Shop Culture & KPIs to Drive Multi-Location Success

Greg Bunch, multi-shop owner and President of Transformer Institute, and Gerardo “JR” Luna, multi-shop owner, and a Transformer Institute member discuss the importance of shop culture, multi-location KPIs, and other key elements of scaling a Digital Shop beyond your first location.

Episode Transcript

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

Tom Dorsey (00:00:06):
Good morning and good afternoon. Welcome to this week’s edition of The Digital Shop Talk Radio. I’m Tom Dorsey, and today we’ve got a great show for you. We’re welcoming, we’re talking culture, and we’re talking specifically culture as a key success factor in the operation of multiple locations. And so whether you are a multi-location owner, new to being a multi-location owner or an aspiring multi-location owner, or as a matter of fact, even if you think multi-location owners are crazy people, you don’t want to miss this show because they’re going to be talking about critical success factors to make you change your mind if you’re not out there trying to snap up shops during this consolidation we’re having in the industry. And so we’ve got a couple of great guests on with us today. We’ve got Greg Bunch who is a very successful multis shop owner, Aspen Auto Clinic.
(00:00:54):
I’m sure you’ve heard of them, and the founder of the Transformers Institute. And we’ve got JR Luna joining us. Welcome back. I should say JR Luna from Concourse Motors Asian Auto Tech Airport and a little bird just told me, just closed on the fourth location coming out of the pandemic in California and is snapping up these locations and making ’em successful, almost like turning a key. And so today’s going to be a great episode. Make sure you got a pen and paper handy. You want to take down notes, you want to get these guys contact information and follow up with them so they can help you to take part in some of that success. So welcome gentlemen. Thank you for coming on.
Greg Bunch (00:01:38):
Thanks for having us to,
Tom Dorsey (00:01:40):
It’s my pleasure. And of course as always our founder and CIO Uwe Kleinschmidt Uwe. Welcome my friend.
Uwe Kleinschmidt (00:01:47):
Thank you. Really, this is really an interesting episode from an aspect that I know both JR and Greg from the very, very, very, very beginning JR was, I don’t know, customer number eight or something like that with one shop in Concourse. And one of my first presentations was in a group where Greg was part of it when I got my tried to get the legs in this industry. So I wanted to have you both on the show.
Greg Bunch (00:02:29):
Yeah, it’s from that rudimentary presentation that had to be 10, 12 years ago to what you’ve built now was absolutely incredible. So
Uwe Kleinschmidt (00:02:38):
Thank you.
Greg Bunch (00:02:39):
Yep, absolutely.
Tom Dorsey (00:02:41):
That’s great stuff. And so there you have it folks, is these are people that have been involved in the industry, not just for themselves, but also giving through mentoring and coaching and developing and networking and communicating. I mean, I JR through the Drive Institute now he’s with the Transformers group in which we’ll talk about today and why and how and what’s going on there. And as a matter of fact, Greg, I mean you’re a guy who has been so successful in your operation, you could probably afford to fly down to Mexico and lay on the beach with Ron Haugen sipping my ties. But instead, what did you do? You start this Transformers Institute, why? What’s your goal there with this organization?
Greg Bunch (00:03:29):
So about four and a half, five years ago, I realized I’d been through multiple 20 groups, been through different training groups, been through non-industry, mastermind, non-industry, CEO round table. And I really came to the conclusion that even though there’s a lot of great programs out there, nobody was really catering and helping and supporting the multi-store guys. And so I really, when I started Transformers Institute, and I want to share in a minute what the name means, but when I started it, the whole idea was to have this little kind of part-time side business that brought multi-store guys together. And I would facilitate it. I could make a little bit of money and gain wisdom and knowledge from all these other sharp operators across the country and make it a win-win. So that’s how it actually got started. And the reason I called it Transformers is I want to help transform the automotive repair industry.
(00:04:26):
And if I can get shop owners and get their mind around what a successful shop owner looks like, what a successful business looks like, make sure they’re the employer of choice in town, make sure they’re making the money that they deserve, that they can give back to their communities. We have enough of these transformational lighthouse type shops across the country. I really truly believe we can take the black eye off our industry. So that’s really, even though I love the robot movies, it was really, I played off that obviously, but it’s about transforming the automotive repair industry. We just finished our platinum one. This original group I’m talking about is still most probably 60%. We’ve had a few people come and go, but the business has exploded. It’s truly a full-time, nine employees. We now have service advisor training, we have four shop owner mastermind groups, we have two key leader groups.
(00:05:19):
We have a COO group and now we have three shop foreman groups going. In fact, jr you could probably talk a little bit about the service advisor training. Jason was just out his shop for two days doing that. And so yeah, it’s been a wild ride. It’s been a great experience and being able to again, get the collective wisdom and knowledge of the leaders of this industry coming together, some very, very powerful things can happen. We had a great discussion on ados and electric vehicles, and Tom, you mentioned the very beginning, the consolidation of what’s going in the industry. And for a single store owner, they really need to be thinking about, Hey, it’s we’re moving into this. Go big or go home. Where in order to be able to be competitive, you got to have factory scan tools, you got to have the training, you got to have a lot of things, and then you can spread that out.
(00:06:16):
If you’ve got 3, 4, 5, 6 stores, you can spread the load of the diagnostic equipment and the training. You can afford to bring people in rather than sending everybody out and hodgepodge training. So I think that’s one of those hidden things about the multi-store aspect that people don’t think about. Now we’re going to talk about it today. I’m reading the banner behind you, shop culture and KPIs to drive multi-location success, getting the culture. So when I ran the store myself, I started out as a technician, service writer, started my own business and I don’t have a degree in any of this. I’ve figured it out as I went. I’ve had a lot of bumps and bruises, getting to where I’m at and the culture and the people and having the right people in place and developing that culture and having leaders.
