Transmission Repair

I couldn't find a place for book recommendations, so I started one. Here's a great list of "must-read" books for business. It's from Ratchet & Wrench magazine. https://www.ratchetandwrench.com/toolbox/educationtraining/article/55242667/strengthen-your-leadership-muscles-12-must-read-books-to-fuel-success-in-2025 https://www.ratchetandwrench.com/shop-life/columnists/article/33006771/bennett-10-must-read-books-for-auto-repair-shop-owners

In one of his books (E-myth or E-myth Revisited), Michael Gerber discusses Job Costing. While it seems easy enough on the surface, implementing it was much harder due to all the "hidden costs" involved. In addition, I felt it took up too much time. After a few months, I learned to streamline the Job Costing process. Originally, I used Job Costing to price out estimates—a big Mistake. Much later, I learned to use it to set our shop hourly rate and parts mark-up percentages. The biggest eye-opener for me was all the "hidden costs" like matching Social Security and building rent, but that wasn't all. Over a year or so, it did get easier because I got better at it. One of the big things I eventually learned was to perform Job Costing on a spreadsheet template I created. Check out Wikipedia Using Job Costing for a more detailed description of Job Costing. As time went on, I would eventually Job Cost on only a few invoices, not every one as I did in the beginning. I would change the basic Job Costing spreadsheet template as my costs would change. Believe it or not, after a while the drudgery of Job Costing became easy and fun. Check it out yourself, you'll be surprised.

Most shops have unrealistic expectations of a newly hired tech. That problem, combined with the new tech wanting to make a good impression during the hiring/interviewing process opens up the possibility of misunderstanding and miscues. We were a transmission shop specialist. Transmission, transfer cases, clutches, and differentials only. No General Repair. Before I became a shop owner, I had more than one shop wanting me to be a "Mr. Know-It-All". This was in the early & mid-1970s when all technical information was only printed in huge service manuals with tiny illustrations and fonts that few shops had current issues. I remember an older gentleman coming around once or twice a year with a trunk full of manuals for sale. I quickly learned that if I wanted a transmission manual, I would have to buy it because the shop owner wouldn't. The excuse he used was, "Manuals have a way of growing legs." because that's been his experience. Technical information was hard to come by in those days. Fast forward to today, everything is online, mostly by subscription. However, there are a lot of industry groups that cost little or nothing where you can both learn & share information & experiences. Our AutoShopOwner group is but one example. Today's technician should have an ample list of their online friends in the business. I can remember meeting several of my online friends for the first time in a face-to-face meeting at the Transmission Expo. It blew my mind because I had made up an image of what they would look and talk like in my mind. In reality, I wasn't even close. What worked the best for me was taking the time to write a Technician's Job Description that I heard about in a seminar I attended. It sounds a lot easier than it is. I don't expect to hire a Walking Oracle, but I do expect the tech to find the information he needs online. I edited the Technician's Job Description numerous times as things came up. It took me at least 6 months to settle on the final contents. We had a 90-day orientation period where both the shop and the new hire learned what to do, what was expected, and how to find information when you needed it. Within 90 days, both our shop and the new hire had a good feeling (or not) about things working out. Sadly, I finally settled on this winning formula later in my career, about 1995-2015. I hope this helps others in hiring a qualified Master Tech. As we all know, they are in very short supply.

I found this great article on WrenchWay's website. The Cost of Technician Turnover and How to Prevent It

