02.22
STRATEGIES & INSPIRATION FOR AUTO CARE SUCCESS
LEVERAGE YOUR LOANER FLEET PAGE 28
REBOUND FROM EFFICIENCY DIPS PAGE 30
RETHINK YOUR WARRANTY PAGE 26
MARKET
CHANGE
TRANSFORM TRANSITION INTO PROFITABLE ACTION PAGE 22
RATCHETANDWRENCH.COM
Embrace Risk Turning his Texas shop from a Toyota specialty to all makes and models proved a fruitful pivot for owner Michael 0 2 . 2 2 / R + WRosenberger. / 1
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FEBRUARY
02.22
VO LU M E 10 N U M B E R 02
7
EDITOR’S LETTER
9
VIEWPOINT
Long-lasting connections
The next step for MWACA
10 SPEED READ
FullSpeed Automotive makes expansion play
12 NUMBERS
The industry’s efforts to increase labor rate
17 ADAPT
EVs poised to gain prominence
18 SHOP VIEW
Atlantic Motor Car in Maine
20 STRAIGHT TALK
Face your biggest fears JOE MARCONI
Transition Time Tom Schearer’s shop has gone through a few different specialty transitions over the years, and the success of those transitions has largely been because of his marketing.
26 CUSTOMER SERVICE
Is it time to rethink your warranty program?
28 CASE STUDY
Better leverage your loaner fleet
30 FINANCE+OPERATIONS Dip in efficiency? Here’s how to rebound.
F E AT U R E
32 THE FIXER
22 COURTESY SCHEARER SALES & SERVICE
SEAMLESS CHANGE
Why you should never stop marketing A ARON STOKES
Don’t let marketing fall by the wayside when making a business change. B Y PA U L H O D O WA N I C
PRINTED IN THE U.S.A. COPYRIGHT ©2022 BY 10 MISSIONS MEDIA LLC. All rights reserved. Ratchet+Wrench (ISSN 2167-0056) is published monthly by 10 Missions Media, LLC, 571 Snelling Avenue North, St. Paul, MN 55104. Ratchet+Wrench content may not be photocopied, reproduced or redistributed without the consent of the publisher. Periodicals postage paid at St. Paul, MN, and additional mailing offices. POSTMASTERS Send address changes to: Ratchet+Wrench, 571 Snelling Avenue North, St. Paul, MN 55104.
ON THE COVER: MICHAEL ROSENBERGER PHOTOGRAPHED BY BRANDON JACKSON
02.22 / R+W / 5
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Ratchet +Wrench Managem nt
Confer nce
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Tek met ric
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EDITOR'S LETTER
EDITORIAL VICE PRESIDENT, CONTENT AND EVENTS Bryce Evans EDITORIAL DIRECTOR Anna Zeck DIGITAL NEWS EDITOR Paul Hodowanic SPECIAL PROJECTS EDITOR Nora Johnson CONTRIBUTING WRITERS Joe Marconi, Aaron Stokes PRODUCTION ART DIRECTOR Zach Pate GRAPHIC DESIGNER Emme Osmonson PRODUCTION ARTIST Lauren Coleman SALES VICE PRESIDENT AND PUBLISHER Chris Messer 651.846.9462 / cmesser@10missions.com ASSOCIATE PUBLISHER Andrew Johnson 651.846.9459 / ajohnson@10missions.com MARKETING STRATEGISTS (NATIONAL ACCOUNTS) Marianne Dyal 706.344.1388 / mdyal@10missions.com Chad Hjellming 651.846.9463 / chjellming@10missions.com Bob Marinez 216.533.8747 / bmarinez@10missions.com Martha Severson 651.846.9452 / mseverson@10missions.com Kyle Shaw 651.846.9490 / kshaw@10missions.com Dan Thornton 734.676.9135 / dthornton@10missions.com Sean Thornton 269.449.0257 / sthornton@10missions.com Kenzie Verschoor 651.846.9472 / kverschoor@10missions.com CLIENT SERVICE SPECIALIST Jen George 651.846.9465 / jgeorge@10missions.com 10 MISSIONS MEDIA PRESIDENT Jay DeWitt GENERAL MANAGER AND PRODUCTION MANAGER Mariah Straub BOOKKEEPER AND CLIENT SERVICE SPECIALIST Meghann Moore EVENT PRODUCER Kate Fahlen COMMUNITY DEVELOPMENT ASSOCIATE Meghan Horan SENIOR DIGITAL MEDIA STRATEGIST Tiffany Fowler ADMINISTRATIVE ASSISTANT Karley Betzler EDITORIAL ADVISORY BOARD Rob Choisser, Choisser Import Auto Services Doug Grills, AutoStream Car Care Center Ryan Hillebrand, Urb’s Garage Bruce Howes, Atlantic Motorcar Center John Miller, Fifth Gear Automotive Lucas Underwood, L&N Performance Auto Repair HOW TO REACH US 10 MISSIONS MEDIA 571 Snelling Avenue North, St. Paul, MN 55104 tel 651.224.6207 fax 651.224.6212 web 10missions.com The annual subscription rate is $72 (U.S.A. only) for companies not qualified to receive complimentary copies of Ratchet+Wrench. BACK ISSUES Past issue single copies are $8. Go to ratchetandwrench.com/backissues LETTERS TO THE EDITOR editor@ratchetandwrench.com ARTICLE REPRINTS For high-quality reprints or e-prints of articles in this issue, call 651.846.9488 or email reprints@ratchetandwrench.com. Opinions expressed in Ratchet+Wrench are not necessarily those of 10 Missions Media, and 10 Missions Media does not accept responsibility for advertising content.
