Joe Marconi

Unfortunately, there are people, who only see price. So, the more value we put into the job the better. In order to avoid customers questioning labor and/or your overall price, you need to do a few things: Bring value to your services and repairs, know your key profile customers (the people that trust you and don't question you) and instead of selling parts and labor, sell you and your shop. Let me explain. Outback sell steak...just a steak. So the price has to be cheap. Their brand caters to a particular segment of the population, or to consumers that are looking for a good meal at a reasonable price. Now, Morton's Steak House or a Ruth Chris Steak House, does not just sell steak. They sell customer service, fine dining, atmosphere and they sell the "experience." Their steaks are 4 to 6 times higher in price than at Outback. Is the steak at Morton's 6 times better than at Outback? Who knows. But the point is they can charge those prices because they have done a great job at removing price from the equation and replaced it with a lot of value. The best shops and the most profitable understand this concept. Don't sell just a water pump, if you do, you will be in trouble. You are not a Deli selling commodities like milk or eggs. If you were I would say price IS a concern. Bring value by telling the customer what they get, all the little extras you do, the warranty, the follow up inspection. Anything that positions yourself different from the Shop down the block. And find the Right Customers. If we continue to go down the road Repair Pal wants us to, we are going to be in trouble. You cannot "cookie cutter" your services. Sorry for being long-winded.

The issues with labor rates continues to plague the industry. Most of us do not get the labor dollars we desperately need. But, there is also something we need to consider. Labor production in the independent repair shops on average is about 55-60%. So, even if you charge $100 per hour, your effective labor, which is the real dollar amount you are making per hour, may only be around $60 per hour. In other businesses, if they work 3 hours, they multiply their labor rate by 3 and that's it. It's not always that way for us. A tech brings in a car that has 2 labor hours assigned to it. The tech then helps another tech bleed brakes, goes onto the tool truck, has a smoke break, helps push in a another car for another tech, and ends up taking three hours on the job. So, to add my 2 cents here: Look at your production efficiency, your shop layout, how you bill the customer, charge for testing and Diag properly, and charge what you need to charge. Thanks xrac for bring up this issue.

I am not here to judge anyone or tell someone how to run their business. But, here is situation that bothers me. I was recently at a shop council meeting and one of the shop owners told that his master tech, a man in his mid 30s cannot get a bank loan to buy a house. When he told ne what he was paying him, I asked him, "That is a real good salary, why can't he get a loan?" He went on to tell me that this tech has only worked for him for 9 months and all his other jobs were either "off the books" or partially off the books. So his last three years of tax returns do not look all the good. I am not naïve or going to tell anyone that I am a Saint. But, this got me thinking. Is this just another one of the reasons why we are plagued with image issues and maybe a reason why many shops struggle? Let me play devil's advocate here. Isn't it true that the best run shops and the most profitable are those that are 100% legitimate. I will leave it right there....

Thank you Scott for your honesty. The truth is we source out the best parts and if we see a trend failure, such as a particular brand that has a high failure rate, we will not buy that particular line. We deal with many different part suppliers because of that reason. We also will go to the dealer (reluctantly) for certain items. For example, on some cars we will only buy factory catalytic converters. What I can tell you too, is that we are seeing an uptick with dealer defective parts too. We needed a transfer case for a Jeep, and we decided to go with the dealer unit. The first 2 units were defective right out of the box. The third was ok. So, I think that what ever is happening, is an issue industry wide. We purchased a PCM for a Dodge Van from the local dealer, and we went crazy trying to find out why the Van would not start. Defective PCM. In regard to my culture, you are correct and I mean what I say. My people are my brand and we are known for our customer-friendly employees and how we treat our customers. Thanks for the comments. That's the power of ASO and of networking on the forums.

You know, it is hit or miss. I have done a lot and tried a lot. What I have learned is that it is never one thing, but a combination of many things. I also learned that different forms of marketing and advertising works differently in different parts of the country. What I can tell you is that the only form of marketing that has worked the best and the most consistent is at the Front Service Counter and on the phone. Delivering world-class customer service. If you deliver that world class service and get the customer to truly think of you as a friend or family member, they will trust you and not question your price or recommendation. This will also keep them coming back. Think about, if your best friend, brother or sister came to you today and you told them they needed front brakes, would they question you? Well, get customers to feel like they are family or best friends. I hope this answers your question.

