After acquiring a second shop, Bruce Williams combined both into a one-shop operation. The results confirm the validity of his approach. Join Bill, Uwe, and Bruce in discussing how combining two shops worked out for him and his staff.
Episode Transcript
*This transcript was generated using Artificial Intelligence. Errors may occur. If you notice an error, please contact [email protected].
Bill Connor (00:06):
Good morning, good afternoon. I’m Bill Connor and you’ve reached a digital shop talk radio where we gather on Wednesdays at 12 o’clock central to have our panelists share some things they’ve learned along the way. Today I’m here with Bruce Williams Rivers Edge Services up in Canada. Welcome back, Bruce. Been here with us before and have always gotten lots of great information to share and AutoVitals’s founder Uwe Kleinschmidt is here as usual to go ahead and help us steer in the right direction. So join us today for a discussion about acquiring another shop, merging them together and implementing consistent operation processes. What did Bruce discover during this change? What are some examples and their advantages and potential pitfalls you might run into? As always, teamwork is required in the shop to provide the best overall results. You take away some tips today about combining two shops, how it worked out for him and his staff. As always, you learn from our guest panelists who operate shops just like yours. So if you wouldn’t mind getting us started here, let’s see if we can’t go ahead and stay on track here and get Bruce to go ahead and share with us.
Uwe Kleinschmidt (01:18):
Of course. Thank you. Welcome. Bruce has been a while. I’m excited to have you back. And we have now observed so many amazing developments in our industry, especially what used to be called the mom and pop shop owner. They want to expand because the digital shop and the teamwork and the staff now allows you to build repeatable process. But it’s hard. I mean probably there’s no school where you can go to and people tell you, and number one is this and number two is this. So there’s a lot of business owners figuring that out by themselves. And when I heard your story, I thought that was very inspirational because you are not just purchased another location, you combine two shops into one. And as you shared with us yesterday, it was a little daunting in the beginning because the second shop needs to be filled with business. But before we dive right into it, would you mind talking about what are today your typical numbers, number of service base, maybe revenue, if you don’t mind sharing number of tax and service advisor staff or other staff. And then compare that with before you did this endeavor.
Bruce Williams (03:14):
Sure, sounds good. Thanks again, bill and Uwe for having me on here. And just want to say hello to everybody that’s watching. So I’ll start maybe better to start. In the past, before I acquired this other shop we were in the location we’re at now in a third of the building we’re in. So we had about 4,000 square feet, four bays. We were running between three and four technicians and two service advisors at that time. And we had a great little revenue generating business. We had a really good name, but we were kind of busting at the seams and we had no room to grow. And over the last few years before I decided to do the expansion, I deal a lot with the local shops too. We send work back and forth, help each other out. And one of the shops in particular was always having problems, either keeping staff or taking on, finding a good technician so he could run it.
(04:10):
And he was back and forth all the time and just having some issues. So we talked about it and a thought process came into my mind and said, well, why don’t I buy you out? Because the people, the other two thirds of my building, those guys were looking for a new location too. And it just got my brain, the cog wheels turning and I thought, well, if they move out, I don’t want anybody else moving in. I want to take advantage of this space. So then I made a deal with the landlord. I took over the whole building, which is 12,000 square feet. And when I was talking to this other shop owner, he agreed to sell me all of his business and come work for me as a lead tech and bring his one other technician on board with us. So we went from four technicians to six. We went from 4,000 square feet to 12,000 square feet. We now have 12,000 square feet, 11 bays with lifts in ’em, a dedicated wash bay, other service areas, a full lunchroom, a full equipment room that’s very well organized, multiple offices. We have three service advisors on the counter and a service manager, which is basically a production manager. He oversees everything. And I basically helicopter parent the whole place now and just kind of touch base on everybody and make sure everybody’s happy and we’re always moving forward.
Uwe Kleinschmidt (05:35):
I thought you were going to say, I play golf every day
Bruce Williams (05:39):
Almost. I’m actually getting out a couple times a week this year finally. So it feels good to get back at it.
Uwe Kleinschmidt (05:47):
And so car count ao, could you share how many techs basically take care of how curls per week or month or whatever you want?
Bruce Williams (05:59):
Right now we’re averaging right around the 250 ROS a month with our six technicians and or our dedicated wash guy, shop helper, our A RO. I was just looking at the stats. When we first did the expansion, we were right around the 600 to six 50 mark and we’ve been posting over a thousand a RO every month for the last five, six months for sure. I owe a lot of that to multiple different platforms. One, when we moved over, we switched. We had a point of sale system that was basically just a ticket writer. It didn’t have the powerful things built into the background. So we made the jump to protractor. It was again, just like everybody, it’s kind of scary to change. And within a month of doing that, we couldn’t even remember how the old system worked and we were just moving forward. It was awesome. So if I can,
Uwe Kleinschmidt (07:00):
So you switched to Prot Tractor at the same time as you expanded
Bruce Williams (07:05):
Just after the expansion? Yeah, so I think it was two months after we switched over to Protractor and said, yep, let’s just jump in. The other one was not giving us what we needed. So ProTrac is much better, of course with AutoVitals, we’ve been a turbo user of AutoVitals for many years, so we had that process styled in, which was great. And then of course a big out to my two business coaches for, I’ve been using them for years and every month we meet and we just keep finding small opportunities to tweak and just keep improving, making the customer experience better and better every month. But yeah, as far as a RO and this year we’re looking to hit a $3 million mark for the revenue for the year, and I’m looking for more technicians because we’re turning away 10, 15 jobs a day. No problem.
