It's the Process: Digital Shop Owners Go Multi

Episode Transcript

*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].

Tom Dorsey (00:00:04):
Good morning and good afternoon. Welcome to this week’s edition of The Digital Shop Talk Radio. I’m Tom Dorsey, and today we’re talking multis shops and specifically how you can take that digital shop technology and apply it to those dreams and aspirations of becoming a multi shop chain owner and use that technology to really help achieve that goal. And so I’ve got two great multis shop operators in today. Welcome to the show. Fred Haynes from Honest-1 in, well, I’ll let you tell. It’s Eagan. Burnsville, Pryor Lake. What do you got? Four locations, Fred.
Fred Haynes (00:00:39):
That’s right. Yeah, two in Eagan and one in each of the others.
Tom Dorsey (00:00:42):
And that’s in Minnesota,
Fred Haynes (00:00:44):
Correct? It’s just outside of the Twin Cities in Minnesota.
Tom Dorsey (00:00:47):
And Fred’s getting hammered by Snow today and he’s still taking the time to, while he’s taking a break from probably shoveling or something like that, or stoking the fire to join us on the Digital Shop Doc radio. And I really appreciate it. Fred, welcome.
Fred Haynes (00:01:00):
Thank you
Tom Dorsey (00:01:02):
And welcome back to JR Luna from Concours Motors and several more, and I think he’s going to share even some more exciting news with us today on this episode. But welcome JR. Thank you guys. Thank you. It’s not snowing here in California. No. Even though it might look like that in his picture, but that’s actually Alaska in the summer, oddly enough.
Fred Haynes (00:01:27):
Now I’ve got Minnesota in the summer.
Tom Dorsey (00:01:30):
Yeah, exactly. From your summer’s, like a three week period there. And then it’s back to winter. But we got these guys on here because it’s really a great dichotomy. JR’s an independent operator, kind of bootstrapping, been in the business, basically went from sweeping floors to going to be his fourth location here pretty quick. Rumor has it, and Fred, who comes from a different industry business decision analysis, crunching the numbers and looking for opportunity and coming from a franchise perspective. So thought what a great two guests to have on to talk about because depending on where you’re at in your pursuit of opening up and expanding your operation and maybe becoming a multis shop owner, you kind of got these two paths to go. You’re either going to bootstrap it and do it yourself or you’re going to get into a system. And so here we’re going to have kind of a great discussion on both sides of those fences. And of course, welcome as always, our founder at AutoVitals and our lone representative on the expert panel of experts today, Uwe Kleinschmidt.
Uwe Kleinschmidt (00:02:42):
Good morning. Great. That you guys could make it looking forward to.
Tom Dorsey (00:02:47):
Yeah, no, thank you very much. And welcome. Welcome. And so let’s just get it kicked off. And if I could, I’d start with you JR. And just tell us a little bit about how you found yourself in your current predicament. And that is chasing additional locations. And as a matter of fact, opening one, I believe one, maybe two, not one, during the Covid Pandemic.
JR Luna (00:03:13):
Yeah. Well, it’s been a long ride here, but I think once you get momentum doing something and you begin doing well and you kind of find the formula and find yourself a great team, have I’ve been lucky to have great managers and a great team and a great group of people. I was lucky enough to be a customer of AutoVitals man many years ago. I think every time I call tech support, they get shocked that I’m like customer seven or something like that.
(00:03:47):
So once you find that formula and you know how to deal it and you get momentum, and for me it’s always been about achieving more and seeing what we can do. And so once you get momentum and you know how to do it, the formula things just kind of fall in your lap. And this last, this current shop that we’re in escrow in kind of just did that and it kind of just fell because we were in momentum. The train is going and it’s easy to pick up others when you got great success coming your way. So we’ve been very blessed and we’ve been very happy to be able to put ourselves in a position and our team in a position to become even more and become even better. And strength in numbers, right?
Tom Dorsey (00:04:43):
Yeah. Plan your work, work your plan. You don’t have to know everything. You have to know what works and be able to repeat that and be able to train it into people. And if you’ve got that, just like, I mean, you couldn’t have said, I mean, we’d end the show JR. Once you stumble, whether you stumble upon it, you pay for it, you find it on the sidewalk, somewhere out in the parking lot, blowing around in the wind. Once you find it and you know that you can do it and you can repeat it and the numbers add up, you end up with more in your pocket than you had to put out at the end of the period. Hey, then you crank that throttle up and you can do it too. It’s about the process. And so that brings us to Fred because Fred, give us your background. You came from a completely different industry, I think really was looking at automotive as strictly the opportunity and what the numbers tell you and what the data says to you. And now here you are with four locations.
Fred Haynes (00:05:47):
I took a very different path. So my background is I worked for General Electric Company for 18 years and the division I was in was sold to a Swiss company. And so in the financial industry and reinsurance. And so I worked there for another 10 and really was living in Switzerland and deciding to come back to the States and was trying to decide what I wanted to do. And so I really looked at any type of opportunity. I was pretty sure I didn’t want to do what I was doing as a profession or owning something. I’m an IT professional by trade and an IT executive. And so I didn’t want to start up a consulting firm. And so getting into something I didn’t necessarily know from a standpoint, I was really looking at franchise and ultimately evaluated several opportunities, decided on Honest-1 because I really liked what the brand stood for and really liked the regional folks I was working with at the time that were here to help me be successful. So my first shop came up in 2012 and I built one from the ground up in 14. I acquired a spec shop from another individual who thought he could do it too, and it didn’t really work out in 15. And then I bought a franchisees location in 17.
(00:07:12):
And so that’s how I got to where I am. And I’ve been doing this now full time since March of 17. So prior to that I had other people working for me and I played a much more back of the shop role now I’m much more front and center for the last three years.