Long-Lasting Connections
TEN YEARS OF (ASKING FOR AND) SHARING YOUR STORIES Not to get ahead of myself, but in our July 2022 issue, we’ll have a special feature sec-
tion celebrating the 10-year anniversary of Ratchet+Wrench. We’ll walk through industry changes, catch up with some of our early story subjects, and celebrate an industry that deserves to be celebrated. Personally, though, I have a hard time associating the “start” of Ratchet+Wrench with its “official” launch in July 2012. Yes, that was the month the very first issue of the magazine was mailed out, but the work for it began earlier. I started at 10 Missions Media (publisher of Ratchet+Wrench) on February 20, 2012—and I was on the phone the very next day, asking many of you about your businesses, your successes, your failures, your strategies, your stories. As I write this, I am almost exactly at my 10-year anniversary of working on the magazine. It’s an odd feeling: I simultaneously find it hard to believe that Ratchet+Wrench has been around for that long, and struggle to remember what it must’ve been like before it. It’s funny, also, because I can remember each and every one of those early phone calls—and my astonishment at how open, honest and willing these folks were. I mean, I was a random person from a company they’d never heard of, working on a magazine that didn’t even exist yet, asking them for the most intimate information about their respective life’s work. Why in the world would they be so willing to share? (I’ll get to that answer in a moment.) Mike Brewster, Brian Sump, Ryan Clo, Rissy Sutherland, Greg Buckley—these were just a handful of the very first folks I spoke to in those first weeks of Ratchet+Wrench’s “existence,” along with dozens of others. They couldn’t have been more helpful, kinder or genuine. And it was their willingness to share—and the willingness of all those that followed in the 10 years since—that has made Ratchet+Wrench what it is. Our goal from the beginning was simple: Deliver stories that inspire success in others. Storytelling is a powerful thing. Telling and sharing stories creates better understanding between people; it connects them. Stories matter—your stories matter. In the years since we released that first issue, there hasn’t been a week that went by that we haven’t heard from someone somewhere who was impacted by one of your stories. Each in their own way, I believe that all those early folks who spoke to me believed that. They wanted to help. They wanted to make a difference for someone else. They wanted to make this industry better. And none of this would’ve ever been possible without all of you who thought that way. That’s why I always repeat this refrain: Ratchet+Wrench is your magazine. I’m proud of the work our team here has done over the years to help share these stories. More than anything, though, I’m proud and appreciative to call so many of you my friends. Thank you for your commitment and support, and cheers to all that comes next.
BRYCE E VA NS, VICE PRESIDENT, CONTENT A ND E VENT S BE VA NS@10MISSIONS.COM AUTOMOTIVE GROUP
02.22 / R+W / 7
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JUMP START
The Future of MWACA
Many ASA affiliates have left to “join forces” with MWACA—here’s what that means
COURTESY MWACA
BY PAUL HODOWANIC
N E WS I D E AS PEO PLE T R E N DS
Over the last six months, there has been wide-
spread upheaval within the Automotive Service Association (ASA) following the installation of a new membership model that dissolved the existing affiliates in favor of a regional model that is overseen by ASA National. As a direct result, nearly all of its preexisting affiliates, other than ASA Colorado, have cut ties with the organization. And while several of those affiliates are still planning what their next steps will be, several of them have already decided. Within the last several months, ASA Northwest, ASA Illinois, ASA Pennsylvania and ASA Texas have all announced their intentions to join forces with the Midwest Auto Care Alliance (MWACA). 02.22 / R+W / 9
J U M P S TA R T / B R E A K D O W N
But what does that really mean? And what do the futures of those organizations look like? Ratchet+Wrench caught up with Sheri Hamilton, executive director of MWACA, who has been in charge of aiding the transition for each group. An Alliance Agreement Each of the affiliates that are transferring over have signed an alliance agreement, which is basically a franchise agreement, Hamilton says. The agreement gives the organizations the right to use MWACA’s branding and logos, even though each organization will have a different name. ASA Florida is becoming the Florida Auto Care Alliance. ASA Northwest is now Northwest Auto Care Alliance. ASA Illinois is MWACA Great Chicagoland. ASA Pennsylvania is Mid-Atlantic Auto Care Alliance and ASA Texas is the Texas Auto Care Alliance. It also gives the organizations access to all of MWACA’s benefits and programs, like marketing resources, which it has built up over the last 3.5 years since the organization split with ASA. Unlike ASA, there is no national board or executive team that is overseeing the various organizations. Instead, there is a “compliance committee,” which includes one member from each of the different Auto Care Alliances. The committee will only meet on an as-needed basis in case one association is inactive or “goes off on the wrong track.” It’s a distinction Hamilton wants to maintain. She wants each organization to 10 / R + W / 0 2 . 2 2
operate independently and instead use each other as a resource to help everyone grow. Additionally, each of the organizations’ funding will be handled independently by each organization, as will its various elections, appointments, and events. All dues will only go to the Auto Care Alliance that collected them. “I think that was what made ASA successful (originally),” Hamilton says. “There’s so much community within a local affiliate. We’re giving them an ability to still have that organization. Let’s be honest, they’re independent business people for a reason; they like to make decisions on what is best for them and for the businesses locally. This puts member choice back in.” There are not many requirements to become an Auto Care Alliance. The MWACA team initially reviews the organization’s existing bylaws to make sure they synergize with their own. They also review the organization’s current financials and leadership to understand its current form before they officially join. Each organization is also required to have a consistent meeting presence, at least an event or meet-up every quarter. It’s part of the process that Hamilton has emphasized. Where many of the ASA affiliates struggled in the past was turning a profit. Events and meetings are the easiest way to do that, because they are non-dues revenue, she says. She hopes with the assistance of MWACA and the other organizations, each organization will be able to turn a healthy profit, which in turn will benefit the members.
Coming to Them When ASA Midwest split off in 2018 to form MWACA, Hamilton and the rest of the board created the brand with the idea that other organizations could join them later down the road. For the past several years, she had on-and-off conversations with many of the affiliates, but they were never prompted by Hamilton. “I never contacted an affiliate. They contacted us,” she says. Following ASA’s announcement to change the membership model, Hamilton says every affiliate reached out to her. Some, like ASA Northwest, immediately committed to joining MWACA while others, like ASA Florida waited just days before the Jan. 1, 2022, deadline. Others, like ASA Ohio and ASA Arizona, have committed to splitting from ASA but have not yet made an official announcement about their future plans. Because of that, each of the organizations are still in the process of changing, branding, appointing leadership. Jan. 1, 2022, was the official date that all ASA affiliates had to make a decision. Some are further than others, with active websites and leadership. Because all the organizations are made up of volunteers, Hamilton expects it will take some time before everything is complete. VISION Update Hamilton also shared the latest update on the VISION Hi-Tech Training Expo, which is run by MWACA. Scheduled for March 3-6, 2022, in Kansas City, Mo., the event is still expected to run in-person, with necessary COVID protocol measures if needed. “Our intent is to focus it solely on attending in person,” says Hamilton, adding that if COVID forced a change it would become a fully online event, not a hybrid event. “To do a hybrid event, there is an incredible investment in time and tech and dollars… Should COVID create issues and we have to go to a virtual format, we’re prepared to do that.” Hamilton says the response to this year’s event has been “incredible.” There are expected to be over 500 first-time attendees. While the event is open to anyone in the industry, there will also be an evening reception on March 3 only for Auto Care Alliance members, serving as the first inperson gathering for the new organizations to meet.
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Contact your local Solid Start Distributor to get True Brand® in your shop. Call Today: 877-290-3950 | www.solidstart.com0 2|. 2#TrueBrandTough 2 / R + W / 11
J U M P S TA R T / S P E E D R E A D
Visa and Mastercard Raising Merchant Rates —
There is no requirement by credit card processors to report the rate increase to businesses.