Uwe Kleinschmidt (08:01):
Wow, wow. And is there some little man in your ear, recession looming, recession looming, recession looming, or are you just plowing away?
Bruce Williams (08:15):
A little bit of both. We’re giving her and the business is here, but we are really working, especially with my coaches, to really recession proof the business. And that comes down to having solid systems and procedures in place. We’ve developed really solid SOPs for the service staff upfront, right from complete check-in procedure, pre-booking appointment procedures. And that goes from everything from looking at all the history, bringing forward all the deferred work, all the recommended items from the inspections that we do, our inspection numbers. Right now we’re getting over 40% edited pictures, well over 20 pictures taken per inspection. Doesn’t matter if it’s just a simple courtesy or our oil change inspection or something. The bigger ones obviously have more numbers. So we’re getting very good quality inspections, which then creates the opportunity to let the customer know of the health of their vehicle and what’s coming up for maintenance. And of course, I think everybody out there in our industry right now is seeing the boost in people keeping their vehicles not buying new ones, whether it’s money issues or supply issues for new vehicles. There’s lots of different reasons why and there’s no reason that they have to get rid of their car every couple of years now because we’re keeping these cars running better and longer for our customers every day.
Uwe Kleinschmidt (09:49):
Very cool. So let’s rewind the tape and put ourselves in the situation when you made the plunge. And so walk us through it. What were your plans, fears, steps you took?
Bruce Williams (10:12):
Sure, yeah. So of course the whole idea was great and ideas are fantastic. Then there comes down to the funding issue because now we have to do renovations on a huge shop. So whatever somebody quotes you on a renovation budget, double it and give that recommendation, just double it. And that’s where you’re probably going to actually land always as you’re going with the progress. So that was a little bit scary. We only had so much funds and the renovations went way over what we wanted. But the other thing too is we officially or essentially had 4,000 square feet where we were making X amount of dollars. The shop that I purchased, they were about 50% of what we were. So best case scenario, I was going to only add 50% revenue, but I was tripling all my overhead rents, heat lights, all that stuff for sure.
(11:07):
Everything tripled. So I knew we had to work hard, dig deep, and it wasn’t long before we really realized we thought we had great systems, procedures in place, but we really had to dial ’em in and everybody had to be accountable for was happening in the shop. The other things that we did is we sat down as a team and discussed them regularly. It’s like, okay, we actually need to be doing this many hours a day per guide. How are we going to get there? What do we need to do? So we really had to as a team, dive deep in our systems procedures and really tighten ’em up. Simple things like all of our work areas had to be well organized because as most people know, a technician’s time is $6 a minute. If he’s wandering around for 10 minutes trying to find a tool that’s 60 bucks, I don’t know anybody that would walk by 60 bucks sitting on the street, they’d pick it up.
(12:06):
So we find a way to capture all those $60, all those 10 minutes, a very detailed organized equipment room. So everything’s there. Parts return when you get to the size we are now and the amount of invoices we’re doing and the amount of parts that are coming in pre-order, all our parts and all it takes is for customer to either not show up or reschedule our parts counters get quite large. So managing that on a biweekly basis now, especially with our main supplier is very important. The year into when we did this expansion, I looked at our parts counter, I said, okay, we have to stop everything we’re doing and go through this. And we had over $10,000 of parts that just needed to be returned sitting here, and it didn’t even look that bad. It’s amazing how it adds up. So we just learned we really had to tighten that up.
(12:59):
And like I said, the point of sale systems, once we were on Prot tractor, that really helped because it was scary the first year. It was kind of chaotic trying to figure out where everything needs to go, how the process is going to work, how everything’s going to flow through this new shop. Like I said, we thought we had it really dialed in at the old shop, but it was smaller, more manageable when we expanded, it was a lot more work and we definitely found some pitfalls and we had to create systems to make sure that didn’t happen again. And we did. And we still are every day. We’re still learning.
Uwe Kleinschmidt (13:36):
So how did you instill the culture in the team to bring up things as they happen or in the meetings or write them down or how did you make sure everybody’s looking out and identifying potential for tightening up the process?
Bruce Williams (13:56):
One thing we adapted was daily morning toolbox meetings about our flow of what’s coming in, where we’re at, what’s still left on the hoist, how are we going to manage it, and everybody’s got their jobs organized that way. And then we have weekly meetings. We picked Wednesday at morning coffee break, we just extend it and I bring up all the things that I’ve noticed as far and sorry in our daily morning meetings too. We also go over numbers from the day before
(14:26):
So everybody knows where we were, if we’re behind, if we’re ahead and all their jobs. And then the weekly meetings, we go over the numbers again as a group weekly. And then also I really let the team be part of the solution and that’s the key. I can’t just bark orders and tell them to do it. The team has the full power to bring up solutions to any problem they see. And that’s what I really instilled in the guys. I don’t want people coming to me with just problems and walking away. If you bring me a problem, bring me some kind of a solution and let’s see if we can fix it. And I’m a yes man, if you’ve got a solution to a problem, let’s do it. We need more AC machines because we just can’t share two of them. Let’s buy more. Let’s just make it happen.
