Think Your Business Isn’t Going to Change Dramatically?

posted on April 22nd, 2015 posted by Bob Cooper

All great companies have one thing in common: They realize industries and consumers need change, so they follow their customers. Apple provides a great example. As we all know, when Apple started they were a computer company, but when that industry began to decline, Steve Jobs was able to see that his targeted customers were investing in music. This is why Apple Computers became Apple Inc., is why they reached a point a few years ago where their online music sales exceeded their computer sales, and is why today they are in the mobile device business. In essence, they transformed to meet the needs of their customers. IBM and American Express are other great examples.

Your business is no different. Over the decades the auto repair business transformed from a “we fix anything” business that rebuilt every component into an industry that installed remanufactured parts. We then transformed from a repair industry into a maintenance-driven industry. If you bring hybrids and electric cars into our discussion, the change becomes even more dramatic. As this progression continues you will be seeing your customers, and repairing their cars, far less often. Interestingly enough, most shop owners are not too concerned because they simply believe that all they will need to do is ratchet up their marketing efforts to bring in more new customers. Unfortunately, there is typically a finite number of potential customers in any marketing community, and your competitors have the same plan in place. So rather than fighting the inevitable changes, or doing business the same old way until your business is out of business, here are my recommendations…

First of all, shop owners typically diversify for one of two reasons: They do it out of desperation, or out of inspiration. The ones that do it out of desperation are the ones that take the leap when they are struggling to pay their bills, and are scrambling to find any way to bring in a few more dollars. The ones that diversify out of inspiration are the ones that see the change in the wind, and take the necessary steps to ensure their continued success.

However, there is no one road that is right for everyone. If you are in a specialty business such as transmissions or suspension, you may want to consider transitioning into general repair. You already have the most important part, which is your customer base. Another option is to consider the exploding world of infotainment. As I am sure you will agree, if you walk into any new car showroom today you will find that just about every new vehicle has a wealth of entertainment features, along with navigational and communication features. So the question is: Who is going to not only be servicing these components, but who is going to be offering upgrades, and handling the installation of the newest state-of-the-art components that the drivers of older vehicles would love to have? Someone is going to do it, so why not you?

I would like to leave you with a story that has a powerful message. It is argued that at one time Bill Gates said, “If Santa Fe Railroad would have realized that they were in the transportation business, and not the railroad business, today we would have Santa Fe Airlines.” This is a message we should all take to heart, because the one thing that is certain is that our industry is going to go through many more dramatic changes. The first to embrace this reality, and make the necessary changes, will become the industry leaders for decades to come.

For additional help building a more successful auto repair business, learn more about Elite’s industry acclaimed Masters Service Advisor Training Program

 
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Success Isn’t Determined By Tools, Equipment or Ability

posted on April 15th, 2015 posted by Joe Marconi of Elite Worldwide

Before you call me crazy, please read on.

Your tools, your technical ability and your equipment are all components of your business, and of course you cannot conduct business without these components, but the real key to your success is who you hire and how you manage your employees.

In addition, morale has more to do with worker engagement than any other element of your business. And engaged workers are more productive, have less comebacks, take less sick days and contribute to the growth of your business.

We all know one undeniable fact: Happy workers create happy customers, and happy customers put you in a position to win.

Think of it this way; what wins baseball games?  Is the stadium? Is it the training equipment? The beautifully manicured field?  The baseball bat? The baseball?  These are elements of the game, but it’s the quality of the players, combined with their drive to be the best, that ultimately determines success and wins games.

Hire the best talent, work real hard to keep morale up, and do all you can to bring out the best in all your employees. Do this, and the rest will fall into place.

This article was contributed by Joe Marconi. Joe is the co-founder of autoshopowner.com, and one of the 1-on-1 business coaches who helps shop owners through the Elite Coaching Program

 
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The Most Powerful Lady in the Auto Repair Industry

posted on April 8th, 2015 posted by Bob Cooper

For an industry that was once dominated by males, I am pleased to have watched us evolve to a point where today we have female technicians, service advisors, managers and shop owners that are superstars in every regard. Without question, there are many powerful ladies throughout our industry that are role models for all of us. When I think of all those amazing women and the impact they have had on our industry, I can’t help but also think of a gal that’s not only changing our entire industry at the speed of light, but that has the power to take you and your shop to the top, as well put you out of business. At Elite we have a name for this amazing lady: We call her Mother Google.