Tom Dorsey (00:07:31):
So yeah, completely different kind of path. So what was it that drew you to it? What made the numbers fall into place? What analysis did you have? And then is that what led you to AutoVitals? How did AutoVitals kind of fit in that math?
Fred Haynes (00:07:48):
Yeah, so like I said, it was really more about the brand. I didn’t know a ton about the industry except for my own experience, but what I did looked at looked promising. I think that there’s a lot of opportunity if you do it, but there’s also a lot of competition. I think looking back on it, it’s a lot more complicated I think, than maybe you would generally understand by just looking it on the outside, meaning there’s a lot of moving parts, literally parts, and everything’s a custom job. And so there’s a lot of knowledge and intelligence that has to happen. And being a Numbers guy, our point of sale system, we use Protractor, which I think JR actually does as well. There’s a lot of great information about what’s going on in that, but it’s not good at it. It doesn’t really do inspections. And so all of that was Paper-based.
(00:08:39):
And so as an IT guy, I felt like I didn’t have great visibility other than to go and pull reports, pull actual physical handwritten documents that look at them to say, are we following the established standard operating procedures or not? Are we even giving ourselves an opportunity to sell when it comes time to sell? Because we are checking OEM recommendations, we’re doing good inspections, we’re noting things properly, we’re estimating things properly. And so that’s what led me to AutoVitals. Uwe came to our conference, I think it’s been about two or three years ago now, and I said I think this is a real opportunity to gain insight in an area that isn’t easy to have insight in. So I do have much better understanding of how well we’re handling the vehicle from the time the guest drops it off until the time that we hand it off to them. So that’s been incredibly helpful and insightful.
Tom Dorsey (00:09:38):
Yes. And you were telling me actually yesterday, you were mentioning that you didn’t really get a guidebook, an instruction book or a really kind of core established standard operating procedure through the franchise and that you developed that over time. Can you tell us a little bit about what that was like? I mean, I’m sure it was a deep analysis and of performance, some goal setting and expectations, and then looking to see how do we get there? And then once the digital shop came in, how did that open up the data points and the analysis, the opportunity to do analysis in that operation to come to your SOP?
Fred Haynes (00:10:30):
Sure. So as I mentioned, when I joined, we had a really good regional person and they had the most successful shop in the franchise in Minnesota at the time. And he had done a really good job of building up the Minnesota area. It’s basically, I think there’s 14 or 15 locations in Minnesota out of 75, 80. And they were kind of the first here. And so he did a really good job of building it up. And he also had a way of doing things. And so he defined what the steps of service wire I, you guys probably know Gary Gunn, right? You’ve heard Gary Gunn. Oh yeah, of course. Okay. So we were very much of that kind of thinking. And one of the most impactful things I learned from the franchise was really when Gary came and spoke about managing for profitability and really understanding what your costs are and what you need to do performance wise in order to make money. And to me, that really resonated. And so I built my standard operating procedures and operating systems around that concept. And so I know every day, and everybody in my shops know every day exactly what their gross profit target is, and they know how they did and they know how they’re doing toward the month. All their bonuses are aligned to that and everything in the front end of the shop, as an example.
(00:11:55):
And I guess another thing, not to offend anybody in the industry, but I think, and it is probably the same everywhere, but it’s very easy as a human being to when things don’t go well, to say, well, it’s because the sunshine didn’t hit the dog today or it rained, or, yeah, everybody, all they wanted was an oil change. They were all waiters today. They were all brand new cars, literally driven right off the lot into our shop for an oil change. And you never hear, well, yeah, we didn’t do great inspections today, or I decided I wasn’t going to try to sell anything to this guy I didn’t think he could would buy. You never hear the real reasons. You always hear other reasons that aren’t things that the individual can control. And so not knowing a lot about the industry, I really said, look, are we following our standard operating procedures? Are we doing all the things that we’ve trained and said we need to do? And that was really my goal with AutoVitals. And so I measure all of that to really understand am I doing a good inspection? Am I sending to the guests? Are they looking at it when I,
Tom Dorsey (00:13:03):
Oh, I’m sorry, Fred, go
Fred Haynes (00:13:03):
Ahead. No, no, fine. Go ahead.
Tom Dorsey (00:13:05):
I was just going to say yeah, because the data will never lie to you, right? The data will never lie to you and it will never hide from you. Most of the time it’s simply having a access to the data and looking at the right data for the situation. And JR if you could tell us a little bit because when you go from, I think you started out as a helper, as an assistant, and then as a tech, and
JR Luna (00:13:31):
Yeah, I’m sorry, I didn’t answer your first question fully. I started when I was working on driveways with Monko when I was young and growing up I knew the automotive real well, and I started as a helper, a local dealership, and I went back to college and the thing that I got paid more to do was working on cars. So I stuck with it and I actually got a bachelor’s in business management and I thought I was going to be a CEO of a company. I try that. I worked at a desk with a white shirt and all that stuff for Caterpillar, and I hit it every moment of it. I belonged in the shop, I belong with the guys swinging a hammer or test driving a car with no exhaust or something like that. So definitely a little different take on that. So I was a technician for a Goodyear store, and then I became a service manager and then a store manager. And after years of that, I finished university and I ventured out to mortgage our house and bought Concours Motors, which was our first shop. It was a failing shop, it was very small and throughout the years it was just myself and one employee and we kept growing and moving forward, change locations. Today we have 25 employees and three locations going on four. So I definitely come from the back of the shop, not from the front of the shop. And that’s my point of view.