(15:14):
So it empowers them to be part of the solution and they know that they’re going to actually get some respect from me and things are going to happen if they bring it up to me. Not all of their ideas are going to be great ones, and that’s okay, but we don’t know if they won’t share ’em with me. So with those meetings, that all comes out and I had one technician have lots of ideas, lots of ideas, and now in the meetings he doesn’t have much more to say because we’ve implemented them all and things are running very smooth and it’s like, well, I got some minor stuff to change in the inspections, but besides that, everything’s going great. And that’s the other thing, in the weekly meetings, we refine our inspection sheets so they’re more detailed into the type of work we’re doing and just all the time we’re constantly making improvements weekly.
Uwe Kleinschmidt (16:03):
Very cool. And was it a little scary for the staff to also be asked to bring a solution and not just a problem?
Bruce Williams (16:12):
Yeah, I think so because typically technicians are just working on cars. They’re not asked to be part of the business discussions and where we’re moving and what we’re doing. So it was a bit of a new world, but we’ve got a great team now that has been together for the last three years, all of us for sure, because that’s when we expanded and they all are very proud to work here. They love helping with decisions to make it better for our customers and it it’s a great place for them to work now. They can feel proud of something that they’re helping build and grow. Right.
Uwe Kleinschmidt (16:51):
I mean just listening to you, it sounds like you have been confident from first minute on. Were there any doubts or any redirections you had to take some turns because something didn’t work out?
Bruce Williams (17:09):
A little bit. We were pretty tight, don’t get me wrong. When we first did it and I went to my lead tech, I’m like, wow, we got to make some changes here or else we’re never going to get ahead and never be profitable. And it all came, we didn’t have to go borrowing money or do anything crazy or drastic. We just had to the meetings take time, be patient and keep making small improvements along the way. And we got there. And now even with my coaches, when they’re coaching other people, they’re using our examples and our numbers of what to do to help. And I’ve actually been asked by both of ’em to now start coaching with them and help out shops that are on that cusp of struggling, which is great. I love giving back to our industry and the community and everybody can bring something different to the table and if we all work together, the industry’s just going to keep getting better and stronger for everybody involved. Our technicians make a good paycheck, we put profit in the bank, I make a good paycheck and that’s what it’s all about. And our customers get a ton of value for the service we give ’em, and we can afford to do that. We can afford to have a dedicated wash guy to vacuum clean out the interior and wash their car before the customer picks it up. So even our dealerships in our area can’t even afford to do that anymore. They don’t have people doing it.
(18:38):
We’re actually leading. Sorry.
Bill Connor (18:40):
When you merged the two shops like that, what was the customer experience bringing them from another shop into your operation that was run? I would assume totally different.
Bruce Williams (18:51):
Well, that’s exactly it. Yeah, our shops were run totally different. Fortunate, the guy that I purchased the company from had done some business training as well, so he had some assistance procedures in place, but I don’t know how to put it delicately, but it’s kind of like old school place doing lots of discounting to keep people happy. Oh, I see. Which is more of an internal thought as opposed to what customers actually want is what I’ve learned. And when you start realizing what the customers really want or the good customers really want, it’s not the discounts, it’s to be taken care of and added value. So there definitely was some struggles. I think we retained probably 30% of his customer base because some of ’em weren’t happy with the way we did things.
(19:48):
They didn’t have digital inspection process with all the pictures. Some of them just wanted it bare bones, dirt cheap and wanted to bring their own parts. Well, we don’t do that period. We just don’t. There’s no other industry, you can’t bring your own wood to the contractor to build your house. There’s no other industry that lets that happen or take the filling material to your dentist so we can put it in your teeth. So we just don’t let it happen. So some people weren’t happy with that. So they they’re okay to go find another shop that works more to their liking and that’s totally fine. It gives us more room to really pay a lot of attention to our good customers and give them what they really want. But there was definitely some struggles with the customers because of course if you’re thinking you’re going to get X amount of revenue from the other shop you bought and then you actually only get 30% of that.
(20:43):
So there was another, holy cow, let’s get busy. And we ramped up our social media presence, which I think we’ve done a great job at. We’re always involved with the local community doing many, many things, and that really helps people like to support the companies that support the community around them. So we do that and just keep working. Everything we do, we’re working towards the better customer experience period. Ultimately that’s the customer. We can all fix cars. That’s the easy part. It’s managing customer’s expectations, right from the booking appointments, the staging process and the checkout process, having enough time to go over all the items that we’ve identified coming up for the health of their vehicle, but having time to go over it in a way that you’re not just throwing it down their throat. It’s like, oh, you’ve got $2,000 worth of maintenance you got to do on your car. It’s having an educated decision with them so they understand what you’re actually looking at so that you can build a plan that fits their budget and their needs and keep their car running long time so they don’t have a breakdown that’s stressful. They don’t have to go buy a new car and they don’t have to worry about it. Somebody else is taking care of it so they can worry about the stuff that they need to worry about getting to work, going home, get their lawn done, whatever the case may be.
