Wheelingauto

$120 Chicago suburbs. I can see $130 by the end of the year. I think in the near future we will be going thru a major industry change. I think labor rate will go up substantially.....like 30%. There is a major tech shortage out there and the ones who will win will be able to compensate their people properly and that's going to take a lot more $$$ and a change in how we currently compensate techs. (flat rate) Of all the industry speak I hear all shops including so called good ones are having difficult times finding employees. Business has been really really good....but we can't keep up.

There is no rule, law or anything else that would limit you from charging for actual time. I know of a shop in Baton Rouge La that does just that. It separates him from the competition and he is very successful. But it's hard to be different, to lead the market and buck the trend. This statement makes absolutely no sense to me. We are in a service business, we do not sell commodity. This items you are describing are commodities/consumer goods. I need you to explain this thought...I cant get my head around it. I think expectations are ours to set. If you choose to live by unreasonable expectations or allow a customer to establish expectations you are at fault. I for one have always established expectations up front with my customers. I am a professional and I will guide this process. If you decide after I present my findings that you do not wish to proceed that is perfectly fine with me. I have explained the charges up front, I will collect for my time and expertise and you will drive a broken or poorly maintained car. While some of you post makes sense it leads me more to believe you've been beat up pretty badly and are venting. I hope it passes.

I think you're nuts!! I think if I looked up ADD ADHD in the dictionary your picture would be there.....please.....don't take that the wrong way. I can appreciate your youthful enthusiasm but as I follow your posts your going off half cocked all the time. It's like you cant focus on one thing and you allow every thought that crosses your mind to become a reality. In one post you go from one shop to three, then back down to two, next your thinking about a tow truck.....discussing how to get proper gp and now selling trinkets....I get tired just reading your posts.....(they are interesting) I suppose one day when you're on the cover of fortune magazine I will be able to say I interacted with him on a message board for a while....good luck.

There are 2 types of marketing. Retention and acquisition. By what you wrote, you are doing neither. This is great news because retention marketing is cheap and very effective. Those 3500 names in your database can be marketed to and you could get an instant shot of business but more importantly if done right, you will be consistently busy. If you've done little or non to this point you basically are waiting for those people to recognize they need something and then seek out the solution. If you wait for that they may not select you. Fist thing I would do is define your recommended service intervals. Someone here posted something about what they follow. Do you truly believe in 3k oil changes? 5k? Different? Or is it something different for each customer? whatever, just figure out a way to define an interval and then notate it. Depending on the software you use there are added software which will track daily mileage and create stickers for next service based on the criteria you set. Now track it. Figure out how to contact you customer and tell them they are due for service. YOU GREATLY IMPROVE YOUR CHANCES FOR THEM TO RETURN IF YOU PROPERLY IDENTIFY WHEN SERVICE IS NEEDED AND CONTACT THEM AT THAT TIME. Too complicated? Just looking for a silver bullet? The next suggestion depends on how you want to market. You could just send out cards reminding your database that you are there, ready to handle their needs. You could follow Anderson and put together an oil change special he is very successful at that. You could put a seasonal special. Either way, those are cheap and effective ways to do it. If you do hire a CRM company they can over do it. It is also costly for what you can do yourself. I personally believe you need to really get involved in it before you randomly hire a company to do it for you. The education will allow you to guide the direction once it becomes a common, ongoing occurrence.

While many trainers slice the pie differently the numbers at the end still come out the same. You should be tracking gp on all income sources. Parts @50% minimum, I think 55 should be the target. Labor at 70%, tires at 30% and sublet @50%. Blended you should end up at 60% overall at a minimum. From what I've seen tire gp is one of the harder ones to maintain unless you include the backside money. We have consistently achieved 62%average gp for years and years so it is attainable.

ahhhh the golden rule. Do unto others as you would have them do unto you. brilliant ideas there.....walk through another's service dept passing out business cards. I can't think of a better way to say "hi, I'm a slime ball" I wonder what kind of person you might attract. And at training??? It's bad enough that shops arent sending their techs to training but to now have to worry about someone poaching them? I suspect you and your shop would build quite the reputation.

