendor CANT pay a $200-$300 labor claim once every 2-4 months...tell them you will find a parts vendor that will gladly pay those labor claims to get your $40k to $75k or whatever it is you spend with them. that's what we do....

 

That's just my opinion.

I wish that were the case around me. I do not believe any part vendors offer to pay ANY warranty on labor at all which is sad when I pay over $7000 in parts weekly on average.

Great Success story!

Believe me I am as cynical as they come. Being from New York City and seeing all the trash I see every day... case in point going to Ikea of Brooklyn of all places, worst experience ever. Crowded, rude patrons and even ruder employees... anyway my point is we can all learn something here. There are times where customers are just d-bags and there is nothing we can do about it. Other times (many other times) there is a miscommunication somewhere or the customer was in some sort of mood that day. If you don't approach the situation in a calm manner and try to resolve the issue as professionally as possible you will have Zero chance of making the situation better for yourself regardless of the outcome. In this day an age, customer opinions hold a lot of weight. Unless you are gifted with a business that has a decades long reputation and a steady stream of business you have to keep on top of customer satisfaction. At the point where a customer is upset with us for any reason I look beyond what their value is to my business, I look at how many other people their negative feelings will touch whether its online reviews or in person bad mouthing.