(00:15:07):
When I started looking at opening shops, I was going to open, I was looking into the franchise model as well, and then one customer, I don’t know if he saved me or he steered me the wrong way, but I’m pretty happy where I am. He was more of a mentor to me. He was a really wise guy. And I asked him and I told him about what I wanted to do and he said some wise words. He said, I come to you because of you. I can care less what names on the building. And so I chose not to go the franchise route. I chose to buy an independent, and that’s how we started. The hardest thing for me is that I and Fred, you said it doesn’t really work this way, but I don’t have a lot of guidance. I have to focus on, get my information from mentors, from companies like AutoVitals.
(00:16:07):
I’ve been a drive client for years and I’ve consulted with other companies and we all need the coaching and we all need the structure. And I think the structure that AutoVitals gives you is it’s really great. It’s really a huge building block on what you can do with your service. One of the things that I find, and we were talking about this yesterday is there’s a lot that statistics that won’t measure and Uwe raises eyebrows right away. And I was like, what do you mean it doesn’t measure? And that is the nailed that accent. Yeah, we could have standard operating procedures, we can have all the things that you want, but that aptitude of our service writers, that attitude of the technician, the culture of the shop, I have three shops, I’m the general manager for all of ’em. They’re all different. You go to one shop and just the vibe is different.
(00:17:15):
It’s got to do with the manager themselves, they’re all awesome, they all do great, but at the same time, somebody can say and do the exact procedure and it’ll be different from one person to the other. And to me, what I find is that human relation that I can download to my guys that whatever the situation might be, we’re here to help the customer. We’re here to help the community. We’re here to help our fellow humans and to provide that honest, accurate estimate, that honest, accurate guidance to the customer. I think that’s what sets shops apart. And I always try to do the best that I can for our customers, for our employees, and for the community. And that I think when you come from that standpoint and you have that in your heart, not fake, it’s going to be genuine, you’ll succeed more. And because our customer base, our public can sense that. So I don’t know if we can gauge that, but there’s a lot of great stats that will give you the clue of who’s doing what. But I think the most successful salesperson and the better shops believe in this. And I know Uwe believes in this.
Tom Dorsey (00:18:40):
Well, I got to tell you, JR. I mean that’s a lot to unpack there buddy. I got so many questions for you and I think the one I want to start out with the most intriguing to me is because again, from Fred’s background and how he got to where you are and from yours, so you have the process down, you’d worked in a bunch of different operations and had process down, but didn’t really have probably or had to figure it out on your own how to do the analysis. Because like you said, a process without the understanding is it’s never going to be sustainable. And I want to get Uwe in here because you mentioned him and B, I know he’s champion at the bit to ask you some questions too when it comes to your process and how you developed it. But if you could, while Uwe’s thinking about what he wants to ask you, tell us a little bit about how that happened.
(00:19:34):
Was that Drive’s involvement? Was your mentor’s involvement on, Hey, here’s the data you need to be paying attention to? It’s changed a lot, right? AutoVitals has had a big part in changing that. You used to be looking at your GP and looking at, and you had these basic industry formulas that you would go through, but it would never give you the same picture. And a lot of that had to do with what you talked about. And that’s behavior and attitude. It’s hard to measure. I’m not going to say it’s immeasurable. It’s hard to measure. So if you could tell us a little bit about how you, because that’s what really is going to put that together and make you successful is take that process and then be able to analyze it so that you know it’s working. How did you get there?
JR Luna (00:20:23):
I think a lot of it has to do with my upbringing. My dad had employees and he was super kind to them. He always catered to ’em and made them feel like family. I love people. I think people is, I’m a people person and it shows if you’re around me, I like my customers, I like my employees, I like everybody, and I loved you before I met you and I love you after I met you. It’s just who I am. But when I went to Goodyear, when I worked for Goodyear, we had a lot of training and a lot of their training was really on providing the ultimate customer service experience that a customer can have. And they wanted us to be the Nordstroms of Goodyear and making that comparison. It was actually a, it was really eye-opening that you can do something, you can have great sales, you can help a lot of people, you can have great income, you can be really honest and sleep great at night. All those things were right up my alley. That’s what I look for. And so obviously drive taught a lot of us in things, but I think it grew with me from when I was a little boy.
Tom Dorsey (00:21:52):
It was just having that desire to succeed and then whatever that meant, if I had to learn a new skill, if I have to learn how to juggle, I’m going to learn how to juggle and it’s practice and follow through. So Uwe, one of the big takeaways that AutoVitals presents to all digital shop operators, but multis specifically is kind of the ability to have a canned SOP, right? Our digital shop operating process. As it comes out of the box, as you’d say, put it this way, if you currently are struggling with a process in your shop or very inconsistent, if you can adopt the digital shop operating process, it gives you that process. From there you discover what’s working and how your operation needs to influence that and it’s flexible and customizable around that. So Uwe, what would you say when it comes to from JR’s experience there and what we heard from Fred, how would you say that through your development, through the tool, what’s the biggest bang for the buck for somebody who’s either a current multi just jumped in or is looking to do an expansion and become a multis shop owner, what would you say is that kind of first critical success factor that they need to be focused on?
(00:23:16):
Oh, I think you’re muted, buddy.
Uwe Kleinschmidt (00:23:18):
Yeah.
Tom Dorsey (00:23:19):
Or you’re speaking in German quietly,
Uwe Kleinschmidt (00:23:21):
Which one do you want?
Tom Dorsey (00:23:25):
That’s silky smooth voice right there. That’s the one.
Uwe Kleinschmidt (00:23:28):
I think if you really look back on where everybody started before the digital shop, it’s very easy to write down a standard operating procedure and hand out a handbook, but how do you know it has any impact on the shop? You install cameras then and start watching people that’s highly trust building. So the ability to measure certain results which are tied to behavior like inspection, weight recommendations and so on and so forth, allows you to have at least a foundational process. It’s like in sports, let me compare the digital standard operating procedure with the triangle defense of the Chicago bolts, there is something where you have the fundamentals down and then you build a standard operating procedure which is fit to your skills, which makes you successful, and that is needed, but it’s as well as needed. As JR said, the attitude, you cannot really separate the two.