Visa and Mastercard have plans to raise merchant rates up to an additional .5 percent starting in April 2022, Facepay announced in an industry advisory. Visa and Mastercard, which make one-third of their revenue from interchange fees, originally announced that fees would increase in 2020. The pandemic delayed the rate increase until this spring. Bloomberg pulled some of the early data to estimate the impact, reporting that interchange fees will increase by .5 percent. For a traditional Visa card, the fee on a $100 transaction would climb to $1.99 from $1.90. For premium Visa cards, the fee would increase to $2.60 from $2.50.” While Visa and Mastercard increased their fees by .5 percent, expect the merchant fees you pay processors and point of sale systems to impact profits by 15-25 percent.
Automakers Pushing to Delay Right to Repair Until 2025 — Automakers are pushing to delay the implementation of Massachusetts’ Right to Repair law. According to a report by the NewburyPort News, OEMs are making a last-ditch effort to delay implementation of the changes as it fights to overturn the voter-approved law in federal court. Two proposals heard Monday by the Legislature’s Committee on Consumer Protection and Professional Licensure, backed by the auto industry, would delay the starting date of the law to the 2025 model year, giving auto manufacturers three more years to comply. Question 1 was overwhelmingly approved by voters in November 2020
and modified the state’s “right to repair” law to allow auto repair shops to access telematics data from vehicles. Backers of Question 1 are ripping efforts to overturn the law and called on lawmakers to reject the proposals to delay its implementation, the report stated. “This technology has been available in vehicles since 2014 and there’s no reason why this law can’t be implemented now,” Tommy Hickey, director of the Massachusetts Right to Repair Coalition and Yes on 1 coalition, told the panel. “Massachusetts consumers have spoken, and the law now gives them the right to control their own repair data so that they can get their car fixed where they want,” Hickey said in a statement following the hearing Monday. “However, instead of listening to their customers and attempting to comply with the ballot initiative, automakers and dealers filed a baseless, anti-democratic lawsuit.”
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J U M P S TA R T / N U M B E R S
The Latest on Industry Labor Rates — According to the 2021 Ratchet+Wrench Industry Survey, 75 percent of responding shops have raised their labor rate in the last two years. While much of it can be influenced by location, where does the industry currently stand on posted labor rate?
HAVE YOU RAISED YOUR LABOR RATE IN THE LAST 2 YEARS?
POSTED LABOR RATE
29%
75% 25.3% 16.7% 13%
Less than $100
$100-$109
$110-$119
16%
$120-129
25%
More than $130
Yes
No
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J U M P S TA R T / A D A P T
EV Production on the Verge of Market Saturation BY NOAH BROWN
One of the biggest takeaways from this year’s Consumer Electronics Show was that automakers, and tech companies wanting to get in on the trend, are betting the house on electric vehicles. Though it will take another 10 years before EVs make up more than 50 percent of new car sales according to projections from LMC Automotive, the process of ramping up to that point has already started. A recently compiled list by MotorTrend shows at least 35 automakers are making electric vehicles, including everything from “mainstream” OEMs such as Ford and General Motors to EV-specific companies such as Tesla and Rivian. That, however, doesn’t include the tech companies that don’t normally produce vehicles and are now jumping on the EV craze; companies such as Foxconn, which manufactures Apple’s iPhone, and Sony have unveiled prototype EVs and are looking into the feasibility of commercial launches. “Technology driven by purpose will change the world,” General Motors Global Chief Marketing Officer Deborah Wahl said in a statement. “We are witnessing what’s possible when innovators and problem solvers embrace the opportunity to change the world, knowing they have the tools and technology to do precisely that. With that capability comes the responsibility to use it.” EVs have come a long way in the last couple of years, and though they only accounted for around 3 percent of the total new car market in 2021, EVs are poised to make a serious push toward mainstream viability. For solid evidence of that, you don’t have to look very hard; within the next couple of years, each of the Detroit Three will have a mid-range, full-sized electric pickup on the market. The first will be the F-150 Lightning, which Ford will begin delivering in just a few months. Touted by the automaker as a “purpose-built, must-have truck for serious work and recreation” and tasked with carrying on its “Built Ford Tough” legacy, the F-150 Lightning has already proven that EV pickups are viable in today’s market. At the beginning of January, Ford announced it would once again double production of the pickup to 150,000 units per year after revealing it had already received 200,000 reservations for new vehicles. The automaker said in September it would invest an additional $250 million across three facilities that have a part in building the Lightning in order to expand production capacity. General Motors headlined its show at CES with the 2024 Chevrolet Silverado EV. Set to have two models available when it launches in early 2023, the full-size EV pickup “was developed from the ground up and leverages the power of GM’s Ultium
S EP T EM B ER 24 - 25 , 2022 DALL AS - FORT WORTH, T X
A D A P TA U T O M O T I V E . C O M
Platform.” Both an RST First Edition and work model geared more toward fleets will offer a GM-estimated 400-mile range on a single charge, a load floor of up to 10 feet, available four-wheel steering, a 17-inch LCD infotainment screen and “the latest vehicle technologies that can evolve over time.” The Silverado EV will also be the company’s first vehicle to make use of Ultifi, GM’s companion software platform to Ultium and will start at just under $40,000, which will compete directly with the F-150 Lightning. Although it won’t bring an EV pickup to market for another couple of years, Stellantis has reassured its customers their fully electric Ram is still right on schedule to launch in 2024. Even outside of traditional automakers, the chase for the next big EV craze is enticing new players into the electrified automotive space. Tech giant Sony debuted a new prototype electric SUV at the Consumer Electronics Show and announced plans to look into the feasibility of entering the global EV market. Already in testing since late 2020, the Vision-S is an electric midsize crossover, according to a news release. At CES, Sony unveiled a new form factor, Vision-S 02, which would seat seven and “uses the same EV/cloud platform” as Vision-S 01, which is still being tested on public roads. “VISION-S continues its aim of evolving mobility to be even closer to people, while developing technologies centered on safety and security, adaptability, and entertainment,” Sony said in the release. “By offering entertainment experiences utilizing the large interior space and variations of a seven-seater, this new prototype will, together with VISION-S 01, promote the accommodation of a large variety of lifestyles within a society where values are becoming increasingly diversified.” In a report from Reuters, Sony chairman and president Kenichiro Yoshida said his company is “exploring a commercial launch” of electric vehicles. “With our imaging and sensing, cloud, 5G and entertainment technologies combined with our contents mastery, we believe Sony is well positioned as a creative entertainment company to redefine mobility,” Yoshida said. To put it lightly, interest in producing EVs exploded in 2021. Seemingly everyone, regardless of whether or not they are primarily automotive manufacturers, wants to create the next big innovation in electrification. ICEs aren’t going extinct anytime soon, but it won’t be too long until their unchallenged market domination faces a major opponent.
