Episode Description
Process changes due to technology have changed how motorists educate themselves, interact with you and your shop, and have improved the shop productively. Join Bruce Williams, Frank Scandura, and Bill as they discuss what the future will bring and how all of us need to prepare to maximize success.
Episode Transcript
*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].
Bill: Good morning. Good afternoon. I’m Bill Connor, and if you’ve joined us today by going to autovitals.com/radio and registered, thanks for attending live. For those of you that are listening later, you can go to your AppleCast, Google, and all kinds of other podcasting platforms and and listen to us that way if you’re out doing some things. The only disadvantage to that is you won’t be able to see our smiling faces.
Today I’m gathered here with Frank Scandura from Frank’s European Service in the Vegas area, also known as Frank’s palace, and also Bruce Williams from Rivers Edge Services up in the Canadian way, and he has a nice castle of a business going on up there.
So, today what we’re going to do is continue on where we started last week and we’re going to explore what is ahead for shop owners in the next three to five years, plus how that is going to affect the processes and maybe even tool changes that are required.
As I said before, we don’t have a crystal ball, but there’s some really good indications as far as what’s going on in the marketplace and the trends that it’s going to, and these two gentlemen are actually associated with a lot of different groups. So, they’ll have some valuable feedback for us.
So, again, AutoVitals’ job is to be the shop success solutions for the folks that we partner with, and we have to help our shops or empower our shops and the motorists to make good decisions. So, today’s focus is going to be on process changes and strategies to stay ahead of the competition.
With that being said, what I’d like to do is we’re going break this down into two segments and continue on from where we started last week. In the first section that we’re going to start into is, after the workflow has been understood and implemented in the shop, maybe you even have a production manager or dispatcher, they find their way into actually running the shop. What other elements do you expect to be important as far as changes coming in the future?
So, for example, we’ve got a lot of struggles when it [comes] to parts, both pricing, availability and scheduling and so on, and also productivity, and we’ve got some changes going on where we started talking about staffing and so on, and even there seems to be a shift from switching to fully flag hourly to a combination of maybe hourly and bonuses and so on.
So, what I would like you two gentlemen is to start out to go down that path, and let’s define what you’re seeing and where you feel that this is going. I guess this time let’s start out with Bruce, if that’s OK, Bruce.
Bruce: Sure. Sounds good. Yeah. Definitely looking into the future is interesting. We’ve been doing a lot of that here as a team at the shop, really focusing on how we are going to retain customers [from] five, 10, 15 years ago and how we’re going to manage repairing and servicing as well. And the biggest part of that, I had to increase my front end team to make sure we have enough time to be able have all those important conversations with our customers. It’s part of our process. I’m not talking about tools or equipment. It’s just building that relationship and being very clear about what the customer expects and also what we expect of them and what we’re going to do and what kind of conversations we’re going to have.
And the clearer you are with that with our customers we’re finding you’re going to gain their family – the husband, the wife, the kids – and you’re going to be in total control of their repair and maintenance procedures on their cars. And that goes all the way down to the exit scheduling, which is a huge part, hooking them in for that next appointment. We’re not a hope and pray business model at all anymore. We’re a scheduled service model.
Bill: And so, Frank, you want to expand on that a little bit?
Frank: Yeah, absolutely. So, if you don’t have a dedicated process for every step of the customer’s experience, you won’t be able to deliver that consistency. We can all relate to stories of going to a restaurant, for example, where the first time you go, it’s the most fabulous thing that ever happened: Oh my gosh, I can’t believe how good the food was. The server was on it. I can’t wait to bring my friends. And then you go with your friends, you get another server, and it’s a completely different experience. And that’s a breakdown in process.
So, it should be every single person that answers the phone, answers the exact same way. Every single time a customer calls for a price, every single person should be giving the exact same value-building proposition – not the price, the value building proposition. Why we are the best shop to deal with at any price. And having those processes dialed in allows for faster training for new people.
I was coaching one of my mastermind groups, and one of the shop owners talked about the new manager’s own way of scheduling appointments. Now they’re dealing with that – his process, which is different than the way the shop had it before. And what that does is it creates confusion within.
So, if you have a dedicated process, it doesn’t matter, it’s for every single thing that goes on, and you deliver that consistent message to the customer, that’s what makes them feel comfortable. That’s what has them coming back.
Because if Johnny says it one way, and Janie says it another way, and they don’t know which is the right way. I don’t know what to expect. And they may never be able to vocalize it, but they’ll just have an internal feeling, hey, this just doesn’t feel right. I’ll go find somebody else.
Bill: This kind of goes back to what we talked about last week, as far defined career paths and so on. Each person has to know what they’re doing, there has to be a process to do it, and so on. Do you find that, let’s take some of the things that we’ve had to deal with in the past, as far as something as simple as converting that phone call that comes in, that shop inquiry about your services, do we handle that a lot differently than we do now? Do we control the conversation differently? Or do we say yes to everybody that actually calls on the phone? Or do we instead of saying yes, do we substitute I can and tell them what we can do for them?
Frank: Who’s up? Bruce.
Bruce: Definitely qualifying your customers. 100%. Having that real conversation, like you said. This is what we can do for you; this is what we can’t do for you. Sometimes the customer is not a customer for you. Sometimes the customer is for somebody else. But taking the time to have that conversation with them instead of just saying, yeah, sure bring it down and we’ll check it out. We’ll look at this; we’ll do that. Explaining the value that you can deliver for them regardless of the repair will pique their interest, and they’ll want to come and actually see your facility and meet you face to face and get a feel of what your shop looks like and your systems and procedures for sure.