In my shop bodywork and interior work are not sublet. The complexity of body work along with insurance company involvement make it too difficult. Interior work allows for too much personal opinion on the finished product. For all the other sublet (glass ,trans work, machine shop work) we pretty much can nail down a price before service or once the vehicle problem has been diagnosed and give a final price to our customer. Trans work is the easiest example for me so....we let people know we have a trans re-builder. Why go with us instead of directly to him. You have a relationship with us, as we do with him. You may have one or two trans failures in a lifetime. We rebuild 10 per year (insert number). This allows us to control the situation better for instance he offers a 12/12 warranty. For us he honors our 36/36 warranty (value). We also ensure the job is done to our standards when the vehicle is brought back to our shop. The volume we do allows for us to get better warranty and better pricing than he can give to the public. For glass work we bring in a glass company, same thing, we do volume which gives us better pricing as well as more leverage if something is not right. For our customer it is more convenient to bring the car to one place and get it all done even if it does cost them a few more dollars. They are comfortable with us and are willing to pay us to take care of it.

If you've already set up this level of tracking one more piece of data would take nothing to retrieve. What I am hearing you say is as long as the results support my position it is good enough....

Many years ago I used to spout off about 60/40/20 and why do I need to track any more than that. A wise shop owner instructed me that one day I might need to be able 'diagnose" an issue with my company if things weren't as good..he was right...maybe you should be tracking where new customers come from.

The one thing I hated about RLO's tracking was when a shop would issue a coupon and then track the returns without separating acquisition from retention for just that piece. I suspect knowing you are a disciple is that you track it this was as well. For the month of June what were your new vs returning and their avg tickets?

And still served your customer and made a few dollars. As it should be?

Psychology 102. We all have little brand ladders in our heads for every brand/caragory we interact with. For instance think about toothpaste. Quick, name off as many as you can. I bet the first is the one you use, second would be one you used to use or would use in a bind, you may call out a 3rd but that is usually it. Go ahead, try it with other categories..... cool, huh? When you consider there are 10's if not more choices in most categories. marketing or first to market usually get us on the ladder ( think 7-up, the un cola) not the first but they created a new distinction with that campaign. theres a lot more to this but quickly, the dealer is usually on the top wrung of auto repair, they sold you the car and are generally thought of as the expert. Everything I have done was to take that top wrung with my customers. Need car service? Think WAC. Need air in tires, think WAC. Need a windshield? Think WAC. See where I am going? By not subbing work you are giving your customers familiarity with other brands and sub specialties in our category by sending them away. IMO a bad move for your growth and success. Establish terms with those vendors, establish expectations, we usually get 30-50% mark up on sublet and get the top wrung unless you want your customers to start wandering.....trans shop, electrical shop, brake shop, specialty shop......your giving them back of the Ming thoughts and ideas to go elsewhere before even consulting you by sending them elsewhere when they have a need. Good luck

Custom, might I suggest one of two things. One, seek and attend some management training. Somehow, someway someone needs to get you to focus on what you can do not what you cant. You can focus on customers who value what you do, you can provide them with outstanding value and get them to tell others how great you are. Charge what you need to in order to be profitable and go to work and have fun everyday. Stop blaming parts stores for industry woes. I think you will find some very busy, profitable businesses represented here...so it is possible to have a thriving business even with parts stores doing what they are. The negativity you bring to these posts are affecting you every day whether you know it or not. This type of negativity weeds itself into every action and interaction you have. You can approach what could be a profitable interaction and turn it negative. Kind of a self fulfilling prophecy. stop, focus on good customers and what you can do. To all the others, stop conversing with them. No, I cant do that because it is not profitable for the business. -or- Dont. Lock up, go home. If things are so bad that you cant be successful recognize this and stop. Life is too short to be in a constant fight for survival. Move, find somewhere you can be successful and thrive.