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T W I T T E R .C O M /A DA P T_ AU TO
0 2 . 2 2 / R + W / 17
J U M P S TA R T / S H O P V I E W
McNeil’s NAPA Autocare BY PAUL HODOWANIC
PHOTOGRAPHY BY DON GREEN
M C N E I L’ S N A PA AUTOCARE Owner: Pete McNeil
A New Look
Location: Sandy, Utah
McNeil’s Auto Care moved into its location in Sandy, Utah, in 1999. The company, started by Mike McNeil, is now operated by his son Pete. Since 1999, the shop has undergone two remodels, first in the early 2000s with a terracotta design, then to a more modern look in 2016. Among the reasons for the most recent remodel was to reconnect with customers. In the previous setup, one large circular table separated the advisors from the customers. The table was scrapped, with several podium counters put in place, allowing advisors to walk out, greet customers and feel more accessible. The shop was brightened up with modern touches, including a swirled epoxy flooring. The shop also displayed classic vehicles, which are rotated in the showroom about every 45 days. “It’s a fun, unique showroom,” Pete McNeil says.
Staff Size: 15 Shop Size: 11,000 square feet Number of Lifts/Bays: 16 Bays Average Monthly Car Count: 475 ARO: $490 Annual Revenue: $2.6 million
“Prioritizing the Mom” The remodel also set out to serve a demographic that McNeil felt the shop was neglecting: moms. The shop now has two waiting rooms, one that serves as a workspace and another for relaxing. It also features a kids play area, wifi and complimentary food and drink. Even though the shop has begun to de-emphasize quick service, McNeil gets plenty of comments from moms who stay while the car is being worked on. “We like to focus on family, but we were mistakenly neglecting the mom. Not anymore,” he says.
Doubling Down on Digital In his time as a shop owner, McNeil has started and recently sold a software company that worked in digital signage. As you could expect, digital signage is present throughout the lobby and waiting rooms. 18 / R + W / 0 2 . 2 2
Running on the waiting room TVs, the company loops different community announcements, happy birthday messages to customers, auto repair facts and other company marketing. It’s not uncommon for customers to ask about certain services that pop up on the digital signage and has provided the shop a nonintrusive way to market. Customers also appreciate the highlighting of community events, something about which McNeil is passionate.
HAVE AN OUTSTANDING SHOP? Send a few photos and a brief description to submissions@ ratchetandwrench. com and we might feature it here.
Blending Local and National It was—and continues to be—a priority for Mike and now Pete to have a larger brand that the store can point align with for credibility. On the outside of the shop, NAPA’s branding is clearly displayed right alongside McNeil’s. To McNeil, it provides a perfect balance. Customers who want a national brand, McNeil’s offers that with its NAPA partnership. For customers that want a local feel, the McNeil’s brand offers a trusted, longtime family business in which they can find comfort. McNeil said the partnership helped in the early days to get customers in the doors. Then the McNeil brand sets in and helps win the customer over. “I still believe McNeil’s is the main brand,” McNeil said. “But NAPA is a key partner and I also believe you have to have a partner to fully exhaust your potential.”
0 2 . 2 2 / R + W / 19
Columns
STRAIGHT TALK Joe Marconi
SHOP OWNERS, WHAT KEEPS YOU UP AT NIGHT? Solve your long-standing issues and reap the rewards
the door to your shop, you reflect on the week and happy that it has come to an end. The events of the past few days consume your mind: employee issues, expenses going up, and every other detail about running your business. You get into your car, turn on the radio, take a breath to relax, put the car in drive, and you begin your ride home. All is good. Or is it? While you may have locked the door to your shop, you haven’t locked out all the emotions and issues that are still stirring around in your brain. A few hours later, it’s time for bed, you’re tired and your body needs sleep, but that becomes an issue, too. The hours pass and now it’s the middle of the night and you find yourself staring at the ceiling. Sound familiar? You’re not alone. Only a shop owner knows how it feels to be a shop owner. The challenges and struggles of running a business are ongoing, even after years of working on the business to get every detail dialed in just the way you want it. This can lead to a condition that plagues many shop owners: the dreaded 2 a.m. unplanned wakeup call. There are many reasons why shop owners have a tough time sleeping. Worry about their businesses, the feelings of being responsible for so many people’s lives, the second-guessing if you made all the right decisions, and, perhaps the most harmful of all, are the “what-ifs.” What if Larry, my manager, leaves? What if my lead technician decides to quit? What if we don’t hit our sales goal? All these what-ifs increases brain activity, and while you are desperately in need of sleep, your conscience mind is in high gear, wondering and worrying, sometimes until the sun comes up. I know it’s aggravating, and while I don’t wish it on you, not being able to sleep at times means you care. 20 / R+W / 02.22
As business owners, you are committed and responsible for not only the success of your business, but for the success of others around you, as well. The worry and fear that things may go sideways at any time can haunt you. So, your brain continues to review and relive all conditions and situations that have occurred and wonder about the things you think may occur. Your body gets stuck in fight or flight mode, a natural human response to perceived or real threats. This condition overcomes you and prevents you from getting a good night’s sleep. What do we do about this condition? First, we need to recognize it as part of who we are and then identify the reasons why we can’t shut off our brains. It usually boils down to issues and problems of which we feel we are not in control. For example, you feel something isn’t right with your staff. You feel there’s a morale issue. Then the thought of losing employees enters your mind, and that scares the hell out of you. The best way to approach this fear, and any fear, is to confront the issue head on and do something about it. Make it a top priority to sit down with your employees. Find out if your fears are true, and if so, deal with them head on. Getting employees engaged and improving morale will calm down your fears of people leaving you. However, you should also consider a recruiting plan, to build a pipeline of potential future employees. The point here is to be proactive with any issue that’s bothering you and not sit on your hands hoping and praying that things don’t go downhill. There will always be challenges in business. Have faith that you can overcome those challenges. Build a company with a strong culture and with great people around you. Also, learn to rely on your employees
Joe Marconi has more than three decades of experience in the automotive repair industry. He is the owner of Osceola Garage in Baldwin Place, N.Y., a business development coach for Elite and co-founder of autoshopowner.com. j.marconi@eliteworldwide.com ratchetandwrench.com/marconi
to take some of the load off of your back. I know you feel that it’s your shop and that the buck stops with you, but trust me, your employees want to help, and they can help. One last word: Make sure you have clearly defined goals. Goals give you purpose, a clear direction, and provides a sense of accomplishment for you and your team when they are reached. This will go a long way in keeping you in a positive mindset, which will help with getting a good night’s sleep. Tonight, when your mind begins to shift to business issues, remind yourself that this is a normal reaction. However, it’s also important to be thankful for all the good in your life. It’s far better to focus on positive thoughts about family, friends, and accomplishments. Remember, your business should never consume your life, your business should enrich your life. Now get some sleep!
