08.18
STRATEGIES & INSPIRATION FOR AUTO CARE SUCCESS
MAKE THE MOST OF SLOW DAYS PAG E 47
BUILD A PROFITBOOSTING MARKETING PLAN
FIND
PAG E 4 8
“It’s important to build relationships based on two-way conversations.”
YOUR
— Chris Cozad Owner Alternative Auto Care
VISION YOUR THREE-STAGE SOLUTION TO BECOME A VISIONARY LEADER PAGE 34
MARCONI
Your ideal customer might not be who you think PAGE 31 RATCHETANDWRENCH.COM
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08.18 VO L . 0 6 N O. 0 8
A U G U S T Special Interest Larry Watson has always had a love for Volvos; he founded his shop in 1978 centered around the brand. Today, he continues to brush up on his knowledge.
F E AT U R E
C A S E
34
54
EVOLVING AS A LEADER
How do you measure your performance as a leader? It might seem intangible, but certain KPIs lend insight into the effectiveness of your leadership.
S T U DY
DELVING INTO DIAGNOSTICS
For one shop, tackling a new vehicle make proved cumbersome—particularly when it came to charging for diagnostics.
R E PA I R
L I F E
72
CRAFTING A NICHE
Larry Watson prides himself on his ability to connect with people. It’s the reason why his Volvo specialty shop has thrived over the years. BY KILE Y WELLENDORF
B Y A L E X VA N A B B E M A
SHEILA CARSON
B Y T R AV I S B E A N A N D A L E X VA N A B B E M A
PRINTED IN THE U.S.A. COPYRIGHT ©2018 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: CHRIS COZAD PHOTOGRAPHED BY HARRY ACOSTA
0 8 .18 / R + W / 5
TA B L E O F C O N T E N T S
J U M P
S TA R T
12 ONLINE
21 BREAKDOWN
14 SPEAKER SPOTLIGHT
23 VIEWPOINT
Online shop tours
The rise of quick lubes Amazon’s aftermarket impact
Keynote speaker Jeff Butler
24 SPEED READ
16 AWARDS INSIGHT
Vehicle age reaching record levels
Tap into your passion
26 SHOP VIEW
Yingling’s Auto Service
17 EDITOR'S LETTER Remember your purpose
28 THE RETURN
PNT4 digital tire gauge
26
Find your customer base JOE MARCONI
THE TECHNICIAN SHORTAGE W IL L N OT D E FE AT U S
autojobcentral.com
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YINGLING’S AUTO SERVICE
31 STRAIGHT TALK A New Look In 2012, Yingling’s Auto Service underwent an intensive remodel to create a more open environment for its customers.
T O O L B OX
71 THE BOTTOM LINE
47 SHOP ADVICE
Don’t ignore industry associations
Maximize inevitable slow days
MITCH SCHNEIDER
48 SALES+MARKETING
78 THE FIXER
Keys to a yearlong marketing plan
A humbling lesson A ARON STOKES
51 INDUSTRY INSIDER How to recruit techs effectively RISSY SUTHERL AND
61 CUSTOMER SERVICE
Design a rewards program that boosts retention
THINKSTOCK
61
WIRED FOR
SUCCESS
You’re wired differently and we like that. America likes that. Visit futuretechsuccess.org and find out how your hands-on talent is the key to an amazing technical career. When Techs Rock, America Rolls ℠ futuretechsuccess.org
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RADIO EDITORIAL EDITORIAL DIRECTOR Bryce Evans MANAGING EDITOR Anna Zeck ASSOCIATE EDITORS Travis Bean, Tess Collins STAFF WRITERS Melissa Steinken, Alex Van Abbema, Kiley Wellendorf MARKETING COMMUNICATIONS SPECIALIST Luke Gagnon EDITORIAL INTERNS Wesley Muilenberg, Kaylee Shields CONTRIBUTING WRITERS Joe Marconi, Mitch Schneider, Aaron Stokes, Rissy Sutherland PRODUCTION ART DIRECTOR Zach Pate GRAPHIC DESIGNERS Audrey Mundstock, Leah Quinto, Lily Risken, Fue Vang PRODUCTION ASSISTANT Lauren Coleman SALES PUBLISHER Chris Messer 651.846.9462 / cmesser@10missions.com NATIONAL ADVERTISING SALES Alysia Nelson 651.846.9463 / anelson@10missions.com SALES MANAGER Nathan Smock 651.846.9452 / nsmock@10missions.com REGIONAL ADVERTISING SALES Josh Imhof 651.846.9488 / jimhof@10missions.com Emily LaPointe 651.846.9469 / elapointe@10missions.com Melody Todd 651.846.9468 / mtodd@10missions.com CLIENT SERVICE SPECIALIST Jen George 651.846.9465 / jgeorge@10missions.com 10 MISSIONS MEDIA PRESIDENT Jay DeWitt SALES SERVICE SUPERVISOR Mariah Straub SALES SERVICE REPRESENTATIVE Meghann Moore EVENT AND SPECIAL PROJECTS COORDINATOR Katie Cornet DIGITAL MEDIA STRATEGIST Josh Jaskulka EDITORIAL ADVISORY BOARD Leigh Anne Best, Mighty Auto Pro Andy Bizub, Midwest Performance Cars Greg Bunch, Aspen Auto Clinic Ryan Clo, Dubwerx Ron Haugen, Westside Auto Pros David Toole, Toole's Garage 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 letters@ratchetandwrench.com ARTICLE REPRINTS For high-quality reprints or e-prints of articles in this issue, call 651.846.9473 or email reprints@ratchetandwrench.com.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.
New Ratchet+Wrench Podcasts. 3 SERIES WITH NEW EPISODES EVERY MONTH.
GROW. Series hosted by industry superstar Rissy Sutherland. Inside the processes, systems and operational strategies that have allowed the industry’s top shops to thrive. New episode this month.
LEAD. Series hosted by shop operator Aaron Stokes. The go-to resource for leadership lessons, philosophies and success stories. New episode this month.
INNOVATE. Series hosted by a rotating special guest each month. An introspective look at the industry’s most pressing topics from the people who know them best. New episode this month.