(00:24:59):
One does work without the other or one cannot compensate completely the other, in my opinion. And so that was for me, the big driver actually coming from sports that high performance athletes get measured in every aspect of their skills and what can we do to do something similar and show the correlation between results and behavioral change? And that’s how the BCP got created because if you can correlate very easily graphically, technician A stopped inspecting service advisor B stopped sending out inspections, whoop ARO took a drop. There’s nothing better in an existing shop culture to talk about this, right? Here’s the data, as Fred mentioned. So the darked, my homework is not a valid excuse anymore, and it was before, and most shop owners either had cameras in the shop to see behavior that’s a very limited way or just went into the shop and look over people’s shoulder. That’s not scalable, nor is it really trust building.
Tom Dorsey (00:26:27):
And it’s reactive,
Uwe Kleinschmidt (00:26:28):
Isn’t it? And it’s reactive. Yes. So does that answer your question?
Tom Dorsey (00:26:32):
Yeah, it sure does. And because it raises a bunch more, and I want to ask Fred, because this is really getting to the heart of the matter, I think, is that you have, I don’t have any experience running a multi-location, automotive franchise or chain. I’ve talked to a lot of people that have, and I’ve looked at a lot of data of folks that do, and there’s a lot of inconsistencies it seems like across locations. And so that’s really another reason why I want to have JR’s got two specialized shops. You’ve got Concours, which is European, you’ve got Asian Auto Tech, which is Asian, and then you’ve got your third location. I believe it’s general. It’s general airport Auto Tech. Yeah. And so there’s different, I would imagine equipment and availability and number of bays and those things are different. And so it throws a lot of even clientele and the clientele.
(00:27:37):
Yes, yes, yes. And so all those variables make it, don’t they harder to have a blanket standardized operating process across all of your network of shops. So then to Uwe’s point, if you’re in there and now you’ve got a shop manager at each location and they’re going out and they’re reacting to what they see and they’re giving feedback and then you go look for it in the data, but Fred, don’t you do the opposite? Wouldn’t it make more sense to be able to sit in a single workstation and look at data and then have a hypothesis about what the data’s telling you and then go observe the behavior maybe even through an area manager or something like that. Can you talk to us a little bit, Fred, about how you manage that and how you react to what you’re seeing in your analysis
Fred Haynes (00:28:36):
So it’s ever changing? So I’m always learning something new in my discussions with my people or my interactions with customers. I mean, JR is absolutely right. At the end of this, you have to provide a great service for the guest, for the customer. And so when I said the brand was attractive to me, that was why, because the whole premise behind Honest-1 is look, every customer comes in, has fear, has trepidation. You don’t wake up in the morning and say, gee, I’d like to go spend 2000 bucks on the fixed oil leaks in my engine today. That sounds like a fun activity today. It just doesn’t happen. And so how do you make that process as pleasant as possible and make sure that the guest understands that you’re not trying to put one over on ’em, you’re trying to make their car as Bill Connor says, safe, dependable, and comfortable. And so just everything you do showing that. So I love the fact that Honest-1 was about kind of that that’s what I liked, and as a business person, it really resonated with me as that’s kind of the hook is that’s why we’re different than just about everybody else.
(00:30:03):
So there are a set of standard operating procedures. You can set up ways to do things that help basically put you in the best possible position to provide that level of service. And so that’s to me what a standard operating procedure is. But just like in the military, you can give an order, but it can be executed in two ways. You could have the way where the guy jumps off his feet and runs across the room and you have the way where he drags his feet every single way that he goes there, but they both end up doing the same thing.
(00:30:35):
It’s the same with this. You can answer the phone real happy and joyful, and you could say exactly the same words, but your tone is completely different when you present the findings to the guest, you can same thing, tone, empathy, how you approach things. And what I see, one of the biggest things I learned from multis shop is I didn’t really know what good looked like personally, but when I got my second and I got my third shop, I understand what is possible now I know what good looks like, I know what the things are, the attributes are, and I would say these operational metrics about am I doing what I say my standard operating procedure is from the time I greet the guest or the time the guest calls to the time they walk away with their keys, am I doing all the things that I’ve set up? Because if I do all those things, that puts us in the best possible position in order to do what we’re trying to do, which is fix cars and make money and of course satisfy the guests. And so that’s just the ticket to the show that doesn’t win. There’s things above and beyond that, and what I found is that most of our variation in the beginning was because we weren’t even doing that part. How can you sell something if you don’t find it? How can you even fix the car if you don’t take the appointment?
(00:32:09):
So I’ve spent a lot of energy, I think just getting to the point where that’s consistent across the board, naming the basics, and I’ve really, since Uwe presented, have really dug into the back end of the shop and making sure that that process is consistent and it’s an ongoing battle. I mean, you have variation all the time. You have new people coming in, you have people that have bad weeks or whatever that happens. So I think that that’s what really focused me and I’ve gotten to the same place I think that JR has gotten is that yes, you need all that. You need that they even have a ticket to the show, but there’s more. And that more is what is it? What are the behaviors? How do people approach things in my organization that are head and shoulders above some of the others in the organization and how do I, through standard operating procedures, training and learning, take those folks who aren’t as successful and give them some nuggets so that they can start to raise their game and get closer to the guy. That’s better.