Frank: And not only that, it’s important to communicate your process. You can hear any one of my advisors saying, we are a digital shop. We are going to be doing a thorough inspection. We’re going to be sending you pictures and links to information so you can make an informed decision, and setting that up right out of the gate and letting people know, this is why I need your cell phone number, this is why I need your email address. Because we’re 100% email and cell phone capture rate for that reason because it’s part of our process.
Qualifying a customer is so critical. We used to be the “we can do it all” shop. Nobody’s better than us. So, when that guy would call up and say, hey man, I tried to fix my car and it’s all apart. I can’t do it. Can you help me out? Yep. Because we’re the best and we can do it all. You end up in an absolute nightmare that you accidentally got married to when you were drunk and you can’t get out of the relationship now. Right? It will cost you a million dollars. So, qualifying each individual situation based on your model is critical to not only your success but the quality of service you can give the customers who are less vocal.
Because if we look at, here’s our range of customers from zero to 100, the bottom 20 are the troublemakers that constantly suck the life out of us. The top 20 are the most profitable and the ones we seldom pay attention to because they’re the quietest. The agers go away; they never say a word. You think about them a year or two later. I wonder whatever happened to so-and-so. And these bottom 20, we just constantly fight with.
So, by creating these processes, having those set standards: this is how we do it, this is what we do. An older car comes in, it’s X number of dollars to work on your car to get an evaluation of what’s going on. It’s our initial testing process. And that’s right out of the gate. We want to make sure you understand we’re not going to check it out and then roll that fee right into the repair. We’re going to honestly test, document, and give you a list of everything we find, especially with pictures.
Bruce: Absolutely.
Bill: Basically to sum up what you said there: You’re not going to be the hero shop that’s going to put yourself in the position to solve everyone’s problem on the planet. You’re going to be the type of shop that will listen to the customer’s concern and if they’re coming here talking about another shop and two or three places that have looked at it, you might be somewhere along the lines of saying, hey, you know what? Based on what you’re telling me right now, we can actually do some tests on your car and determine what’s going on, but we’re going to have to charge you for it, and by the way, I don’t know those shops very well, but I don’t hear a lot of bad about them, so they probably eliminated all the easy stuff. Therefore, I need X number of dollars to start with. Are you okay with that?
So, you’re taking yourself completely out of being the hero, and you’ve really learned over the years that heroes really don’t get paid that well. You watch the news and so on and they get abused quite often. So, you don’t want to be the hero. You want to actually be somebody that’s profitable so you can support your staff.
Frank: Let me put it this way. I want to go from hero to professional.
Bill: There you go.
Frank: This is how a professional shop operates. It’s in all of our documentation, when I put an ad out for a technician. We are a professional European service facility. I think that’s important and I think that attracts the right people internally and externally.
Bill: Let’s go back here a little bit. I moderate a lot of forums, and I know you guys do also. And there’s this big debate going on in the marketplace right now about customers bringing their own parts. Do I mark parts up? Can I mark them up like I used to? Do I have to not mark them up at all and just charge for labor? Any thoughts on where you think the industry might be going along those lines?
Frank: I have an opinion on that.
Bill: What a surprise.
Frank: We don’t sell parts in pieces. Good customers don’t buy brake pads and rotors. Good customers buy trust. And that’s why my goal is: to build that relationship of trust so that when I have a line item on a repair order that says perform complete brake service on the front wheels, which includes blah, blah, blah, blah, blah, blah, blah, and a total price for that is listed, not $19 for a brake pad sensor, not $16 for the brake cleaning kit, not $99 for the brake pads. And that builds value. And then our warranties build value.
Parts – quality problems are an enormous issue. There are so many counterfeit parts coming across. We even have to be careful. We got stuck with a set of counterfeit ignition coils for a Jaguar. Put the coils in, send the car down the road, comes in with a bad coil. Couple weeks later, comes in with another bad coil. And then we said, you know what, let’s just replace them all.
And then we see the same box. They came in the same box. They looked nearly identical. But they were so obvious side-by-side that now we’re more cautious about what we’re doing.
Anybody’s whose bringing their own parts. They’re buying race to the bottom parts, the cheapest they can find. And a lot of our suppliers can’t even filter out all of the counterfeit parts coming through. When it comes to installing the parts on the customer’s car, I am the professional. I have done the research. I have vetted the vendors. I have vetted the suppliers. I take full responsibility for everything I recommend on your car.
Bill: And you have to mark it up accordingly.
Frank: But you notice I never said markup. I never talked about that.
Bill: No. It’s part of the overall mix.
Frank: Right. What’s the value that I bring to the table? Doesn’t it give you peace of mind, Mr. Jones, that for the next three years or 36,000 miles no matter where you are in the country, if you have a problem with one of the parts I have installed, here’s a toll free number. Get it resolved.
Bill: Parts have a direct impact on everything that goes on in the shop as far as availability and so on, Bruce, so what do you see changing, actually impacting the shop? Are you having to put people in loaner cars for an extended period of time? You having to order parts in advance and have the customer prepay so you can get them in on your schedule and not have 50 cars waiting on your lot for parts? What are you seeing changing on that front?
Bruce: So far, we haven’t felt the parts supply shortage with what we’re doing here in my area. But, that being said, we do preorder parts all the time and make sure everything’s here for my technician to be efficient, not standing around going, where’s my parts? We have a very organized parts system that works seamlessly.
So, we’re not really seeing that. The key is like we were talking about earlier: having a proper process in place so it’s repeatable all the time and it’s what’s expected. 100%. We’ve got a policy. We do not let customers bring their own parts, period. Every time I’ve gotten loose with that, it’s bitten me in the [expletive]. 100%. So, it’s just period, no.
Frank: Yeah. Never fails.