LISTEN AND SUBSCRIBE S E A R C H “ R AT C H E T + W R E N C H ” I N A P P S FOR APPLE AND ANDROID
AUTOMOTIVE GROUP
PODCASTS
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POCKET CASTS 0 8 .18 / R + W / 9
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ONLINE 08.18 COMMENTS, DISCUSSIONS, FEEDBACK AND MORE FROM AROUND THE WEB
FEATURED TOPIC:
IMMERSIVE SHOP TOURS
PREV
NEXT PODCAST
—
In July, Ratchet+Wrench introduced photo carousels to several shop profiles. The Shop View articles, for example, which take readers on a virtual tour of shops, now feature several facility photos, which readers can flip through as they learn about the businesses.
RADIO
AUGUST RATCHET+WRENCH RADIO LINEUP
—
Each month, Ratchet+Wrench plans out the schedule for its podcast, Ratchet+Wrench Radio, which brings the magazine’s everyday conversations with automotive repair professionals to life. Here are a few episodes you can expect this month: How I Did It: Frank Leutz A master of marketing, Frank Leutz simultaneously hosts a radio program in Chandler, Ariz., while running Desert Car Care of Chandler. Leutz details how his marketing efforts have led to his shop’s success, including 30 percent year-over-year growth three years ago.
@RATCHETANDWRNECH
If you have an Instagram account, be sure to follow Ratchet+Wrench at @ratchetandwrench, where you’ll find plenty of shop photos that didn’t make it into the magazine and receive some inside looks at Ratchet+Wrench’s office.
Innovate: Inspection Perfection Digital inspections can streamline the courtesy inspection process and lead to improved efficiency and ARO—but how do you make a seamless transition into using the software? Here’s everything you need to know, from choosing the right software to making it part of the repair process to achieving a return on investment. Grow: A Monthly Podcast from Rissy Sutherland Inside the processes, systems and operational strategies that have allowed the industry’s top shops to thrive. This monthly addition to Ratchet+Wrench Radio is hosted by Ratchet+Wrench columnist and industry superstar Rissy Sutherland. WEBSITE: ratchetandwrench.com
JOIN US ONLINE
FACEBOOK: ratchetandwrench.com/facebook TWITTER: twitter.com/ratchetnwrench LINKEDIN: ratchetandwrench.com/linkedin INSTAGRAM: instagram.com/ratchetandwrench PODCAST: ratchetandwrench.com/podcast WEBINAR: ratchetandwrench.com/webinar
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Lead: A Monthly Podcast from Aaron Stokes The go-to resource for leadership lessons, philosophies and success stories. This monthly addition to Ratchet+Wrench Radio is hosted by Ratchet+Wrench columnist and shop operator Aaron Stokes.
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SPEAKER SPOTLIGHT / JEFF BUTLER
Retaining and Engaging Millennials in Your Shop The speakers for Ratchet+Wrench’s 2018 Management Conference and their sessions have all been announced. Jeff Butler, renowned speaker, author and millennial expert, will deliver the Day 2 conference keynote. He has addressed Fortune 500 companies like Amazon and Google, and has helped thousands of professionals across North America with hiring. Unlike other experts on millennials, Butler has been in the trenches of what it means to be a millennial and what it takes to retain and keep them engaged. Utilizing his own experience as a millennial working in three Silicon Valley startups & Fortune 500 companies, Butler will speak to the auto service industry’s talent crisis, and what attendees can do to attract talented young workers to their shops. For a list of the other speakers at this year’s management conference, visit rwconference.com
C H I CAG O
FAST TRACK YOUR BUSINESS The 2018 Ratchet+Wrench RW To Go app is the most efficient way to improve your business. Gain access to podcasts, videos, articles and more. All in one spot. Wherever you go.
RW 14 TO / GO-0218.indd R + W / 0 8 2.18
R E G I ST E R AT
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2/20/18 3:36 PM
FILE PHOTO
Ignite+Engage
SE PTE MBE R 20 –22
D O IN W A A N N P LO D P R S AD O T ID O F R O A E R N S F D F R iO O EE S R
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AWA R D S I N S I G H T
ALL-STAR NOMINEE
JOS H M I S LI C K — TECHNICIAN OCEANSIDE AUTO OLD SAYBROOK, CONN.
BY A LE X VA N A B B EM A
Although technician Josh Mislick has many awards and achievements, including his recently received master technician status, service manager Daniel Stewart says that Mislick’s growth and value at Old Saybrook, Conn.-based Oceanside Auto goes beyond just his certificates. In his 2017 Ratchet+Wrench All-Star Award nomination, Stewart says his technician always thinks outside of the box, from problem solving different electrical issues to giving advice to his fellow technicians when they hit a snag, and always works to improve his overall efficiency. And these efforts have paid off for both him and the shop—from month to month, Mislick’s efficiency is always 140 percent and his productivity is 100 percent. In the seven years Mislick has worked at Oceanside Auto, he says he has consistently tried to improve, through his own education and his own desire to be the best. On a shop level, Stewart says Mislick is always willing to help another technician when in need. “Wanting to strive, wanting to get better, wanting to learn more ... It’s slowly brought him to the top, to be honest,” Stewart says. “It wasn’t overnight, but he just wants to learn.” On the management side, both Stewart and Mislick know it’s important to create a strong environment where staff members tap into their passion, and continually want to learn. The two detail three keys to creating and maintaining a culture of improvement in a shop.