Tom Dorsey (00:33:19):
Yeah. So I got to tell you, so Uwe, this almost sounds like a luxury if you’re at the level where you’re analyzing kind of presentation. I mean, if I think of it as a restaurant, we’re cooking the steak perfect. Now we’re focused on making it really pretty on the plate, and that’s almost kind of I would say an offshoot or a benefit of being able to see your basic KPIs, your basic metrics, and knowing that all things considered we’re doing it, we’re nailing the basics, and now it’s time to refine. Now it’s time to build it up and improve it for that next step. If you could Uwe, tell us a little bit about what that would look like and from your perspective in developing the tools and developing, especially because we’re going to talk a little bit about KPIs here in this last segment, and we’re going to talk about how it all brings it together.
(00:34:20):
Because the way I see it is if you have that repeatable process down, you get then consistency of a result, whether it’s a good result or a bad result, well, that’s your job to analyze that and figure it out because just because you have a process doesn’t mean it’s the right process. You might have to find a, it’s not the tech’s fault, it’s not survey. Your process stinks. Now I’ve discovered that through that analysis. Now I fix that process and now we kind of relearn and retrain and then we reexamine reanalyze. The second thing is be able to do exactly that. The analysis, the comparative analysis that Fred nailed it, right, is that now I didn’t know what, I didn’t know when I had the one, but now that I got another shoe on and I find out this yields a little shorter than the other one, oh my shoes, I need new shoes.
(00:35:06):
You know what I mean? I need new shoes. It just finally dawned on me and when you can sit and analyze that data and then start to look at these questions that you have, why is this one so different than this one and drill down to get those answers, and now we have that information, we know what we don’t know or we know what we need to address. And then it comes to the ability to have KPIs. I think that look at behavioral, because this is what we’re ended up talking about is it refines down to the behavior, the presentation, and I believe, I think even now without new algorithms and new KPIs and data points, we have the ability to analyze that employee morale and behavior right through the existing data. Would you agree? You’re muted again, buddy. You must be doing something that you don’t want us to hear in the off
Uwe Kleinschmidt (00:36:11):
Segment
Tom Dorsey (00:36:13):
Over there. What I was going to say, it’s
Uwe Kleinschmidt (00:36:18):
Good stuff. No comment.
Tom Dorsey (00:36:22):
It’s a good thing Your camera’s up here, buddy.
Uwe Kleinschmidt (00:36:26):
Oh, and just because I muted myself. What’s going on? What’s the question again?
Tom Dorsey (00:36:34):
Exactly.
Uwe Kleinschmidt (00:36:36):
So let me try to unpack that. I think you can say there’s something, what I would call shop operation and then there’s something called motorist interaction and going digital has helped in both areas to create transparency for the shop operation. That’s basically the availability of tools where we can measure what people do, put it in a graph, align it with the shop SOP, the standard operating procedure and so on. So I can say Doc eight, my homework is not a valid excuse anymore because I put the goals out and say how it works and measure against it, and then I have a third party provider without any emotion showing the data. That’s pretty straightforward. I’m not saying it’s easy, but it is pretty straightforward and the behavior in that you can really see what the worst BCP graph is. Worst in the sense of the most challenging is when it’s inconsistent. So you go up and down and up and down over a period of time and you don’t know how to fix it. So there’s a clear consistency problem. That is what the graphical trend analysis has over any dashboard. In dashboard, you only get a snapshot. You have to do the trend analysis in your head.
(00:38:14):
That is what really helps you say, am I in the place I wanted to be and is this an outlier or am I still being inconsistent and the training didn’t work or other stuff is more important, very easily identifiable. The interaction part is the most challenging, but also most interesting for me because we all know that selling has become education and most of us, I don’t know how many percent, but the overvaluing majority uses online sources to educate themselves and actually make a decision and buy. And that trend is clearly unstoppable and more and more bigger ticket items get purchased online without any human interaction. I’m not saying it replaces service advisors. What I’m saying is the service advisor in the motorist interaction has to transition to a transparency driven education piece because it’s so easy to compare any words you are saying with a Google search.
(00:39:41):
And if that comparison fails, my favorite example is in the old days, if you said tying belt replacement, the seven 50 bucks, then service advisor in case was a trusted advisor, would be asked, what is a timing belt? In case you didn’t know it today? People wouldn’t even ask that. They hear seven 50 bucks, hang up Google timing belt, and guess what? They find a rubber band for 150. So who is now connecting the dots between the 150 and the 750? And so long story short, the motorist interaction has now so many digital assets involved in the communication, which is a blessing for us to measure. Is that interaction helping? Is it highly engaging? We measure motorist research time as a big KPI, but we could go into much more detail and see for example, if a process is followed or not, when does the motorist open the inspection? What do they do further? I mean, you can go into analysis of phone calls or certain keywords there. It’s all possible. And I bet you would find the guy with the attitude JR you are describing is going to score higher than the guy who’s just following a process, right?
Tom Dorsey (00:41:16):
Yeah. Because don’t you see that though, JR? I mean, hey, my number of recommendations are starting to fall because I’m not really with the program or my picture edit rate is getting really kind of wild and it looks like I’m just kind of cherry picking. Now my picture edit rate’s really big on this big exciting thing with these basic stuffs that really pays the bills and butters the bread. I’m doing it kind of half, but so you kind see that now in the data, don’t you?
JR Luna (00:41:46):
Oh, absolutely. I mean, there’s a lot of graphs that we follow, a lot of KPIs that we follow that tell you a lot of the story, a lot of what’s going on in the shop, absolutely. That is 100% true for the technicians inspection quality. We measure deferred work. That’s what I measure to see if cars are being looked at, how much, what’s the opportunity that came from the table in a certain week and a certain day from a certain technician, and you find a lot out of that.