As you well know, the people in your community no longer have their auto repair choices limited to a few printed pages in a worn out directory. With just a click of a mouse, Mother Google, who’s on call 24/7, will now provide that potential customer with information on dozens of auto repair facilities. The only limits in place are self-imposed by the consumer: ­­How many pages of results they’re willing to search through, and how far they are willing to travel. So in essence, the consumer’s options are endless.

Mother Google will also help that potential customer decide which shops they should call by scouring each website for relevant information, and then presenting the sites that she feels to be the best choices on the first page of her search results. Even though you could argue her job would then be done, she doesn’t stop there, as she will look at every word on those sites, and she will rank her search results in an order that she feels best serves the consumer. In essence, she’ll tell your potential customer, “This shop is more likely to be able to fulfill your needs than the one I’m showing you below it.” So if you’re not one of Mother Google’s top recommendations for your targeted keywords, you need to talk with a search engine optimization (SEO) expert about how you can move your website up in her rankings. Please keep in mind that it can be very difficult to evaluate the capabilities of one SEO expert versus the next, so I’d encourage you to ask other business owners you know if they can recommend an SEO expert that has delivered results. In today’s day and age there are many ways you can get your phone to ring, yet as I am sure you will agree, Mother Google will play an incredibly important, if not leading role.

Beyond search results, through Google+ reviews she is now providing a platform that enables people in your community to share their experiences and overall opinions about your shop. The day is rapidly approaching when there will be no secrets due to her diligence and the insights to your customer experience that she makes accessible to the world. So while providing an amazing customer experience has always been critical to a shop’s success, it’s never been more important to ensure you offer a customer experience that’s second to none.

And what about pricing? Not too many years ago it was a task for customers to look for price comparisons, but today she has reinvented that entire process. Not only are there companies like RepairPal that provide community-based price comparisons, but Mother Google will find prices and availability for your customers instantaneously. You can rest assured that when you call a customer with a service recommendation, and they tell you they’ll call you right back, in most cases they’re reaching out to their friend Mother Google for more information they can use to make their decision.

Does Mother Google have weaknesses? Of course. For example, she typically provides more confusion and misdiagnosis than accurate results when it comes to providing diagnostic information. But when you judge her by her strengths, and you consider that she is available to each and every consumer at a moment’s notice, you will then see that she is not only the best friend of today’s consumer, but like many women today she is revolutionizing our entire industry, and she is absolutely critical to the success of your shop in the coming years.

In closing, I hope you consider that people in your community now have far more choices than ever before, pricing transparency is becoming more the rule than the exception, and you have to be at the top of your game if you want Mother Google to recommend you. There’s a good chance those that fail to appreciate her power, that don’t offer an amazing experience for their customers to share and that are unable to get onto page one of her recommendations will ultimately find themselves in front of a bankruptcy judge. But if you stay sharp, and never put money ahead of people, Mother Google will help you take your shop to the top.

For additional help building a more successful auto repair business in the years to come, learn more about how you can receive 1-on-1 coaching from one of the top shop owners in America through the Elite Coaching Program.

 
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Taking the Mystery out of Labor Inventory

posted on April 1st, 2015 posted by Jim Murphy of Elite Worldwide

Many colleagues in the industry seem to be confused about managing labor inventory in their shops.  Much of the confusion comes from the terminology thrown around the industry and because the definitions for these terms vary (no disrespect to my peers).  I would like to clarify, from my perspective, what I believe to be the proper terminology and formulas for managing labor inventory.

Let’s start with the basics:

- Available Time – This is number of hours your technicians are physically in the building, ready to work on vehicles.

- Actual Time – This is the time measured when a technician is working on a vehicle and producing billable labor.

- Sold Time – This is the time the customer is charged for the specific time the technician produced from an assignment or labor operation.

From this information we can measure certain things as managers of our businesses, and create changes for improvements.  The following are the KPI’s that I feel are most important to pay attention to when measuring your technicians:

- Technician Productivity – The Actual Time ÷ Available Time x 100 = the Technician Productivity percentage.  Each technician should achieve 90%.

- Technician Efficiency – The Sold Time ÷ Actual Time x 100 = the Technician Efficiency percentage. Each technician should achieve 125% unless they are a general service tech that is predominately producing low sold hour operations, such as oil changes.

The next items will help you effectively measure the business performance, as it relates to labor inventory:

- Labor Sales Per Billed Hour – This is measured by the Total Labor Sales for the month ÷ Total Sold Time produced by the technicians. It is important to monitor your average labor sales per billed hour compared to your door labor rate to determine if your front counter staff is doing a good job of not letting the labor rate erode due to discounting or selling work below your posted rate.

