Joe Marconi

1099? Seriously! That is just as bad, might be worse!

Good for you! And you are right on target! 1099? Seriously! That is just as bad, might be worse!

A shop owner friend of mine recently interviewed a technician he was looking to hire. At the end of the interview, the tech turned to my friend and said, “If I get hired, I would like half cash off the books, and half by check.” My friend replied, "That’s not happening.” I hope to not sound naïve, but does this still happen? Please, I have been around for many decades, and years back this was common. But I hope that we have progressed as a profession through the years. Tell me I am wrong. Tell me I am right. But tell me how are we ever going to raise the level of professionalism if there are shop owners paying people off the books? Doesn’t this also hurt the actual pay scale by lowering it from what it is? How does help to attract new people to our industry? Please let me know your thoughts on this.

I know it's rare but if OSHA walked into your shop today, would they find violations? I remember when I was getting my company ready to sell, I asked my electrician to inspect my buildings to see if there were any Code violations. He came back and said, "Good news, bad news," There are no code violations, but you have many OSHA problems. How do you ensure that your workplace is safe for your employees, and also avoid any issues with OSHA?

Marconi: There’s No One Size Fits All Repair Shop Business Model Knowing your business and your customers safeguard your shop against trends that may not benefit you. Joe Marconi The year was 1973 and, like many from my era, I started my career working as a technician in a gas station. The typical gas station had two to three bays, and at least two to four gas pumps. Part of my job description was to pump gas if needed. Self-serve was not yet the norm. By the way, we were open seven days a week, with half days on Christmas, New Year's, Easter and Thanksgiving. The automotive repair industry has changed dramatically over the past few decades. There aren’t many gas station/repair shop business models these days. Today, there are franchises, tire stores, off-road shops, specialty shops and other niche businesses. In many markets, the independent general auto repair shop model dominates the typical modern-day model. No matter what business type, it seems shop owners crave benchmarks and guidelines. While there is merit to this, there’s no one size that fits all business model. And there shouldn’t be. Numbers Vary Between Shops The reason why I bring this up is that there are a lot of discussions these days about certain standards that auto repair shops should aspire to. Perhaps the most popular is setting a standard for the right KPIs and profit margins. Also, many industry people are promoting the five-day workweek as the standard, with some saying that a four-day work has benefits that outweigh the five- or six-day work model. Additionally, it’s common to hear that technician production and efficiency standards need to fit into a certain range to determine the overall success of the company. We all understand the value of benchmarking as a way of analyzing what we are doing compared to other similar businesses. However, auto repair shops are like fingerprints; no two are alike. And from my experience as a former repair shop owner and now a business coach, trying to fit your repair shop into a neatly formed benchmark-based model may be more detrimental than beneficial. If we look at KPIs and margins, for example, it’s typical for a general repair shop to strive for 70% or better on labor profit and a 50% part margin. But everyone reading this understands that percentages and dollars are not the same. Some shops do not fall into the typical percentage range, but their business model produces remarkable results to their bottom line in terms of “profit dollars.” Customers Trump Trends Let’s talk about the four and five-day workweek. As I mentioned earlier, back in the '70s, the gas station I worked at was open seven days a week, with half days on holidays. When I started my own business in 1980, I was not about to be open seven days a week, and holidays were out of the question altogether. But being open six days a week was something I felt I needed to do. I had to be there for my customers. Through the years we tried to close on Saturdays, but it just didn’t work for us. This is not to say you must be open six days a week or even five days a week, which is the point I’m making. Some point to employee morale and increased production by not working a five- or six-day workweek. This may be true and probably is for many shops. But can anyone say that this is true for every repair shop, in every area of the country? Know Your Shop Here's the bottom line. While there is a benefit to having standards and benchmarks, every repair shop is different. Learn what others are doing but understand your business model and the KPIs that drive dollars to your bottom line. Then decide for yourself what makes the most sense for your business, not someone else’s. View full article

You bring a lot of great points. The transmission business is different, such as collision shops. It would have been interesting to see if you could have gotten customers back after a major repair for a fluid service, health check or some other way to keep in contact. As you say, a one and done type customer base has no real value.

I like to refer to CRM as Customer Retention Marketing, which is nothing new in the auto repair business. And everyone reading this understands its value. However how many shops consistently implement a CRM process that boosts future service appointments? Which will help to reduce slow times for your auto repair shop. An effective CRM starts at car delivery. Inform and BOOK the next appointment for your customers. Also, inform them of upcoming needed services, and discuss a timeline for any deferred and declined work. Fill your calendar in advance with future appointments from your existing customers. A VERY AFFORDABLE way to market your company. Lastly, this strategy is nothing new, but it needs to be revisited from time to time. Especially since the last few years have been banner years for most repair shops. A consistent CRM process is perhaps the most effective and affordable way to market your business. What CRM strategies to you use to boost your future business?

You make a lot of sense Larry, and I agree. The culture of the shop starts at the top!

The aftermarket has always and will always find a way. Agree!

Gary, True Leadership Wisdom. As you state it IS all about the culture of the company, founded in hard work, team work, integrity and just doing the right thing for the right reasons. There are a lot of shops like yours. I have the highest respect for every shop owner on the planet, however, our responsibility also rests with the future. We, as an industry must do all we can to ATTRACT and RETAIN qualified and passionate people.