Bill Connor (22:11):
So in your case, this came about because you were networking with this other shop owner and basically it was just presented that way. Is there some things that there’s plenty of opportunity in the marketplace right now, people retiring and so on. Are you looking for a customer base? Are you looking for employees that you can transfer? What are some of the things that would go in and help you make that decision to acquire somebody else’s business and then try and merge in with your existing?
Bruce Williams (22:39):
Probably a little bit of both as well as all equipment. Right away you can have all equipment to add base, put it in place, and employees. Employees I know in our industry is a big problem trying to find quality employees. And even in our local trades program here, there’s not a lot of people going through ’em and a lot of the people that are thrown into it because that’s what people, it’s the only thing they think they can do as opposed to really wanting to be in this industry. So I think those are the more important things. Getting all the equipment, getting the space, and getting the technicians that can fix the cars. We can always get the customer bases if we’re advertising right, and being in the community and doing a great job.
Uwe Kleinschmidt (23:34):
So it sounds like you bought three times the space. You had three times the overhead, you had planned your initial revenue plus the revenue from the other shop, which was together, not enough to meet the three times expansion, and you realized it’s just 30% of the other shop, so you had to fill a pretty big gap. How long did it take you to fill it and how anxious were you to get there? I mean, how did it affect you in your decision making?
Bruce Williams (24:20):
Well, definitely I was pretty anxious to get there for sure. It took us, and of course all through this, it wasn’t long after this expansion, the year later is when Covid hit too.
Uwe Kleinschmidt (24:33):
Exactly.
Bruce Williams (24:34):
And that’s exactly, we were really trying to build our customer base to grow and then covid hit, but I was fortunate enough to just keep advertising and people, the other thing I’m fortunate enough with is our website, which is actually taken care of by AutoVitals. And because we’ve been doing it for a long time with you, we were quite high on Google, if not number one in the first two or three. So that was very fortunate. We get right now, pretty much everybody that knew that comes in the door is Google, Google, Google. They found us where the guys in the course, our ratings are good asking customers for reviews from that. So that’s really helped to be honest. Before I expanded, the reason I wanted to expand is we were turning people away at that point too. We were two weeks or booked out in the summertime for sure all the time. And that’s what we’re finding now, we’re we’re turning away too many people. We had the people calling to help fill the shop as well. I just didn’t have the space or the technicians. So that did help sort itself out. But once Covid hit, of course that was scary for the whole world. Everybody, nobody knew what was happening really. It gave us time to focus and dial in our systems and procedures and just refine ’em to where they’re at today, which is I think we’re about 90% to where I really want to be.
Uwe Kleinschmidt (26:04):
And was there some impact on pay for the technicians or the staff through the pandemic, or were you just putting the bill and let’s just get through it and improve our business?
Bruce Williams (26:19):
To be honest, as soon as Covid hit, we had about a three week shutdown because nobody knew if you were allowed to work. And as soon as we knew we were allowed to work because we’re essential service, everybody was back to work that day. We had enough work waiting, everybody was there and we kept everybody working at least to 75, 80% capacity. So we got everybody right back, right away and just kept moving forward at that time.
Uwe Kleinschmidt (26:51):
So would you say, and it sounds weird what I’m going to say, that the pandemic as bad as it is, also gave you an opportunity to fine tune and hone your business practices?
Bruce Williams (27:04):
Absolutely. For sure. Throughout any kind of diversity or adversity like that creates opportunities and it forces you to think outside the box. It’s really easy to get stuck in your lane thinking you know it all and everything’s going along good, but if you just get out of that lane a bit, you see, well, wow, if we do this and this and this, we can actually create a better product and make more revenue. And that’s learning from that. That’s why I’m a yes man. Now it’s like, yeah, if you see something you want to do and you think it’s going to work, let’s do it because it’s way better to take a chance on it and learn from it than to not even bother. You’ll never know.
Uwe Kleinschmidt (27:48):
Have you noticed that you take higher risks now that it paid off taking risks in the past?
Bruce Williams (27:56):
Yes, definitely. When I started my business years and years ago in a one base shop all by myself, I never took any risks and I moved very slowly in expanding and looking back, if I would’ve done this 20 years ago, I would be way further ahead. So definitely it’s worth taking the risk because it creates the anxiousness like you talked about. So that means you have to go produce. Yes, it’s too easy. Like I said, just stay in your lane and just be comfortable. If you’re comfortable, you’re not working hard enough, you’re not testing yourself, let’s push yourself. If you’re ready to retire, sure, but keep pushing yourself and make an exit strategy and let somebody else push it because why not? And that’s the headspace I was at at the time as well, is kids are pretty much all grown up. They’re all in high school.
(28:56):
I’m not coaching the sports anymore, things like that. And I just had more time to really focus and I’m like, yeah, let’s turn up the dial and let’s go for it. Let’s take a chance. My wife was a really big sporter, says, yeah, if that’s what you want to do, let’s do it. Go for it, push yourself, because why be comfortable? I could have just stayed to where I was at and been comfortable, but we took on a lot of stress and anxiety, but it made us the top shop in town now as far as I’m concerned, and we’re expanding trying to expand even more.