MICHAEL HOEWELER
It’s 6:15 p.m., Friday night. As you lock
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IDENTITY CRISIS
A guide to marketing a shop in transition BY PAU L H O D O WA N I C
M
PHOTO BY BRANDON JACKSON
ichael Rosenberger saw unrealized potential when he bought out the owner of Tommy’s Hi Tech Auto in 2017. Generating roughly $1.8 million in annual revenue at the time, Rosenberger knew he had the space and capability to bring that to $3 million or $4 million, but it wasn’t happening with the current business model. After looking through demographic data of Denton, Texas (where the shop is located), Rosenberger realized his Honda– and Toyota-specialty shop was going to struggle to meet those lofty goals in his market. In fact they would need to service nearly all the Honda and Toyota vehicles in the area to hit the mark. So, he pivoted, transitioning the shop into an allmakes-and-models shop. Four years later, the shop is on track to do $3.8 million and Rosenberg just announced the opening of a second location. Rosenberg’s story of expanding his shop’s focus isn’t uncommon. Neither is a shop narrowing its scope from all makes and models to becoming a speciality shop. Shop owners across the country are constantly moving and adjusting to best fit their unique markets and shops. And while countless hours are spent making sure the shop has the expertise, tools, training and technicians to make that shift, one of the often overlooked parts of the transition is marketing. Whether it’s intentional or unintentional, too many shops take an “if we build it, they will come” approach, says Carrie-Lynn Rodenberg, founder of the automotive marketing firm Turnkey Marketing. “You can be the best, but if nobody knows who you are and what you do, it’s not going to matter,” Rodenberg says. So how do changing shops ensure their marketing efforts maximize the move? Ratchet+Wrench spoke with marketing experts from inside and outside the industry to understand the best marketing tactics to deploy while making a business change, whether the shop is narrowing or expanding its focus.
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Day 0 Checklist Marketing strategy depends largely on what type of transition the shop is making. Is the change additive? In other words, is the shop widening its scope by taking on more work? Commonly, this is a speciality shop that transitions to an all-makes-andmodels shop. Another example is a shop adding an EV focus to the business. Or is the change restricting? It could be the business narrowing to a specific speciality or the business stopping service of vehicles past a certain year. As you’ll see, two very different strategies come into play for these scenarios. However, there are several commonalities that any business, regardless of the type of change, should make. These should be made the moment the change is implemented, if not before, says Rodenberg. And while they seem simple, obvious and easy, a surprising number of shops forget to do them, she says. 1. Change all messaging on website to reflect the change 2. Change Google My Business page 3. Change all social media pages, including the types of vehicles that are in photos 4. Stop any current marketing that doesn’t accurately reflect the new business model “It’s just inaction,” Rodenberg says. While it seems minor, if not done, it creates confusion and a lack of transparency. In an industry already plagued by a lack of consumer trust, inconsistent messaging adds to it, says Nic Natarella, founder of AdWise Creative.
The Next Chapter Upon purchasing a shop, Michael Rosenberger laid out a systemized plan to guide the transition.
TOMMY’S HI TECH AUTO Owner: Michael Rosenberger Location: Denton, Texas Shop Size: 9,500 square feet Staff Size: 18 Number of Lifts: 17 Average Monthly Car Count: 680 ARO: $450 Annual Revenue: $3.8 million
“Even if it’s no big deal, [customers] are going to invent the questions. Get there before they do and answer it,” Natarella says. The final task is to make sure the shop staff is on board. Natarella and Rodenberg have both had clients who are intent on making a change, however they don’t realize their staff is against it. Rosenberger experienced it first hand. He had to replace several service writers and a technician who were so set on being a Honda/Toyota shop. Identifying and removing those individuals is key to making sure the messaging is consistent. The Expansion-Focused Roadmap When a shop widens its customer base (most often when a speciality shop becomes an all makes and models shop) there are two distinct types of customers that need to be marketed to: current customers and potential customers. For current customers, Rodenberg says, reach out to them over email but also communicate the change next time they are in the shop. Many customers will want to know if their shop is still the same great specialist as before. Ease that worry as firmly and quickly as possible. Let them know that through signage and personal conversations. In an effort of transparency, try to be the first person to tell them. Don’t let them hear it from a third party. It’s also important to communicate the change with current customers because they are likely to have other vehicles that you can now service, Natarella says. Don’t think of “new” customers as just ones you’ve never met before. However, most of the energy and money should be devoted to new customers, Rodenberg says. After all, the shop likely made the change to attract large amounts of new customers. Thus, shop owners should assume the new potential customers have little to no idea the shop exists. It’s not quite starting
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IDENTIT Y CRISIS
from step one like you’re a brand new shop, because you have existing customers, a website, a history of service and revenue, etc., but the messaging needs to be introductory in nature and it needs to help the customer understand who you are. However, the marketing materials, whether it’s a mailer, a tv advertisement or a simple word-of-mouth conversion, shouldn’t dive too deep on what you were doing before. “You don’t need to draw a lot of attention to the fact that you used to be a Honda specialist and now you do everything. If someone has a Nissan, they have no idea you existed and that you’ve worked on just Honda and Toyota. Don’t focus on that. You have so little time to capture attention,” Rodenberg says. The frequency of the marketing should also mimic a shop opening. Get the shop brand out often and to the surrounding customers and make it clear who you are. While the shop has built trust with one customer base, it is starting from zero with many others. The Narrowing-Focused Roadmap Since Brian Walker started his marketing agency Shop Marketing Pros in 2011, he’s helped many repair shops transition from an all-makes-and-models shop to a Euro specialty. In fact, nearly all of his work is with European shops. In his experience, the messaging for those transitions varies greatly from the steps Rodenberg and Natarella laid out for becoming a generalist shop. While a newly transitioned generalist shop should likely focus on marketing location, quality and fair pricing, marketing for a speciality shop is going to be just that—specialized. It will require more demographic data than a generalist shop to understand each unique neighborhood and what cars are being driven so they can send specialized marketing campaigns to each group. But as is the case with a generalist shop, there are different approaches for current and new customers. For current customers, there shouldn’t be much marketing needed at all. In fact, Walker does not recommend the shop come out and say they don’t work on certain types of cars anymore—at least at the beginning. Instead, Walker recommends stopping any general marketing you did before. 24 / R + W / 0 2 . 2 2
“Let natural attrition occur,” Walker says. This will organically thin the generalist customer base while supplementing revenue as the company grows its speciality brand. Slowly, the generalist customers will be whittled down. Once the specialty work is built up, then the shop can either choose to continue serving those longtime loyal customers or cut them off. This scenario allows the shop to avoid a situation where they are abruptly cutting off a large customer base and causes a more natural dilution. The messaging to new customers is also different. Serving as a general shop before, it’s likely that the prospective customer base has at least heard of the business. The new marketing should be used to legitimize the business so customers who previously ignored it become intrigued, Walker says. For specialty shop customers, that usually means promoting the high quality and the convenience, as these customers are often business owners or executives and are focused on making their lives easy. Tom Schearer has gone through both transitions. Originally a Volkswagen and Audi specialist upon opening Schearer Sales and Service in 1995, the company switched to a generalist shop after going through a downturn several years in. It stayed that way until a few years ago, when the company narrowed its focus to just European vehicles. Schearer followed many of the steps that Walker recommended. To this day, the shop still services any car that comes in the door, but it only markets to Euro customers. It also has a deal with a local domestic and Asian repair shop. Any domestic or Asian vehicle that comes in and needs diagnostic work, Schearer will send to their partner shop. Schearer offers to facilitate it himself or for the customer to do it independently. In turn, the other shop will send Schearer all European vehicles that needs diagnostic work. “We want to be their contact. So if it means we do some of the work that’s what we do,” Schearer says. From a marketing perspective, the latest transition to becoming a specialist shop has been harder, Schearer says. With a generalist shop, all the marketing material can be the same. But when he switched to European only, he began to target specific markets, from BMW to
Marketing Mistakes to Avoid — 1. Inaction, specifically on platforms like social media or the shop website. That causes confusion and a lack of transparency for customers. 2. Not having a plan. Don’t get trapped into accepting just anything from any company that pitches you, says Brian Walker. Make a cohesive plan to ensure consistency. 3. Poor messaging. Approach marketing from the customers’ perspective and what they want to hear.