Have you ever tried to get an extended warranty to cover a major transmission issue? Every step of the way, they find a reason to delay and tie up a lift. I shoot a short video on every transmission we do, whether it's for an extended warranty company or not. In the video, I make these important points: 1. Why did the transmission fail? 2. What we're going to do to fix it. 3. And most importantly, what are we going to do to keep it from happening again? I call videos like that the "Show-N-Tell" video. We have at least 2,100 Show-N-Tell customer videos on our YouTube channel. BTW, all of our transmissions come with a 5 yr/100K mile warranty. Retail customers are very happy with me sending YouTube video link and a .pdf of what it's going to cost to fix it. They either call me, or Email me, (50/50 split) with the O.K. and that's it. Not so with extended warranty companies. Unless it's a relatively minor mechanical issue, extended warranty companies are hard to deal with, second guess our diagnosis, and want to supply a used transmission. We have more than enough major transmission work to where we can be selective on who we choose to do business with. It took me the first half of my career to finally send those jobs to my nearest competitor who likes to do the work; they have the time. Problem solved. Here's one Show-N-Tell video as a sample to let you know how thorough we are. 3:41

Thanks, Matthew! We had a virtual shop tour on the landing page of our website for about 5 years, produced by a locally well-known investigative reporter for a local TV channel. In just about every TV market area, there is one TV news station that will go to bat for local consumers who feel they have been wronged by a business/company. In our Salt Lake City market, that investigative reporter is Bill Gephardt. Here's his self-produced video tour of our shop. --->3:21 https://youtu.be/U4oXYH8JFF8 That video sold a lot of major transmission work for us. Because we also used Call Tracking, we knew exactly the source of each phone call.

My biggest problem with extended warranty companies is they plug up the shop's production.

I disagree with shop owners who say word-of-mouth (WOM) isn't as effective as it used to be. Unless those same shop owners use Call Tracking to quantify that statement, they are shooting from the hip. They have no real data to base it on. They are making a false general assumption based on a "hunch" or a "feeling" that Google and/or social media is making WOM less effective. I believe that Google and social media, if handled correctly, ENHANCES WOM advertising.

During the last half of my career, I learned to not accept work for ANY extended warranty company for reasons too numerous to mention. I would typically steer the customer towards one of my competing shops that would accept extended warranties. Problem solved.

I find this topic very thought-provoking. I feel my shop's experience may not be the norm because we were a transmission repair specialty shop, not a General Repair shop. Here goes... I personally handled all our shop's advertising and marketing efforts. My favorite was Google AdWords because it allowed me to accurately measure my effectiveness, in real time. By default, Google AdWords would only come up in the SERP (Search Engine Results Page) within a 5-mile radius of our location. However, I learned I could change that with only a few mouse clicks. If business was slow, I could increase the radius to whatever I felt was appropriate. Conversely, if we got really busy, I would either pick a smaller radius, or I would pause all AdWords advertising, depending on how far we were backed up. The key to any advertising effort is the use of Call Tracking, which is a subject unto itself. The last time I checked, the cost for a Call Tracking number was only $3 a month. The most I ever spent on Call Tracking was about $250/mo. for 100 Call Tracking numbers. That is way too many phone numbers for the average single-location shop. The 100 Call Tracking numbers were divided among 5 transmission shops. I will go in greater depth of Call Tracking in another post, for another time. Meanwhile, here's my call tracking data for only one day. (Make sure you scroll to the right to gain a perspective of how many fields are included.)

Here's another great sales video by Todd Hayes. I had to read the article twice because it had so much good information. Overcoming Sales Objections Article

We did exactly what you suggested, Joe. Because our average ticket was so high, we got a smoking deal on credit card processing fees. All, but American Express were under 1%. AmEx processing fee was 4%, but we didn't get many AmEx cards. I know of a few local businesses that simply don't accept AmEx cards because of their high fees. These were the same businesses that gave a discount for cash. My question was, "What's the difference between giving a discount for cash vs. paying a credit card fee?" The only reasonable thing I could come up with was the sale would end up being unreported income, aka skimming cash. Our average monthly sales were about $100K and just about everybody used plastic to pay for major transmission work. Our average monthly processing fee was rarely under $1K. Although we did accept cash and checks, very darned few people use those methods of payment. As a sidenote, we didn't even have a cash box! I actually preferred payment by plastic. Another fee we calculated into the cost of doing business was shop supplies. Like charging for credit card fees, customers feel a little miffed when charged for shop supplies. To many, it's like splitting hairs. The bottom line of our strategy was to have nothing but parts and labor on the invoice. Everything else was simply calculated into the cost of doing business.