(00:07:11):
There’s fact somebody on this call that was partnered at one time with me that saw a lot of those bumps and bruises and not having the right leadership in place and those kinds of things. So we’re in a much healthier place now, but man, that culture is so important and it’s much more difficult to manage and have when you have multi-store and you can’t physically be in more than one place. And so KPI is extremely important, but building that culture and how do you, I think Richard Flint said it best and I’ll probably screw it up, but having a present present when you’re not present is very difficult. And most people fumble the ball there. A lot of people have gone multi-store and said, you know what? This is too hard. I don’t have good culture. I need to bring this and back into one. So again, that’s another thing that we’ve learned through the hard knocks and we’re able to help other shop owners now that go, Hey, I’m scared about this because I don’t want to lose what I have built as I expand and grow. And if you don’t do it right, it’s very easily to fall on your face.
Tom Dorsey (00:08:21):
Well, and that’s an incredible story, right? Because I mean, you start out basically you wanting start a 20 group, you were going to start a 20 group and get some good information shared amongst peers in the same spot as you, and look at the hunger and the need and what it’s developed into. And because of that consolidation, and I would sincerely thank you for being somebody who fills that gap and represents the independence because if you don’t, it’s the hedge funds and these multinational corporations that are taking over all these shops. I mean, we’ve all heard the story about, I guess there’s three letters of the alphabet in a row that would come in and then get your database and then open up a shop down the street. And they were just, I mean, it is like a hostile takeover. And so sure there’s people that would say, Hey, I’m ready to just sell my shop and get out.
(00:09:17):
Well, I bet you could help them. And then there’s other people who say, you know what? I’m going to like jr. I’m going to go ahead and start snapping up some of these locations and you can help them also. And so I think it’s a really, don’t be surprised that this thing is woo to the moon because there’s such a strong need out there and such a huge opportunity for folks. And if not, I mean the other side of that is that we walmarty auto repair, it becomes Amazon and then good luck if you don’t have the right opinion, they just won’t fix your car anymore. But that’s another story. But tell me, because looking at your mission statement and listening to you, it seems like you focus on what I would call the intangible success factors, right? Culture, psychology, mindset, developing teamwork, developing transparency and behaviors. And a lot of people, I mean they’re more operational folks that are doing the same type of consulting work as you are. How do you put KPIs around those intangible success factors?
Greg Bunch (00:10:32):
Good question. Good question. So that is one thing that’s a little bit different with our mastermind group is we do talk a lot about KPIs. We do talk a lot financials, but it’s not a traditional 20 group where we have a composite that everybody reports to and we spend two or three hours going, okay, Jr, why is your average perimeter down at this store and Uwe, why is your car count down at that store? And so as people have issues and they know what they need to work on, they’ll bring those issues to the table. But you can always track a KPI issue back to a human and to a human behavior. And so one of the things that we look at and we do a lot of training and help on is phone conversion. So a shop owner, it’s not uncommon to spend six figures on marketing, especially when you’re a multi-store and you want to know that that investment is paying off.
(00:11:28):
So number one, what’s the KPI? What’s our conversion rate? Some people have the ability to access that through their marketing or website software. So if we see that, hey, they got a low conversion rate, then let’s jump on the phone call. Now we’re talking about behavior. So we’re listening to phone calls and what happens when somebody calls, they sound busy, they sound rushed, they’re inconvenient. They pre-qualify too much. I’m not saying don’t do this at all, but they pre-qualify that customer too much on the phone. And so we did an exercise one time, Jason listened to, I dunno, three or four hours of this, and this is a successful shop, so it’s not like this guy was, but he didn’t feel his marketing was working as well as it should. So we listened to three or four hours Jason did of his phone calls and he goes, Greg, we could literally, for all the real work that they turn away, pre-qualifying too tightly on the phone, we could put a shop in their parking lot and have a million dollar store tomorrow.
(00:12:29):
And so we all know this, right? You can call an organization, it doesn’t have to be an auto repair shop. And they could say yes, but they’re really saying no where they’re like, yeah, I guess I could squeeze you in. You don’t feel special. You don’t feel like, okay, I’m an inconvenience. I’m the customer. I’m trying to spend money somewhere and you’re making me feel like you’re doing me a favor. If I’m doing business with somebody, I want to be treated like, Hey, I want to earn your business. I want you to do business with me and you’re the most important person in the world. So listening to those phone calls, conversion rate, right? Then when they come in, is it just talk to ’em about what they came in for and put that at the computer? Or do you build a relationship? Do you start that conversation and find out what their needs are, what their driving habits are, what’s their goal with that particular vehicle?
(00:13:22):
Again, that it’s going to come out in our KPIs, but it’s again, it’s that human behavior. It’s that relationship building that’s going to drive those KPIs. So there’s definitely this balance, and I think the KPIs are a great tool to go, where do I need to go looking in my organization to fix this KPI. And the other thing that I want to bring up, and I don’t mean to dominate the conversation, is each business is different. So JR has got a full blown Euro shop. His KPIs are going to be different than his general repair shop. If you’re in a rural community somewhere and you fix tractors and boats and everything else, and your KPIs are going to be different than the shop that’s in downtown Chicago. So all of these things go into place. And so that’s why I don’t believe in the cookie cutter model. I don’t believe in the, you do it just one certain way. And again, that’s what makes not to keep pitching transformers, but that is one thing that makes us different is we don’t put anybody in a box. Your model works for you. Let’s talk about improving your model. Obviously got to a level of success the way that you have and if we can help, great. Or we can take what you’ve learned and help within the rest of the group.
Tom Dorsey (00:14:32):
So we’re still going to have best practice processes in place. We’re still going to have maybe scripts, drop off scripts, intake interviews, exit interviews, pickup scripts, but they’re going to be tailored custom to your unique situation.