Tom Dorsey (00:42:16):
So you’re looking at deferred work that was sold or outstanding deferred work that was recommended and not sold and then needs to get up.
JR Luna (00:42:26):
I measure the exit schedule that was not sold,
(00:42:31):
That left. How much opportunity did we have and how much did we sell out of that? And if we sell too much for me, it just tells me that the car we just fixed, whatever that car came in for, there had to be some deferred work in my opinion. I see that. I mean sales average ro, gross profit, new customers, those are all key KPIs that I follow. Research time, picture editing and deferred work. Those will tell you a story of where do you need to look. And what I find is that if the employee is willing to change and to tweak their processes, they probably had a fight with the dog that morning.
(00:43:19):
Something happened. They were just off game. If you got up and downs, and that’s where, well, when you have multi shop, you can’t stay at one shop and fix those things all day every day, right? You got to have eyes in many places and many crews. So I focus my time on looking at the KPIs, but my majority of the time is being spent in leadership and mentoring and guiding my leaders, setting goals, setting objectives, influence them on to think that is possible, to think how we can accomplish that, to think how we can help others be their best and themselves. Because once you get that, get that willingness, we’re all going to win. And having that camaraderie of the shock that everybody comes together and we’re all rowing, and I’m not talking rowing to the same ship. I’m talking about rowing to the second door on the left side of that ship. It’s got to be pretty specific. And once we do that, everything becomes easier. Everything falls into place. You have a great interview with a customer, you tell the customer what’s going to happen. You got to have great pictures, impactful pictures, recommendations, great estimates, and you have a great conversation with the customer. I mean, it all just falls into place
Tom Dorsey (00:44:58):
And it falls in a place across your network because there’s an expectation now and then there’s a bar to be measured against, and I see it in both of your data in all kind of shops data that adopts the digital SOP is that pretty soon it becomes apparent where the laggards are, and then you can really see, it’s like they hit the nitrous button and then those laggards all of a sudden are getting whatever it might be, their inspection rate up, their picture rate, whatever starts, and then here comes the payoff, right? That ARO is creeping up, that hours sold per ticket is up, the customer retention rate starts to move up. All of those good critical success factors start to move in a positive trend, in a positive direction. Once you kind of really look at that big picture and start doing those comparisons. Fred, is that how it’s working with you? I mean, are you seeing that same thing where you’re able to identify potential behavioral issues or competency issues inside of that data and then go find that specific individual to observe and do correction or continued training or even of course replacement if necessary, if they just can’t get with the program when you’re doing your data analysis?
Fred Haynes (00:46:21):
So it’s kind of progressive, right? So what I’d say is I said, the first thing you have to do is do it and do it right? And so before you go and look for all kinds of other reasons why something is the way it is, the first thing I can do very quickly now is I could confirm, well, are we following the standard operating procedure check? Okay, got it. Where do I look next? I mean, I measure, I know exactly how many calls I’m getting. I know exactly how many sales calls I got, which is in my mind a great measure of if am I waiting for the guest to call? Am I sending it and waiting for the guest to call, or am I picking up the phone and going old school with people? So I audit phone calls, I listen to those, we judge what’s going on there.
(00:47:11):
So I know now whether we’re following standard operating procedure. And so my time is really more spent on understanding, well, when we have different outcomes and we’re both following the same procedures, then it’s clearly something outside of what I’m measuring. So I’m either got to figure out and quantify what that is and try to figure out how to get a handle on it. I have to look for, well, what are those differences and how do I get the other people to understand what those are? Why are they successful versus another? It’s also recognizing that there isn’t just one way to succeed, right? There are different styles, there are different approaches that can work. There are definitely things that don’t work that we should avoid, and there are in the absence of a way that works, how about adopting one of the ways that do work?
(00:48:05):
Give that a whirl. Which one’s comfortable for you? Let’s give that a try. And that’s what we do. I’ve done a lot recently with ranking employees. It doesn’t affect performance or anything, but if you look at technicians, what are the metrics that they can kind of control? You mentioned deferred service. You mentioned edited pictures or pictures. I think they have an influence on research time because if they’re taking good pictures and they’re finding things that are really needs, then they can have a good score. So you can see who’s doing it right versus who not. You can look at it at a shop level. You can look at an individual level. I do the same thing on the service advisor side. Who’s got the best GP and the best ARO who’s handling the most tickets? Why is that? What are they doing different than the other guys?
(00:49:01):
There is a bit of that inherent competition between teams and then me just being a commitment is, look, I want everybody to be successful. I want everybody to earn every bonus they’ve got. That’s what I want. It’s a win-win win. If we’re doing that, that means that we’re fixing people’s cars and making ’em safe, making their cars reliable, and we’re making ’em comfortable and we’re all happy. We’re getting rewarded for doing that great service for people, and that’s how it should be. And so that’s really where I spend my energy is figuring out how to get there. And I’ve gotten to the point now where, yeah, I’m in search of what specifically do I need to tweak to get over that next hump?
Tom Dorsey (00:49:44):
Yeah, no,
Fred Haynes (00:49:46):
It probably won’t be done when I get there. But that’s the point is is you’re never really done and it’s constant. You have to just keep after it all the time
Tom Dorsey (00:49:53):
And you’re just getting better and better. You’re just refining it and it’s a better product. And as you learn from it and then your team, again, it goes back to the culture. But if the culture says we’re all in it to win it and we’re all sharing in the success, well then those refinements, a lot of times that gets brought to your attention, which we’ve talked about several times in the show through that culture development and through that transparency and opening that door to say, okay, yeah, this is the way it is today. Prove that there’s a better way. Prove that that better way can be adopted consistently and produce consistent results. And then, hey, of course we’re going to do the better way and we’ll make those changes into the process and adopt that and move forward. And then again, find a better way. Uwe, we’ve got 10 minutes left, buddy.