CONSTANT TRAINING: When Mislick first joined Oceanside Auto about seven years ago, Stewart says he was already a talented technician, but through constant progression and training, he’s taken his abilities to the next level. He’s received his ASE master technician L1 and L2, is an Automotive Career Development Center hybrid-certified technician, and is certified for emissions repair in Connecticut. “When I first started, I always wanted to be the best. I realize that’s a huge bar and that’s impossible because a lot of people are better than me, but that’s one thing I always wanted,” Mislick says. “I’ll never stop learning because I want to be the best.” His training has provided tangible returns on investment for the shop. Recently, Mislick went away for a week to learn every16 / R + W / 0 8 .18
thing he could about hybrids. Now, Stewart says, Oceanside Auto is a hybrid-certified shop thanks to him. While Mislick feels comfortable with gasoline and hybrid vehicles, his next step will be additional training on diesel vehicles. ALWAYS BE READY TO LEND A HAND: While he praises the efforts of all his technicians at Oceanside, Stewart says Mislick is always the “go-to” guy when any of the other technicians have an issue, especially as he’s learned more throughout the years on the diagnostic side. On that end, Stewart says Mislick has used the training he’s acquired over the years to help the rest of his employees whenever they’re in a bind. Stewart mentions a recent
issue where one tech was drilling out a spark plug on a Ford Triton engine. The tech went to Josh and asked for his assistance. Stewart says Mislick didn’t simply do it for him, he instead taught the tech how to prevent the issue going forward. “There’s a lot of guys in the field that are also very good, but don’t want to pass it on because they think you might take their job,” Mislick says. “I’m just not that way. I’m not scared of that.” TAP INTO YOUR PASSION: Putting aside all the awards and achievements he has received, Mislick maintains that he has a passion for the auto industry as a whole. Even outside of his mandated training efforts, Mislick says he takes time outside of work to learn things that didn’t make sense to him at shop, or about which he’s simply curious. Even in his personal time, Mislick says he’s still “working” in one way or another, whether that means working on his personal vehicles, or researching how certain vehicles that previously stumped him in the shop work. On the management side, Stewart says he tries to create a loose, easy-going environment, so everyone feels good and free to tap into their passions. “The biggest thing around here is that it’s fun to work here—it’s not stressful,” Stewart says. “We have a lot of fun with each other, and that helps set the mood itself as far as the attitude in the shop.” NOW ACCEPTING NOMINATIONS! Know someone deserving of a Ratchet+Wrench All-Star Award? Nominate them today at ratchetandwrench.com/awards
FUE VANG
Maintaining a Culture of Improvement
EDITOR'S LETTER
The Road to Motivation
NICK SPAETH
Right now, I’m taking a break, surrounded by the “needle” rock
formations of South Dakota’s Black Hills. This morning, I was at Mount Rushmore. Yesterday, I was in Yellowstone National Park. It’s all part of a two-week, Clark Griswold–style family road trip— a full 3,500 miles and 50-some hours of hunkering down in the minivan, camper in tow; my wife and I with our four kids (one a 3-month-old) and a puppy through six states, three national parks and two national monuments. We’re about 90 percent through the trip, as I write this, and save for a bout of strep throat for three of us and the dog leaping out the window of our moving car somewhere in Idaho (don’t worry; he was recovered and fine), it’s all been pretty smooth. I’m enjoying this brief moment of silence while everyone is napping (or most likely, pretending to nap; as long as they’re quiet for a moment, what’s the difference?), but I don’t sit still well. I want to get moving. And that’s exactly what’s in store for me when I get back from this trip. August is a critical time in the year for our publication. Not only are we about to be dive head first into our 2019 planning, but we also are gearing up for our Ratchet+Wrench Management Conference in September. This trip has been a great way to recharge and refocus on what’s important. My takeaway? Well, it plays in nicely to the theme of our cover story this month; finding inspiration for change and improvement, and finding the motivation, inspiration and strategy to see it through, doesn’t come from keeping your head down plugging away day after day. It doesn’t come from staring at spreadsheets and breaking down numbers. All of that’s necessary at times, but the greatest leaps and changes leaders make in their operations come from remembering why they do what they do and for whom they do it. Read the stories of the operators in this month’s issue and you’ll see how they took that inspiration to push their businesses forward. As for me, I can hear the dog barking, at least two kids crying and another kid laughing. Time to get moving.
BRYCE E VA NS, EDIT ORIA L DIREC T OR BE VA NS@10MISSIONS.COM
0 8 .18 / R + W / 17
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J U M P S TA R T NEWS
SHOP VIE W
/
IDEAS
/
PEOPLE
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TRENDS
26
BREAKDOWN VIEWPOINT SPEED READ SHOP VIEW
COURTESY OF YINGLING’S AUTO SERVICE
THE RETURN
Eye-Catching Pieces Yingling’s Auto Service collects antiques and displays them around the shop.
0 8 .18 / R + W / 19
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The ATX-3 offers precise and accurate fluid measurement with minimal technician input to maximize efficiency. A revolutionary fuel priming system, the EFP-150HD dramatically reduces a shop‘s labor time and costs.
J U M P S TA R T
Losing the Quick Lube Customers VALVOLINE AND TAKE 5 OIL CHANGE’S RECENT EXPANSION’S IMPACT ON INDEPENDENT SHOPS BY A LE X VA N A B B EM A
Your shop shouldn’t be above oil changes,
Greg Sands says. Because if it is? You might just fall behind. For proof, take a look at the quickly growing quick lube segment. According to the Auto Care Association’s (ACA) Auto Care Factbook, automotive oil and lubrication shops showed sales increasing year over year in 2017, from $5.8 billion to $6 billion. “Successful quick lube franchises are finding opportunities to test their pricing power as the number of vehicles on the road and miles driven increase without the commensurate growth in service locations, driving revenue growth in the market,” says Behzad Rassuli, senior vice president of strategic development, ACA. Then look at the major players: Take 5 Oil Change announced extensive plans in early June to franchise in the Southeast and beyond, and has the capacity to support 2,000–3,000 units nationwide. Valvoline is also expanding rapidly, with plans to add 20 stores to its 1,100 locations between June 2018 and August 2018. This expansion scares Sands, who has opened more than 90 independent shops with his company SRS & Co. He believes shops need to stop neglecting oil changes and implement them as part of their routine services. And as traditional quick lube–only shops expand their offerings into more light service, independent shops will need to re-evaluate their value propositions, Rassuli says. Ratchet+Wrench took a look at the expansion efforts of Take 5 and Valvoline and how independent shops can stand out and capture those customers. QUICK LUBE EXPANSION As vice president of franchising Ted
Rippey puts it, Take 5’s expansion plans are an effort from Driven Brands to increase its vertical reach in the automotive industry. Meineke, CARSTAR and Maaco cover the maintenance and collision verticals, while 1-800-Radiator delivers parts to the brands and Take 5 covers the quick lube market. Over the next four years, Rippey is looking for multi-unit developers to bring the brand to roughly 200 franchised stores, with a pipeline of 300–400 committed units. Valvoline offers full-service oil changes along with instant, drive-thru oil changes. It also does antifreeze changes, along with basic part changes. Additionally, Valvoline owns and licenses the Valvoline Express Care Brand, which licenses independent quick lube and preventative maintenance owner-operators to use the Valvoline brand. Greg Armbruster, Valvoline’s vice president of real estate, says the brand will add roughly 23–25 new construction stores in 2018. For 2019 and the next few years, Valvoline expects company stores to grow at 25 per year, and franchise stores at 25–35 per year. OIL CHANGE MARKET SHARE Sands says independent shop owners need to be concerned about this rapid quick lube growth, especially those that don’t offer oil changes, or neglect them as part of their services. He believes independent shops who are being told to turn away oil changes are getting the wrong advice. “What you’re seeing with these quick lube centers, they’re executing on what shop owners aren’t doing,” Sands says.