Time For a Deep Dive — While it’s true that the shop should avoid sharing the entire backstory to why they made a change, there is a time and a place for it. To Nic Natarella, those are opportunities that can be explored on social media or Youtube, or the shop website once the change has been made and well received. The community knows who the shop is and what they do. Now the shop can use its backstory to take their storytelling to the next level. “It is a great opportunity because you’re handed a compelling story,” Natarella says. “They don’t know you that well or they dismissed you. Now all of sudden they get to know you. Talk about the progress. Share what the shop is going through. Now the customer is invested in the outcome.”
Ready to Specialize? The Schearer staff, led by owner Tom Schearer (center), has undergone multiple transitions, as the shop switched up its specialty.
COURTESY SCHEARER SALES AND SERVICE
Porsche to Audi owners, each with their own marketing campaign. It also required the shop to change the marketing company with which it worked. The company Schearer used to market as a generalist shop wasn’t comfortable, and didn’t have the knowledge to go after just European customers. The change helped tighten up the company’s AdWord usage and navigate the switch. Schearer’s motto through the transition has been, “focus on your strengths.” He recommends any shop switching to a speciality do the same. “We can do so much more because we are specialized,” Schearer says. So that’s what he markets. And that’s how he’s found success. Shift the Perspective Too many shops craft their marketing messages around what they want to hear, not what the customer wants to hear, Rodenberg says. “What’s in it for me? That’s what customers are thinking,” she says. That means incentives, discounts and other messages that persuade customers. “Shop owners hate incentives, which I
get. But you have to play in the confines of reality,” Rodenberg says. To get in the mind of the consumer and what they want to hear, Natarella recommends joining different Facebook groups. Natarella is part of an owners group for Chrysler Town and Country vehicles and he also belongs to several restoration groups. Spending some time on those pages can give shops a great sense of the issues those owners are facing and how to market. And the most effective way to understand the consumer is also the easiest and quickest way: ask them. “You’ve got an entire database of contact information, use it,” Rodenberg says. Commit to It What causes marketing efforts to fail more than anything is a short leash, Rodenberg says. “Whether you like it or not, marketing takes time,” Rodenberg says. “As a marketer, I hate it. I wish we saw results immediately.” Making a business change is a big move. Naturally, shops want to see results right away, but that’s not often how
marketing works. One month isn’t long enough to try something, especially when it’s new. When marketing the shift, the biggest push is the first one. After that it continually needs to be nudged. Natarella likens it to pushing a car. The first shove is going to take the most energy and it’s only going to move an inch. But every push after that is going to get easier and after a while, the car will be moving on its own. That’s how to visualize marketing. “Change doesn’t happen overnight, neither does marketing,” Natarella says. Rosenberger’s revenue has increased dramatically since the change, going from $1.8 million before the transition to $3.8 million in 2021. While that has spiked, the changes have still been gradual. One of the main customers Rosenberger hoped to add by going to an all-makesand-models shop was Euro customers. In the first year after the change, European vehicle repair made up just 2 percent of the business. After the second year it was 5 percent. Through three and a half years, it’s now over 11 percent. “It’s not a quick growth,” Rosenberger said. “You just have to get your name out there.” 02.22 / R+W / 25
TOOLBOX
MAKE M O N E Y. WO R K SMARTER.
Extend Your Warranty
Six reasons to rethink your current offering
Those who visit Friendly Auto Centers’
website may have to do a double-take when they see the section that reads “most repairs are guaranteed for life in-house.” It’s not a typo. Steve Rozansky offers a lifetime warranty (with a few caveats) at his shop in Mesa, Ariz. There are some out there who may think he’s nuts; after all, he’s giving 26 / R+W / 02.22
up revenue in the years to come. Rozansky, however, doesn’t see it that way. He sees it as gaining a customer for life, with an opportunity to see that vehicle again and again, each time getting to do a full vehicle inspection on it. And, if you’re charging what you should be in the first place, you’re really not losing out on much if you have
to replace an alternator down the line, Rozansky explains. David Johnson, owner of DJ Auto in Provo, Utah, also offers an extended warranty at his shop of 5 years/50,000 miles. With the price of new vehicles skyrocketing and the average age of vehicles on the road rising, Johnson explains that the
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PARTS PARTNERS —
Take advantage of the warranties offered by your vendors Part of the cost of offering an extended warranty can be covered by your parts vendor. Many parts companies offer warranties on many parts. Here are three popular parts vendors and the warranties that are offered for alternators. AutoZone Warranty Breakdown Limited lifetime warranty Advance Professionals Limited lifetime warranty NAPA Auto Parts Limited lifetime warranty
plains, but their actions don’t back it up. An extended warranty shows customers that your word is good and that you’re willing to back it up. 2) It sets you apart from your competition. The way Johnson sees it, the freedom to set his own warranty is a way to set him apart from dealerships. The dealers in his area have labor rates roughly $130 per hour and his shop is at $165. “We’re more expensive, but we have quality parts and a five-year warranty. The dealership only gives you one year— that’s how we’re pulling customers from dealerships.”
market for a quality warranty is growing and that customers will see the value in it. So, if you’re a shop owner that offers a standard warranty, you may want to revisit it—and here’s why. 1) It exudes confidence. What could look better to customers than saying that you will stand behind your work for years to come? Or even for the rest of that vehicle’s lifetime, in Rozansky’s case. A lot of people say that they stand behind their work, Rozansky ex-
3) Customers are asking for it. There’s a huge industry for additional warranty, Johnson says. “People are buying them because they see the value for them,” he says. People are keeping cars longer and the majority of customers are interested in long term value, meaning they want repairs to last longer. So, when the warranty comes up, Johnson says, people find a fiveyear warranty very attractive. 4) Vendors will help offset the cost. Both Johnson and Rozansky say that if you’re using quality parts, the chances of those failing within an extended warranty period is not likely.