(00:50:51):
Do you want to give an example of the business control panel in a scenario? Do you have one ready that we can show? I think we’ve got one for Asian Auto Tech JR If you don’t mind us kind putting you on the spot and presenting you with a question in the data and just get how you would analyze that and what the next steps would be. I think it would really help folks that either aren’t using the BCP and they have access to it, they’re customers or they’re looking at coming on with AutoVitals and see what the potential is. What have we been talking about this whole episode? Because it really, I think, goes to the crux of it When you nail the process and you’ve got the right tools in place, now it really is using those tools to do the analysis that we’ve heard both JR and Fred talking about, which is so important, especially as you expand your business because you get to a point where it’s herding cats, good luck and you can only be in so many places at once, and if you’re going to spend your day trying to run around or you’re going to get a lot of speeding tickets and you’re probably going to retire early, not by choice because that’s a lot of stress, Matt.
(00:52:01):
A lot of stress,
Uwe Kleinschmidt (00:52:04):
So Sure.
Tom Dorsey (00:52:05):
Can you share?
Uwe Kleinschmidt (00:52:07):
Yeah, I’m trying to, give me one second. Okay. So I want to make it as big as I can. I hope that’s okay. JR we didn’t pick the best curve. We picked one which has a lot of discussion potential. And let me just share this if I understand how to use the tools here, can you see it? Oh,
Tom Dorsey (00:52:39):
It’s huge. It’s perfect.
Uwe Kleinschmidt (00:52:41):
Lots of data. Sorry, let me try to do something else here so I can, that was not what I wanted. One second. Where did we land here?
Tom Dorsey (00:53:00):
We’re looking at your water bill or something.
Uwe Kleinschmidt (00:53:04):
Yes. So as you can see, there’s a lot of data on here, and let’s just cut to the chase. One of the KPIs we were talking about is deferred work, and the deferred basically starts at the technician with a number of recommendations by vehicle. If you follow that curve here, those blue triangles purple
Tom Dorsey (00:53:37):
Buddy.
Uwe Kleinschmidt (00:53:37):
That’s purple. Purple. Oh yeah, it’s purple. Sorry, it’s kind of inconsistent. And then I don’t know, did you put your foot down or what happened? Right, the text started creating more. But if you look at the estimate to recommendation rate, it does not reflect the same kind of zeal or attempts to turn that new well of recommendations into a presentation to the customer.
Tom Dorsey (00:54:15):
So it almost looks like somebody said something, Sixto went out and said something to the text, and then the texts for a period of time did what was expected, but there was no behavior change at the service writer level. So then the text said, well, what are we doing? It kind of looks like it just got old.
JR Luna (00:54:35):
Got it. So I don’t follow this when estimated recommendation rate, what does that mean?
Uwe Kleinschmidt (00:54:42):
So that means that assuming you lose a lot of canned jobs, service packages in Protractor that attack the moment they select a condition, a recommendation, it’s a service package is being put on the work order, right?
(00:55:05):
And what this means is if you just look at the average, only 19% of those recommendations actually made it to the estimate. Or worse, if you use the work order update button, 80% got deleted by the service consciously. Right? Got it. And so depending on how you use the tool, it’s either not added or it has been deleted. And so that is a discussion where you would say, where is the discrepancy between the technicians doing an awesome job, as you can see here. So it’s still a little inconsistent, but the overall trend is extremely positive and except for the last few weeks, but overall it looks really awesome, but the estimate to recommendation rate, it actually goes down during the same time. So if you follow the little triangles and compare them with those diamonds here you see there is a, it’s like the scissors open up.
JR Luna (00:56:26):
So the way I keep track of deferred work in protractor, I see that stat and I keep that track and I track that money. And about two months ago, which probably the be of that purple line, we started at our meetings, we started talking about average recommendations where on technicians I saw a lot of discrepancy on it. So that was brought to attention recently to meetings. But I don’t know on the estimate recommendation rate, I don’t know if that’s accurate because the money I graph the deferred work money that has been about the same and I don’t think those guys will delete something out of it. So something’s got to be funky.
Tom Dorsey (00:57:23):
Yeah, well and that would be the point though, right? Is that it’s the same because the service writer’s kind of still doing the same thing he’s putting, but it should be significantly higher because there’s just more opportunity there. The techs have been delivering more potatoes on the plate and we’re still eating the same two spoonfuls. And that’s what I wanted to show this. It’s because right there in the data you see that behavioral difference and that’s an action item. That’s somewhere to get out and say, Hey, if I’m going to introduce the techs, cranking it up more on recommendations, I got to make sure I go and tell the service riders. You guys better be estimating more stuff too. Absolutely. And bring them up together so that they don’t diverge or even worse kind of fight against each other sometimes. And that becomes transparent in those trend lines when you’re looking at it from that perspective.
JR Luna (00:58:16):
Absolutely.
Fred Haynes (00:58:17):
Yep. Hey Jay, can I ask a question real quick of JR? Of course. Just wondering, JR in comparing it to my experiences, what do you expect deferred to be, say as a percentage of what you recommend or a factor of how many dollars you sell? I’m just curious.
JR Luna (00:58:39):
Sure. So we sell about 40% of what is recommended.
Fred Haynes (00:58:42):
Okay. So what I’ve found is that it’s usually two to three times as much deferred as there is sold. And I’ve also found that if you’re not deferring 70% or better of the items that you find, you’re probably not doing good inspections.
Tom Dorsey (00:59:05):
Yeah, that’s awesome.
