Joe Marconi

After nearly 40 years in business, I can tell you that there is no real solution to this problem. I gave up on labor claims years ago. I would wait months to hear back from an engineer's report, only for the report to say that somehow my tech installed the caliper wrong and that's why if failed. I don't want to sound negative, but that is a reality. Joining a program group, like TECH NET, that pays labor is perhaps the best option. Also, document all comebacks: The brand, the store you bought it from. Look for trends. Then, sit down with your parts supplier and work out a deal. No one wants to get rich over a comeback, but the truth is comebacks kill. Lastly, make sure your gross profit on parts and labor is in line and factor in a percentage for warranty issues. No company is perfect and no tech is perfect. Hope this helps.

Frank, thanks for the feedback on a very controversial topic. Many companies are a waste of time. And we have had denied claims too for reasons I am not sure. The teardown issue is another topic that is ridiculous. It's the company's way of pushing the expense and liability to the customer. That's why we make it policy to discuss everything upfront with the customer. Ethics and morals win out each time.

I can't tell you how frustrating it is to give a price on a radiator to a customer at the service counter, while he's on his phone searching for the part! Here's what I do when I get a customer that tell me he can get the part cheaper....I agree with him! I let him know that he can get the part cheaper, just like he can buy a steak and potatoes cheaper at the super market too. But he'll pay more for the steak and potatoes at a restaurant. And then in a calm manner, I review all the benefits of me suppling the part, the warranty and the fact that if the part is wrong or defective or fails in the future, he will have no recourse and will have to pay to have done all again. For most, it works. For many it's all about price. Now Most IMPORTANT IS THIS: The reason why you don't mind spending more for a steak at a restaurant is because of the experience. So, make sure the customer experience clearly demonstrates the value of why people need to do business with you. When Value goes up, price becomes less of an issue. Hope this helps. Let's hear from you on this frustrating topic!

With Mother's day approaching soon, plan on a Mother's Day promotions. It could be an individual flower, like a rose, to all the Mom's a few days before Mother's day, or little boxes of candy. It does not have to be a big deal, just something that tells your customers you are thinking of them. So, think about a small promotion and trust me, it will be a hit. Another marketing tip: Father's day is coming; so don't forget the dads!

“Your labor rate is too high. If you can’t negotiate your labor rate, I will have the car towed from your shop to another shop in your area that will do the work at the labor rate we want to pay.” Those were the words spoken to my service advisor a few weeks ago from a claims agent at an extended warranty company. The name of the company doesn’t matter. What does matter is what would you do when faced with this situation. Here’s another scenario you’re probably familiar with: After diagnosing a failed steering rack, the customer informed us that she had an aftermarket warranty policy. She asked me if I could find out if the steering rack is covered. I said, “Sure, I will be happy to help. But, just to let you know, most of the extended warranty companies I deal with have their own labor and parts pricing policies, which may not be aligned with our pricing. So, whatever they don’t pay, you will be responsible for. Are you OK with this?” My customer said, “Absolutely. I understand. I appreciate anything you can do for me.” I thought the hard part was over. What came next was bizarre. The insurance adjuster I spoke to authorized the repair, told me the labor dollars they will pay and then said, “OK, it looks like I have a used rack in a salvage yard in South Carolina. I can have that rack to you in two days.” I had to pinch myself to make sure I wasn’t in a weird dream. Used steering rack? Salvage yard? Is this guy for real? I quickly shot back and said, “Let me ask you a few questions. First, where does is state in the contract that your company will supply a junk yard part for your insured? And why in the world would I remove an old worn-out steering rack from my customer’s car and put back an old used rack from a junked vehicle? Is that really in the best interest of the customer?” The claims adjuster replied back, “Well, shops do it all the time.” I said, “I don’t think so, and I won’t do it either. Let me tell you how this is going to go. I am replacing the rack with a quality part, and I will make sure that my customer gets the best job possible. So, please give me the authorized amount and I will let the customer know what the balance is that your company will not pay.” He said, “You can’t do that.” I said, “Yes, I can. My customer is already briefed on the situation.” He reluctantly gave me the authorization number along with the dollar amount. I relayed the story to the customer. My customer then called the insurance company and gave them hell. They did end up authorizing additional money for the part I installed. Before we continue, I want to be fair and balanced. There are some extended warranty companies that try to offer their customers a peace-of-mind policy, and do pay a good portion of the repair. However, far too often, it’s a struggle to get an extended insurance company to agree to our labor and part prices. Here’s the deal. If you’re like me, you have spent countless hours understanding the numbers of your business. You’ve also spent a great deal of time and effort to put the right people in place, develop the right pay plans and have created the systems to run an efficient business. You know the balance between being competitive and profitable. When you consider all this, we need to carefully consider how negotiating our prices will affect our bottom line. I understand the reality too. Sometimes, you really need the work. You don’t want to lose the job. And settling for something is better than losing the job. I have been there. But the truth is that negotiating your prices, in the long run, will not only hurt you, but will also hurt our industry across the board. By the way, my service advisor never did negotiate our labor rate. He simply told the agent, “Our labor rate is non-negotiable. Do you have any other questions?” The agent eventually backed down and paid us the job at our labor rate. Be upfront with your customers. Clearly explain to them that their warranty policy may not cover the entire repair and come to an agreement with your customer before you call the warranty company. Lastly, make sure you know what it takes to earn a profit. Profit is needed to pay your expenses, put a little money aside for the future, pay your employees a decent wage and also pay yourself the salary you deserve. When you really analyze the bottom line and what’s really left over, do you really want to negotiate your prices? This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019 View full article