Greg Bunch (00:14:51):
And I hesitate, we don’t teach. I mean, there’s some word tracks that we teach, but we certainly don’t teach scripts. If you and I are, we’re at Uves house and I meet you for the first time and it’s at a barbecue, and you said, Hey, I’m in the automotive industry too. Tell me about what you do. And you said, oh, by the way, I had my car into the shop and they said, I need a set of struts. How much does your shop charge for that? I’m not going to pull out my cue cards and go through it, but I’m going to have a natural conversation just like we would at a backyard barbecue. That’s what I want my, that’s why we hire service advisors that have a great personality, that engage with people and people and build that relationship. That’s what I want more than, and of course there’s pieces in the puzzle that I want to bring up in that conversation and questions I want asked. Yeah, bullet points like Bill Connor said rather than scripting,
Tom Dorsey (00:15:48):
But I know u’s championing at the bit right now to get into this. We were talking about it a little bit before the show and some really interesting conversation he’s been having with John Long. And the funny thing is is that, and I’m not going to steal your thunder Uwe, but Uwe was talking about kind of the four phases of training and development and how KPIs play a role in there. And I think you just set ’em up. I mean the ball is on the T Uwe. What do you think, buddy?
Uwe Kleinschmidt (00:16:16):
It is, but I don’t want to be impolite. JR is our panelist and I’m so in awe about his history, so I can wait, how is
Tom Dorsey (00:16:28):
That? Okay. Okay. So folks, we’re going to put the pause button on here and introduce R real quick and then we’ll come back to Louis’s take on those four phases Jr. First of all, how did you get with Transformers? Oh, go ahead.
Greg Bunch (00:16:43):
Oh no, I want to hear, and this is unscripted, I want to hear from JR as part of this because Jason, our service advisor training was just out there and Jason and I have had a conversation about some of the dangers of digital inspections and if an advisor relies on it too much versus not enough and what that looks like. So again, JR be honest and transparent, but tell me what you picked up on that going through our service advisor training on an intimate setting with Jason out there along with these four points.
JR Luna (00:17:18):
Yeah, absolutely. Well, first of all, when the service advisor class was great, I mean having Jason and one instructor to ourselves was just very intimate. The guys all huddle around him at break time and pick his brain on some key issues they were having and having the class tailored to what we do, our culture, our processes and our aims and goals was just fabulous, was just out of the park. Jason sio, a topnotch instructor and everybody had a great, great time. So yeah, I highly recommend him,
Tom Dorsey (00:18:00):
But did you learn anything?
JR Luna (00:18:02):
Oh man, are you kidding? It really plays down to what we teach or what our culture is because we really want to service people. We really want to service not only their vehicle but themselves and the way they live. And we don’t put everybody on the same box. We want to get to know them, their automotive needs and just service them as people like we just like we are. And it builds relationships, it builds the community and it helps all of us. He makes our job fun. It’s no fun to sell something that is forced that somebody doesn’t need. You really want them to buy from us, not us sell to them. And that was Jason’s main key point.
Tom Dorsey (00:18:45):
And to Greg’s point, sure you could over rely on the digital process and take yourself out, but really what, at least at AutoVitals, what we’ve always talked about and build our best practices around is that what the digital inspection and the digital process does for you is it actually frees up your time to interact to learn more about that customer, to connect with them on how people want to be connected with. Because once you’ve developed that transparency and trust in the actual the images and videos of my vehicle conditions, after that, there isn’t that discussion. It is not selling, right? It’s educating and showing and then having a discussion about what are the next steps and what are your options and what should we do in a priority to manage whatever those issues that you find are. How did your service advisor training incorporate that, your current digital intake process and digital estimating process in with the goal of connecting better with that customer base?
JR Luna (00:20:05):
Well, it really helps in the base that there’s no, we’re not hiding anything from anybody. It is fully transparent. We get their email, we do, obviously you guys know, we text, we email it and we go through it with the customer and there’s nothing we’re hiding. And there’s a level of serenity when everybody’s got all the cards on the table, there’s just nothing to hide. And Mr. Customer, in your situation for the amount of time you’re going to keep this car or because you’re giving this card to your daughter, this is what I recommend and it just flows a lot better. With all the carts on the table, there’s nothing to hide and it’s fully transparency. Everybody just accepts that a lot. And if we can give the expectation when the vehicle gets dropped off and we show our customers, you’re going to get an email with, it’s going to look like this. Everybody just benefits. Everybody’s waiting for it. And it almost puts the conversation less about money. Like, oh man, I’m at the shop. What are you going to get from me more to How are you going to help me? And the writer comes for more from a standup, this is how I can help you, Mr. Customer.
Tom Dorsey (00:21:19):
John Miller said Serenity. Now
JR Luna (00:21:23):
I want to talk a little bit about culture, if I may.
Tom Dorsey (00:21:26):
Of course. Because you have a good one.
JR Luna (00:21:29):
Oh, thank you.
(00:21:32):
One of the reasons why I used to work for a large national chain and I left that job because the culture just was all about the numbers. It was just about the KPIs. I used to get two calls a day, one at 11 in the morning, one at four in the afternoon, and it was, how many tires have you sold? What’s your number and how many credit cards have you gotten? And some days I can have a dynamite day going on a lot of tires, a lot of sales, but I didn’t sign up anybody for a credit card. Bad jr. You’re bad boy, get back in there and sell me a credit card. And it gets tiring. And that culture is just all about selling. Now you’re presenting to the customer almost with because you’re forced you. You’re doing things because you don’t want to do it because you have to do it.
(00:22:24):
And now you’re on the text and because I’m stressed out and I got to sell something, everybody, the culture is just tense and people are upset and people are in fear and it’s just not one way to do it. So when I left that job, I didn’t want to create that in my own shop. I didn’t want to manage like that. I wanted a culture where I can lead people, not push ’em where I can inspire, not make them fear me. Because one of the things we kind of, well, it’s easy to lose track of as the owner, as the boss. You can get trekked into this way of thinking that you’re just going to order people around and you can demand things from them and use
Tom Dorsey (00:23:11):
Those KPIs like a hammer, right?
JR Luna (00:23:15):
And that can be a fallacy that is no good,
Tom Dorsey (00:23:21):
That is a misapplication.