- Effective Labor Rate – This is one of the most confusing terms in the industry. Effective Labor Rate deals with analyzing your available time and your labor rate.  The formula is Total Labor Sales for the month ÷ your Total Available Time. The reason for this formula is to help you determine how effective your staff is at selling your technician’s entire labor inventory.  If we have 3 technicians in the building for 8 hours per day and for 21 days in a month, we will have 504 Available Hours. If we divide that into our labor sales we will get a comparison to our labor rate. If the staff sells and produces more flat rate hours in a month and those hours are sold for a better Labor Sales Per Billed Hour, then you will have a more effective (or more profitable) Effective Labor Rate.

Remember, at the end of each day what we have to sell is labor, as parts sales naturally come along with the sale of labor. It is very important to manage that labor inventory because it is a perishable commodity that spoils daily and cannot be replaced. The shop owners that I work with that do a great job of managing labor inventory, controlling margins, and controlling expenses tend to be some of the most profitable shop owners I coach.

This article was brought to you by Jim Murphy. Jim is the leader of Elite’s prestigious Pro Service, a 20 group-like community comprised of 90 of the top shop owners in  North America.

 
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Hit Any Potholes Recently?

posted on March 25th, 2015 posted by Joe Marconi of Elite Worldwide

Driving to work yesterday was like driving through a road that was recently shelled with bombs. Because of the severe winter, potholes and damaged roads are a big problem. But let’s face it, there are a lot of other people that are driving on these roads, and a lot of them are our customers.  In fact, unless someone’s car was parked for the last 2 months, just about every car will need to get inspected for winter-related damage.

Now, I don’t want to sound like Dr. Evil and wish bad things on anyone, but the fact is that we are already seeing pothole-related damaged cars.  Damaged tires, wheels, suspension, steering, wheel alignment and other damage.

If your shop suffered through 2 rotten months of bad weather, do yourself and your customers a favor and inspect each car for winter-related damage.  The opportunities are there.

You owe it to your customers and to your bottom line!

This article was contributed by Joe Marconi. Joe is the co-founder of autoshopowner.com, and one of the 1-on-1 business coaches who helps shop owners through the Elite Coaching Program

 
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This Announcement Will Impact the Future of Your Shop

posted on March 18th, 2015 posted by Bob Cooper

I wanted to share the news that last week GM decided that their 2016 Chevrolet & GMC vehicles will only carry a 60,000 mile warranty on the powertrain. This is down from the 100,000 mile warranties that they have been providing for nearly a decade. This reduction in coverage will provide our industry with many more sales opportunities, and as we all know, if a customer has a remanufactured engine or transmission installed in a vehicle with 60,000-100,000 miles, there is a far greater probability they will authorize ensuing services and repairs. Although this will not have an impact on our industry until those 2016 vehicles come out of warranty, it is certainly promising, and it will better ensure your success in the coming years.

 
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Remember Shop Owners: Everyone is Watching You

posted on March 11th, 2015 posted by Joe Marconi of Elite Worldwide

Perhaps one of the most difficult things to do as a shop owner is to consistently present yourself with a positive and upbeat attitude. Let’s face it: your life is filled with issues, from bounced checks to complaining customers, to comebacks and employee problems.

But the fact is you are the boss and the leader of your company, and everyone is watching you.  What you do and what you say is seen and heard by everyone.   As the leader, you set the tone, the mood and morale of the shop.

If you are negative, everyone around you will be.  One of the best ways to lead is to set an example by being positive at all times. I know this may be hard at times, but to walk around with a doom and gloom attitude will actually makes things worse.

People react to the emotions of the leader. It’s far better for the long-term success of the company to have the people in your shop feeding off your positive energy, than being brought down by doom and gloom.

This article was contributed by Joe Marconi. Joe is the co-founder of autoshopowner.com, and one of the 1-on-1 business coaches who helps shop owners through the Elite Coaching Program

 
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A Shop Owner’s Guide to Handling Phone Shoppers

posted on March 4th, 2015 posted by Bob Cooper

Today’s consumers have more choices than ever before. When it comes to choosing someone to take care of their automotive needs, they turn to their friends, family and co-workers for recommendations, they consider brands that they have heard of, and they search the web as well. Once they have a shop in mind, they may then either reach out over the web or stop by your shop, but the majority of your potential customers will pick up the phone and give you a call. Since you’ve spent a good amount of money to make the phone ring, and because most of today’s consumers are well-armed with information, you and your employees need to be far more than just good on the phone: You need to be extraordinary. I have created this particular guide to help you do one thing; Create an experience that will turn those difficult phone shoppers into lifelong customers.