“If they don’t fail right away they’re going to last—risk is low,” Johnson says. Many parts vendors also offer warranties on their parts, which covers part of the cost for you. AutoZone, for example, will give you a lifetime warranty on its parts, Johnson says. “There you go, that’s half your cost. Your vendors will help,” Johnson says. [See breakout Box: Parts Partners] 5) Charge correctly and you won’t lose money. Rozansky does charge a little more at his shop in order to cover being able to provide a lifetime warranty. “You can charge more with a premium warranty,” he says. Doing this has allowed him to get the type of customer that he wants—one that sees value—and helped him make up for the fact that if he does have to do a job again, he’s not getting paid for labor. “If you’re charging full price and you’re making a good profit margin, you should have no problem doing that job five years from now,” Rozansky says. Rozansky says that when people complain about not getting paid for the labor, he claps back that many throw money at advertising and never see a return. 6) It’s just good business. One of the biggest hang-ups that many shop owners may have is that it doesn’t make business sense to offer services for free. Both Johnson and Rosansky would argue that it actually does. Johnson offers a lifetime warranty for batteries at his shop. In order to do this, he charges $40 more, but when he explains to the customers that the battery is the heart of the system and, if you purchase the warranty your car’s battery will always start, many jump at the chance. Those that jump at the chance will continue to come back every time they need a new battery, and most likely for any other repair needs. With a lifetime warranty for in-house repairs, that pretty much guarantees that Rozansky’s customers will come back to his shop. That’s retaining a customer for life and when and if they do come back for a job that’s under warranty, it’s a chance to do a full vehicle inspection. So, sure, maybe you lose out on labor for one job, but you may find other work that needs to be done. 0 2 . 2 2 / R + W / 27
T O O L B OX / C A S E S T U DY
LEVERAGE LOANERS Use your fleet to your advantage BY TESS OWINGS
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At less than 1,000 square feet with just two bays, you may be surprised to hear that Premier Auto Repair in Worcester, Mass., sees 210 cars per month and has an annual revenue of $1.3 million, but it’s true. The tiny powerhouse, owned by John Cayer, has made the most out of its limited space and finds ways to compete with larger shops and dealerships in the area. One of the largest contributors to the shop’s success? Its loaner fleet.
PREMIER AUTO REPAIR Operator: John Cayer Location: Worcester, Mass. Size: 950 square feet Staff Size: 4 Average Monthly Car Count: 210 Annual Revenue: $1.3 million
THE BACKSTORY At roughly 950 square feet, the tiny shop is often overlooked by customers. Because of this, Cayer has had to find ways to retain his customers once they do come in. One way to do this is by delivering on a quality repair with the least amount of inconvenience for the customer. THE PROBLEM Cayer says the two main objections he sees from customers about getting additional work done to their vehicles is that they either don’t have the time or the money. Cayer offers third party financing, which helps with cost, but he had to figure out a way to address the time concern. “The second most common objection I hear is that, ‘I need my car to do stuff,’” Cayer says. THE SOLUTION When customers say that they don’t have the time or that they can’t leave their vehicles at the shop because they need it to get around, Cayer says, “I can put you in a car right now,” which disarms that objection.
Premier Auto Repair is a Shop Fix Academy member and, inspired by Aaron Stokes and the importance he places on loaner vehicles, Cayer purchased his first two in June 2021. His loaner fleet has now grown to seven vehicles in total. Being able to offer customers a loaner vehicle has not only worked in his favor by allowing him to sell more work by taking the time objection off the table, it’s also allowed him to shuffle work around. Customers who are in the loaner vehicles aren’t in as big of a rush to get their vehicles back, he explains. If, for example, there’s a bigger job that will take four hours, Cayer is able to push it back if that customer is in a loaner car. He, of course, lets the customer know that it may take a little longer, but more often than not, he or she is more than fine with it as long as they have a vehicle to use. To stand out and attract customers, the loaners are advertised on the website, in all of the shop’s direct mailers and mentioned to customers when they come in. Loaner vehicles are not offered for simple services, such as oil changes, unless there’s a special request. Every
customer that has a substantial repair is offered one and if, for whatever reason there is not one available, they are offered a rideshare service or can schedule the repair based on when a loaner vehicle will be available. THE AFTERMATH Before the loaners, the average ticket at the shop was $283—it is now at $525, which Cayer believes has a lot to do with the fleet. Car count is also up 60 cars from the previous year. Although it may seem expensive upfront, Cayer’s extra business has more than recouped the costs and he says that third-party warranty companies will often reimburse a certain amount per day for loaners, you just need to ask. THE TAKEWAY Cayer now echoes Stokes’ sentiment about loaner fleets. “Any shop owners that are hesitant— have them give me a call,” he says. Loaner vehicles have increased his car count, his ability to serve his customers, and his service advisor’s sales. In his words, “there’s no reason not to have them.” 02.22 / R+W / 29
T O O L B OX / O P E R AT I O N S
Get Back on Track
How to recover from a dip in efficiency It’s the end of the month and you’re
checking your numbers and there it is, glaring back at you: your shop’s efficiency percentage. A number that has always been consistent and high has dipped and you’re unsure as to why and beyond that—how to get it back to where it was. Even the most well-run shops have been in this situation. It happens. The true test is whether or not you get yourself back to where you need to be. Patrick Murray, owner of Redline Speed Worx in Green Brook, N.J., has been in business for 14 years and runs an operation just shy of $3 million per year, is no stranger to this situation. He’s learned how to identify the cause and get back on track. He and Chris Kanna, a former shop owner and a business coach with his company, Camel Theory, share what to do if your efficiency dips. 30 / R+W / 02.22
Identify the Problem According to Murray, if your efficiency dips, it’s probably due to one of three reasons. It’s an issue with a technician, you’re not bringing in as many cars as you should be or not enough work is being identified and sold on each vehicle. “If we see something we’re not liking, what’s the root cause?” Murray says. “What’s the roadblock?” Before you can get yourself back on track, you need to find out where you went wrong. If you’ve done a good job of tracking your numbers, it should be easy enough to find. Scenario 1: Low-Producing Tech If you break down each technician’s average and find one is bringing down the total average, then you have a technician issue.