My first time the topic of a radio/music came up was over 30 years ago and I was an employee. Most transmission shops have a "building room" and transmissions aren't built in the open shop. I have always preferred to NOT HAVE any radio/music when building transmissions. To me, it's too distracting. I prefer total silence. The only noise I would hear when building transmissions was only the sound of blowing parts dry or the parts washer running. I've always been that way. Ever since I became self-employed, I let the employees work it out between themselves. It has never been a problem that I'm aware of. I've never seen the use of earbuds or headphones by any employee. Maybe I'm just lucky. What HAS been a problem is when an employee performs a road test, they sometimes change the customer's radio station to their own and/or turn the volume up so loud, it blasts the customer's eardrums. I had to institute a "don't mess with the customer's radio" policy. It's bad enough when they change all the customers' mirrors. Over the years, I finally got smart and included my radio/mirrors policy in the employee manual.

Super-valuable information most shops don't even think about... 11:34 How To Create A 1-Liner For Your Business

We use pig mats from the New Pig, Inc. https://www.newpig.com/universal-mats/c/147

The 2024 Ratchet and Wrench Management Conference has already taken place. You can put the 2025 conference on your calendar... OCTOBER 8-10, 2025 Renaissance PHOENIX GLENDALE RESORT GLENDALE, AZ

I can't believe that a subject as large as advertising is even patentable. https://www.ratchetandwrench.com/site-placement/latest-news/news/55138413/ford-files-patent-to-collect-driver-data-for-tailored-advertisements-in-vehicle

A very short, but fact-filled article... https://www.ratchetandwrench.com/running-a-shop/operations/article/55138527/numbers-whats-keeping-shop-owners-awake-at-night

Great points, Joe. I think a bigger problem is due to shop owners being afraid to charge what it costs to be profitable. There's plenty of articles stating one facet of inflation: vehicle repair costs. I'd rather have a shop that's not that busy, but profitable, than a shop that is busy, busy, busy, but not very profitable. The "profit" of a shop IS NOT the owner's salary. The profit of a shop is after ALL COSTS AND EXPENSES, including what the owner gets paid. I believe the fear of charging more is the biggest detriment to shop profitability than any other threat. This is especially true for shops that charge/bill flat rate. Flat rate was developed over 100 years ago and penalizes technicians for a shop's inability to market/advertise effectively, aka not busy. IMHO, flat rate no longer applies to today's technology, market conditions, or risks. Most repairs today involve a certain amount of research, reading, and studying; especially for first-time repairs. Has a TSB been issued? There's no flat rate time for that, let alone getting paid for it, but that's the reality of our industry today. Another profit-eater few think about is supply chain issues that tie up a bay or lift. Being a transmission shop, removing the front suspension and/or frame would really cripple our shop's production. My answer to that was to buy 10 engine hangers and 10 car dollies as shown below. It really upped our production and profitability even when supply chain issues befell us. I've posted this video before, but it bears repeating. 0:48 https://youtu.be/XhcSqfBsjJ8

Zoya, you describe our automatic transmission repair shop business perfectly. I bought a list of all registered vehicles in our state (Utah) from the DMV and was shocked by the fact that ALL European vehicles COMBINED made up only 6% of the vehicle population. Our shop was located in a more affluent area that had 8% Euros. Nationally, the number is less than 10%. I reasoned to myself and realized that if I specialized in only non-European vehicles, we would still have 92% of the market. You speak of risk, and the Euros were riskier, too. At first, I couldn't believe the low European vehicle population; I was in disbelief. I felt that I SEE more than that on the road. It was only then I began to pay attention when I was on the road and this is what I learned: When we see a Euro vehicle on the road, we naturally take notice. When we see any other non-Euro vehicle, it's just merely traffic, and we don't notice other than the traffic factor. Speaking of specializing, there's a local shop near us that started out specializing in front end, brake, and suspension work. They eventually morphed into doing mainly 4X4 trucks and Jeeps. You can check them out at https://layton-ut.fatbobsgarage.com/. So, in my opinion, in today's environment of high-tech and changing trends, specialization is a must if a shop is to remain profitable. You know the adage, "Jack of all trades, and a master of none."