Bruce: We use only quality parts. We’re [inaudible] NAPA Auto Pro here in Canada, which is like an off Napa Auto Care in the states. We use the gold level or better parts, period. I will not put in a sublevel part. I will not put in any of their entry level line parts. That’s not what we are. We are not the budget place. We are exactly what Frank said. This is the value we’re given. This is the process. This is the brake job that we performed on your vehicle and it’s X amount, and that’s what it is.
Simple analogy. You get a guy to build you a fence, he doesn’t break it down into cost of nails, cost of lumber, cost of his lunch. He gives you a packaged price. It’s $2,000, I’m going to build the fence. And you’re either going to see the value in that service or you’re not.
And that’s what we supply as well. Just exactly what Frank said. This is the value that we’re given. It’s going to cost this much. And customers are super happy when they leave here with the complete process, all the way through, especially with the digital updates all along, the pictures, and then as it’s scheduling, they’re like, absolutely.
I can’t believe how many customers still have no idea that automotive shops do digital inspections. When we have new customers, they’re completely blown away. Instantly they’re a Facebook fan and instantly they’re giving reviews that are five stars.
Frank: And they always refer to the pictures.
Bill: Absolutely. So we know that the future really starts today, this afternoon, as we go back to our shops. So, when we look around at what’s going on in the marketplace right now, we drive by car dealerships and there’s no cars in the lot and the used car prices are going through the roof, is there anything we can use about that situation to put ourselves in a better place in the marketplace right now? You got any ideas on how we can start using that this afternoon?
Bruce: Well, marketing the value of your used car and maintaining it well, because you can’t just go and by a new one, like you said, as easily as you could before. So, keep that car, save money, keep it in tiptop shape and you don’t have to worry about the shortages of cars in all the dealership lots.
Frank: It’s cheaper to keep her. Right? So, another angle on that is we’re seeing more and more parts being discontinued. Forget the parts that are hard to get that are going to be hitting the market again soon. I used to be able to get parts for late 90s or early 2000 Mercedes, BMWs all the time. A friend of mine is looking for a speed sensor. He teaches at a local college here for BMW transmission. The speedometer doesn’t work. No longer supplied. No longer available.
A speed sensor for a speedometer, I mean, how complicated is that? And I think that manufacturers are just cutting their costs by not maintaining the inventory on these auto parts anymore. And a little part of me, the cynical part, the conspiracy part, thinks this is a ploy to get older cars off the road. Because the cars that are on the road today, and I’m sure that it’s the same in Canada, are the oldest that they’ve ever been in the history of this customer – somewhere between 11 and 12 years old average. That’s pretty deep. So people are keeping their cars longer because they’re better and putting more money into it.
So, how do we get those cars off the road and get you into a new car? We just won’t make the parts available.
Bill: This is really the opportune time in our life cycle in the industry. I know you guys have been around a long time like I have to actually coach the customer and say, look, let’s do a condition based inspection. Let’s get everything done up to date on your car. Whatever’s broken, let’s fix it before parts on these things are discontinued or we can’t get them or whatever. Let’s keep this vehicle on the road as long as we can so you don’t have to be waiting for them to manufacture one. Who know if Ford’s going to get enough chips to go and put in their cars that are all staged all over parking lots just sitting everywhere, and other manufacturers are going through the same thing. So, isn’t this a good thing where we start talking to customers about maintenance, talk to them about the convenience of having it serviced while it’s in the shop today, and also here’s why, to protect your investment, to make sure we get the parts now and so on.
Frank: And let them go out and look at the price of cars. They’ll come back with absolute sticker shock. It’s mind boggling how expensive cars are today, expensive to the point where now they’ve got six and seven year financing options. I mean, it’s like a mortgage on a house. You should pay off your house in 15 years. You’re going to finance your car for seven? That’s crazy.
People are doing it. I know. I’m the weirdo. I’m the no debt guy. If you can’t afford to pay for it, you can’t afford to have it. But it’s just absolutely mind boggling what people are faced with when it comes to purchasing a car, if it’s available.
I like the idea of educating our customers. We do it all the time. What’s your intended use for the car? How long do you plan to keep it? What does your future look like? Well, I want to fix it up because my kid’s going to be driving in a couple years; I want them to drive it. OK. Let’s make sure that car is safe. Or, I’ve got a big bonus coming in at the end of the year; I’m going to dump this turd as soon as I can. OK. Let’s do what you have to do right now. Help them prioritize.
Bill: And so, that comes back to what we are talking about, is these defined career paths. So, if we have a service advisor that’s properly trained to understand the things that they’ve got to learn from the customer when they drop off their vehicle or as they’re building their relationships, and that goes back to what Bruce was saying earlier. Relationships are actually a key to success. When you build a good, strong relationship with customers, you’ll find that not only they refer family members, friends and so on, but people really associate with people just like them. So, if they’re good people they associate with good people or if they’re – what do we call them – maybe the price shoppers, or the ones that cause the most amount of difficulties, they tend to associate with people just like them also.
Bruce: 100%. I’ve learned over time how a few bad customers come through and everybody’s like, we’ve got to take care of them, because what if they’re going to badmouth what happened or they’re going to spread the word? Well, guess who they’re spreading it to?
Frank: Bad people.
Bruce: Bad people. People that aren’t our customers anyway.
Frank: Birds of a feather.
Bruce: Like Frank was saying, you’re focusing on those 20% or 10% that cause you stress and grief. Just put a little bit of that energy into your good customers, and you’ll never have to worry about those bad customers again.
Frank: It’s always, what if they leave a bad review? Well, what if they do? It’s a great opportunity to write the review – not to respond to the person writing it, but to respond to the person reading it. Hey, I’m so sorry you had a bad experience. If you had stopped by and given us an opportunity to fix it, you would have seen how we shine and the way we step all over ourselves to take care of our customers. We have this outstanding warranty. And just go on right down the line to build yourself up. Because most shops have a really good reputation. There’s a few bad apples, but for the most part we have a good reputation.