Welcome and great post. There are tons of great information on the ASO. So, don't be a stranger and best of luck to you.

Oh, so that the reason! Good reason. Funny!

Thanks for the kinds words. I too learn a lot from reading the posts. There are so many great ASO members, with such great knowledge. Your question is great. I require all my techs and service people to attend training. But, the issue is; How do get people to adopt the culture of continuous improvement and training? Here's what I do. I make it part of their requirement when I hire them. All bonuses, Holiday bonus and other benefits are tied into the amount of training they attend. If they don't go, they sacrifice certain benefits. I also have in-house lunch meetings (separate from techs and service people) where we have open discussions on topics that the group wants to cover. For example; if a tech has an issue with TPMS, we discuss the problem and then the manager will get the needed information, training video, whatever. In other words, we make training part of our culture. I hope this helps and great post!

As everyone must have noticed by now, I remain neutral on this subject. Yes, I do a lot of work for Elite, in the form of business coaching, consulting, working with other coaches and also performing seminars. I am also cofounder of AutoShopOwner.com, so for obvious reasons I need to separate the two. With that said, anyone can send me a private email for more information on Elite and what I do. But, I will not promote or be proactive about it. I hope everyone understands my position. Joe Marconi

It is truly amazing how a brand such as Sears, which dates back over one hundred years could be in financial trouble. The closing will impact 31 auto centers. Here's a link in Aftermarket news. http://www.aftermarketnews.com/Item/130695/report_sears_closing_100_us_stores_and_auto_centers.aspx

When you speak of production hours, there is a lot that goes into that. It depends on tech experience, the type of work you sell, are you billing properly (especially for diag testing) and the balance of your schedule. With two techs, if they are doing a lot of oil services and minor services, you labor hours will not be as high as opposed to a tech that is strictly doing repair work. A production tech (one that does only repair and diag work) must be able to produce more hours than he works. So, again, it depends on a few variables. Take a look at the work you do and your appointment schedule, have a balance of service, repair and diag. Make sure you are getting enough labor hours too. As far as Tech classification, that also depends on the type of work and the shop. Typically, a C tech is entry level, a B tech is a production tech, but may lack in advanced diagnostics, an A tech is a Master Level and is expected to perform just about anything you give him/her. I hope this helps. Great question!

I love that story...just in time for Halloween!

I fixed the link. Sorry. Because of the issues we are seeing, for the last few years we track everything. We created a spreadsheet and track the following: Reason for comeback: Tech error or part failure, other If tech error, what action is taken: More training, better operating procedures, better quality control system, better communications problem between advisor and tech If part failure, document the following: Part supplier, brand, part number - Contact part rep ASAP and report Document all information: Customer, vehicle, date of original job, original miles and miles when failure or comeback occurred Calculate loss to shop: Towing? Rental? Labor loss, give back or goodwill to customer, other misc.costs

Source: Warranty returns plague aftermarket industry

The issue with part quality and returns is on every shop owner's mind these days. It doesn't matter if you buy from NAPA, CARQUEST, Advance or O'Reillys. Poor quality parts, comebacks and getting the wrong part hurts our bottom line. I don't know how many of you track your losses with regard to comebacks and returns, I do. And I can tell you, it is doing more damage to your profit margin than you may think. I don't have the answer but I will bring up one fact. In the industry's effort to reduce prices, we have sent a lot of manufacturing business overseas. In order to maintain or reduce price, too often quality suffers. But who's is to blame? The part companies, the shop owner's who are seeking low prices, the consumer? The truth is, the time for pointing blame is gone. We need to change our mindset, not chose parts by price, but by quality. We need to start sending a message to our suppliers that we want quality not just price. We also need to insure that we don't have internal issues. Are our techs properly trained and do we have an adequate quality control system in place. Our reputation and the safety of the motoring public depends on it. Here is one other fact that you cannot deny: If you reduce comebacks, improve quality, sell quality parts at a reasonable margin, you WILL make more money, have happier customers and have a lot less stress. Here's a link to an interesting article on part quality from Aftermarket Business World http://www.searchautoparts.com/aftermarket-business/opinion-commentary-distribution/warranty-returns-plague-aftermarket-industry?cid=95879

To be unsure of what you want to do in life is normal. You will figure it out. It's not easy to find your calling. What ever you decide to do, remember a few things. You must have passion for what you are doing. You must put people first, money second. You must have the desire to be the best. You must adopt the culture of continuous improvement and you must have clearly defined goals. Oh, almost forgot; to be in business, you must learn business. One last thing, don't let fear or the fear of failure hold you back. No one can predict the future or guarantee success. I can speak firsthand that I have failed many times and made many mistakes. But what you learn from those mistakes takes you to another level. Good luck and great post!