JR Luna (00:23:25):
But when you can invite, not dictate, when you can sell the goal, the vision for everybody and drive everybody towards that, I mean that is power and that is really what the culture you want. Now you’ve got a service writer that is going to give you that drop off script from the heart because he really wants the outcome, not because he has to. So that is a big difference. And when you look at KPIs, just like Greg was saying, every store is different and you can’t beat somebody with a bat. I used to get compared all the time at the store that I used to run, look, your neighbors are doing so much better than you and you’re not. You’re a bad person. Seven lashing to you. And
(00:24:11):
I had a track record, I was doing the best that I could. Nothing had changed. It’s just some things are a little different. And I’m not saying that I’m going to settle for less and then I’m going to accept excuses. It’s not that that you don’t have to be a dictator, but you still can be strong as a leader. Absolutely. And that leading is not something you can buy or you can inherit. It’s something very precious that you must earn. And it takes some time and it takes some the right words and the right culture, the right attitude. And to me that is the most important things that we can have.
Tom Dorsey (00:24:52):
Cj, you asked me why we didn’t have a practice round. That’s exactly why, buddy. Because you’re humble. Honesty. I mean, you got the chat fired up. I knew John Long was over here just nodding his head like that little doggy toy that sure enough, he just wrote. Amen. Because that’s exactly that point. And that’s what we were talking about Vin and I before we came on today, is that you can miss KPIs for the sake of KPIs without the context around ’em, without the goal around them can be a negative influence if you’re not developing and mentoring and talking about the context underneath those KPIs and why and what’s in it for me if I do reach that. And so my natural, because we like to talk about that movie Moneyball in the scene where they’re sitting around with the scouts and they’re basically explaining who’s this kid down here? And they’re explaining why those KPIs are important and it’s the exact same thing. If you do not do that with your team, then it just becomes a cudgel. But if I know, because if you listen to any professional athlete, what are they talking about? They’re talking about improving their percentage shot percentage by this amount, their lap time by this amount.
(00:26:10):
Well, because why? They’re in the fourth phase, right? Uwe, I’m going to let tell the, I don’t want to steal that thunder, but that’s really what happens. And you need to develop, I think your goal setting and your metrics, the way you apply your metrics along way you would mentor somebody who’s brand new in your shop up to become that a tech, right? Your GS guy to your A tech, you need to mentor them along the way with those KPIs as well. Uwe, what do you think?
Uwe Kleinschmidt (00:26:45):
There are KPIs and there are KPIs, and they’re extremely powerful in a positive and a negative sense. If you take the KPIs and manage against them with no context, no goal, no culture, you get what you ask for. That’s exactly what JR just described, right? Exactly. Oh, your motorist research time is low, make it better by next week the person doesn’t even know what to do. And it’s a teamwork, which for example, in the case of the motorist research indicates a certain improvement, right? KPIs only work in the context of your culture period. But there are also things we cannot ignore, and that is that the interaction goes more and more digital. So what you could measure as a service advisor before with your gut and through the verbiage on the phone is now gone. You have to measure that differently. That’s for example, why we introduced motorist research time. It’s the interaction with the digital asset. And so long story short, it all comes to what you all have already expressed. It’s about transparency. If I have the buy-in into transparency, whether that’s internally with the team or the demand by the motorists because they have been taught by Amazon and any other online tool to get the fullest transparency right or wrong, with all the downsides of finding in 17,000 search results on Google, which one is the right one?
(00:28:46):
That’s the downside of full transparency. That’s why it’s so beautiful when a service advisor as the enabler of that information, as the, what’s the best word? The service advisor gets a buying question from a motorist who has digested the digital assets. That’s a completely different interaction than the service advisor on the phone trying to explain everything. That’s the beauty about the digital transformation and whether we want it or not, it’s happening in our world of interaction. And so that’s why certain KPIs help setting in a transparent culture the tone of how to interact with each other. I give you one example. There’s a shop owner in the audience where I looked at the I compared two service advisor he had simply by the KPIs. And I said to him, please watch, listen to their audio recordings of their interaction with their customers. They approach the selling completely different.
(00:30:06):
That’s the only explanation why the KPIs look the way they are. And that’s exactly what happened. What I’m saying is KPIs can help uncover things which normally are only coverable by watching a person do their job. How uncomfortable is that? And then you change your behavior, the boss is watching me. So the moment you are in full transparency, K KPIs, who said it? Edgar, perfect thank you, is a diagnostic tool in the context of the culture, but you cannot miss them, in my opinion. Back to Tom’s point, high performance athletes teams or individual sports, it doesn’t matter, do nothing else at the really high maturity to fine tune their skills. And last thing, the full phases of learning, and sorry, I come across as a professor or whatever, but I don’t know how else to say it, not you. There are the four phases of learning, right?
(00:31:23):
In the first phase, you don’t know what you’re doing wrong, so you’re doing it wrong. In the second phase, you know, have awareness that something needs to change. In the third phase, you are consciously doing the right thing, but you have to invest your time and your thinking in doing it right? And in the fourth phase, you do it unconsciously, right? Perfect example, how to tie your shoe laces, how to eat with fork and knife. When we were kids, we had to focus on those skills. Now I can carry on a dinner conversation while eating the fork and knife. I do it unconsciously. So as long as the team is not in phase four, you are in phase three at best and have to work constantly to fine tune those skills. So back to motorless research time. If it’s high grade, don’t stop teaching your team how to achieve a higher motorless research time. You might still be in phase three. That’s why every sport, even the famous Kobe Bryant went into the gym at the peak of his performance and what did he do? Practice fundamentals, right?