We need those occasional bad reviews, number one, to remind us we’re not perfect. We’ve got to make sure we’re aware of what’s going on. Two, get better at reading customers, because the customer that comes in and badmouths the last nine shops they were at, you’re next. And if you think you can overcome that, you’re crazy. But then, you know, just shine. So what if they leave a bad review? Oh well. Even though I take bad reviews very personally. It hurts.
Bill: I think everybody does. But the job of a shop owner or any business owner, for that matter, is to take that adversity and turn it into an opportunity. So, Bruce, when you respond to reviews good or bad, do you have a tendency to – if it’s a bad review – do you just kind of take ownership of it and ask them to contact you directly? What would be your thought process on it?
Bruce: Yes. That’s exactly what I do. I respond personally and ask them to contact the shop or when the best time [is] that I can actually have a face-to-face conversation with them to see if we can resolve whatever issue there was and move forward. I think we’ve had maybe three bad reviews in the last year. Not one of them has ever contacted me back.
Frank: They never do.
Bruce: They don’t actually want to talk to you. They just want to [expletive] about it online because it is their safe place to say whatever they want.
Frank: Yep. Cyberbullies.
Bruce: Yep. And as far as the positive reviews, we always respond thanking them for their trust, and also respond in it, which is key, is the year, make and model of the vehicle and what kind of repair we did, because on the back end of Googling my business, that’s a huge driver of proper reviews and getting me to the top of the page.
I really found out this last year it really helps to say, thank you very much for bringing in your 2015 Ford F150 for us to take care of the tune up, or the brakes or whatever. Put those key words in, it’s like SEO in the back end of your reviews.
Bill: Well, that’s a process that somebody could go back to the shop today and start implementing, and it’s very easy to do and it has a good return on investment over time, for sure.
Bruce: Huge. It’s free.
Bill: And don’t be scared of the occasional bad review. You want to turn it into an opportunity by letting people know that might trip across it that you really care about your customers and that you’re looking to solve it rather than just leaving it out there and not responded to.
Bruce: Absolutely. When I’m looking at products online or whatever, when I’m looking at reviews and they’re bad, I always read why and how, and if some company hasn’t responded in a positive way, I can take that with a grain of salt, and I can understand that there’s two sides to every story. Definitely responding is the key.
Frank: There’s three sides to every story: his, hers, and somewhere in the middle is the truth. It’s not that somebody’s lying. It’s their perception of the events.
Bill: When we talk about productivity, we know there’s a shortage of staff out there in the marketplace, and we also see shops all the way across the country that their productivity for their employees is a lot lower than what it should be. So, what processes can we change in the shop to get productivity up? I know that making sure they’re not doing repair orders that are $200 a piece, because I don’t think that you can even afford in a professional shop environment to write a $200 repair order anymore.
So, what are some things that they can take back to their shop and do to work on increasing their productivity, bearing in mind that at a certain point in time, we may all be forced into [an] hourly plus bonus pay structure?
Bruce: I said before about the simple thing like a part structure, but it’s right from start to finish, service-wise is being prepared, prewriting work orders, getting as much information from the customer as possible, looking at all their deferred work, talking to them about it, what kind of add-on can you do today.
Hey John, you’re in for brakes today, but I notice you’re only about 1000 kilometers away from doing your next oil service. Why don’t we do the oil service while you’re here today while it’s here as well, saves you another trip back to the shop, and in the back end, it actually adds another hour to our labor in the back, which now my tech only has to do two jobs instead of three or four jobs that day.
So, really taking the time to look at all the potential service, deferred service, and having a good conversation. Now you actually have a repair package that you have for the customer instead of just these one little hope and pray repairs. You’ve actually educated them on the service and you’ve got extra hours.
We just finished tire season, but still our ARO is still almost $700 bucks repair order. And we’re shooting for $1000 all summer long. And we’re not far off that, for sure. I’m sure Frank’s like that as well. Like you said, you cannot afford to do a $200 repair order with everything that’s cost overhead now. You can’t do those all day long and be efficient.
Frank: If you are fixing broken cars, that’s you’re focus, you’re not going to have a high ARO. You’re not going to have a high customer satisfaction. I know shops, I see them on Facebook, and it blows my mind. We don’t do oil changes; it’s a waste of time. [They] are doing their customers an enormous disservice. Enormous. A sound process is: every car gets inspected, every inspection gets estimated, every estimate gets presented to the motorist. It’s not your money. It’s not your business. It’s not your problem. It’s your moral obligation to notify them of everything that’s going on with that car, right from the first visit too.
If you’re afraid to tell the motorist what you discovered on the car on the first visit, hire somebody who’s not, and it will change your business. And this is how you put out high quality work and this is how you put out good ARO.
Is that Canadian or US by the way – $700? Probably Canadian. But it’s a great ARO for general repair. We’re hovering around $1200-$1300 for a Euro shop, which is pretty standard for Euro. You are not doing a customer any favors if you don’t tell them about that hose that’s maybe a little swollen or a little bubble in it, and, I’ll just tell them next time, and they forgot to tell you or didn’t think it was any of your business. Well, I’m going to go see Gramma 300 miles away through the desert, and they break down and that hose bursts, and the tow truck driver says, you know, if you had your car serviced on a regular basis, they would have seen that. Oh yeah? I just had it in. Why didn’t you tell me? Oh, I didn’t want you to get mad at me for telling you that you needed a bunch of work. Well, now I’m mad at you because I just blew up my engine.
Bruce: And the key is having that dropoff conversation, like you said earlier, Frank. We are going to inspect your car when it’s in today and I will be go over that inspection with you and advising you – like I said before, we’re not service writers, we have advisors – we’re advising you of any repairs or maintenance that’s upcoming, and then the customer can choose whatever they want to do with that.