In a perfect world we would only charge for our labor with a minimal parts margin. The reason we need to supply parts is because we know the ones that will last VS the cheap crap in the marketplace. Unfortunately we have been artificially suppressing our labor rates with parts margin for all of eternity or as long as I can remember. The problem with changing now is the increase in labor charges would be noticed, compared and judged. It would require a lot of educating and some dont want to learn. If your customers are checking parts prices often you either are catering to the wrong crowd or not providing enough value in your services. If you feel I am wrong on either point, drop your parts margin to 10% (covers warranty costs) and raise you margins on labor by charging more and appropriately. There are a select few who do business this way and I envy them because I dont have the guts to make that change. But if you do that, the same people will bitch about the labor charges now......

Great answer. Yes, this is a place to discuss ideas and such and a great resource for management ideas. i am one of those 30 year guys and have been regarded as a "numbers" guy. While I have been thru many many hours of training I cannot find much of a use for ELR. Really, if you wish to improve bottom line you can charge 2 for 1' that will impact elr. You can also start stepping on the labor guid. If it calls for one hour and you bump it from 1to 1.2 ( in dollars not hours) and correct the hours back down you will really impact elr. You stated above this was shorting the techs. I could argue it isn't but it's one metric over another. I would focus on gross profit and expenses. Efficiency and productivity. If you still think there a % or 2 on the table raise the targets. Don, t change the measuring bowl.

You've pretty much answered your own question. 2 for one diagnostics will increase EFL and maintenance (packaged) items such as a flush you charge more than 1/2 hours labor but credit the tech for 1/2 hour. My question back to add to the discussion is why are you looking at ELR? I used to belong to a 20 group and they had us looking at a lot of different metrics. While it is important to know the metrics and what affects them in reality there are only a few you really need to get a hold of and monitor. You just have to chose the ones that mean the most to you. Example..... hours per ro or dollars per ro? Which one would you rather track and focus on? I can certainly manipulate one for the other.

Simply put, I and others may split our retail commodity purchases between different stores for whatever reasons, I do not split up my "purchases" from service providers such as my landscaper, painter, dentist, contractors etc. We are in the automotive SERVICE business. We need to realize this is the position we are capable of being in (USP, Unique selling point) and should focus on this position rather than attempt to compete on commodity.

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I have always argued there is more than one successful business model and thats why I chirp about mine as much as you do yours. We both run successful operations and large ones. I just dont want someone who runs a smaller operation who might be struggling to think the only way out is discounting and maximizing car count. Too many shops think car count is the answer and most of the time it is not. But its the easiest thing to fix.

I feel compelled to chime in as well....... There are a lot of different people out there. You state GET THE CUSTOMER THRU THE DOOR......how do you keep the consumer out? As the self proclaimed car count fixer getting car count as you have learned is fairly easy. Getting quality car count not so much. While you appear to be an advisor, I have run a repair shop for the last 30 years. In my early days I spent a lot of time and energy sorting thru consumers with unreasonable expectations. While easy for you to say get cars thru the door, when you spend a lot of time and energy for someone who does not appreciate it or value it it reduces GREATLY the time and energy needed to deal with customers properly. So imagine if you will a batting cage. Each ball represents a customer/car. a large % of them are off target but if you dont swing you can "hit" them. So you spend all day swinging at balls and occasionally one crosses the plate. It catches you off guard and you cant focus on it quickly enough or completely enough and you foul it off. Sure, you may occasionally hit a single or double but I would bet more than not you foul it off because you were trained by all the ones that did not cross the plate, but you swung at them anyhow. If you were to slow things down, dial in the machine to only pitch over the plate how many home runs would you hit? Now, understand the example you use above states we are all large retail corporations whos value lies in pricing (walmart, costco, and Target) and the reality is we are mostly small, individually owned automotive SERVICE centers. Our true value is in TRUST, EXPERTISE and CONVENIENCE. Price is not a primary concern for our CUSTOMERS, yes we need to be competitive but we should focus on value, not price. We dont need a ton of opportunity, just enough over the plate to hit home runs. All the other things you've suggested are retention items that do not get cars in the door the first time. Each suggestion you have made is critical in keeping in touch with you customer and showing them you care about THEM. Once you have made this connection you can stop trying to get them in with price...it no longer matters. They will then chirp loudly about how wonderful you are and the friends they send in are coming in for the same treatment, not a cheap oil change. This approach vs the suggested one is much easier to manage and far less stressful IMO. Just another viewpoint of the game.