Uwe Kleinschmidt (29:32):
Very cool. You said earlier you mentioned things like appointment making, staging, exit interview. Would you mind taking maybe those, I call them the workflow steps and maybe use one you think had one of the biggest impact and explain how it was before and how it’s now? So I don’t know which one that is, but
Bruce Williams (30:12):
Right. I think looking at all the, so we have four dedicated ones for sure that we use all the time. One is staging the work order for our pre-book clients. So stage it out early, have everything added, make sure the customer knows what we’ve identified and then give them an opportunity to either schedule those in or move them to future. Next one is when the customer arrives, whether they’re a returning customer or not, the review process at the counter, so the service advisor knowing exactly what the customer’s, asking the customer, knowing exactly what the service advisor’s recommending and the detailed notes that go back on the tablet to the technician so they don’t have to walk up and ask, I hear there’s a clunk or it says diagnosed clunk, but what does that mean? When does it happen? The more questions they have to ask upfront, the more time they’re wasting getting the job done. So that one is a big one. How
Uwe Kleinschmidt (31:13):
Did that come about? Did the technician tell the service advisors in your daily slash weekly meetings, guys, the information is a little short. Yeah. Could you do X, Y, Z on top of it?
Bruce Williams (31:27):
That’s exactly when it comes up in our weekly meetings, saying back from the technicians, given them the go ahead to voice their opinion. It’s like on these diagnostics, we need more information so we can do a better job because walking all the way across 12,000 square feet to go ask a silly question, they don’t want to do it either. So they would rather just have as much information on the tablet as possible so they can just get right at the job. So that’s exactly where that came up in the weekly meetings so we can make a better process. And then our phone calls, once we’ve done the inspection, the phone call about reviewing the inspection, letting the customer know we’re building the estimate, we’re going to send it out to ’em. Some of it is necessary work safety concerns, some of it is future maintenance, some we can defer and we’ll discuss that at pickup. And then at pickup, the pickup process is really, I think the biggest one when the customer’s picking up, as long as they’ve already known exactly what they’re getting today, it’s about setting
(32:41):
The seed or planting the seed for the next appointment, what they can expect from us, and really setting the expectation, the customer’s expectation of what they’re going to get when they come to River’s Edge for any kind of service or repair. We’ve definitely had people that say, we don’t want any of that and we’re totally okay. The service staff knows that they’re allowed to say to the customer, it’s like, well then I guess we’re probably not a great fit as a shop for you, but we can recommend a few shops that probably are, and it’s okay. We do it in a very positive way because that’s okay. Not everybody’s a fit for every shop.
(33:19):
And it’s funny how human nature is to spend so much time on a negative or solving something that is outside of your system procedure instead of just letting it go and really dial in and focus on the positive customers that are the ones that never complain and they just pay their bill and they do what they say, and yet we don’t work so hard and go out of our way to give them anything extra. We always do that for the customer that’s dropping in last minute, that’s never going to come back and everything else. So we really focus on our really good customers.
Uwe Kleinschmidt (33:56):
And I assume that was a big decision because it’s time consuming, right? Exit scheduling is one of the, I would almost say unsolved challenges in the industry because it’s a high pressure point from a timing perspective. People want to get home, car is fixed, so why do you need to tell me more? Right? You have my money.
Bruce Williams (34:26):
Right, exactly. And that’s why we really try to do plant the seed along the way with the other steps, let them know so we don’t have to explain everything that we found at the pickup stage. Let them know when we send the inspection, the conversations during the day, so when they do pick up the keys, it’s as simple as this is exactly what we did today, what you approved today, whether we can save ’em a couple bucks at that time or not. And then we’ve now scheduled you, just like we talked about earlier, you’re scheduled in three months from now. What we do here is we schedule everybody for a Sunday and then we let them know that the week prior to that Sunday, we’re going to give them a call, slot them in our schedule based on what they’re available. Because most customers that we found, they don’t know exactly what they’re doing three to four months exactly. So they know that they have another appointment coming up in three to four months and that they’re going to get a call so we can refine it and fit it in to their schedule, what fits best for them.
(35:30):
And that seems to be working quite well. Customers are a lot more inclined to take that appointment than to say, no, no, I’ll just give you a call. If you try to lock ’em down to a date and time, a lot of ’em will just say, well, I’ll just figure out what I’m doing in November and I’ll give you a call. And that doesn’t work very well.
Bill Connor (35:50):
So for shop center are just starting out into the inspection that kind of booked their day. How do you handle the fact that there’s a lot of discoveries made that you can’t go ahead and get done today and your schedule’s already full? Do you have a fear of putting that off for a later date or you just try and cram ’em in there? What is your process to help them through that opportunity for improvement that most shops find when they start doing a good needs discovery?
Bruce Williams (36:20):
Well, I know we used to deal with that a lot too, bill, and that’s in our drop off conversation. We, again, very transparent with our customer that we’ll be doing your oil change. With that today comes a very extensive inspection, and if there’s anything safety severe, we’ll let you know right away. If we can get that taken care of today for you and fit it in our schedule, we will. If not, we’ll have to schedule it out as the earliest convenience for both of us. So you’re safe and anything that can wait, we’ll discuss that and we’ll fit it in as soon as possible depending on the urgency of your needs. So it’s already preset up that we’re going to possibly find that, have that conversation later, and we’ll do everything in our power to get the safety stuff taken care of so they can actually drive home safe and competent with their vehicle and reschedule them. Everything else can more than likely wait at least two weeks, if not at the next service type schedule.