But like Frank said, if you haven’t given them all the information, shame on you. Give them all the information and let them decide. It’s their money. It’s fine. Then your conscience is clean. I told the customer everything they need. If they choose not to do it, that’s okay. I know it took so much stress off me once I really started focusing on that. Give them 100%. I don’t care if the list is four pages long –
Frank: Doesn’t matter. Yeah.
Bruce: And now the customer gets to decide what to do with their property that they own and their money. And if they choose to get it all fixed, that’s great. We’ll take care of it, and we’ll keep taking care of them in the future.
And I know a lot of shops are scared. Well, I don’t want to scare them away. They think of fishing. You’ve got to have that conversation up front. So, it’s not a fishing expedition at all. It’s you telling them – not even asking them – you can’t ask, can I do an inspection? You’re telling them, this is what our shop does. This is our process. I actually had one customer that said, I don’t want you to inspect anything. OK. The guy down the road can do that for you no problem.
Frank: True story. One of my service advisors let a customer say, don’t inspect my car. I just want the oil change. My technicians know [to] come get me right away if a service advisor temporarily loses their mind and lets a car come in without an inspection.
So, I go down there and this BMW is covered in oil underneath. And, of course, this is one of those “I’m going to wait for my oil change” guys, “so I can pull out of here and say hey, it never leaked oil before you changed it.” Brought him back and said, look, this thing is soaking wet in oil. I know you said you didn’t want an inspection, but we are going to perform a complete inspection on this car so you know what’s going on.
I firmly believe [that] people who don’t want an inspection want to blame you for what’s next on their car. I firmly believe that.
You want to get to Jen’s question, Bill?
Bill: Yeah. Why don’t you address that if you would, Frank.
Frank: Sure. Jen: How do you guys handle comebacks? How are you boasting about being a professional shop if the customer has to come back for the same thing?
First thing, I have a written process for return work as well. And it’s very important that the customer has the impression that, oh my gosh, we’re going to get right on it and see what’s going on. I care that much. But let me start off by saying that the worst comeback is the one that doesn’t. OK? The worst comeback is the one that doesn’t.
It’s the customer who leaves, [inaudible] for whatever reason goes, great; here we go again; just another shop that doesn’t know what they’re doing, and off they go to somebody else. So the fact that you have the car coming back is your opportunity to shine with the customer and then determine why it came back.
In my shop, it’s one of four reasons a car comes back: parts failure, service advisor failure, technician failure, customer failure. So, if the parts failed, all right, that’s no too hard to overcome. That’s what the warranty’s for, and do what we have to do to make it right. Did the service advisor fail? Did he not write down on the repair order everything the customer said? Did he not present everything on the inspection to the customer? Did he not explain that, hey, your check engine light was on. We found a code for the oxygen sensor, we have to replace this first and drive the car. Be prepared; the light may come on if there’s an underlying problem.
Because customers don’t know the O2 sensor is used to test other components. They don’t know that. So, nothing can be tested and they can be driving it around for eight months with the light on. So, that’s customer education. And maybe it’s just the customer’s expectations. Hey, I brought it in for the check engine light, and it should never come on again for as long as I own the car. What did you do to my car? You guys, ever since –.
So, we need a process for quality control, number one. Test drive the car is number two. Get the boomerang out of the back seat before you cut it loose, number three. And then you can help cut down on those comebacks.
But when the customer’s perception is I’m coming back for the same thing. We didn’t verify it correctly, bad parts, something happened. If that’s happening a lot in your shop, you’ve got to zero in and determine.
One of the most common comebacks is noises. If you don’t have somebody getting in a car and verifying a noise with a customer before they leave, you’re opening the door for not fixing a noise the customer hears and you’re going to fix the noise the technician hears. Period.
So, what can you do to prevent it from coming back? That’s got to be your focus. And be grateful that it comes back. Show excitement to the customer. Show appreciation. Thank you so much for giving me an opportunity to make this right.
Bill: That’s exactly correct. Treat it as an opportunity.
So, let’s wrap this first section up and kind of review here. We’ve determined relationships with the customer is key. There has to be a process for everything that goes on in the shop. If there’s not, and as Frank would spell out here, it probably needs to be a written process, so that way it doesn’t get deviated from. We have to explain the process to our staff and also the customer, and then if you explain your process to the customer, you better [expletive] sure live up to it. And the next thing is don’t be a hero.
So, those are what we have from that. And what I’d like to do is move on to a second part here and move on to what you see is going on with the customer – true motorist interactions for now and in the future, maybe related to pickup and delivery. Do we need to pick up their vehicles and get them back to them? What are we doing to communicate with the customer? Do they need to be able to communicate directly from your website to the internal chat? How about online estimate approvals?
These are all things that are changing and morphing into the industry. Why don’t we expand on some of them a little bit?
Bruce: A couple of things that we implemented obviously due to COVID: Text to pay, contactless pickup and dropoff. The only thing that we are working on right now and haven’t fully got is our diagnostic checklist sheets. I’m trying to make them digital right on my website, so a customer can go in just like if you have to fill out something for the doctor or dentist. You can go right on the website, fill it in and submit it. It comes through electronically. That’s our next step [that] we’re in the process of building right now.
Just due to COVID, contactless and finding it actually convenient for customers. They’re like, oh, I can pick my car up at 8 o’clock tonight? Perfect. Keys will be in lockbox number whatever; here’s the code. Text to pay payments. Those are a couple of things that we have implemented this year for sure that really help.
Bill: So, have things like loaner cars and the need to be able schedule Uber drives for your customers and stuff. Are these all things that are happening and being driven by the consumer or is this just by COVID and we are just trying to make sure they stay in effect afterwards for the convenience factor?