JR Luna (00:59:06):
Well that’s exactly where I get at. If we sell more than 45%, I know that the car was just looked at for whatever it came in and pencil whipped something else in. So I tracked the defer work as some money and that normally gives me a data per week. And I know obviously I can track it per rider and I know who’s estimating correctly or at least putting everything on the estimates or not.
Fred Haynes (00:59:37):
Yeah, I think we’re doing the same thing,
JR Luna (00:59:42):
But 35, 40, that’s pretty much what we sell on the, that’s what I expect.
Fred Haynes (00:59:47):
And of course I’d like to have just as many recommendations and a higher sell rate, but I recognize that and that is absolutely an opportunity for improvement. I guess the other part of it is if I don’t win today, obviously goal one is get the work today, don’t give any opportunity for it to happen elsewhere. But that’s why we have all those other marketing campaigns and activities. We do a great job. They like everything that we’ve done so that they do come back. So we’ve talked about, I know a lot of shops are doing scheduling at checkout. When can I get you in to get those things taken care of that you didn’t get done today?
JR Luna (01:00:29):
We do that. We’ve been doing that. I call it if we’ve made a great impression, we want the customer over, we’re at their new shop or they like us even more or we sold ’em service, they’re both the win. And what I call is planting the seed. We plant the seed that your structure coming up next and we can schedule that or we can call you later and schedule that and we can remind you when you come back. Those are called planting the seed for a later harvest. And we’ve been doing a lot of scheduling on exit and that stuff works, especially with the covid we had to do to change our strategy. We had to push ourselves to get better at capturing the work that we already done because when the car has been inspected, estimated we already greeted you, we already got all the vitals out of the car and we’ve done a lot for it. Now it’s just to pick the crop to bring the work in and we can schedule that or we can future remind you. That’s been awesome.
Tom Dorsey (01:01:37):
And that’s exactly where we were going with that question and with that scenario is exactly that. Because the other side of the coin, and that’s the last kind of step, is when you see that sales to estimate rate dropping and you see that red flag, then you check your exit scheduling and if your exit scheduling is up here through the roof, the end result is the same. You’re getting it done, you’re taking care of the customer, you’ve educated them, you’ve got a plan, and they’re committed to the plan. And at the end of the day, they’re going to get the work done, whether they get it done today or they get it done next month, work gets done. And a lot of times it’s situational. You’re overbooked, you’ve got a bay tied up that you can’t use. And so that’s the smart move is to push those struts off and that’s what you have to check.
(01:02:22):
That’s the next thing you check when you see that type of situation in your data, then you check what is the other available success factor. And that is the exit schedule and that’s the commitment to come back and get the job done at a different time and then hey, okay, we’re firing on all cylinders. Let’s crank that throttle, let’s do more of it. Or exit scheduling’s falling off the map. Also, Eric, time to have a shop meeting time to freshen up on some of them basics and time to train and reinforce that SOP so that we make sure we’re not cutting corners. Because when we cut the corners is what leads to the inconsistency. It’s not the volume, it’s the cutting of the corners. And if you can get your process down to where you can wake up at 4:00 AM and just start running your process, Hey, can I get you opt in for your text message each and every time?
(01:03:17):
And you do it the right way, then you’re going to see those consistent results. And then when you’re looking at the big picture through the data, it all makes sense. And then to what Fred was saying is that then we’re really doing the fine tuning and the refining and we’re on the path to get the most out of it, to get the highest, the peak performance possible. Then we just open up more stores and keep doing it. Having fun guys, it’s the top of the hour. I really appreciate this discussion. We got to come back, we got to have a secondary follow up to this multi shop. I mean looking at that data and presenting that scenario, I dunno, what do you folks think? Yeah, I think I could do a whole show on it. I’d like for you, text us in, give us your feedback in the chat or email me Tom at AutoVitals.
Uwe Kleinschmidt (01:04:07):
What’s that? Tony did already, right? She’s asking us, going over those KPIs and analyzing them is very beneficial. So we should just dedicate a few shows to how do you interpret the data and what do they mean and what do you do about it?
JR Luna (01:04:22):
Well, I’m very interested. I’m going to go drill down this sales to estimate because that’s not what I expect
Tom Dorsey (01:04:28):
At all. And same with Fred. And so yeah, email in if you have a specific scenario you want to talk to about if you’ve got a B, CP example from your own data you want us to analyze, send that stuff in, and we’ll build a show around that. Next week we’re going to have something very similar. We’re doing like an ask me Anything an AMA with our expert panel of experts. We’re going to have John Long, Adam, Bendzick, Uwe coming on, and so send in your questions, make sure you tune in. If you can’t get your question out or you don’t have time to be live or you don’t want to ask it live, you can email those questions into me. Again, it’s [email protected] and we’ll make sure we get your questions on there and we’ll be sending out some contacts to you and mine in some of those questions for ’em.
(01:05:15):
But we got a huge response. It was kind of by popular demand. I surveyed a lot of people and they said, you guys need to do a Q and A. I’ve got so many questions for X, Y, Z, so we’re going to bring that to you next Wednesday, and then we’re going to cook it up because this KPI analysis is I think really solid and we’d love to bring some of you guys back in here, get some scenarios from you and don’t, we might even make it a regular addition into the series of being able to do that depending on how successful that is and how much engagement we get. So if you like it and you want it to happen, participate and engage so we can give you more of it. Gentlemen, really appreciate the discussion. It was great and I really appreciate you taking the time and coming in. I know it helps a lot of people and there’s a lot of people that are looking to follow in some of the trails. You guys have been blazing. I think you gave ’em really clear information on both paths. What to do next. Uwe, as always, appreciate everything. Thank you very much for all you do. Thanks for everybody tuning in. I hope you got some notes taken and this helped you and tune in next Wednesday, same time, same place, and we’re going to do it.