It was a busy Friday morning when Tom called me for an update on his vehicle. I let Tom know that his car would be ready at the end of the day. There was a pause, and then he blindsided me with this, “You know, Joe, I did a little research on that water pump you’re replacing on my car. I can get that same part for $30 less. Why does your part cost so much?” I fired back at him by saying, “That’s impossible; it can’t be.” I went on and on attempting to defend myself, but I could tell I wasn’t getting through to him. After a few more words back and forth, Tom finally said, “Look, you started the job, so you might as well just finish it.” You’re probably thinking Tom went online to check the part. Well, this happened in 1980, my first year in business, and years before the Internet, as we know it today, even existed. Tom simply called a local part store. The parts store gave him a discounted price and then figured he would challenge me. Consumers checking your prices is nothing new—it just got a whole lot easier these days with the world wide web. Now, let’s clarify one thing: I am not going to tell in this article that there is a foolproof way to train consumers not to go online to check your prices. However, what I can tell you with certainty is that if you continue to feature products and not the customer experience, you are telling people to please check your prices. Consider this: You’re out to dinner and you ask the waiter for the wine list. As you scan the list, you recognize a brand and then look to the right at the price. Do you Google the bottle of wine to check what you could buy it in the store? We all know that a $10 bottle of wine in the store can cost well over $40 at the restaurant. Here’s the bottom line: The restaurant is selling more than wine and food—it’s selling the customer experience. And if all goes the way it should, we pay for the meal and the bottle of wine, even when we know the wine is priced higher than we could purchase it at the store. And, we are OK with it. Our business is no different. We need to focus on the experience, not the products. Yes, we install water pumps, control arms and radiators. But, that’s not our main focus. Our focus is on the value and the benefits of doing business with us. Now, with that said, there’s a delicate balance between being competitive and being profitable. But, as value goes up, price becomes less of an issue. Here’s the difference between our business and a product-driven business. When you buy a product—let’s say a watch or a cell phone—the experience lives on long after the sale. Every time you put on the watch, or use your cell phone, you are continuing the experience. And if the product is high quality, the experience gets reinforced over and over every time you use it. With auto repair, in most cases, what we do, does not live on after the sale. Once a customer leaves with a new timing belt and water pump, there’s not much about that repair that lives on in the eyes of the consumer, except the customer experience. Your entire sales process—your marketing, the look of your shop, the people you employee and every aspect of your business that the customer sees—must tell the customer that what you sell is worth the price. Let’s remember one thing: Your prices will be challenged from time to time. So, here are a few more tips. Get the right training for your service advisors, especially in the area of customer service. Make sure your marketing and advertising communicates your brand and your culture, and please be careful with discounting. Claims that you have the best price on tires or brakes only results in consumers checking online to see if that’s true. Highlight your warranty, which has a lasting impression on the customer. Above all, communicate the benefits of doing business with your company. Let’s get back to Tom. After 39 years, Tom and his family are still customers. I have to believe it’s because Tom appreciates the level of service we have given him throughout the years and the relationship we’ve built. Tom has learned what Warren Buffet has often said, “Price is what you pay; value is what you get.” This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019 View full article

This is a tough situation, if you have no proof the damage was not there when the car was brought in, you may be responsible. People have an heightened sense of awareness when they pick up their car. And if this guy really loves his car and takes care of it, it just intensifies the situation. If you haven't done it already, you need to make it part of your workflow process to perform a walk around and document any damage. Many shops create video's of the car's exterior before any work is done, even before a tech gets into the car. You need to protect yourself. As far has any help with the exterior finish, consult a detail shop or body shop. I hope this helps and good luck. I have been in this situation, so I know what you are going through.