But that's not what gets the customer thru the front door the first time or what gets them to try coffee in the first place. Discounting IMO is a fairly unimaginative way to attract new customers. It is easy, it is effective but comes with baggage that I dont wish to deal with. That being said, I would ask the following: What are your shops unique competitive advantages? If you were in Anderson's market, what would you claim to do or do that would make you a better choice? ( I pick on Anderson because he states cheap oil changes is the way to bring in new customers) If It were me, a first class web site with customer reviews is a must. People need to look you up and "see" you online. What they see online needs to directly correlate with what they get in person. For me, we have all ASE certified Master Technicians, we use factory scan tools and factory information systems to service your car. We are the experts who can fix what others cant. We have a fleet of 26 loaner cars we freely offer for any type of service. We back all of that up with a nationwide 36 month 36,000 mile warranty. We have a sparkling clean waiting room for your convenience (if waiting). We take care of factory warranty and recalls for our customers. We do whatever we can to make it convenient to do business with us. Now, how to get the message out? Website #1. Optimize it and set up a pay per click campaign but dont compete for the common searches (oil change, alignment and tires come to mind). Join the local chamber and get out there and kiss babies and shake hands. Get involved in community events, donate time and effort, it will get the best results. Direct mail is quickly loosing it's effect here in the city but I would try it in the smaller markets. In everything you do talk about quality, convenience and expertise. In all polls those are the things that matter to people. When you make price the most compelling thing it becomes the most important which tends to commodify what we do. (oil changes). We wash every car we service, makes people feel good about their car. Put all the focus on what you do well, better than anyone else (then do it!) Hope this at least gives you somewhere to start.

Best May in the 30 year history of the company by 12%. Everything was up.

Just keep in mind one day down the line they could shut you down. I have a good friend who is in the same situation, he rented a building from the competition, the lease finally ran out and as it did they declined extending it since they wanted to expand to that location. Luckily he negotiated a buy out per say and since he is near retirement it is his way out. Not the best scenario but it worked out for him. I would suggest if you proceed you go with this knowledge and structure a lease that favors the tenant with possible purchase terms spelled out down the road.

And you can e mail me for a pay plan if you'd like [email protected]

I would be happy to share my program but it is similar to yours in the fact we pay hourly and an efficiency bonus on top. I have 2 lead techs and they are paid hourly only. Bigger question is what do you wish to accomplish by changing pay plans? The first thing that stood out about your post is the question about non billable tasks. Imagine your tech as a tool for a moment. Your company is not making money if the tool is not working. I would bet the average tech bills out $180 an hour in parts and labor. That's $3 a minute. They say when you take a tech off a job is takes a minimum of .2 to get his mind back to the task at hand. Thats 12 MINUTES. 12 x $3 = $36 of unrealized billable time. That would pay a helper 3 1/2 hours to unload a truck, empty garbages, clean floors and or anything else that needs doing. This frees up the techs to MAKE money for the company. I would take a day and sit out in the shop, analyze everything the techs do that is not billable and figure out how to have helpers/porters anyone else but the techs do. The fastest way to true profitability is through tech efficiency and productivity. If you focus on this you will crush the numbers AND have very happy techs because they will finally be making what they should as techs, not garbagemen....truck unloaders, floor sweepers, shuttle drivers, etc. Dont pay a $30 broom to sweep the floor when a $10 one will do the job just as well....