Tom Dorsey (00:32:47):
Every day, VJ sing every day. Yeah, VJ Sing would hit something like a thousand golf balls a day
Uwe Kleinschmidt (00:32:52):
Right
Tom Dorsey (00:32:53):
After being on the pro tour for 25 years. I mean, just incredible the dedication and the amount of training and consistency that they apply. But that’s the point, right? Is that when you’re in the phase four, it’s not a cut. You’re not using the KPI as a hammer hammer. You know why? Because that person is applying it to themselves already. See, that’s why when you’re hearing those high performance athletes, I’ve been into that F1 series on Netflix, right? I was telling you a little bit about it before F1 drive to survive, you guys got to watch it, it’s cool. And those guys are talking about their lap times and they’re holding themselves accountable. The team doesn’t need to tell ’em anything about it. They know exactly what their times are and where they need to go, and their pressure is on themselves. Now, whether that’s great in your shop, having them under that level of pressure or not is another matter.
(00:33:44):
But what I’m saying is that when you’re putting those goals in place around KPIs, there’s context behind it and they influence another goal. Our profit, our ARO, and that’s what they need to understand. And I can show you, I can say when we don’t have a 302nd motors research time, our a o is here when we have a plus 302nd motors research time, our a o is here over hundreds of inspections as an average. Okay? Bing, the light bulb goes off, I understand it. Higher motors research time, which I can influence in my job by doing X, Y, Z equals more money for all of us. Okay? Now all of a sudden I can have a solid goal around that. And what I can do then is, or you can give me, is I want you to raise it by 10% this week or by 50 seconds or whatever it might be as your individual goal as you are adopting this on your way to that phase four, where now you don’t have to tell me because I understand I do my job this way because it’s better and well, who’s it better for?
(00:34:46):
It’s better for the customer. They have that transparency and they get to see that big picture and make their own decision, and then they’re going to make the decision in your favor if you just present it the right way. Would you agree JR?
JR Luna (00:34:57):
Absolutely. No. KPIs are definitely, they’re a must. We must measure the performance of everyone. I do all of my writers input on a spreadsheet, we track all the main KPIs individually, and then the store managers do the whole store. And it’s just like a car. The car might be driving great, but it’s overheating a little bit and we need to find out why. It’s just we need to measure it.
Tom Dorsey (00:35:23):
Age is on a dashboard.
JR Luna (00:35:25):
I talk about culture. I’m not talking about just singing Kumbaya and have a great time. And if somebody buys something, great, if not, oh, well that’s not what I’m talking about. I’m just talking about having the right attitude behind it. I lost my train of thought. Go ahead.
Uwe Kleinschmidt (00:35:43):
If I may. Another thing KPIs do is especially if you have a bigger organization, and especially if there’s a high specialization within the organization, it sets a framework of transparency and trust and accountability. You can develop individual people and that’s absolutely necessary. But the moment everybody is willing in that culture to make it transparent where I am on my way to whatever I’m developed to, that there is no, not even the slightest chance of favoritism or other things which this industry is really kind of baggaged with from the past. So now the ability to have with a digital system to create KPIs, which makes it completely transparent, I think can be abused in the way we described it as a hammer, or it can be utilized in the most beautiful way in the context of the culture, in my opinion,
Greg Bunch (00:36:59):
In the Transformers organization. Like I said, it started out kind of a part-time, and then it’s grown. And one of those people that’s on my team now is a gentleman, Dan Taylor, who’s been a business coach, not necessarily automotive, he’s done some automotive things, but in general corporate America. And then about last 20 years as a business coach and a certified life coach. And so he helped bring a program to the Transformers Institute called Transformational Coaching. And so what it does, and it puts ownership. So your employee is telling you what they want to accomplish, what their goals are, what their KPIs are, what they believe they’re capable of, and then the leader steps in and then they have that discussion, okay, let’s work together. How do you accomplish those goals? How do you move those KPIs? So there’s this partnership in moving the needle versus what JR was talking about where it’s that abusive phone call at two and four o’clock or 10 and four, how come you haven’t done this?
(00:37:58):
What’s going on? And so what it does is for the leader, it puts you in that servant leadership role, and now you’re going KJR, it seems like you’re struggling with getting people credit cards. How can I help you? What’s some of the barriers to moving that needle that you’re looking at? What can I do to help you through that? And whole different approach. And some business owners, they’re going to go, okay, what happened to John? It sounds like not John Long, I’m just using that as generic name. What happened to John? Did he get taken over by an alien? Is he up to something? Because he’s always been the guy that beats me up. He’s never offered to help, he’s never, and so you have to break down, for some of us, you got to break down that hardened wall that you’ve built between you and being instead of being that dictator leader or dictator manager to being the coach and the helper because nobody comes to work wanting to do a bad job, but that doesn’t mean they don’t need accountability and they don’t need coaching and they don’t need help in certain things. And so again, it’s a different approach and sometimes it takes a little bit longer, but I think the results that you’ll see in your organization can be just blown up. And JR and I have talked about this and of course I want to hear his answer as much as you guys is, he’s obviously a super smart guy, built a great organization, been through some different coaching programs, but what are some of those things that you saw different about Transformers than some of the past stuff that you’ve been through?
JR Luna (00:39:34):
Sure. So I was with Drive for many years and I owe them most of my success. They taught me the fundamentals. They taught me how to play the game, and they worked out great for me. And some of the friends that I’ve met there and some of the coaches that I met that they’ll consider, I’ll consider them my friend for life, they’ve just been great bonds that I’ve acquired through ’em. But some of the teachings, especially in the last couple of years, Greg and I have met at several events and Greg has taught me or introduced the multiple shop owner coaching that he developed. And that’s one of the things that I needed. I needed to go into a bigger picture thinking and I had some questions that I needed to get help with that I wasn’t being helped anymore. And going with Transformers, being around those guys that are just thinking huge, much bigger than I can ever think is just very, very interesting. And you just find it, it’s kind of like the law of exposure. When you’re exposed with people that are thinking a certain way, you begin thinking a certain way, if I was to hang around with Olympic athletes, I would’ve a six pack and we’ll make that happen beer.
(00:41:05):
So in that context, when I hang around with some of my platinum two partners, they’re doing some incredible things and I needed to be around that bigger thinking and that bigger strategy that Gregs brings to the table. And it’s been phenomenal. It’s been eyeopening, and I’m really glad, Greg, that you invited me over. I’m having a great time with him. Been learning a lot.