“We have people telling shop owners they shouldn’t do oil changes, should turn them away or slow them down. But speed sells in every industry. It always wins.” Sands says that oil changes are where shops can get an introduction to possible long-term customers, as well. His advice is to not turn away oil changes, and offer additional services with them that the quick lube centers can’t offer. This may mean offering services like a more indepth summertime checkup, or a tire rotation with oil change services. “If you have a shop, you should never give a customer a reason to go to a fast lube center,” Sands says. “Once they do that, they may not come back to you.” HOW TO PROFIT Speed is the name of the game for quick lube centers, and Sands says that shop owners should take note here. In addition to offering expertise and additional services, Sands says shops should at least try to compete with quick lube businesses when it comes to speed of service on oil changes. “A quick lube station can get you out in 15, 20 minutes,” Sands says. “You have to be able to do it fast.” For Sands and his shops, that meant putting quick lifts in his stores, and even a portable lift outside one shop, so his staff could get the oil changes done faster. To train his staff, he put stopwatches on the front counter, to let staff know how long a customer has been waiting for oil changes. Since the quick lube shops will likely still be faster, Sands concedes that you’ll likely have to charge less than they do. But, he stresses that oil changes are all about making the introduction, and working to build long-term customers, even if you’re taking a small loss. “I don’t care about oil changes—I care about the introduction,” Sands says. “When you take care of customers when they come in for oil changes, you’re going to be where they go to get a brake job or some other type of major repair. If I lose money on the oil change, I might eventually make $2,000–$3,000 on the repair side.“ 0 8 .18 / R + W / 21
IT’S WHAT’S INSIDE…
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J U M P S TA R T
The Amazon Takeover AMAZON’S INCREASING OFFERINGS IN THE AFTERMARKET COULD SPELL TROUBLE FOR INDEPENDENTS BY A LE X VA N A B B EM A
BACKGROUND: Ojastro Todd, insights manager, One Click Retail
COURTESY OF OJASTRO TODD
As average vehicle age continues to increase, the automotive aftermarket continues to thrive and has become one of the fastest-growing segments in online sales, forecasted to break $10 billion in 2018, according to a Hedges & Company forecast. Amazon is well aware of this fact, and has invested significant resources into the industry, especially with its recent partnership with Sears. Recently, Sears added 71 auto centers to the list of stores that will offer installation and balancing for customers who purchase tires on Amazon. Additionally, Amazon has signed partnerships with GM and Volvo to offer in-vehicle delivery of packages, and is developing Alexa-powered Echo speakers designed for cars. Over the past year, Amazon has expanded its same-day delivery services, which allow both do-it-yourself customers and commercial customers to receive their parts immediately. One Click Retail (OCR), a company focused on e-commerce data measurement, recently released a report taking a deep dive into Amazon’s disruption into the automotive market. According to the report, Amazon earned an estimated $1.8 billion in first party aftermarket, and is growing at a rate of 18 percent year over year. Ratchet+Wrench spoke with Ojastro Todd, insights manager at OCR, to learn more about the study and how Amazon’s plans moving forward will affect shop owners.
WHY IS AMAZON GROWING SO QUICKLY? WHAT ADVANTAGES DO THEY HAVE IN THE SPACE OVER TYPICAL INDUSTRY PLAYERS? In almost every industry, e-commerce is outgrowing brick and mortar. Amazon is outgrowing typical industry players because it is beating them at e-commerce. Typical industry players were all initially brick and mortar and, as such, have adapted slowly to the online economy. While some of the competitors (like Walmart and Home Depot) have adapted quickly to e-commerce, the majority of these competitors fall into one of two categories: companies that underestimated e-commerce and were slow to invest online and are now playing a catch-up game (or possibly still haven’t started really investing online), and companies that tried to move into e-commerce without innovating and have fallen behind due to lack of adaptability (any company, retailer or manufacturer that tries to run e-commerce the same way they run brick and mortar is doomed to fail). In comparison, as one of the first online retailers, Amazon has been a leader in innovation from the start. This Sears partnership is just another example of how Amazon
is constantly working on innovative approaches to retail. GIVEN THE PARTNERSHIP WITH SEARS, DO YOU THINK IT'S POSSIBLE FOR AMAZON TO PARTNER WITH A MAJOR AUTO CARE CHAIN? Historically, Amazon has piloted new programs in smaller areas before expanding their services. For example, Prime Now and AmazonFresh were piloted under a limited scope before expanding across the country (and even now these services are only available in specific areas). Essentially, this Sears partnership is Amazon testing the waters for this service. If things go well, we may see an expansion of similar services. This could potentially include partnership with a major auto care chain. However, if Amazon finds this partnership minimally profitable, it may allow this program to die out in favor of more profitable approaches. IS AMAZON TRYING TO DOMINATE THE AFTERMARKET FROM ALL FACETS? In the long term, I would say it looks like Amazon wants to dominate every market
everywhere. In more realistic terms, Amazon knows it can’t dominate everything all at once. Instead, Amazon is using testing and pilot programs to decide which section of the market is the best investment option. Once Amazon identifies where it will gain the most profit, it will double down on that area of the market. Once Amazon has dominated that section of the market it will move on to the next most profitable and so on. IT’S EARLY, BUT WHAT KIND OF SUCCESS HAS AMAZON SEEN WITH THESE EFFORTS? Overall, tire sales on Amazon have not yet seen a significant impact from this deal. However, as you said, it’s still early. I will say that OCR has limited visibility on this program. OCR estimates total product sales through Amazon, but does not have immediate visibility on geographical trends. It may be that tire sales have increased significantly in the geographies where this service is available, but that the increase in sales is not yet noticeable when viewing the data on a national scale. I’m sure that Amazon is looking at its own data in those specific geographies, however, and those trends are what will determine Amazon’s next move. DO INDEPENDENT SHOPS NEED TO BE WORRIED ABOUT AMAZON’S INFILTRATION? CAN THEY PROFIT IN ANY WAY FROM AMAZON'S INCREASED PRESENCE? Everyone should be worried about Amazon, or, more generally, everyone should be worried about e-commerce. Amazon’s success and continued efforts in the automotive aftermarket are a sign of the increased digitization of this market. Independent shops should be worried about how well they are adapting to digital trends, because if they don’t adapt, they will be left behind by those who do. OCR’s main focus is on manufacturers, so I have very little experience in what approaches repair shops could use. I would suspect that Amazon’s increased presence in the automotive parts industry may be beneficial for repair shops that need to order very specific parts, as Amazon tends to make online shopping much easier, but I can’t say for certain. 0 8 .18 / R + W / 2 3