Here's how to REALLY stand out in your business... 3:04

Matthew, Thanks for the detailed reply. I believe everything you say as it pertains to a G/R shop. Remember we were a transmission repair specialty shop. For example, we only wrote about 25 R.O.s a WEEK whereas a G/R shop would write that many, if not more, PER DAY. We had only 3,000 sq. ft. of shop space with just 4 lifts. Yet our annual sales were consistently $1.2M to $1.3M. I compare our shop more to a collision shop than I do a G/R shop. It's "one and done" if everything is done correctly. If we have a repeat customer, it's usually either a customer with extremely bad luck, or has lots of vehicles, or it's a warranty job. The attitude of indifference that so many shops inherently have is largely fueled by a technician turned shop owner. They also tend to hire the technical type in the customer-facing positions. In my technical sales videos, I always tried to make 3 important points, A. What the failure was. B. What it's going to take to fix it. C. What are we doing to make sure it doesn't happen again. I retired before YouTube shorts were conceived. However, I would use it today if I was still working. I still try to keep my head in the game because anything and everything automotive still excites me. Yet, here I am, 9 years after selling my shop and if the truth be told, I'm not much better than the Monday morning armchair quarterback. 🙂 Lastly, here's a random FB post about giving customers pictures with a DVI tablet. https://www.facebook.com/watch/?v=1170301943452267 Every major metropolitan city has at least one investigative reporter standing up for consumer rights and Salt Lake City is no different. We have Bill Gephardt. I used him to shoot a 3-minute video endorsing our shop. I had the video on our home page, as well as any landing pages. His name recognition was off the charts in our market area. The very first month we had his video on our website, we saw an immediate $40K improvement in sales. Check it out for yourself. https://youtu.be/Loo6V7Nln-o We also had a killer location with 265K vehicle count per day, a huge parking lot, which was double-fenced. Take a peek at this 1-minute video... https://youtu.be/V89FJzM7KCg If you need to contact me, here are several ways to contact me... [email protected] | https://www.facebook.com/larry.bloodworth.5 | (801) 885-2227

Matthew, I originally would send the video link in the same Email as an Adobe .pdf attachment. I quickly learned that was not a good strategy because some of my customers would only look at the .pdf to get a bottom-line price without ever looking at the video. Using this method, I had an 86% closing ratio. Unless people look at the video, they have no idea of how involved the job is. The strategy I eventually adopted was to only Email the video as a private video, first. While I was waiting for the customer to view the video, I would write the estimate. ONLY AFTER the customer viewed the video (by the number of private views being 1 or more) would I send the .pdf of the estimate. Using this method, I had an astonishing 98%+ closing ratio! Half the time, I would get a return Email asking when they could expect their vehicle to be ready. The other half would call me and either have questions or they were calling to give a verbal OK on the job. For me and my shop, YouTube became our 'secret weapon'. As cell phone technology advanced, I would eventually just put the video link in a text to the customer. Due to the big-ticket nature of automatic transmission repair, it made it well worth the extra effort required to go through the hassle of a video to close the sale. I can't say how effective using video would be for small ticket repairs. There were some of my customers that would forward the video link to friends, family, & spouse to "prove" what a good choice they had made. I can remember a few customers that the view counter would be in the double-digits. From what I'm reading, there's Shop Management software that uses a tablet to send customers a video or photo link from a DVI. I've never used such, however, I know they're out there.