Greg Bunch (00:41:31):
Thank you. And I guess one thing that I think you found different than from our conversations is we’re a collaborative brainstorming model. It’s not, Greg is the smartest guy in the room, and this is the business model. You have to follow that everybody has a little bit different approach. And what I say all the time in our meetings is there’s a lot of times there’s more than one right answer to a question. So Uve could give his opinion, I could give mine, and they’re both right. They both worked for both of us in our individual situations. And then JR gets to pick which one resonates with the way he wants to do business,
JR Luna (00:42:08):
Right? Absolutely. Yeah. When you have a problem and you have four answers and they’re all right, you can almost combine two and you can morph one answer out of four. I mean, there’s just a lot of collaboration and a lot of great, great ideas from years and years and probably decades of experience from multi shop owners. That’s invaluable to me.
Greg Bunch (00:42:29):
And that principle boils back down to the transformational coaching where you’re sitting with an advisor and you can say, Hey, this is what worked for me, or this is what worked for a friend of mine that he was able to move this KPI, whatever that is, I suggest you try it, but it’s not that dictatorial do this or I’m going to fire you type leadership. It just, maybe that worked during World War ii, but it’s a different generation now. And again, it’s understanding people want to be there and they want to succeed and they want to, again, if you painted the picture, if you’ve got a good mission, vision, value, culture, you’ve got direction where you want to go. They believe in the leadership of the organization. So a lot of people try and push this stuff until they fix that. Me being, I’ve had those problems in those areas, and until I got that fixed and not saying, well, perfect, but we’re a heck of a lot better than we were, then you get that buy-in and then you get that. You just have people come to work with a different attitude than seeing it as just a job. Or why did you stay with that company that you did? Well, you were making good money and you had the title of manager, but, and if they would’ve treated you well, maybe you’d still be there. So again, it’s a lesson for all of us as we’re talking about KPIs and culture and how they come together and getting people to move the needle for our companies.
JR Luna (00:43:54):
I just read two quotes that I’ll share with you guys that I think are applicable to this, that Henry Ford said, anytime I ask for a pair of hands, they always come with a brain. And I don’t know who said that culture eats strategy for breakfast, and I believe that dearly.
Greg Bunch (00:44:16):
Yeah, Peter Drucker said that famous quote,
JR Luna (00:44:18):
Because you can have a great strategy and some great foundation and some great vision and thoughts, and then the first time you get punched in the face, things change real quick.
Greg Bunch (00:44:30):
Uve, with your permission, I sent you a couple slides here earlier this morning. I would love just to give a quick overview and there’s some basic principles, but man, when you really think about ’em, it’s a great lens to look at our businesses through. Would you mind throwing those up if you can share that? Oh,
Uwe Kleinschmidt (00:44:49):
Do you have them in front of you, Kim? Just share your screen.
Greg Bunch (00:44:53):
It’s going to take a second. So
Uwe Kleinschmidt (00:44:55):
Same here.
Tom Dorsey (00:45:05):
Getting those slides up there, I want to bring in, so John Longs made a couple comments in the chat that I think that are highly relevant. And the first was, you know what? Lemme scroll back up. I don’t want to paraphrase John because he’ll send me a negative Facebook gifts in my chat, but John said, focusing on KPIs as an obsession with the temporary game, we should focus facilitating growth among our teammates. We should be more concerned with creating winners than winning temporary games. And then he followed up and said that. So what happens when you see a KPIs out of range? You focus on that and it improves. Then the next month you see a different KPIs out of range. You focus on that. And then the original KPI now is out of range. Again, you stopped focusing on it, and that’s kind of where we were talking with that fourth phase of learning, right?
(00:45:58):
When it becomes, you’re doing it subconsciously, or you’ve developed that muscle memory in that habit, he says, that’s why I say focusing on KPIs is a temporary game. And you’re right. If you’re applying, this is my opinion, if you’re applying the KPIs in that manner, you’re a hundred percent correct. I think that it’s just like if you’ve got gauges on your dashboard and you see your water temp is starting to rise, there’s an indicator there, like what Edgar said as a diagnostic. It’s telling you that there’s some other route, there’s a route somewhere, and that I can then at least have this investigation to determine what it is. And it may not be something that’s even, it might be on you, it might be on your process. It’s not the tech’s fault. In other words, I’m not going to go out and berate him about his KPI. I’m going to say, oh, you know what? I needed a new impeller bearing my drive belt fell off, and then I can fix that route and then use that KPI now as a way to verify that the training or the process or whatever it is that I have in place is actually functioning as expected or not. Would you agree with that, Greg?
Greg Bunch (00:47:25):
Absolutely. Absolutely.
Uwe Kleinschmidt (00:47:30):
Frank said it great in the chat, I don’t focus on p you on a dictatorship, they just see you as the main dick. Was that the one were talking about? Oh no, D,
Greg Bunch (00:47:40):
We must be on a cable network.
Uwe Kleinschmidt (00:47:48):
He just put it in chat. I don’t focus on KPIs, I focus on people and the KPI helps me measure their performance. Exactly. It’s the transparent meter when you develop individual people or the team,
Greg Bunch (00:48:03):
Right?
Uwe Kleinschmidt (00:48:04):
Absolutely.
Greg Bunch (00:48:06):
So this is some of the things that we’re working on at Transformers, and again, helping people to look at their business in this way. So when you look at, and this doesn’t matter, this is what we want from AutoVitals. This is what we want from our grocery store. This is what we want from when we stay at a hotel. Number one, a personalized and individual experience. And to me, this is where the danger can be if a service advisor relies too much on a digital inspection. And believe me, we’ve talked to advisors that they’re so thankful for covid because now they feel like they don’t have to build a relationship that boom, I just send things off and they just check off the box and I don’t have to have a conversation and a relationship. So when I say personalized and individual, I’ve got, I dunno, way too many cars, but there’s some cars that I want serviced in a certain way and it’s my baby, and other ones are just transportation, get back and forth.