J U M P S TA R T
CARSERV, LYFT PARTNER FOR NEW LOANER FLEET OPTION CarServ, a cloud-based software platform for the automotive repair industry, has announced an extensive partnership with the ride sharing company Lyft. CarServ is a cloud-based management system that works primarily with national franchisors, and has several hundred shops using the system. Mars Mundy, the CEO at Carserv, said that while the company has a focus on franchised repair shops, it has signed up more independents shops in recent months. The first step to the partnership means that the repair facility working with CarServ will not need to sign up with Lyft to order rides, and neither will their customers. A shop can order Lyft rides for their customers through CarServ when they drop their cars off at the facility, and if they need a ride back into the shop, the customer can call Lyft to pick them up.
While many shops already use Lyft or Uber for transportation with their customer base, Mundy said this partnership is extremely beneficial because it cuts down on the amount of devices needed to order ride sharing vehicles for a customer. Through the application, the service advisor or user can order a Lyft directly through a customer’s account, which has their address saved as the default pickup and drop off point. Then through the application, Mundy said the shop can see what rides need to be scheduled, and how much the shop is spending on these rides.
AVERAGE VEHICLE AGE IN US REACHING RECORD LEVELS The average age of light vehicles on U.S. roads has changed significantly in recent years and reached record levels, auto industry analyst Jim Lang noted in his recent Aftermarket iReport. And that fact could have serious future impact on the industry.
The average age of light vehicles in the U.S. increased nearly two full years between 2007-17, increasing to 12.1 years. And, the dramatic change in the average age of vehicles has serious implications for U.S. aftermarket product volume over the next five years or so, Lang feels. Domestic nameplate vehicles were 3.6 years higher in average age than foreign nameplate vehicles in 2017. Lang reports that the growing difference in light vehicle age between domestic and foreign nameplates has largely been driven by the increasing share of new light truck sales captured by foreign nameplates. The lower average age of foreign cars and light trucks will likely help to reduce the foreign vehicle share of scrappage and increase the amount of foreign vehicles in operation—an occurrence that figures to also increase foreign aftermarket product volume.
READ WHAT THE PROS READ. “I like Ratchet+Wrench because the articles are about current topics and really focus on owners and running a business. The topics are new, interesting and thoughtprovoking, and I always take away something.” - Troy Minske, Owner | Rum River Automotive, Princeton, MN
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6 REASONS TO CONSIDER UPGRADING YOUR ALIGNMENT EQUIPMENT
F
or years, the technology behind alignment equipment has advanced one small improvement at a time. Recently, big strides have been made in alignment to help shops save space and become more efficient. Many of those steps have been made by a company that you already know and trust: Rotary. Today, Rotary offers a full line of wheel service equipment that includes changers and balancers. But it’s Rotary’s wheel alignment systems that really turn heads because its major addition comes in the form of subtraction—their machines don’t require large, obstructive camera towers. And that’s just the beginning. Take a look at these six reasons to consider Rotary above the competition.
1. NO TOWERS Rotary wheel alignment systems don’t use camera towers. Depending on the model, the cameras are either mounted on the lift or are included in the heads themselves. By eliminating the towers, your bay can be any size—with no minimum. This saves you up to 90 square feet of space because you don’t need the five to eight feet of space between a tower and a lift other systems require. In addition to saving space, Rotary’s mobile alignment systems turn any bay into an alignment bay so you can increase your revenue by using the same system in different bays.
2. NO COMPENSATION OR ROLLBACK Without towers, techs won’t need to move vehicles back and forth on the lift in order to align tower cameras with the alignment heads. That makes them much easier to use and can increase your shop’s productivity.
3. NO INTERRUPTED SIGNAL How many times have you been in the middle of a measurement, you or someone else accidentally blocks the signal from the tower to the targets, and you have to wait for readings to reappear? Without a tower, you won’t need to worry about that, which means more efficient measurements throughout the day for even more productive alignment bays.
4. NO HEIGHT LIMITATIONS With standard alignment towers, there’s a small window of possibilities when it comes to how high or low you can raise a lift. With Rotary alignment systems, that’s not a problem. Your techs can perform alignments at the height that’s most comfortable for them.
5. NO WORRIES ABOUT COST Premium alignment systems typically come with a premium price. But with Rotary’s new equipment, you get the quality and performance you’d expect from Rotary below the competition’s price point—so it won’t cost as much money to get an even better, more efficient SPONSORED CONTENT
alignment system. And when you bundle Rotary’s alignment equipment with a Rotary lift—such as the XA14, the industry’s most versatile alignment-ready scissor lift—you can save even more.
6. NO FOUR-POST LIFT REQUIRED Only Rotary offers a choice of alignment lift styles that includes scissor, four-post or the exclusive vertical rise platform with spacesaving, Y-shaped legs. This allows you the flexibility to perform alignments using lifts that meet your shop’s specific needs. Your local distributor can help you determine the best lift and alignment system to upgrade your alignment service.