Bill Connor (37:21):
That sounds how a doctor’s office work. You go in there to get a physical and you might get sent to the emergency room or you might go ahead and have procedural scheduled going out into the future.
Bruce Williams (37:30):
That’s right. Yeah, that’s perfect.
Uwe Kleinschmidt (37:33):
And did you buy a few more loaners in case they just want to leave the car there or is it mostly like you just described? It’s more like two weeks out, not two days.
Bruce Williams (37:49):
Yeah, it’s more like two weeks out because we are pretty booked, so we don’t have any loaner cars here, but we offer shuttle service to and from work to and from home. And if it’s something where somebody needs a vehicle, we offer to arrange a rental car for them so they can do it, so they can take care of it. And depending on the circumstance, we can negotiate a pretty good rate with the rental companies. Maybe the customer is going to pay for part, we’re going to pay for part depends, everything can be negotiated to create a good customer experience for them. If we’re tearing something apart to diagnose it and we cannot put it back together for them, we feel a little bit responsible even though we’re not. So we do everything we can to help out our customer and make it convenient really. Ideally, most people have another form of transportation or some way to get to and from work, at least in our community. Maybe in some of the big centers it’s different, but most people have another way if they have to. They don’t want to ever, but if you have to, there’s usually a way.
Uwe Kleinschmidt (38:59):
I would like to go to something you said in the pre-meeting yesterday, you was super confident to share basically the dollar amount of deferred services you have on the books. So that means you have some algorithms, some process implemented where this is a goal. KPI for you, can you tell us how that works and how you calculate this?
Bruce Williams (39:33):
Yeah, so we do multiple different things. Obviously with our inspection process, we identify any concern that is visually identifiable, like dirty fluids, et cetera, et cetera. And that’s the other thing we’ve really been doing a good job at or our service team is with Dirty fluids is explaining now that you’ve missed the boat for maintenance, now we’re almost in a repair procedure trying to clean out your differential. If it’s already dirty, just servicing it is not going to clean it. Very good. You’re going to have to actually do some catch up servicing. So the service staff’s really good. Now is the thing, training the service staff on what a service procedure looks like, what it should be intervals. We have the maintenance, a River’s edge maintenance plan built into Protractor, which recommends all the different maintenances at the right interval for mileage and time. So going back, we take all of that identified stuff and then we look at all the vehicle’s history, how long, maybe the customer’s only been here one other time, so we don’t have a lot of history, but we are tied in with Carfax.
(40:43):
So we look at that. If there’s not a lot of value in the Carfax because they haven’t been to a shop that uploads to Carfax, then we have a conversation with them about we have no history on your car, so we don’t know when anything’s been maintained. If you don’t have records, we’re going to build you a maintenance plan that’s going to be a catch up maintenance plan to get all your fluids caught up, maybe your timing belt caught up so you don’t have a breakdown. And explain to ’em that doing proper maintenance is actually going to save them time and money in the long run. So we look at all those pieces and then the service team, and that’s why we need at least one service advisor per two technicians, if not more, because this takes time now they have to estimate all those services, repair procedures, maintenance services, so they estimate ’em, all of that deferred work.
(41:37):
We have a 300 rule, a hundred percent cars get inspected, a hundred percent of that stuff gets estimated, and then a hundred percent of that gets articulated to the customer. So the customer knows exactly the health of their vehicle when they leave and what it’s going to cost them. So then now they choose to not do it. It goes into the deferred work bank. And on average, I think we’re at least in the $250,000 range every month. Last month was almost $340,000 of deferred service that we couldn’t do. But now it’s in the bank for future that we know that a lot of these services are coming up for customers and it’s great for their next service. So now we have some add-on services for catching up and it keeps them from having a breakdown.
Uwe Kleinschmidt (42:26):
That’s very impressive. I’m just wondering, a declined job, which becomes a deferred one, is not necessarily one where your customers next time say yes when they said no this time. Do you have another, what’s the word attribute if they keep saying no is my point, and it’s not a real deferred service, right? So do you have a kind of qualifier that the chance that your deferred work is being sold is high?
Bruce Williams (43:10):
Well, it is what we do because tracking it in ProTrac, every time the customer comes back in, all the deferred work gets put back on,
Uwe Kleinschmidt (43:17):
And
Bruce Williams (43:17):
If they decline it again, it goes back in. And then in their deferred work, there’s actually a timestamp every time that happens. So our rule is once somebody’s deferred a maintenance service three times we’re having a real conversation with them about
(43:32):
Their maintenance preferences and maybe that if they’re not a maintenance customer, they’re not our priority customer, so they’re not going to go to the front of line. We’re not going to go the extra value for them. They don’t work with our system procedures and we may just get the basic off ’em, or maybe they might want to find another shop that doesn’t waste their time with all this because it does take time. So if they defer it three times, then we have a serious conversation and take ’em off the maintenance plan and don’t waste our time and effort into them and we put it into our bedside one that do work. Just
Uwe Kleinschmidt (44:09):
Three strikes out. Oh, Ken has two questions. How long did it take and how, oh, lots of questions. How long did it take and how did you build the Riverside maintenance plan inside Protractor? That’s two questions in one. And then does it really help the front desk? That’s a facetious one, Ken.