(00:49:08):
So I want someone that’s going to personalize my recommendations according to my driving habits. Obviously, we all want to service with no defects from a bottled water at seven 11. I don’t want to see floaties in it. I want a clean bottle of water. People want their car fixed the first time. And when I say service, that could be also letting them, keeping ’em updated at what’s going on with their car. It’s a service failure when they drop the car off at eight in the morning and they don’t hear from anybody until three in the afternoon and somebody they call in and Oh, oh, Tom, I was just about to call you, right? Famous last word. So a service with no defects, timeliness, right? People want to get their car in and out, and how do we fix that? When we work on our technician productivity, we work on our parts acquisition, we can create a timely service.
(00:50:01):
Now setting those expectations, if you know it’s not going to go by the end of the day, letting somebody know ahead of time, most people can adapt to that. And then someone who is nice to them, how far removed are now? Probably nobody on this particular podcast is going to have this problem at their front counter, but holy cow, I’ve been to shops, I’ve done mystery shops and tours and go, man, you just need someone that’s nice at the counter. Like this person doesn’t like their job, they don’t like people. They’re that technician that no one know what to do with them and put ’em at the front counter. That’s bad. So if we can really focus in and go, okay, how do we put a system in a process? What are the KPIs to make sure that we’re hitting all four of these, we’re going to increase our business.
(00:50:48):
So it’s a basic four things, but when you really dig into it and you evaluate your company and go, how am I really, really doing at these four things? Not one person has gone and said, Nope, I got all that nailed. There’s something for everybody in that. And so that’s what the client wants. And then what does the company want? Obviously we want more sales, we want more clients, we want people to come back and we want to increase increased efficiency. So how are we going to get more sales? What behaviors need to happen? What KPIs are we tracking? What kind of scoreboard do we have in our organization to get more sales? Are we looking for more sales per vehicle? Are we looking for more vehicles? That’s something that the company wants. We want more clients. It doesn’t matter how good of a job we are, we do. We’re going to lose clients. They’re going to die. They’re going to move, they’re going to buy a new car.
(00:51:46):
My dad was a sheep herder as a hobby most of his life. So I spent a lot of weekends mending fences, sheep, my dad took, he was a great shepherd, made sure that they had plenty of alfalfa and grain and green grass, but they’d still, they’d try and get through that fence and go somewhere else. So you’re going to lose through attrition. There’s no way around that. And we want repeat business. We work really darn hard and we spend a heck of a lot on marketing to get people to come to our store and we don’t make money. The first time they came in, we got to turn ’em into repeat business. What does our CRM look like? What are people following that process? And then of course, this is where AutoVitals shines so well, is increased efficiency. Where are those bottlenecks happening within my company?
(00:52:35):
And without adding an extra bay or adding another technician, can we get two or three more cars in by improving our efficiency? So internally, focusing on these four things externally, focusing on what our clients want. That’s a lifetime of work for any one of our businesses. But I promise you, if those eight things are focused on a regular basis, what’s going to minus staffing shortages and technology and everything else, all the challenges that we have. But when it comes to having an effective business, those eight things are what’s going to move the needle. And AutoVitals can be a big part of both of these slides. So I know you get picked on for being the German engineer, but you really have done a heck of a job helping us address all four of these or all eight of these things as an industry. So thank you for that.
Tom Dorsey (00:53:30):
I don’t mind.
(00:53:37):
Thank you. No, that’s great. And just looking at that chart, I mean, you can probably think to yourself what KPIs underlie each of those points? And that’s exactly the application that is a healthy application of KPIs and how to use ’em to monitor them in your shop, is that there’s things that support everything. And if you can measure it, well, then you can improve it, you can increase it, and it doesn’t. And when it’s a team effort and a team goal and it’s a constructive application of those KPIs, that’s when the glory happens the other way, it’s like what Frank said, you become a dictatorship and nobody likes you, and you have a lot of turnover, and even the customers don’t want to come back because that’s exactly what it does. It permeates through your team morales down. As soon as the customer walks in the door, they see it written all over your team’s face and they go, woo, dodged the bullet. Let me get back. Hey, let me think about it. I got to go let go get my wallet out of my car. I’ll be back.
(00:54:41):
There they go. And that’s really where it all stems from, is the application that really appreciate. And we only have a few minutes left, and I really wanted to get into, and I might have to have you guys back, is to talk about, because there’s a lot of unique challenges. I’m sorry, bill. Every time I say challenges or anything, bill corrects me to say opportunities. So there’s some unique opportunities for multi location that a single operator doesn’t have. And so Greg, what I would ask you is give me what are the, say the top three big differentiating opportunities between being a multi, because this prevents, I think a lot of people from considering becoming multi. A lot of times you got to hammer down a process and it has to be of course, repeatable and has to be profitable and successful in your single location. But it’s so hard to develop culture even in one shop. Now all of a sudden try to do it in five, good luck. And then that’s the worst thing, right? Because you have this one center that’s just stinks. They’re in the tank. And when you talk about KPIs, using KPIs as a cudgel, that happens at that level, doesn’t it? Where I go, oh, store number two, they stink over there and then store number two thinks that they stink, and guess what happens? They stink.
Greg Bunch (00:56:03):
Yeah, no, it absolutely every phone call I have email when I’m training JR was there in Mexico when I talked for Bosch last year before the world changed, talking about getting out of your comfort zone. And so many shop owners feel like they have to be the answer, man. They’re addicted to being a problem solver. They don’t think their shop would operate without ’em. They’re not good leaders. They don’t know. And that’s not their fault. They’ve never really put the effort into developing their leadership, raising the lid on their leadership abilities. So number one is working on yourself, becoming a better leader, engaging and empowering the people that work for you to follow your vision. And when you get to that level and then they get kind of bored and they’re like, man, I’m making money. Things are going well. I don’t have to be there every day.