J U M P S TA R T
Yingling’s Auto Service BY A L E X VA N A B B E M A PHOTOGRAPHY COURTESY YINGLING'S AUTO SERVICE
1
2 S H O P S TAT S
1 / OPEN KIOSKS
Owners: Brian and Brandon Yingling
With Yingling’s Auto Service’s recent intensive remodel in 2012, service manager Pete Fail says that they wanted to create a more open environment for customers. When a customer goes through an initial write-up or check-out, a service writer works with them directly on the kiosks. The computer monitors are below the glass, to keep things out of the way as the customer enters the lobby.
Location: Topeka, Kan. Size: 11,000 square feet Staff Size: 12 Average Monthly Car Count: 360 Annual Revenue: $1.52 million
2 / ALL OF THE LIGHTS Behind their desks, service advisors see a light system that allows them to non-verbally communicate with technicians. The red light means that a technician needs more parts, the blue light corresponds to one service advisor and the white light corresponds to the other advisor.
3 / CLOWNING AROUND The shop has a 90-gallon, saltwater fish tank that currently has two clown fish. The aquarium arrived during the shop’s 2012 remodel, when co-owner Brandon Yingling brought in his own aquarium for storage, which drew interest from other staff members and inspired them to add one of their own. Fail says the shop has previously owned a serpent starfish, peppermint shrimp, and an assortment of snails and clams. 2 6 / R + W / 0 8 .18
3
5 4 HAVE AN OUTSTANDING SHOP? Send a few photos and a brief description to submissions@ratchetandwrench.com and we might feature it here.
4 / COFFEE AND THE COMMUNITY The coffee bar offers a fridge stocked with different sodas, water and juice boxes, and a Keurig machine with coffee, tea and hot chocolate. There are a variety of brochures, and other reading material on the counters that advertise local, non-competing businesses. The picture on the wall is a bird's-eye view of Topeka, the shop’s home city for the past 60 years.
5 / HOMAGE TO HISTORY Yingling is a collector of antiques, and there are many old signs and trinkets throughout the shop. Before entering the shop’s waiting room, customers see an old Texaco gas pump, an homage to the shop’s initial origins as an oil company. 0 8 .18 / R + W / 27
J U M P S TA R T
SHOP RE VIE WS OF AUTO CARE PRODUCTS
PNT4 A SHOP OWNER REVIEWS THE PNT4, A DIGITAL TIRE GAUGE BY KILEY WELLENDORF
STATS Website: exceltiregauge.com
THE SHOP: The 12-bay shop has been in Lake Worth since 2004. Tires Plus Total Car Care specializes in quality automotive care that ranges from brake and exhaust system repair to wheel alignment and oil changes. The fullservice facility includes a diagnostic center for customers seeking assistance on their vehicle as well as hybrid services for electric cars.
Cost: $695 Uses: Digital gauge that inflates and deflates tires Training Required: None
HOW IT WORKS: able to go about other business while the tire reaches the desire pressure. Once the tire gauge has reached the set PSI, a beeping notification sounds, letting users know the tire is finished.
THE REVIEW: Stillman heard about the PNT4 tire gauge through an individual in his dealer network. It came to his attention and it interested him, so the shop tried it out. Prior to using the product, the shop frequently worked with hand-held gauges and had not yet tried a digital gauge. Today, there are a total of six PNT4 gauges stationed around the shop. “They don’t break, I don’t have to continuously buy any new gauges,” he says.
The Reviewer M A RK S TILLM A N T IRE S PL US T O TA L C A R C A RE L A K E W OR T H, F L A .
— Mark Stillman is the president of Tires Plus Total Car Care in Lake Worth, Fla. Stillman has been in the automotive industry for 28 years and has spent 14 of those years at the Lake Worth shop. Stillman started the Tires Plus shop in 2004.
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The product is heavily used at Tire Plus Total Care every day, Stillman says, and the beeping notification is frequently heard throughout the shop. Since the product has a clamp-on chuck, those using it are able to part ways with the product momentarily while they tend to other tasks. The product’s beeping notification provides a sense of accountability ensuring that staff members perform their work accurately, Stillman says. When customers hear the sound, they know their tire has been properly checked and is ready to go.
THE ROI: While Stillman has not calculated how much time has been saved, he does believe the product has provided a lot for the business. The makers of the PNT4 product, Excel Tire Gauge, have created a savings calculator that determines how much income and job opportunities are lost by using a handheld tire gauge instead of a digital tire gauge. After testing the savings calculator out, Stillman discovered that using a handheld gauge at his shop would cost the business 320 minutes of lost time, as well as $16,426 in other billing opportunities.