Bruce Williams (44:36):
Okay, so I’ll start with the first ones. How long did it take? Well, fortunately for me, my coach is also a protractor user. He used it forever at his shop, and so he had a template made already. So when we launched with ProTrac, he was my guy and he put the template in to the system. We still have to go through every new customer and actually turn it on for each customer as we build the work order. And then we just set, we went in and set all our mileage based intervals to suit what we wanted. It was very close already, but it was pre-made by the guy that got me onto Protractor. So that one was easy. As far as the service staff, we just added it to our system procedures. As you’re going through, you’re not allowed to click past it, you have to turn it on, you have to go in and remedy it because if you have a gas vehicle, it also, the maintenance plan has diesel stuff. So we clean it up and look at it and turn it on and have that conversation with the customer about what that maintenance plan is for and that it’s there so we can take care of our customer’s vehicle so it lasts longer for them and saves them money.
Bill Connor (45:54):
Do you have a formal interview process you use for a new customer versus a returning customer?
Bruce Williams (46:00):
We actually do. Bill is what we created. We created a company brochure that we have at the front counter. So with that brochure, it starts off for a new customer. We talk about Welcome to River’s Edge, we find out how they heard about us and we say it is just, we’re going to take a couple of minutes of your time. I’m going to go through who we are, what we do. And one of the first things is is that we do do an inspection every time you are in the shop, whether it’s a courtesy inspection or more, and there’s a checkbox that for our guys that have that conversation with that customer. Then the next checkbox is called maintenance preferences, which means now me and John are going to have a conversation about what are their maintenance preferences and ideology around maintenance. So we get to know the customers and they might say, well, I don’t know.
(46:52):
I just go when my car says I have to get the oil changed, I just get it changed. So now we know where their Headspace is at so we can have a educated conversation with them about what we do and how we do it and the values of that. And then inside the brochure explains all our maintenance procedures, our warranties, our team, it’s just a two page maintenance or company brochure. So it gives the new customers a picture of who we are, what we do, and the professionalism and the value that we’re here to give them.
(47:28):
And that’s been working really well. When customers see that they’re completely blown away that we do that in the first place, just like they’re completely blown away that we have that quality of inspection process and the pictures and stuff that they get customers that have never seen it even I have one technician that’s working for us now that was a 25 to 30-year-old or 30 year dealership technician at a local Dodge dealership and then down in another city in the province at a Dodge dealership. And he says, we are leaps and bounds above where they’re even at in technology terms. So that’s pretty cool. Customers are completely blown away by them.
Uwe Kleinschmidt (48:10):
Very, very cool.
Bruce Williams (48:13):
I seen we had another,
Bill Connor (48:15):
I see some similarities between what you’ve done is merging another shop into your existing, and also there’s a lot of shops out there that have lost a large number of employees and now they’re bringing in a bunch of replacement at the same time. So do you see some similarities in how you’ve done in handling the situation of bringing in multiple employees at the same time being handled in a similar manner?
Bruce Williams (48:41):
Yeah, exactly. There’s a big learning curve when you bringing people over, whether it’s a new person or somebody that’s got a lot of bad habits, ingrained or don’t even know, a different process. And again, it goes back to patience, having patience with them and letting ’em know that we are here to help ’em and train ’em and make sure their mindset is the same as ours of why we’re doing it. We’re not doing it for to line our pockets or to line their pockets. We’re doing it for the customer experience that’s going to be recession proofing our business per se, and make it a long great career for all of us. And in the meantime, we all get paid well to do it too. So it’s a win-win win. It has to be a win for everybody. It has to be a win for the technician. It has to be a win for the shop. And if for sure, it has to be a win for the customer,
Uwe Kleinschmidt (49:32):
But changing the process is not perceived as an immediate win when you approach people. So how did you do it? I mean, was there pushback and how did you overcome pushback?
Bruce Williams (49:49):
There was some pushback. Short story is this is how we do it, so we’re going to work together to figure it out. We’re not going to not do it. It’s a non-negotiable, like you said, these things are the non-negotiable bucket negotiables.
Uwe Kleinschmidt (50:05):
Wow,
Bruce Williams (50:07):
How we get there. We can negotiate that. We’re going to offer you training and help and figure it out, and it’s going to benefit. You’ll see the benefits once it’s there. Trust us. I trust my technicians. They also have to trust me that I’ve got them too. And just having those conversations that they’re part of the solution, not just order takers really helps in that process.
Uwe Kleinschmidt (50:33):
Right. Would you mind sharing your payment structure? How you do you?
Bruce Williams (50:41):
Okay. Yeah. Up here in Canada, we are not flat rate. We’re hourly. So everybody’s paid. They’re eight hours a day, five days a week, straight up. It doesn’t matter if they’re pushing a broom or fixing cars. So it’s my job to keep the shop full of cars for them to work on. And that’s what we do. We’ve got for the technicians anyway, and they’re paid top of the industry, they’re paid at least as much as the dealership tax or more because I am a firm believer if they’re generating revenue or why shouldn’t they be rewarded? Also because not everybody’s motivated by money, but they need to have a good wage to also have a happy life and family and everything else.
Uwe Kleinschmidt (51:28):
Do you have another bonus on top of it or another incentive of any kind?