My son is not in the automotive industry. He is in the commercial real estate business. However, the workplace problems are the same. Recently, his frustration with the heads of the company reached an all-time high. When I asked him why he doesn’t speak up and let the leadership know how he is feeling, he responded, “Anyone who has voiced concerns or issues has been viewed as weak and incapable of doing their job. I don’t want to be viewed like that.” This is an example of a toxic work environment. If you are a shop owner, you are a leader. And leaders must be approachable. That means that you are willing to hear the concerns of others and have them express themselves. It also means that while you may not agree with someone’s perspective on an issue, it is their perspective, and that viewpoint needs to be recognized and respected. Make it known that you want to hear the opinions of others. Literally, ask for input from others. And thank those that speak up. Now, I am not saying that you need to act on every concern or opinion. That would not be realistic. But just listening may be enough. And you never know, someone in your company may have an idea that you never thought about and even improve your business.

You bring up another rather sticky point, but valid; our pay structure, and the flat rate system. Also, very impressed, Adam Smith and the Wealth of Nations, a timeless classic!

On a recent podcast, I listened to a technician complaining about the repair quality from some repair shops. He also stated that we don't have a lack of technicians, we have a lack of quality repair shops to choose from, which is pushing techs out of the industry, and a reason why we don't attract enough qualified people. I understand that this his perspective, and one point of view. But does he have a point?

As long as the aftermarket continues to give value, we will be in good shape. That does not mean, cheap, we need to charge what we deserve.

From speaking to shop owners, clients and friends, it appears the summer months have been very good. Banner months for many. My question is, do you think this is a trend? Or is it an anomaly? As cars age, and with many shops closing the past few years, there is great opportunity. In addition, there are a lot of cars on the road these days, and motorist art taking to the roads more now than ever. How do you view the auto repair and service business? What trends do you see?

Happy Labor Day to all! Take time to reflect on your hard work and commitment to the Auto Industry!

HA! I bet you are right! I am in New York, born and raised in the Bronx, but my repair shop was in Putnam Country NY, about 45 minutes north of NYC. We learned how to use a torch before learning how to use a wrench! Published book times are a joke for so many operations. As pros, we need to factor in the variables. As you point out NY is not the same as Arizona. In the end it comes down to LABOR DOLLARS, not LABOR TIME.

I would be very interested in hearing from other shop owners, what they feel about flat rate, and also from former techs, now shop owners, who worked under the flat rate system.

I was never a fan either. It's an antiquated process that pushes the envelop in the wrong direction. I know there are shop owners that swear by it, and say they have no issues. It was just not for me.

I listened to this podcast with a lot of emotions. Collin Draker's perceptive as a technician should be required listening for all auto shop owners. The issues he brings up about the work environment and the auto industry are a real. With that said, there are many shop owners that are making a big difference, especially in the area of culture and the workplace, but we need to go further. Shop Owners: Take the time to listen to this podcast!

Great feedback, and great strategy! Thanks for sharing.

I like the six months inspection. Before I sold my business, I began a Pit Stop Service, where customers were scheduled every 6 months for a basic inspection. Unfortunately, the plan was implemented just before I sold the business, and without much data on it success.

Great strategy! Question, How long have you been using this strategy, and how has it made a difference in overall GP dollars?

Source: Feature in Ratchet and Wrench Magazine https://www.ratchetandwrench.com/magazine Vehicle Delivery Process: The First Step to Your Next Sale Every fall I have my chimney cleaned. For years, I would search for a reputable local company. Then, 10 years ago, I met Mike at AAA Chimney, and he became my go-to guy. Each year, Mike returns and earns my trust over and over. You may wonder if it's because he cleans my fireplace better than anyone else or if it's the price. While those are reasonable questions, the real reason why he gets my business year after year is simple: Before he leaves my home, Mike takes the time to review exactly what he did, gives me tips on how to best care for my fireplace and then he books the next appointment for the following year. In essence, he performs what we know as a vehicle delivery process, or in Mike’s case, a chimney cleaning delivery process. Performing a comprehensive vehicle delivery process and booking the next appointment in our industry is nothing new. Many shops have been doing it for decades. However, there are still many repair shops that have not adopted this goldmine strategy. The vehicle delivery process helps to create that memorable experience that gives the customer a compelling reason to return. When combined with scheduling the next appointment, your repair shop stays branded in your customers’ minds, improving customer retention and helping to ensure future sales. The auto repair business today is not like it was. Even 10 years ago we would measure customer retention with a factor of four, meaning that customers visited your repair shop about four times a year for routine services. Today, unless there’s a breakdown or a warning light, you’re lucky to see your typical customer once a year for routine service. Consumers these days don’t have the same sense of urgency regarding vehicle maintenance as they once did. Just think about all those customers who have traveled over 15,000 miles in their vehicles since their last oil change. This trend has been slowly creeping up for the past 15 years, if not longer. There’s another factor we need to consider: if the length of time between visits is too long, the average consumer loses some of the emotional connection they have with their repair shop. What you don’t want to happen is when the oil maintenance light does come on, your customer just finds the most convenient shop to get the oil service done. Think that doesn’t happen? Unless you're fortunate enough to be in a heavily populated area with no competition, and car counts are never a problem, you will benefit from a well-defined vehicle delivery process; a customer touch point that brings the entire customer experience full circle. Vehicle delivery is never a transaction. It is an opportunity to keep building the relationship. It’s also essential that your service staff discusses and books the next appointment. Everyone reading this knows that booking the next appointment is a strategy being done by dentists, doctors, hairdressers, nail salons, eye doctors, pet groomers, and yes, even Mike at AAA Chimney. Booking the next appointment is not limited to oil change services either. Just consider all those recommendations you make on just about every car you service each day. Why not create a process that helps to fill up your calendar with profitable future services needed by your existing customers? Don’t rely solely on your CRM program either. The impact of an engaging vehicle delivery process is powerful. Every customer that leaves your shop today will need future services and repairs. The question is: Where will they go? Make your vehicle delivery process your first step to your next sale. View full article

All great points, and also interesting to hear from your perceptive.