34 years ago, when I opened the doors to my shop, I had broken cars lined up in front of the bays on a daily basis. Thank God for GM, Ford and Chrysler. Cars back then broke down at any alarming rate. We didn’t have to be the best sales people either; broken cars just arrived at our doorstep. We lived in a reactive world, where we repaired one car after the other. Those were the days! Well, those days are gone. Today, if you wait for cars to come to you, you may be waiting a long time. With extended service intervals, improved car quality, and less maintenance items to service and repair, we need to take a proactive approach. We need to improve our image, hire the best people, adopt a culture of continuous training, speak to all customers as if they are best friends or family, inform them of needed future services, book the next service, sell preventive maintenance and deliver world-class customer service. Most important; Create the customer experience so memorable, so enjoyable, so rewarding that when they leave your shop, they think to themselves…. “That was a great experience, I’m coming back.”

Funny! I always love your jokes!

I have had mixed results from any new resident program I used in the past. Years back when the economy was booming and my area (Putnam County New York), was one on the fasting growing areas in the northeast, I was fairly successful with a new resident program. The last time I tried a few years back, it was a bust. But, the housing market in my area tanked. What are other shops doing to attract new residents? This appears to be a potential source of new customers. I don't want to sound like I am endorsing anyone, but I have heard Jay Siff from Moving Targets give presentations on new resident marketing, and he sounds like he really knows his stuff. Has anyone used a new resident program lately, and what is your opinion on the results? Moving Targets link: http://movingtargets.com/

Source: Anyone using MOTOSHOP Technology Tools, by Advance Auto

I was wondering if anyone is using any of the programs from Advance auto? (MOTOSHOP) Advance is offering three tools to help shops; MotoLOGIC a repair and diagnostic information system, MotoREV, a shop marketing program, and MotoSKILL, a interactive online series of ASE prep tests. Here's a link below for more info. https://www.motoshop.com/motoshop-home

This is a classic case of someone with the right intentions, the desire and all the heart in the world, but no business sense. Many of us started this way, I was one of them. But, what happens is you get burned out. And, if you don't change, you fail. For this case, he should have clearly outlined the charges and kept the customer in the loop. He should have documented everything he did. The fact that he gave up means he should not have taken the job in the first place. The saddest part of this story is that it's not that uncommon, not the part with the MR2, but with the fact that too many shops don't spend enough time learning about business. This is sad because if you know anything about the typical shop owner, he or she, is a hard working person, goes the extra mile each day for the customer, sacrifices a lot, works long hours, takes little time off and does not make the money they deserve.

Ideally you do want someone in charge of inventory, returns, cores, and insuring that every part is charged out correctly. It sounds like you need a quick and easy way to manage your parts and returns. Here is what I suggest: First, have a meeting with your suppliers and tell them your issue. Also, tell all your suppliers that every invoice must have a PO#, or you will not pay it. This puts the burden on both you and the in your shop Create a system where the parts are checked in and make sure that the part is entered correctly on the customers work order, BEFORE it is installed on the car Create shelving that clearly designates, Parts in, Cores, Defects, and holding (for ordered parts, but the car is not in your shop yet) All daily invoices must be marked with the customer work order/ invoice# for tracking purposes, and also the person who ordered the part Tag or mark each part. You can put customer's name, invoice, license plate, etc. Some part companies will give you stickers; Core, Defect, etc Do returns daily or every other day, don't delay. Put the returns in a tote or box and instruct the parts driver to take it. File all return slips in a separate file File all invoice slips in a separate file Review this file daily to insure its accuracy Make sure you have a copy of the return slip that goes to the parts store Make sure you get a separate credit invoice with a detailed list of every item, don't wait for the actual statement. You don't want a total credit from the supplier, you want a detailed list of what you returned. Match all the returns against your file You need to match every invoice and credit against the statement I hope this helps, it's a basic process without using computer software or spreadsheets.

No, sorry, it's been a few years since I have been there. I have a few obligations to take care of that week and the weekend.