COURTESY GINA LAROSA
The PNT4 is a tire gauge that allows users to either inflate or deflate a tire within .5 pounds per square inch (PSI) of a certain pressure. The device is able to connect with a shop’s air compressor line before the unit is used, too. The user is able to utilize the device by hooking up the PNT4’s 30-foot coil hose to the tire, which is then secured by a lock-on chuck, making the device hands free. From there, the user can set the PSI to any preferred pressure, which appears on an illuminated LED screen. Tire Plus Total Car Care sets the PSI to 35, as that is the most common number for most shops, Mark Stillman, president of Tires Plus Total Car Care, explains. When the chuck is clamped on, users are
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Columns
STRAIGHT TALK Joe Marconi
DEFINING YOUR TRUE PROFILE CUSTOMER Finding your ideal customer isn’t as easy as picking out your favorites
MICHAEL HOEWELER
We all have our favorite customers. You
know who there are. They’re the ones that throw their keys on the service counter in the morning and say, “Do what you need to do and I’ll see you at 5 p.m.” They never question your price, they trust you and they keep coming back. But does that person define your true profile customer? The answer is probably yes. But it’s not the only criteria. It’s a little more complicated than that. Defining your true profile customer starts with you. It starts with who you are, why you are in business and the culture of your company. By the way, determining your true profile customer has nothing to do with excluding certain people due to their income level. The young 23-year-old college graduate who sets aside part of her paycheck to shop at Whole Foods does so because she believes in the company and for what they stand. It’s not about what she “supposedly” can or cannot afford. She is Whole Foods’ profile customer because she aligns herself with that brand. And Whole Foods welcomes her with open arms. Many of my profile customers endured tough economic times during the Great Recession of 2008. They lost their ability to pay for some of the things they previously could afford. What they didn’t lose was their loyalty to my company. So, what did we do? We helped them through that difficult time. We helped them manage their car care needs better, offering services that would save on fuel, reduce repair costs, and reduce breakdowns. We showed them how to squeeze every mile out of their tires and brakes. We took care of them and we still do to this day. We consider them family and we don’t turn our backs on family. One thing we didn’t do, and will never do, is
compromise on price to get a job. That would not be fair to all my customers, my employees or the company. With regard to pricing your services and repairs, it’s a delicate balance between being profitable and competitive. But I don’t know of any shop that prefers a customer walk away or sends someone to another shop because he or she cannot afford a particular price. A smart service advisor will give options, prioritize the work needed, and offer finance options. If you’re a startup company, your doors are wide open to everyone. You need customers and car counts, and you need them right away. But as your business matures, you begin to realize that not everyone is your customer. And there’s nothing wrong with this realization. As you build your customer base, you begin to see that there are customers that respect the work you do, align themselves with your culture and appreciate what you do for them and for the community. They become your profile customers. Let’s say you sponsor a youth baseball team in your area, help out at community events and involved with local fundraisers. You will become known as the business person that cares about the community and children. That’s making your business stand out among the rest. As you define who you are, you also attract those that want to do business with you and support your brand. While I do recommend treating everyone the same, I don’t recommend trying to be everything to everyone. That’s not a sound marketing strategy—that’s a recipe for failure. Defining your customer and targeting your market does not isolate consumers. It actually increases market share. Here’s an important fact: In your geographical
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 Worldwide and co-founder of autoshopowner.com. j.marconi@eliteworldwide.com ratchetandwrench.com/marconi
area, automotive shops basically do the same thing; they repair and service automobiles. So, how is a consumer going to choose you over another? You need to stand out. You need to be different. You need to build a brand culture and establish a marketing position that will make people take notice. By the way, every successful company, large and small, understands its true profile customer and creates a marketing plan on attracting them. One last thing: When you build a business around your culture, you put the focus on your brand and the value you provide. This strategy is one of your pathways to success. When you combine value with culture, you will have an enduring and profitable company. If you want to build a great company, ask yourself these questions: Why are you in business? What’s your life’s purpose? Your culture? Build a marketing strategy and a brand message around the answers to these questions. Not all people will take notice, but your profile customers will. 0 8 .18 / R + W / 31
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S E P T EM B ER 2 0 – 2 2 | CH ICAGO
YOU WOULDN’T LE
HOW TO RUN FROM A B A N D YO U S H O U L D N ’ T L E A R N A U T O C A R E S T R AT E G I E S F R O M O U T S I D E R S
The Ratchet+Wrench Management Conference is led by real shop operators who have achieved real success in the auto industry. Connect with the best and start implementing strategies that you can trust.
“The conference has completely revolutionized the way we do business, and I’ve grown exponentially because of it.”
“This is such a great resource for our industry. I always meet new faces and make extremely valuable connections for my business.”
“I think that the Ratchet+Wrench Management Conference will have a long-lasting impact on the industry.”
- Bill DeBoer, co-owner, DeBoer’s Auto
- Ryan Clo, owner, Dubwerx Inc. and Just Saab Cincinnati
- Mitch Schneider, owner, Schneider’s Auto Repair
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R E G I ST E R BY S E P T E M B E R 5 TH A N D S AV E $ 4 0 0 O N YO U R A L L-A C C E S S PA S S
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LEADERSHIP BOOT CAMP YOUR BLUEPRINT FOR BECOMING A MORE EFFECTIVE LEADER B Y T R AV IS BE A N A ND A LE X VA N A BBEM A
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Five people shuffle into a room, gather around a circular table, and take a seat. Then, someone walks in, sets down a tray of 12 donuts right in the center, and walks out without saying a word. If you’re at that table, what do you do? Here’s the catch: No matter what, David Rogers says, you’ll choose wrong. “Should you have one? Should you not? Are they for you or someone else?” he asks. “You don’t know because nobody told you. If you eat it, you’re wrong. If you don’t, you’re a fool.” Now pretend it’s not a table of strangers, but instead a group of technicians on the shop floor. And instead of a plate of donuts, there’s one employee who’s not pulling his or her weight, and the others don’t know how to react. Do they complain to the boss? Make up for the slack themselves? Yell until they get their way? Essentially: What foundation has been laid by the leader? “It all goes back to expectations you’ve built,” says Rogers, president of the industry consulting firm Auto Profit Masters and COO of the $3 million Keller Bros. Auto. “How well am I living by the example I’ve been asked to follow?” Chris Cozad’s employees would know what to do. And that’s largely because Cozad—a shop owner who has become a standout, recognized model for leadership at the Automotive Training Institute—is a visionary who’s chosen to focus on the big picture and empower her team to succeed. She keeps her team and operation small, which only maximizes her impact on individual employees. They’re invested in her vision from day one because she’s set a course for her shop, outlined expectations, and carried herself with a caring, democratic aura that’s infectious. There are KPIs that track productivity, salesmanship, customer service, profitability—but how do you measure your performance as a leader? It’s difficult to gauge how well you’re leading your team, whether your employees feel inspired, whether your vision is being realized. And until you’re ready to evaluate yourself and the role you play as the CEO of your company, your team will aimlessly drift without a captain to follow. Luckily, there’s help. The two leadership experts in this article have mapped out a program that, from beginning to end, provides a blueprint for anyone looking to become a more effective leader. In fact, Ratchet+Wrench can prove the visionary leadership styles championed by Cozad and Rogers work because of data culled from the 2018 Ratchet+Wrench Industry Survey, which is sprinkled throughout this story. So this is where you turn everything around, Rogers says. Your team is done wondering what direction it’s heading; you’re no longer allowed to sit idly by—it’s time to step up and pave a road to success.
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LEADERSHIP BOOT CAMP
A Visionary Before Chris Cozad started Alternative Auto Care, she established a vision for her shop.