The aftermath of the great recession, which caused many new car dealers to go out of business, has resulted in a new breed of dealers. They have come to realize that the lower margins on new cars, combined with the intense competition, means that their service and parts departments must become primary profit centers. Which also means that they need more customers beyond the warranty period …. and that means they want your customers. Ten years ago, I laughed at the attempts of the local dealers to try to steal my customers...but no longer. Smart dealers have 4 primary strategies: 1. Offer free oil changes, - some for life, some of a specific time period - And setting up the first oil change service at the time of the sale 2. Wrap future maintenance plans into the monthly payment 3. Sell maintenance plans at the time of the sale 4. Use recalls as a way to sell services and repairs. What are you doing to fight these strategies?

Spring is here! Market you shop in your community. Dollar for dollar, the best marketing you can do is right in your own back yard. This is the time of the year when a lot of outdoor events begin: From youth sports to adult golf games. In addition, there are fund raisers each weekend. Find out what's going on in your community. Get involved. Sponsor a youth sport's team, sponsor a golf tournament fund raiser or other fund raiser events. Get your shop known for being part of the community, not just another repair shop. The more you stand out, the more people will take notice and stronger your business will become!

Remember, each customer is a chance for a future sale. Make sure you take care of each customer, let them know of future needed services and repairs, and setup of future appointments at car delivery.

a Perhaps the greatest marketing/advertising strategy is still word of mouth. So, you need to create an amazing experience and be active in your community. Now, with that said, you also need a balance of different forms of media: A great website, SEO strategy, Social Media, online banner ads, etc. You also need a CRM Service Reminder system. Hope this helps.

Here's an situation we need to be aware of. I got a call the other day for a price on a Timing Belt for a Honda. I asked the caller, "Have you been shopping around, and if so, what prices have you gotten?" He relied, "Well, that's the problem, I have different prices from different shops." To shorten up this story; this caller was getting prices on the Timing belt job with different options; with a water pump, with belts, with antifreeze service....and the exact opposite....with only the T Belt and labor, and other combinations. So, this confuses the consumer. Bottom line, I am not hear to tell anyone how to conduct business, but just think about this: We all do business a little different from each other. If you do decide to give prices, you better be sure the customer is comparing apples to apples, if not, the price you give may be "perceived" as too high, when in reality, it's not. Food for thought...and your thoughts?

That is a tough question. My techs and advisors are very particular when it comes to brake parts, due to quality and noise issues. They actually make decisions based on the vehicle. For hi-end models, (BMW, Mercedes, Etc.) we prefer World Pac and try to chose OE or as close as possible.

Great points from someone in the towing business, and yet runs a repair business also. The more dialogue the more we all learn!

I have been in business a long time, and the only tows I am interested in are from our own customers, or when someone calls and asks to be towed to us. I have arrangements with a few tow companies. I pay them a wholesale rate and I charge the retail rate to the customer. I don't rely on tow companies bringing me work that they recommend. There aren't many people that breakdown and don't know where to have their car tows. People do breakdown on the highway, and we do get tows from that, but it's not a major source of income.

I remember being at a meeting with my staff where I voiced my opinion on an important issue. When I was finished, I asked if everyone was in agreement. Everyone nodded their heads yes. After the meeting, one of my service advisors told me that half of the employees did not agree with me. When I asked why did they agree, he replied. “You’re the boss, you intimidate others.” This made me think about my leadership style. Being unapproachable will prevent you from hearing other opinions; which is important to the success of the company. When speaking with your employees, ask a lot of questions. Avoid giving your opinion until you have heard from others. Praise suggestions and the opinions of others, and thank others for speaking up. The most successful teams are those that build strategies through a collective effort.

