Transmission Repair

Thank you, Joe. The link starts playing about 7 minutes into the video for the sake of brevity. Members can also start the video from the beginning if they are interested in viewing the whole video.

I've been a transmission repair specialist for all of my 40-year career. At first, it was because I loved the challenge of automatic transmissions. As time went on, I learned I was truly blessed because I haphazardly learned that specialization was the key as well. Lucky me. I don't know of a tech that can meet the time for any G/R time the first time they do a job. For that reason, I never went into G/R because there were too many 1-off and first-time repairs. However, I was tempted to go into G/R when transmission repairs got slow. I agree that specialization is the key, as well as the future, of G/R. I predict the majority of the shops will do what they've always done when technology changes; they will adapt. After all, didn't G/R originally adapt from the blacksmith shops to cars? Below is a recent CNBC news video that puts forward an idea of what the automotive industry can expect over the next 11 years... https://youtu.be/P-NF-7miGLo?t=418

The nearest transmission shop was 7 miles away.

The term "Loaner Car" implies the word "free". Here's a link to a used car rental company's rental agreement that you could modify and make it your own. https://www.rentawreck.com/rental-requirements.htm

UPDATE: Altman has returned to OpenAI. This speaks volumes about leadership. 2:30

Some business models work well with call tracking while other business models don't. The transmission repair and collision business are two business models that work particularly well with call tracking. Using call tracking, I was able to whittle down my keyword list from 1,400 keywords to only 35 keywords. It worked particularly well for my transmission repair shop.

Here’s what’s happened in less than a week: OpenAI's board fired their CEO, Robert Altman, then Altman was hired by Microsoft, and over 500 employees of the 700-employe workforce sent the OpenAI’s board members a letter to hire Altman back, all board members are to resign -OR- the 500+ employee workforce will resign and go to work for Altman at Microsoft. Microsoft's CEO Satya Nadella said late Sunday that the company was hiring Altman and Greg Brockman, OpenAI’s president who resigned in protest after Altman was ousted , and was opening its doors to more joining from the company behind viral chatbot ChatGPT. That’s a lot to happen in less than a week. It becomes obvious that Altman had a close relationship with the workforce. The workforce believes in and has respect for Altman. The best automotive repair shops are run this very same way. Let this be a lesson for all. The moral of the story is no matter how big your shop is, it’s never too big to develop a close relationship with all the employees. (3:00)

If that's the case, first-year revenue is going to be an educated guess, at best. No fortune tellers that I know of. Your guess will be as good as mine.

Thanks for the detailed explanation. The first problem I noticed was the long wait time. That's not a "busy-ness" problem, that's a production problem. My first suggestion is to hire more technicians. That will be a self-fulfilling prophecy. It will increase repair business sales. Yes, buying your own building is best, but remember the majority of your profits come from fixed operations (parts, service) and not new car sales. Focus on those 2 revenue streams. Instead of making up numbers, I would forecast future sales based on previous sales and add what you feel is appropriate for the number/capabilities of your techs. Most importantly, don't estimate or bill by the book unless it's warranty work. "The book" is grossly underestimating work creating a situation to where you end up under-paying techs. Make sure you get all the adds when it comes to labor. As the saying goes, "Work ON your business, not IN your business" Tom Peters calls it MBWA or "management by wandering around." I know you feel you want to be productive, but you will be less productive by being a hands-on owner. Lastly, hire a new/used car sales manager. You don't need the headache. Delegate. Focus on fixed operations. Larry Bloodworth [email protected] (801) 885-2227

The learning curve was long and slow. I did a lot of research figuring out how the bidding system worked in AdWords. They were using the Dutch auction, aka 2nd bid, method. Only if I was the top bidder on a particular keyword, I would win the auction but pay only a penny more than the second-highest bidder. It took me a couple of years to finally learn that. I originally started bidding cheap with about 1500 keywords. Over time, I learned that I only needed about 35 keywords. Then I learned the power of negative keywords. I put leaks, noises, and vibrations in as negative keywords, basically any minor work. I also came to learn that no matter how much I wanted to spend, there were only about 1,500 clicks per week to be had in my market area. The last 3 years we had before I sold our shop, I was spending about $1K/wk. on ad spend. We kind of grew into an equilibrium of that much in ad spend with gross revenue of our small, 3K sq. ft. shop of $1.2M-$1.3M/yr. I only used Google AdWords for the last 5 years we were in business. We started out with $25/wk. ad spend and in 2 years we maxed out at $1K/wk. ad spend. To answer your question, it took 2 years to get the results I wanted. Google AdWords has changed a lot since I retired. As I understand it, you can no longer have different bid amounts for different keywords. Instead, you set up a weekly budget amount and AdWords does the rest. My top #1 keyword was transmission repair. I hope this can help others.