Frank: Some weird. I was doing all that stuff before the pandemic, and it is because I always want to find a way to be able to deliver an exceptional experience to the customer. We were picking up and dropping off cars for years. Back in the old days, you used to be able to lock a key in a car. Right now, with smart keys, it won’t let you do it on some cars. That’s when we got the little lock box out there. Your locker number’s three; here’s your code. Go ahead and retrieve your key. COVID just helped get that message across to more people for us. So, it became, here’s an option that you may not know that we’ve always been doing.
It allowed us to not have to explain why we don’t want you waiting in the lobby anymore. We’ve always been against waiters. The fact is, customers waiting for their car, whether they’re standing in front of my service advisor saying, the car has been out in the parking lot for five minutes; you haven’t looked at it yet, or they’re at home, or they’re at work, or at the grocery store, or at the movies. No matter where they are, they’re waiting for their car, so we want to make it as comfortable as possible for them.
We’re not afraid to tell them, an oil change takes between three and five hours. I’ll put you down for five. You don’t want to wait here for five hours. Well, why does it take for so long? Let’s go over it again. It’s going to get a complete inspection. It’s going to get the service performed. If there’s any service needs, I’m going to make you aware of it. The car’s going to get washed, vacuumed, and clean the windows. It gets test driven by the technician, then I have a final test drive by my quality control technician just to make sure everything’s OK. So, that’s our process and that’s why it takes so long.
Bill: Our digital process has always been to send the inspection results to the customer after the estimate is completed, and we see a lot of shops out there due to the different new POS systems sending the inspection results and the online approval for the estimate at the same time. What do you think about that practice? You got a definite opinion there, Frank?
Frank: Yeah. Our estimates tend to be very large. It’s not uncommon to have a $3000 or $4000 estimate. So, if you present the customer with blah, blah, blah, $900. Blah, blah, blah, $1200. Blah, blah, blah, $67. Blah, blah, blah, $92. They’re looking at the numbers. They’re going, oh my gosh. I don’t know what I need to do. Oh, wiper blades? I understand that. Let me approve that.
So, what I’ve learned is, it’s more important to continue to review the inspection with them: Do you see the picture? Do you see where the arrow is? Do you this picture? Do you see where the circle is? Do you see this picture? This is where it’s leaking. This is where it’s broken. This is where it’s fuzzy. This is where it’s not fuzzy. Then I can present them [with], let me just tell you, if we did everything, it would be $6250. Well, I can’t do everything. No, no, no. I didn’t think you could. Let’s go over it and see what we really need to do now.
So, I’m giving the customer an opportunity to digest what I said. I’m giving them an entire estimate. Because anybody who says, well, the fan belts are $190, the brakes pads are $299, and this is that and this is that, and never gives them a total, they’ll remember one or two numbers, and they’ll come in and see that $1200 bill and say, I thought it was like $299. What happened here? I didn’t approve all that.
Again, the process with the motorist. Then, after all of that, we will approve what the customer approved on the phone, then send it to them so they can have an eye on it and review it. Otherwise, it’s too confusing. In my opinion, we’re taking away that value building, that relationship building, by reviewing and answering questions live.
Bill: Do you do the same thing, Bruce? Would you ever consider sending the estimate along with the inspection result? Or do you do it the same way? You want to have a consultation with the customer, answer their questions, and then provide them with pricing-type information?
Bruce: We do it the exact same way. Yeah. Send the inspection, monitor when they’ve looked at it through AutoVitals, and then call them, go through it with them, make sure they fully understand, and then we present the estimate to get the repair done. Same thing, as a package price.
And then, exactly what Frank said. If it’s like, whoa. We can’t afford that. What do I really need to do? Then we get to continue that conversation. Just sending the inspection and estimate at the same time, I 100% agree with Frank, and it’s happened. They get confused. They look at the items instead, and it doesn’t take very long before they start ignoring everything else because they’re overloaded.
Go through the inspection. They don’t need to know the price or anything. You need to advise them of the health of their vehicle. And that’s what you’re doing. You’re going through it so they understand that. And in the end, the price might be only $568 bucks. Or it might be $5600 bucks. That’s irrelevant once they understand the importance of what’s needed to be done their car.
Bill: One of the other industry trends that we see going on right now is it’s harder to get tags, it’s harder to get them to work on all makes and all models, so we get into these companies investing heavily in remote diagnostic tools or they’ve got mobile groups out there. Do you see these as a viable tool for shops that don’t have certain specialists on hand, or is this just a fad? Are these big companies investing in the wrong area right now?
Bruce: In our community anyway, we’re having to invest in all the OE scanners and tools, etc. But we are also pursing [inaudible] the online diagnostics as well because we can’t have every single option in our toolbox. We’re profitable, but we’re not that profitable. Over time, we eventually get it.
These online companies, there’s a few of them out there for sure that you buy the J-tool and they just log right in and they can help you through every step of the way, and it’s part of kind of a membership type system. I see the future going that way a lot more, for sure.
Bill: And also, not just for programming [but] also for diagnosing and performing online tests?
Frank: Exactly. So, there’s two aspects to that. Like Bruce said, this car needs this module that I just diagnosed programmed. And you’ve got that every once in a while. It’ll happen to us. It was like, this doesn’t make sense. I should have this resolved based on these results and this test. So, you need help. It’s like having a business coach. You don’t know what you don’t known until you hear it from somebody else. And another pair of eyes is usually exactly what you need.
So, I don’t know that they’re too early. I know there’s going to be some big changes coming in. I know the FTC, the Federal Trade Commission, is coming down on manufacturers pretty hard about not sharing information. The manufacturers have failed, and this is across the board – whether its computers, telephones or cars or toasters — they’ve failed across the board to adequately demonstrate why an independent service provider cannot do the service and repair properly.