1. Start with the end in mind. You need to ensure your advisors and support staff have clearly defined car count goals. Start each day with a predetermined number of vehicles you want to get into your service bays, and then have your team monitor that number throughout the day. For example, if based on your ARO you need 8 cars a day to reach your sales goal, then your advisors simply begin the day with the number 8 on a note pad, and once the first customer comes in, they strike a line through the 8, and write a 7 underneath it. This easy-to-use method of tracking your progress throughout the day will bring a whole new level of focus to your advisors, and time and time again I’ve been amazed at how effectively this focus helps advisors bring in more phone shoppers. Additionally, this approach will provide you with the opportunity to acknowledge the success of your staff when they reach the daily car count goal. I used this simple technique to grow some of the most successful shops in America, so I know it will work for you.

2. Meet with your entire crew and create a list of reasons why your shop is the best shop in town. Your list may include items like your commitment to ethics, world class technicians, second-to-none warranties, etc. In order for your advisors to effectively sell anyone on anything, let alone sell those tough phone shoppers, they first have to believe in themselves and in your company.

3. Implement a phone procedure you feel comfortable with, and mandate that every employee follows that procedure. The top shops in America realize that phone procedures are critical to their success for many reasons. Well-developed procedures will provide you with consistency in how your callers are handled, it will allow you to know what is being said or not said to your callers, and that consistency will help you bring in more first-time callers. In all cases, well-designed procedures will put the caller at ease, will reflect your professionalism, and will build interest and value in the services you offer. Never forget, the first thing the caller has to buy, regardless of how tough the caller may be, is your advisor on the other end of the phone. The right procedures will help ensure that the caller likes your advisor, trusts your advisor, and views your advisor as a credible expert.

4. The top shop owners in America record their calls. Not only will this better ensure that your employees follow your phone procedures, but you can use the recordings as training tools when you are coaching your advisors on their phone skills. Recording calls gives you the opportunity to praise their successes, and discuss the areas that need improvement.

5. Understand how the callers think. At Elite we have trained thousands of service advisors, and over the decades we have learned that understanding how callers think is critical to success in sales. There is a misconception about phone shoppers that they are only interested in the lowest price, yet in reality that’s the furthest from the truth. The reason most people ask for a price is because they don’t know what questions they should be asking. For example, if a call comes in from a lady that says she is calling around for prices on behalf of her husband, and if she states that her husband has the vehicle so she can’t bring it in for an inspection, your advisors should say something like this –

Well Mary, I know price is important to you, and if I were in your position, it would be important to me, too! But I have to tell you, if you call 10 shops today you’ll more than likely get 12 different prices. Mary, do you have a pen and piece of paper? Great! When you are calling around, I’m going to recommend that you consider asking some other questions as well. You may want to ask the shops you’re calling how long they have been in business (At this point the caller will typically thank your advisor for the tip). Another question you may want to ask them is whether or not they have ASE Certified Technicians (This is when your advisor can explain to the caller what the certification means, and how they will benefit). Some other questions I would encourage you to ask are how they go about diagnosing vehicles such as yours, what warranties they offer and whether they are in writing, and whether or not they provide options in their service recommendations. The last question I would ask, Mary, is if they are approved by AAA.”

I used this procedure in every shop that I owned, and found it to be so effective and powerful that Elite now teaches it in all of our sales courses. The reason this procedure works so well is pretty simple: Your advisors will be providing the caller with the kind of information they need to choose the right shop, and showing them that you care more about them than their credit card. You can also rest assured that the shops they call will stutter and stammer when asked these questions, and every time the caller asks the recommended questions they will be thinking of one thing – your advisor.

6. Never prejudge or prequalify. Many of those difficult phone shoppers are people just like you and me. Most just feel they have been taken advantage of in the past, so are legitimately overanxious. Win them over, and they can become your biggest songbirds.

7. Lastly, ensure that all of your employees realize that their responsibility is to help people, not just to fix cars. When they embrace this responsibility, when they follow well-crafted phone procedures, and when they live by the principle of never putting money ahead of people, you will be doing a lot more than just bringing in those tough phone shoppers; You will be setting a new standard for the industry, and building a more successful shop at the same time.  This is a promise I can make to you.