Being a transmissions-only repair shop, I used Google AdWords to "throttle my business". Normally, I would target AdWords for a 5-mile radius around our shop. If things got slow, I would expand the radius. Conversely, if we started scheduling something like 2 weeks out, I would actually pause my AdWords campaigns altogether. The furthest out I've ever done is a 100-mile radius. Because of our geographical location in the SLC area of Utah, we would then start getting out-of-state jobs from Nevada, Idaho, and Wyoming. Over time, I eventually got good at throttling our business to where we usually had a steady, controllable volume of work. I learned it took about 3 clicks to get an appointment and clicks were averaging about $12/ea. The cost of customer acquisition ended up being about $36 to $40 each. Not bad considering the nature of big-ticket transmission repair. It worked well for us. I learned how to work on my business and not in my business as we did all our own website and AdWords campaigns. Our AdWords campaigns were definitely not like this:

I agree.

Call tracking can be had for as little as $2 per line, per month. You use different numbers for Yelp, AdWords, Google search, etc. All the numbers are forwarded to your main line. You get a report on demand whenever you need to see which marketing/advertising works, and most importantly, which ones don't work. If you don't have a way to know where the phone calls are coming from, you will have no idea. I used Convirza.com and had 50 numbers to get popular search term data. Take a look at Convirza Video. Here's a sample of the data I got for just one day of calls. https://docs.google.com/spreadsheets/d/0B6naMtwBgwRKUlhUbnRJQzlTUzA/edit?usp=sharing&ouid=116584774469407774432&resourcekey=0-ZaeM6Cd4yWsV_dtIRyZUEw&rtpof=true&sd=true Be sure to check out https://www.convirza.com/price/ for a form to fill out to get the latest pricing information.

Speaking of advertising dollars, are you using tracking numbers for different marketing/advertising efforts?

I didn't use the phrase "loaner car". I had the customer sign a car rental agreement. It worked well for me. If the job turned out to be something major, I had the option to waive the car rental charge. We were a transmission shop, with no general repair. Just transmissions, clutches, transfer cases, and differential work. I sold our shop to a nearby competitor in 2015 and sold the real estate to a plumber in 2020. I often miss the good old days. 🙂

Free? You've got to be kidding. You're offering a convenience service and that has value. What value should be determined by you, even if it is only a token fee.

I would offer a pickup & delivery service instead of working in the customer's driveway. An hour's shop time would be an appropriate fee for both if they are within a 5-mile radius of your shop. More time for further out.

Sounds like frustration to me. Where is the tech's slice of the pie? Perhaps a mass exodus in the making?

As I understand it, if a flat rate pay system works out to be less than minimum wage, THAT is illegal in all 50 states because it's a federal law. I completely understand, Joe.

I would never live in a Democratic state or town. They overburden businesses and citizens in a myriad of ways.

To my knowledge, California is the only state where flat rate is illegal. See https://www.ratchetandwrench.com/topic-category/finance-and-operations/article/11488505/the-legality-of-flat-rate-pay

I agree with you Joe, especially about writing estimates. In my view, more can be gained by ensuring estimates are correctly written than any other owner activity. All of my techs punched a time clock and were getting paid for at least 40 hours per week, sometimes more @ time X 1.5. This made correctly written estimates an imperative. As a general rule, my management style was to not pressure the techs to become more productive. I've found that when techs are pressured, mistakes and misdiagnosed problems increase while at the same time, profitability decreases. I've found that new techs will soon get into "the rhythm of the shop" set by other long-term techs. If they don't, I try 1-on-1 coaching. If that doesn't work after multiple tries, they were simply a bad hire for the shop and were soon terminated. Too many shops look at published times as the gospel. The title of a published labor time book is Parts and Labor Time Guide, and as such, should be just used as a guide. It's not the bible. In our shop, over the years I have found the published times for transmission work to become increasingly inaccurate. In the early part of my career, the most labor-intensive times were for 3-speed automatic transmissions. Back in the day, we could beat published times by 50% or more. Today, it's just the opposite. Published times are much too low, even with all the adds. Over the course of my career, I have grown more confident in my labor and parts estimating skills than any published book. In closing, let me say this topic dovetails perfectly with your other conversation on "Technicians Are Demanding More Pay" How can a shop afford to pay top wages with poorly written estimates?

My YouTube channel made most repairs amazing. That's because we had over 2,200 customer videos of their transmission. In each 3-4 minute video I would explain 3 important things, 1. What failed. 2. What we are going to do to fix it. 3. What we are going to do to keep the failure from happening again. I would then follow up with either a text or Email of a .pdf of the final invoice, including tax. If we found anything extra after that, we would just eat it. Part of an amazing experience is not surprises.

I define an amazing experience by great communication. The more I communicate with the customer, the better. The mode of communication doesn't matter. It can be through direct fact-to-face communication, a phone call, text, Email, or a video. Keep the customer informed and make sure you understand his needs. People are prone to go with what they know. Make sure you read all of Joe's blog on customer retention.

Because I'm retired, the transmission shop I have the most contact with was once a sales & management client with me for about a year. Because of his inability to hire a competent transmission rebuilding tech, he has pivoted his business into more G/R than a transmission repair shop. The phone has a lot more activity, causing more R.O.s, and smaller AROs. In addition to supply chain issues and inferior parts quality, he has the "triple whammy" of failure to hire competent technicians. Needless to say, his business is suffering at a time when he should be retiring. He's 10 years older than me.