One example in the article I read was fabulous. Well, it’s because our batteries are glued in and you have to have special tools to break the glue. And the FTC’s response was, well, why did you design a computer with a glued-in battery? Why don’t you just have a battery pack that can be easily replaced by the consumer? So, it’s like the manufacturers are intentionally designing the products to be difficult to repair, requiring special tools and special software trying to lock us out, so there’s going to be some very substantial coming down in a few years. We do need to be ready for that.
Bill: On the inspection, we always talk about the inspection as the condition of the vehicle before any work is done. Now we’re getting into these highly complex repairs and services. Do you find yourself using pictures, photos, video and stuff on the repair order section to further demonstrate or build value into what we’re doing for the customer?
Frank: Always did from the very beginning. That was a critical aspect of it. Always did. We take screenshots of the scanner screen. We take screenshots of the PicoScope. We take screenshots of the digital voltimeter. We take pictures of everything so the customer sees what we’re doing. We’ve got to justify all the money they’re spending.
Oh, I read the codes. Maybe it’s an O2 sensor. Maybe. Maybe. Could be. Let’s try one. No. Here’s the test that determined why it’s not the O2 sensor. It’s X, Y, or Z.
That’s a critical aspect. Shops who are not using that feature are missing out on a great opportunity to build value.
Bruce: 100%. We do the four Cs: the concern, cause, correction and confirmation. And it’s all labeled, not just on the inspection site, but exactly what you said, Bill, on the repair. Our diagnostic procedure too that we performed, it will say everything we did in there, and like Frank said, all the pictures of the scopes before and after testing, confirming that did repair it.
So, there’s no questions after. They don’t just get a work order that says, here’s $800 and we diagnosed your car. They get a full package. They understand 100% what they got.
Frank: You know, it kind of reminds me of a scenario: Your car’s fixed, $800. What did you do? Well, I fixed it. People want a little more than that. They want to really know what’s going on. That quality control process also helps in that.
We have mandatory pictures on our QC, under hood, [inaudible] cluster, key on engine off, key on engine running. So, hey man, you gave me my car back with my check engine light. No, we didn’t. Here it is. Or, hey, it failed QC and a service advisor didn’t pick it up. Because my QC guy, his job is to fail every car he QCs. I don’t care [what]. Your job is to find something wrong.
It could very well be the car’s got a vibration, we made the motorist aware it needs engine mounts, and he declined them, but it’s still a failed QC because the car’s not perfect. So, you’ve got to have those pictures. You’ve got to, got to, got to have them. You’re missing out if you don’t.
Bill: So your advice if anybody says that I want to go back to my inspection report, and I want to put the pictures of the changes on that inspection report, would be, don’t do it; it’s a trick. Put them on the repair order and use that to show value.
In that past, it wasn’t uncommon for especially your highline European owners to go their work and brag and say, I just dumped $3500 in my Beamer. Good job, high five. Now they can just send a copy of their work order with all the things that were done to them.
And the same thing with shops that do a lot of custom repairs to actually document disassembly, reassembly, show them pictures of the old parts next to the new parts. It might take a few seconds to do that, but as far as building value and demonstrating value to the consumer, that’s actually a huge part of what we need to do, not only to make them more comfortable, but maybe they’ll share it with a friend, co-worker, family member or so on.
Frank: And that’s very effective too. My guys will do that. Especially when we had a drive shaft that had a carrier bearing on it. The bearing was just destroyed. And it was really, really, really dramatic between the old and the new. And he did that; he took a picture of the old one and the new one.
If there’s not a dramatic difference, then don’t. Don’t take a picture of the old alternator and the new alternator if the old alternator doesn’t look like it’s been on the car for seven million years.
Bill: AutoVitals, when it comes to retention, we’ve been repurposing the inspection results on that next reminder for the customer along with pictures, notes, video and so on. Is there anything else that we can leverage things for to actually put the customer – or even somebody that’s just searching for repairs; maybe they’ve never been to your shop – is there anything we can use those results for to further leverage them?
Frank: That’s above my pay scale, but I like that. It’s a great idea. If somebody’s doing a search, with the picture of a problem being corrected at my shop be available. Is that what you’re [thinking of]?
Bill: Yep. Can we repurpose them? Maybe they’re searching for a timing belt on a mini Cooper or a timing chain on a mini Cooper, and you’re showing them where you’ve successfully done it and pictures of maybe disassembly and reassembly, or whatever. So instead of just reviews, we’re sending them reviews that are maybe on people just like them or at least just serving up the information. And again, what I’m looking for is what I can use that we have today to further give you guys a unique value position in the marketplace.
Frank: That’s very interesting. I like that, except the mini Cooper example. That might cause other people to bring in more mini Coopers.
Bill: Oh. Right. But they’re an opportunity. Yeah. I get it.
Frank: You know, when you can buy a car for $3,000 or $4,000 and then the first time you bring it in and it needs $11,000 worth of work, you know why you bought that car for three grand. It’s kind of hard to help people. A bunch of grown men and women cry.
Bill: But you would still exercise your exact same shop policy. Everything gets inspected. It gets estimated. It gets prevented. So, that’s all good.
Anything else related to shop processes? Obviously we’ve got to continue to have written policies. We’ve got to excite the customer and deliver value to them in every way we can through communications and visuals.
Actually, one of the things that we didn’t touch on is when it comes to productivity, we’ve got this shift of pay structures that some states are actually doing to where it’s got to be hourly and then you can have other bonuses. Do you see that happening, and do you know of ways that we can prepare in advance in case it does happen?
Bruce: Well, I can quickly touch just from our experience. In Canada, we’re almost 100% hourly anyway. The only ones who are flat rate are dealers. So, I’ve only operated it independent and I’ve always paid my guys hourly. I pay them well. There is bonus structures on top of the expectations that we can do, for sure. But we pay our guys really well.
