Joe Marconi

A critical strategy that should be consider by shop owners! Excellent podcast!

Once again, Hunt brings clarity and great information to shop owners!

With labor rates going up, one concept me also need to consider is multi tier labor rates. For example, performing jobs on heavy trucks is different than work on a Honda Civic, or Toyota Corolla. Also, if you do complicated computer work, electrical and driveability, that requires your top tech with the most expensive tools and training. And those jobs have no part profit. Shouldn't this be billed at a higher labor rate? Do you have a tier labor rate strategy? I would like to hear from other shops.

I think all of us have been down that road. We sometimes get in the way of our own success, when it's right in front of us. Great point!

I had a recent discussion with a coaching client, who was complaining that sales are off. But, when we looked at his car counts, it was steady with no decrease. In fact, car counts were slightly higher than normal for last month. Another thing we noticed was that his calendar was booked out about a week and a half out. Reviewing the calendar revealed that many of the customers had previous recommendations and deferred work that was not addressed at the time of the current appointment. After a proactive approach of reviewing the appointment and vehicle history, the service advisors were able to discuss with their customers past recommendations and increase sales. Do you use your calendar as a way to prepare for your customers and increase sales opportunities? What strategies can you share that helps you to increase sales by using your calendar or other technologies?

When I look back at my 41 years as an auto shop owner, there is a direct link between my best and most profitable years to the quality of my employees. Contrary to that, the years I struggled in business was directly related to having the wrong team, more specifically, a bad apple or a few bad apples. If you want to truly achieve great things in business, you need to have great people around you. Take a hard look at the people you employ now. Would you hire them again? Think about this: If your auto repair shop is reliant on your skills, your intellect and solely on you, your business will eventually plateau and stall. You need great people around you to build your empire. The strategy of finding the right people for your company is ongoing. Lastly, once you have assembled the right people, then you need to do all you can to give them the training, the coaching, the support, the praise and recognition to bring out the best in them.

You are right. Here is my take on this. Creating an amazing experience is nothing more than building strong relationships, being nice, friendly and making sure that you are taking care of the customers needs. You are right, as we build value, we sell ourselves. I don't think the customers "expect" any experience. They get beat up everywhere, and now they are just looking for a someone who truly cares. For example, I am dealing with a knee issue. I called the doctor three times, left messages, got hung up on twice, and it took days for someone to call me back. And this is a doctor's office! Again, this is no brainer, just be nice, do a quality job, and the rest takes care of itself....for the most part.

Wow. You bring up so many critical issues. I do feel that the work environment and ownership/management has an obligation to provide a workplace that takes care of it's people. As you said, money is not the only factor. Another thing, most shop owners are former techs, with little to no training in employee management or leadership. Perhaps this needs to be addressed, or the problem will only get worse.

Great advice! Sound business strategies!

Costs are rising, and every shop owner needs to make the decision on where to spend and how much. Events like the R+W can be valuable in terms of knowledge and networking, and morale. As for the P/L, there needs to be a line item for Training and a budget. That budget will depend on the level of your team and your goals. I would look at my total overall expenses (not including tech pay), and my goal is keep total expenses no more than 40% of total revenue. You business model, was different..

Welcome to Auto Shop Owner!

I agree with you, and to your point, this is a problem. Thanks for the valuable feedback!

I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.” Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us? Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills. Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for. Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”

The fact that inflation is under control is a good thing But that does not mean that the normal operating expenses have gone down. In fact, rising rents, utilities costs, insurance costs, etc. are much higher today than just a few years ago, How will you as a shop owner respond to this economic situation? And what about your employees? They are feeling the pain of increased prices too.

A great recap of some of the events and scenarios that could happen. Life may throw us a curve ball, are we ready? A important and worthwhile podcast for shop owners!

You bring up great points. To add to your comments, this mindset of hiding cash also gives the shop owner a false sense of financial security, and leading to so many other negative consequences, as you mentioned.

Interesting point. Your business model relied on this strategy. For many long-established business, retention through delivering a great customer experience is also a solid strategy. For many business models, it's more cost effective to retain customers. However, every business needs an infusion of new customers too.

Sometimes perception turns into reality. I have seen this all too often, "Feb is always slow, there is nothing we can do." Just by thinking this, it become the reality. A key thing you did was to be proactive, not giving in to the mindset that Feb stinks. Great job! When I was in business, we had a plan starting in Sept to flood Jan, Feb and Mar with Service reminders, backed up with reminder phone calls. Again, be proactive, not sit on your hands!

A few weeks back, I was at Vision in Kansas City. I spoke with many shop owners who were there with there entire staff. Others brought either all their technicians or their service advisors. The objective was to get three packed days of training. Is this something you would consider? What are the pros and the cons?

This may be a sensitive discussion, but many companies, especially restaurant chains, are considering Dynamic Pricing - Charging hire prices for meals during busy times. Hotels and airlines have been doing this for years. I am not a fan of this, but I am being naive? With rising costs, and rising cost of payroll, is this something the auto repair shops should consider?

Speaking to many shop owners, I get the sense that sales are slowing lately. Is this so, or has the ramp up in sales the few years made many shops complacent? Should we get back to the art of selling, taking care of customers, offering options and making sure we create an amazing experience?

Every shop has different needs, I get that. My feeling is that too many consumers today don't think about maintenance as they once did. Some drive well over a year and over 12,000 mile without an oil change service, tire rotation, etc. And then when the maintenance light (or sometimes the oil light) comes on, that drives them in for service. I guess what I like to see is what dentists do, for the most part they schedule your next cleaning and checkup, it's a maintenance visit, to avoid things going wrong, It also helps to control the schedule.

Agree! it always does.

I may have missed my point. I have shop read and heard on podcasts that if the shop creates an estimate for a check engine light analysis at 2 hours billed to the customer, but the tech finds the problem in one hour, the shop adjusts the labor down to one hour. MY QUESTION is, if a customer is billed 3 hours for a Water Pump Job, but completes it in two, we would never reduce the price. Right? So why do it on a Check Engine light or similar job. I hope I am making sense.

When a tech completes a timing belt in 3 hours, but the job is billed to the customer at 4 hours, we don't reduce the labor charge. BUT, if we project a check engine diagnosis to take 2 hours, but the tech completes the testing in 1.5, why do so many shops reduce the labor charge to 1.5 to the customer? We need to get away from selling time, to selling what the job is worth. We need to factor in that highly complicated jobs require your top tech (the most expensive too), the most expensive equipment and information programs, more service advisor time to explain, and have NO part profit. Your labor rate also has to be based on your top tech's pay rate, plus your average gross profit percentage added to your labor rate, at minimum. Your thoughts, comments, opinion?