For additional help turning phone shoppers into lifelong customers, learn more about Elite’s Masters Service Advisor Sales Training Course.

 
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Sometimes, a Compromise is a Win

posted on February 25th, 2015 posted by Joe Marconi of Elite Worldwide

A long-time customer came in the other day for a LOF service and an annual state inspection.  He also needed a battery, but said that he would come back for it.  When I tried to explain to him that we had to jump start the car, he said he knew about it and would come back.

This did not seem right. Being me, I pushed a little; “Tom, why won’t you let me install the new battery today?”  He was silent. I then said, “Tom, you are going to buy the battery from someone, why not buy it from me?”  He replied, “Joe, I can’t afford your price.”  I replied, “Tell me what you want me to do.”  He said, “Nothing, I will put the battery in myself and save the labor.”  I told him, “No Tom, I will put the battery in, you pay for the battery and I’ll pay for the labor. Deal?” He was silent again, and then said, “Yes, you got a deal and thank you.”

Sometimes, you need to close the book on sales strategy, profit margins, and quotas and just do what you feel you need to do.

Sometimes, a compromise is a win.

This article was contributed by Joe Marconi. Joe is the co-founder of autoshopowner.com, and one of the 1-on-1 business coaches who helps shop owners through the Elite Coaching Program.

 
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Tesla is More Than Just Another Automobile

posted on February 18th, 2015 posted by Bob Cooper

Over the years our industry has seen many changes. For example, beyond the changes in styling and efficiencies, today’s vehicles are better built, they last longer, and they require less frequent servicing than they have in the past. But there is one emerging trend that will have a far greater impact on our industry than all the other changes combined. Consider this…

Electric cars are not new. As a matter of fact, they date back to the mid-nineteenth century. Yet if you step back and look at what has happened with them over the past 10 years or so, if you consider the societal trend toward clean energy, and if you take a really close look at Tesla Motors, you’ll see that the Tesla is not just an automobile; it’s a glimpse into your future.

Tesla Motors was started in 2003, and in 2004 Elon Musk was appointed as the Chairman of the Board. Since then not only have prominent individuals and world-class business leaders, such as the co-founders of Google, invested in Tesla Motors, but the global powerhouses of Mercedes Benz and Toyota have invested as well. I find it intriguing that so many say Teslas are too expensive, and that because of limited driving distance due to battery storage capacity, the vehicles will never become mainstream. However, here’s why that presumption is the furthest from the truth…

With rare exception, every new technology will target the most affluent markets first, because they can afford the new technology, and can provide a fertile testing ground. This is why products like airplanes, computers, mobile phones and advanced medical diagnostic equipment are typically introduced to the wealthy before any other market. Once it’s determined that the product is a good one, it is then scaled to the masses.

Today Tesla is following that same developmental path. While the company is still marketing to the affluent with vehicles that range in price from $70,000 to $95,000, they undoubtedly have clearly defined plans in place to reach the mainstream consumers in the next few years. As a matter of record, they plan to launch a vehicle in 2017 that will have a price point of under $40,000.

By now you are probably wondering what this means to you. Simply put; our industry has now seen the beginning of the end of internal combustion engines. They will inevitably go the way of the horse-drawn carriages and steam engines. As we move forward battery life will inevitably continue to be extended, and society will continue to show a far greater interest in vehicles that are less of a pollutant, are quieter, and are more dependable due to fewer moving parts.

There is no question in my mind that if you were to close your eyes and open them ten to twenty years later, you would see far more electric vehicles than you would ever imagine. So the questions you need to be asking yourself are; What are your plans to participate in this emerging market, and what will your business model look like when the industry is all but devoid of internal combustion engines?

In closing, I am not suggesting that you are in any kind of eminent danger if you don’t move quickly, because that’s not the case. What I am suggesting is this: The future is yours if you have the vision, and if you take the appropriate steps to keep yourself at the leading edge of the service industry. And if you want to see what the future looks like, you don’t have to step into a time machine or find a crystal ball.  All you need to do is find a Tesla showroom, and spend some time there. If you do, you’ll see why beyond being an amazing automobile, Tesla really is an omen… for our entire industry.

For additional help building a more successful auto repair business in the years to come, learn more about the 1-on-1 coaching and customized action plan offered through the Elite Coaching Program.

 
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