Got your attention? Good! Before I start, let’s get something out of the way. Does technician aptitude or attitude affect the productivity of your shop? Absolutely. But this is the exception, not the rule. If your overall production levels are low, that is the sole responsibility of management. Let’s look at a few reasons for low production levels. The first area I want to address is billing. Many hours of labor go unbilled due to not understanding how to charge. This area is most prevalent with testing and inspecting. If your technicians are handed a work order, with no direction and not a clear process of what to do, or when to stop and ask for labor testing fees, there will be a ton of wasted labor hours, never to be recovered again. Next is training. Service advisor and technical training is a key component to high production levels. But let’s not forget in-house training. All policies and procedures must be reviewed often and refined if needed. Your team must follow a process. With no road map, labor dollars are lost. By the way, if you don’t have procedures in place, you need to make this top priority. Every successful organization has a detailed set of workflow guidelines. Let’s look at shop layout. How organized is your shop? Are shop tools and equipment readily accessible? Or do techs tend to wander around looking for the shop scanner or TPMS reset tool. Are stock items such as wiper blades and oil filters fully stocked and cataloged properly? Do technicians have separate access to technical information? Or are techs waiting to use the same computer station? Again, all these things kill labor production, which kills labor dollars. Next up is scheduling. There should be a structured approach to scheduling where the day is balanced with enough opportunity to make profitable sales. Have a process where vehicle history is reviewed before the customer arrives. Any previous service recommendations or notes is any opportunity to make a sale. But the key ingredient is in preparation. A customer that’s scheduled for an oil change may have forgotten that he or she received a recommendation for tires. Informing the customer at the time of scheduling and preparing for the work ahead of time, greatly improves productivity and overall efficiency. Another problem area is with service advisors and their workload. The service advisor, in many situations, handles the front counter, the phone, scheduling, helps with dispatch, part procurement and sales. All these tasks are critical to the daily operations. However, nothing happens in the shop until a sale is made. You need to look at your service staff. Are estimates getting processed quickly and upsells getting back to the technicians in a timely manner? If not, this is another area where production suffers. Carefully analyze your staff and run the numbers. More estimates processed means more sales and higher profits. Adding a service advisor or an assistant may be the missing link in a shop’s production problem. Knowing your numbers is another key component to attaining high production levels. I will refrain from giving you benchmark numbers, since all businesses models are different. With that said, you need to determine your breakeven and establish your labor goal for the week. Then knowing your labor goal, you need to calculate how many labor hours you need per technician. Then, you need to communicate this number to each technician. Having clear expectations and knowing the goals of one’s position is essential for hitting production goals. With regard to the technician’s responsibility, let’s remember one important fact; the technician has control over his or her efficiency. That’s it. If you dispatch a four-hour ticket to a tech, the ability of the tech to meet or beat that time depends on the technician’s skill, experience and training. There are a lot of other factors that influence production, such as the right pay plan and hiring the right people. But perhaps the most important influence is leadership. The shop owner or manager must study and look at the entire operations of the shop. Productivity goals must be established and then a system of monitoring production must be put into place. This includes sales goals, as well. Service advisors and technicians must get continuous feedback on their progress. Improvements in sales and in production, no matter how small, must be celebrated. The bottom line is this: If you’re not happy with your production level, you need to look at every aspect of your company that influences production. Improvements in key areas put technicians in a position to win. When they win, so do you. This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2019 View full article

If anyone is going the the Vision Conference in Kansas this week, I will be there at the Bolt on Technology booth. Come by and say hello! For more info, click on the link below. I will be representing Elite Worldwide. I will be there Friday afternoon and Saturday to mid day. https://lp.boltontechnology.com/industry-experts-at-vision

January and February have always been a struggle. People are still paying off credit card bills from the holidays, heating bills are an issue, the weather is a problem and the overall mood of the consumer is not as positive as with other times of the years. The only thing that seems to help somewhat is the make sure you flood your customers with service reminders and recommended repairs during this time and get on the phone and call people who have not done the work you have recommended. Also, budget for the slow down to ride out those months.

If there is one thing that doctors and dentists do very well, it's that they book the next appointment for their clientele. I have heard every excuse possible why many auto repair shops don’t do this. But the fact remains that everyone in your shop today will need future service and repairs. And the question is, “Are they coming back to you.” Another reason for booking the next appointment is that there are times when not all the recommended services were done today. Some were postponed due to budget and prioritizing what’s most important. So, before that customer leaves, make sure the customer commits to a future date to have the work done. After all, why did you recommend it in the first place? Car delivery is the time to review all the work done today, continue to build the relationship and to inform your customers of upcoming work and services. But don’t leave it to chance that the customer will remember. Be proactive, discuss future dates and put those dates in your calendar. Lastly, call customers a few days before the appointment as a reminder. If the appointment has to be moved, then move it.