Bruce Williams (51:32):
Not for the technicians. We do have a bonus structure that we’ve been running quite successfully for the last six months for the service staff. So they have a base salary plus bonus based on labor hours sold that starts at certain amounts and things like that. That has been working very well. And their parts margins comes into that effect too. So it gets, their emotional bank account gets now ignored because it cuts into their own potential bonus. I’ve been tracking it very closely. I know it’s a slippery slope with bonuses, but they have not been, they’re not gouging or overselling. They’re only selling the identified work. They’re not discounting it to try to get the work. It just is what it is. So they’re actually, it created more confidence and my service team is pretty young and fairly green, and they would just feel bad if it was a $2,500 repair. So they right away, before the customer said anything, they’d kind of find ways to discount for them to make them feel better. But the customer never even asked. They just want to know when they got the car back.
(52:41):
So it stopped that, and it really helped them to be able to push themselves out of the comfort zone with the checkout process, with booking that next appointment because now they want the customers to come back. They really do because it also affects their pocketbook and ideally it’s better for the customer, which they all knew it just having that extra push to really have those solid conversations. So that has helped with them. But our technicians are paid hourly, a hundred year plus for our senior technicians, a hundred grand a year plus for them. No problem. They’re paid well.
Uwe Kleinschmidt (53:24):
Very cool. So Ken is on a roll today. Maybe reach out to Bruce via the AutoVitals for Messenger. Of course. I see.
Bruce Williams (53:34):
Yes, of course. I’m open to having Zoom calls with people. Any questions they have, I can show all my systems. We’re definitely here to help out for sure. So reach out to me and we’ll schedule something up for a conversation.
Uwe Kleinschmidt (53:51):
And he’s also asking whether you would be willing to share one of your brochures with other shops. And if the answer is yes, I would just propose once we post the recording of this podcast, if you could just attach one of the brochures with the reference to the recording so it’s not out of the blue.
Bruce Williams (54:23):
Yeah, yeah, I can do that. I’ll just very cool. Post it in there and show an example of the brochure for sure. Yeah. Thank
Uwe Kleinschmidt (54:32):
You.
Bill Connor (54:33):
Cool. So we’re down to the end here. And what I’d like to do is whether you’re merging another shop with yours or whether you’re replacing a lot of crew at the same time, perhaps, what are the top things that somebody listening should be having on their mind to go and motivate those people and what type of timeline should they expect to get it done in knowing it’s not going to happen overnight?
Bruce Williams (54:57):
Wow, timeline. That one’s tricky. You never know what it’s going to take. But like I said, bringing people on board, explaining who we are, what we do and why we do it has really made the new technicians feel very positive and comfortable being here and being part, letting them be part of the solutions for the shop and build it. They really have a lot of pride in knowing that what they say matters and helps out the shop. So they can walk around wearing the logo on their jacket and feel proud of that. And people will stop and say, Hey, yeah, my brother goes there. I heard great things about you. And they’ll be very proud of that timeline.
(55:43):
Even all our new technicians, it takes ’em only a couple of weeks to be totally proficient with the tablet and the system, especially if they understand because we’re not flat rate. I give my technicians an hour on their tablet to do an oil service inspection. So they have lots of time, and we only bill our customer 0.6 for that same thing, but we give our technicians an hour. But our technicians now, we’re running well over 150% efficient and we’re over a hundred percent proficiency all the time now because they’re getting eight hours a day because we have our daily meetings about it, easily sold for the shop. Some people are getting 12 to 14, some people are getting three some days because of weird diagnostics that go sideways or whatever. But as a team, we know at the end of the week, we need this much or this many hours sold. So everybody lifts each other up. And that’s the other thing is having everybody in the shop working together to lift each other up and make a better product for our customer as a team. Teamwork really does work. So
Bill Connor (56:58):
Having everybody hour hourly takes that whole equation out there and puts the making things get done back on the management of the business rather than out of the technician’s pocket.
Bruce Williams (57:09):
That’s exactly right. That’s how I feel about it. I know there’s different systems, different hybrids and ideology, but when they’re not worried about their hours sold is their paycheck. They get their paycheck and the whole shop’s got to win because if the shop doesn’t win, the shop won’t be here to keep feeding them a paycheck either. So all the hands feed each other all the time, and we make a great product for a customer. And then the technician also gives them the time to be able to go out and talk to the customer and not worry about that. The clock’s counting down because they can talk to the customer, explain things. Maybe the customer wants to know exactly why something happened. So they had the freedom to go and talk to the customer. And it’s not counting down the clock on ’em either.
Bill Connor (57:59):
Cool. So Bruce, once again, I’d like to thank you for joining us here today. Lots of great information and maybe we can get the questions and answers going on the forum also. And I’d like to go ahead and for everybody to join us live today. Thank you. And go out there and help some other shop owners by referring them to AutoVitals.com/radio. There’s all our podcasts there. This is number 178, so there’s plenty of wisdom there to be farm. For sure. And go out there and make some money and while your customers in the process. Thank you, Bruce. We certainly appreciate it.
Bruce Williams (58:32):
You bet. Thank you very much. I appreciate it as well.
Uwe Kleinschmidt (58:36):
Thank you, Bruce. That was an inspiration. Thank you.
Bruce Williams (58:40):
Thank you. And yeah, to everybody that’s watching or does watch it, reach out on the Facebook group, ask any question you want, I’m here to help out. For sure. I love giving back.
Bill Connor (58:52):
Thank you.