Get Back on Track If Murray finds that a technician has been slower than normal, he sits him or her down for a conversation. “Me, as the owner and leader, I want to do all that I can to help these employees,” Murray says. “I want them to be successful. Is there a solvable issue? Do we have a skill problem? What can we do or make available to increase skills and abilities?” If the tech needs more formal training, for example, he sends him or her to that training and puts the technician on a 30-, 60-, 90-day plan to increase skills and abilities and then gives that person reasonable targets based on his or her abilities. If that person doesn’t get there after that time period, it may not be a good fit. Kanna agrees that if it’s a technician issue, it falls on the owner of the shop and that the culture of the shop or the
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you’re probably going to attract price shoppers that may only come to the shop that one time. “Your marketing has to line up with your business model,” Kanna says. Another issue you may need to consider if you find yourself in this scenario is not converting leads, Kanna says. Every time a customer calls in, that’s a lead. Often, whether it’s because of a lack of people skills or time, that conversation will cause that potential customer not to come in. To increase lead conversions, Kanna suggests recording lead calls and then listen back to them with your team and discussing what was done well or what could have been done to get that customer to come in. Scenario 3: Low ARO If the car count is there and there’s not one or two techs to blame but the shop as a whole, then efficiency may be low because higher hour jobs are not being sold.
relationship between the technician and the shop may be the cause. For example, if your technician isn’t performing because he or she is going through something in his or her personal life, it shouldn’t come out of the blue that efficiency goes down. “As an owner, you have to go out there and demand communication, because, let’s be honest, techs don’t talk to people,” Kanna says. “You, as the owner, need to be good enough to fix things and build relationships.” Build a rapport so your staff knows that they can come to you with issues and you can help. Another tip Kanna has for keeping out of this situation is to make sure your technicians are aware of their efficiency numbers every day. This can be done through a management system so they know if they’re not performing up to the standard that has been set. “If your staff doesn’t know what it is and what it means what it dips and when it’s high, you’re not going to get anywhere,” Kanna says. Scenario 2: Low Car Count If you see that your car count has dipped or
isn’t as high as it could be, then your technicians aren’t being given the opportunity to turn the hours they are capable of and it comes down to a lack of customers. Get Back on Track If this is the issue, it falls on you as the owner, Murray says. “We, as the owner, did not deliver the cars to the shop,” he says. “We didn’t hold up our end of the deal to market and get cars in.” Whether it’s new or returning customers, the owner needs to do whatever he or she can to make sure those customers come in and once they’ve come in, stay customers for life. “Historically, a good shop should run 70 percent return customers. If that ratio is out of whack, that tells you something,” Murray says. “If you’re servicing 10 percent return customers, why are they not coming back? Do we need to attract more customers or invest in the team and give them training on how to take care of customers?” Kanna says the type of customer that you’re marketing to could also be an issue. If, for example, your direct mailers are touting the “lowest prices in town,”
Get Back on Track Murray is very focused on how much opportunity is found with each car at his shop. “Is that opportunity being discussed with the customer?” Murray asks. “When efficiency is low, most of the time, techs are doing a poor job of inspecting cars.” In most cases, Murray explains, techs don’t understand that there’s a target dollar amount to be identified on each vehicle which will vary from shop to shop. If that’s the case, the owner needs to make that known. Murray wants his techs to find $1,000 of work per car. In order to do this, he has four checkpoints that he has his techs go through when inspecting the vehicle to go over with the customer. The first is solving the issue that the customer came in for. The second is any safety issues that are an immediate concern, third is anything that may become a problem soon and fourth is any maintenance needs. “If they do these things, you’ll get a few hours of work,” Murray says. Kanna agrees that a proper vehicle inspection is key to maintaining a high efficiency. In many cases, service advisors are afraid to sell, he explains. If you set up the customer for what to expect in the beginning and “plant the seed,” selling that extra work at the end is easier. 0 2 . 2 2 / R + W / 31
Columns
THE FIXER Aaron Stokes
MARKETING MAYHEM It’s time to wrap your head around marketing
continues to be marketing. I preached about marketing and the importance of continuing to market a lot throughout the past two years, but it’s going to continue to remain extremely important if you want to grow. I think a lot of people will say, “You know, I spent $50,000 on marketing this year and my business only grew by X.” The sad thing is, that’s the improper way to measure return on marketing. Marketing is measured by car count and understanding that you have a really good person answering the phone, curb selling that customer and getting them over the curb into the shop. The way you track operations is through average ticket and the reason for that is because average ticket is what you do with the car. That’s how well you sold it, how well you inspected it, how well you performed the work and got it done and out of the shop. Your cash conversion cycle, on the other hand, is how efficient your business is. So, if you put $1 into marketing, how long does it take to go through the system—whether it’s Facebook, Google ad words, radio, direct mail, whatever—and come back to a customer who shows up at your shop, spends money with you, you get that check or credit card payment, and it’s in your bank account. How long does that take? That’s the cash conversion cycle and how long that takes is the magic behind this. I think if you can get that from 10 days to eight days to seven days to five days to four days, the more profitable you are. Without getting too deep into it, I think a lot of owners right now need to look at their marketing from the past year and ask, all right, how many cars did I get? Let’s say you’re tracking 3,500 cars for the year, and last year you did 2,500 cars. So you grew 1,000 cars and 32 / R+W / 02.22
spent $50,000, I would say the marketing worked. But how did revenue do? If your revenue is only up 10 percent, that tells you your operations did not increase and improve enough to keep up with how well your marketing worked. And why’s that? Because all you did was basically raise car count and drop ARO. If we don’t reframe it and understand it from a business perspective, we can get way too caught up in just average ticket and repair car count. When we just focus on those two, we don’t dig down into the system of the shop, which, at its core, is based on the amount of cars and what we did with those cars. If we can understand that, we can really grow. When it comes to operations, what it really comes down to is being able to look at your business from the front of the house and the back of the house. You need to be able to say, my salesmen is selling well but my technician is not fixing real well, or vice versa. Everybody has a role and everybody is needed, but you need to be able to segment my operations to find the problem. People will try to fix the back and the front at the same time, but they break it in half. It’s like a teeter-totter, actually. You need to say no, I’m going to shelve this because the front’s got some issues, but it’s not near as bad as the back and I’m going to focus on the back first. This is a low-hanging fruit concept but you’ve got to really wrap your head around it. Otherwise, you might be adding too much effort on something that’s not the best use of your time. Remember, time is not infinite. It’s finite. It’s going to run out. You have an hourglass. I have an hourglass. What are we doing with that time? That’s the only reason one shop owner has outgrown another—it’s because of what they did with their time. It’s not that they spent more time on the business. It’s what they did with it.
Aaron Stokes grew his business, AutoFix, into a six-shop operation that is widely regarded as one of the top repair businesses in the country. He is also the founder of Shop Fix Academy. aaron@shopfixacademy.com ratchetandwrench.com/stokes
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