So, I don’t really have much more to input than that because I know in the states a lot of shops are all flat rate.
Frank: I think we need to prepare for it now. I think it takes a lot of pressure off technicians. There’s two sides. As a shop owner, if I pay them hourly and there’s no work, I’ll go broke. And what I should be thinking is, if I pay them hourly and there’s no work, why isn’t there any work, what have I done wrong? What am I doing wrong? Why isn’t there any work in the shop, training on the counter, marketing, whatever the case might be?
From the technician’s point of view, at least he knows I can pay rent and buy hot dogs just if I show up. And if I do a really good job, I can buy a house and buys steaks. And that’s the mindset I’d like to deliver. What can I do to help you understand? Here’s some basic survival money, but this is where I need you to be. And then you can decide if that person should be staying in the organization or not. If you’ve got a guy that can only flag 30 hours a week – he’s in late every day; leaves early every day – you need to sit down and have a chat with him. Say, hey, what’s going on? What’s wrong? I’m worried about you when you’re not here on time. Did you get in a wreck? Is something going on? Your team’s counting on you. The customers are counting on you to be here for the work. Is something wrong?
Well, you know, boss, I just didn’t get up in time. OK. Well, this is something we need to work on. I had one guy get real emotional with me and say, I have to take my kids to school. I can’t get here at 8:00. I said, wow. You know what? We can work with that. I’m not going to have you drop your kids off at a locked gate and hope nobody snatches them before the school opens. Let’s work on that schedule. Let’s be a little flexible.
And those of you who don’t know, you cannot pay your technicians a salary. Do not pay them a salary. It could cost you hundreds of thousands of dollars in fines and overdue overtime fees. You have to pay them hourly. You have to track their hours. And you have to pay them overtime. And their bonuses have to be calculated in the overtime.
That might be another show, Bill, if you want to go over that another time how to do that. I’ve got some ideas for that. But it’s very important to be compliant with the federal laws.
Bill: The interesting thing is that when I get into the discussion with this on many forums on this same exact topic is there is no better time to start planning for this than now. There probably will be a point in time we will be driven to because of the unavailability of employees to be hourly, but to be able make sure that production and sales and gross profits, all these things are all tracked.
Again, it goes back to we want to offer these guys a cradle to grave career path. And different things have to happen in the shop so that way they always know what’s going on, what can come next, depending on where they want to get off the merry-go-round, and create good solid opportunities for those in the industry.
We’ve got about two minutes left. So, Bruce, if you want to give us your takeaways, that you’d like to have people remember and maybe even go back to their shop and start working on today.
Bruce: Well, the biggest advice I can give is set up a concrete process, start to finish in your shop. And which we didn’t really touch on, which ties into everything, is measure. If you can’t measure, you don’t even know what you’re doing. You don’t know if you’re making money, losing money. You’ve got to measure. We have so many tools available through AutoVitals.
And also structure. We structure morning meetings, weekly meetings, monthly meetings. Most times the monthly meetings we get to just chat because things have run so smooth, but our morning meetings every day are set up with expectations, how we did yesterday, what we’re expecting today, all our customers are lined up. Here we go; let’s get’er done. And everybody is pumped up.
When the technicians are seeing their numbers and what they produced, and it’s all in a group, they’re challenging each other, we’re [inaudible]. But they’re challenging each other and the whole team lifts up and everybody does better. So, measure, measure, measure. Know what your shop’s doing.
Frank: You can’t manage what you don’t measure. Absolutely correct.
Bill: Frank, if you would go ahead and give us your wrap.
Frank: Total agreement with Bruce. Not only does it have to be written down, everybody has to know where it’s written. They have to have access to it and they have to know if I have a question, I go here first. I don’t go running over to Frank’s office and go, hey, what do I do again if XYZ?
One of our guys got bumped in the rear by another car. For whatever reason, we didn’t tell him what to do in the case of an accident. So, he takes a picture of the guy’s driver’s license and comes back to the shop. No phone number. No insurance company information. Nothing. And we’re like, how the heck did we miss that?
That’s why it’s so important to have those little details where people can find the information. There’s a lot of free tools online. It doesn’t have to be complicated. It doesn’t have to be a 97,000 page three-ring binder. But it’s got to be where it’s repeatable. And then when another employee comes in, here’s my chart. OK. Here, read this process here. Read this, read this, read this, read this, read this. Oh, you read it all? OK. Sign here that you read it all.
So now, when you get in an accident and you didn’t get the information, you go, wait a minute, man. You told me that you read that. You signed it. Now it’s on you, not me.
So, it’s got to be measurable. It’s got to be available. It’s got to be written down. If it’s not written down, it’s not going to be consistent. And if it’s not written down, you didn’t say it. That’s my rule.
Bill: Awesome. So, once again, I’d like to thank you guys for participating. I hope to have you on again really soon. I’d like to encourage people to go to autovitals.com/radio and register. And also, if you would, find somebody else in your area, another shop owner that maybe has some struggles that they need to overcome and invite them to take – well, there are 123 episodes – there is a lot of wisdom that can help them out in their shop. And again, if you don’t want to view our smiling faces, download the podcast from GoogleCast or AppleCast and so on, and listen to it when you’re on a bicycle ride or riding your Harley or whatever else it might be.
So, once again I’d like to thank you guys. Lots of great information. I’m sure we’ll get it posted on the different forums and get it dissected a little bit. For everybody else, go out there and make some money and share your experience with other shop owners that maybe could use some advice.
Frank: Thanks for having me, Bill.
Bill: Thank you, guys.
Bruce: Thanks again, Bill. Good to see you.
Frank: Nice to see you, Bruce.