(00:56:59):
That’s when you go, okay, next step. Now we need to look at adding to your organization, building your bench. But it really, I’ve got a video series on my website called the most important seven inches, and it’s this right here. And you’ve got to get through and have a mindset change and a shift because 95% of us were technicians when we started in this industry. And you got to get out of the technician mindset into an entrepreneurial business mindset if you’re going to grow your company. And it’s not for everybody. So there’s people, they’re going to crash and burn or it’s just out their wheelhouse. And so again, I don’t want anybody to feel like, gosh, if you’re not doing that, there’s a lot of guys that absolutely love fixing cars. They’re great at it. They can make a good living at it, and they’re going to retire from that, absolutely no problem.
(00:57:49):
But if you’re really seeing what the future’s going to bring over the next five and 10 years, I think it is the strong, independent, multi-store relationship model businesses that are going to far exceed what the dealerships are going to do, what the electric people are going to do, and the franchises are going to do. We have the greatest opportunity. There’s going to be more cars out of warranty on US roads than ever in US history in the next five to seven years. And so I want to capture every bit of that as I possibly can while helping transform the industry. So that’s my
Tom Dorsey (00:58:23):
Brilliant. That’s brilliant in a nutshell right there, folks, because that is exactly what’s happening. And you could be on the sidelines and watch it happen. You should have bought Bitcoin 10 years ago. But really, I mean, the opportunity is there, this consolidation, like Greg said, all those vehicles coming out of warranty, where are they going to go? And there’s that whole factor is that as we become more digital and anonymous, man, do you hunger for some of that traditional face-to-face, good, solid customer service?
Greg Bunch (00:58:58):
Well, pre pandemic, I traveled a lot, and I know you did too. If I’m going to a city, I want whoever I’m with, or if I have the choice, I don’t want to go to a chain restaurant. I want to go, what’s the unique, what’s unique to here? What’s your favorite restaurant where the server knows your name and they take great care of you? So where do the locals go? We crave that experience, and I’m telling you, coming out of this pandemic, you offer that in a restaurant, in an auto shop, anywhere, people are going to gravitate towards that. I want to go back and give people a hug for where I do business. That’s very meaningful to people. So don’t lose that.
Tom Dorsey (00:59:39):
That’s a brilliant point. That’s a great way to end the show. Greg, how do people find you buddy?
Greg Bunch (00:59:45):
Greg, GREG. Just like on my zoom here, not two [email protected]. [email protected]. I would love to connect. If you send me an email today, I can probably get back to you, but JR is actually in Colorado and we’re having our two day event tomorrow. So please bear with me that it may be Saturday before I get back to you, but I would absolutely love to connect with anybody that’s interested in learning more and how we can partner and help. So thank you very, very much for having me on here. I’m honored.
Tom Dorsey (01:00:20):
Oh no. Thanks for coming. It was really great. It was a great show. This was a great conversation. I mean, the chat was blowing up. Take it to the Facebook forum. If you didn’t get your question answered or something comes up, we can always connect through the Facebook form, continue the discussion. Love to have you guys back on again. I actually got to tell you because there’s so many more questions I have for you and I want to explore, really get down into the nuts and bolts of that opportunity that exists in this consolidation in the multi shop and how you’re helping folks. Because I know Jr’s a brilliant guy and it ain’t luck. And just seeing, we’ve known JR for a long time and watching I live right down the street from him. I mean not down the street but a couple miles away.
(01:00:59):
And so just watching the success come through, especially through this pandemic, it’s just inspiring and it couldn’t happen to a nicer guy, couldn’t happen to better people. And that’s what happens is when he set that goal out and you empower your team around you, you’re letting the brakes off and now everything out in front of you, thank you, bill Connor is an opportunity and you just got to get out there with both hands and grab it. And I think that’s where this symbiosis right here between how JR as an aspiring and new, I mean what it’s been only two years, maybe JR since you opened up Asian Auto Tech. Yeah. And the amount of growth you’ve had and success you’ve had in that short amount of time. You think about it when you first started up until this point and now what’s happened over the last year, year and a half, it’s been incredible. And he doesn’t have a magic wand. He didn’t go to Hogwarts. You can do it too. You just need to get with the right folks. You need to get in the right mindset and you need to apply some fundamental best practices and get out there and do it every day.
Uwe Kleinschmidt (01:02:01):
Actually, I think JR has a magic wand.
Greg Bunch (01:02:05):
He has two magic, I’ll tell you what they are. I’ll tell you what they are.
Uwe Kleinschmidt (01:02:09):
Can I first No, go ahead. Go ahead.
(01:02:13):
It’s a person and her name is Rita.
(01:02:15):
That was the,
Greg Bunch (01:02:19):
So Henry Ford was interviewed by Napoleon Hill and he said, what is the key to your success? Number one was Mrs. Ford and number two was being part of a mastermind group. So I was going to say
JR Luna (01:02:32):
Number
Greg Bunch (01:02:32):
One and number two, he’s in a mastermind group. So
JR Luna (01:02:36):
Absolutely no, I’ve been blessed with a great, great wife, an awesome team around me. And it takes both to get it done because one of the fallacies of the last 20 years or maybe 30 years is that concept of if it is to me to be, it’s up to me. And that is totally wrong. We need people around us, we need the team to rally around our goals, set of common goal and go achieve it as a group and not as an individual.
Greg Bunch (01:03:04):
Yes. Awesome. Thank you guys.
JR Luna (01:03:06):
Thanks for having me
Tom Dorsey (01:03:07):
Guys. No, it’s brilliant. Thank you for coming on. Again, wish you all the success in the world. I know you’re already after it and I look forward to having you both back on in the future and we’ll do this again. Sounds good. Thanks everybody. Tune in next Wednesday, same time, same place. We’re going to do it again until they can get out there and make some money. Call Greg, he’s going to help you out. A lot of shops out there for sale. Just saying. Alright
JR Luna (01:03:28):
Greg. Thank you guys. Thank,
Tom Dorsey (01:03:30):
Thank you. Thanks.