S TAG E 1:
Back in the 1980s, the automotive industry had a terrible reputation for ripping women off. “Everybody has a horror story,” Cozad says, detailing why she felt inspired to open Alternative Auto Care, an open venue where she sought to connect with customers and ease out the stigma that had plagued the industry she loved. To this day, 35 years later, Cozad’s small $500,000 model is still thriving in Columbus, Ohio. Her message is so inspiring and widespread with her five employees and community that, in 2015, she won the Automotive Training Institute’s Humanitarian of the Year. And that’s all because, before she started to lead, Cozad says she evaluated herself—her ideals—and established a vision. And according to the Ratchet+Wrench Industry Survey, a “visionary” leader is the most effective kind of leader (See Sidebar: “The Four Kinds of Leaders”). “It’s more about what you’ve done before opening day,” Rogers says. “The planning, the self-study, the policies and processes you’re willing to create, and then being able to set clear expectations on the first day.” Whether you’ve just opened up your shop or you’re a veteran 3 6 / R + W / 0 8 .18
looking to set a new course for your team, there’s always room for change. But before you can stand in front of your employees and try to explore those new avenues, you’ll need to do some prep work, Rogers says. So, grab a pen and paper, and then ask yourself these questions: • In one sentence, what is your vision for the shop? • Where would you like your team to be one year from now? • How do you want to be perceived by employees? • How do you want to be perceived by the community? • What type of environment do you want employees walking into each day? Whether it’s a document you keep to yourself or a handbook you write for the entire team, the answers to those questions should outline the way both you and your employees should conduct themselves, Rogers says. Craft philosophical guidelines for yourself to live by, and policies employees must follow that abide by your vision. By knowing the image you wish to portray before walking into the room, you’ll be able to embody an ideal kind of leader.
HARRY ACOSTA
Prep Yourself
The Four Kinds of Leaders The Ratchet+Wrench Industry Survey asked respondents what leadership category they fell into—by far, “direct involvement” won out, followed distantly by “visionary.”
Which best describes your leadership style? Direct involvement: I get my hands dirty on the shop floor and lead by example:
41%
Hands off: I trust my team with key decisions and am not afraid to delegate:
17%
Democratic: I encourage staff input in decision making:
DIRECT I N V O LV E M E N T Direct involvement is by far the most popular leadership style with shop owners, with over 40 percent of respondents picking this option. However, it had some of the weakest overall KPI numbers. Only 26 percent of the respondents reported having an annual revenue of over $1 million, below the overall survey average of 42.9 percent with a revenue above that number.
Annual Revenue Over $1 Million
26%
Sales Closing Ratio Over 70%
56%
Average Repair Order Above $400
44%
Overall Gross Profit Margin Above 50%
40%
Gross Profit Margin on Parts Above 50%
34%
Gross Profit Margin on Labor Above 60%
43%
Overall Net Profit Margin Above 10%
48%
Posted Labor Rate Above $110
20%
Effective Labor Rate Above $90
22%
Efficiency Above 100%
13%
Productivity Above 90%
24%
Annual Revenue Over $1 Million
48%
16%
Visionary: I focus on the big picture and inspire my team to succeed:
25%
*1% responded “Authoritarian: It’s done my way or it doesn’t get done”
HANDS OFF The hands-off, delegating style seems to be fairly popular with many recipients, and it led in three KPIs: average repair order, gross profit margin on parts, and posted labor rate.
Altogether, those respondents posted meeting these KPIs in their businesses:
Sales Closing Ratio Over 70%
55%
Average Repair Order Above $400
61%
Overall Gross Profit Margin Above 50%
65%
Gross Profit Margin on Parts Above 50%
56%
Gross Profit Margin on Labor Above 60%
59%
Overall Net Profit Margin Above 10%
63%
Posted Labor Rate Above $110
55%
Effective Labor Rate Above $90
48%
Efficiency Above 100%
25%
Productivity Above 90%
33%
Annual Revenue Over $1 Million
61%
AV E R A G E S O F A L L SURVEY RESPONDENTS D E M O C R AT I C
Revenue of over $1 million:
43%
Effective labor rate above $90:
36%
Average tech efficiency of over 100 percent:
21%
Respondents with the democratic leadership style saw some strong stats, with over 60 percent of those shop owners having a revenue above $1 million. Nevertheless, the AROs, effective labor rates, and net profit margins in this category were all below the survey’s average .
Average tech productivity:
29%
Overall net profit margin above 10 percent:
53%
Average repair order over $400:
52%
After sifting through the same numbers as noted above individually for each leadership category, however, Ratchet+Wrench was able to note in which categories certain leadership styles post the best KPIs.
VISIONARY Just over one-fourth of respondents chose the visionary leadership style, but this style led in seven of the 11 main KPIs. Annual revenue, overall net profit margin and average repair order in this category were well above the overall survey average.
Sales Closing Ratio Over 70%
62%
Average Repair Order Above $400
49%
Overall Gross Profit Margin Above 50%
57%
Gross Profit Margin on Parts Above 50%
49%
Gross Profit Margin on Labor Above 60%
49%
Overall Net Profit Margin Above 10%
49%
Posted Labor Rate Above $110
42%
Effective Labor Rate Above $90
32%
Efficiency Above 100%
25%
Productivity Above 90%
30%
Annual Revenue Over $1 Million
62%
Sales Closing Ratio Over 70%
46%
Average Repair Order Above $400
62%
Overall Gross Profit Margin Above 50%
68%
Gross Profit Margin on Parts Above 50%
51%
Gross Profit Margin on Labor Above 60%
70%
Overall Net Profit Margin Above 10%
69%
Posted Labor Rate Above $110
50%
Effective Labor Rate Above $90
55%
Efficiency Above 100%
29%
Productivity Above 90%
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LEADERSHIP BOOT CAMP
S TAG E 2 :
Step Into the Leadership Role Sure, you can have a handbook to give out to employees. And that document could outline everything you wish to accomplish, the precedent you hope to set. But until you’re ready to have a conversation with your team, to set the tone, to walk the walk? That “plan” will be nothing more than just a document. “When it comes to the best kind of leader, it’s about selfawareness and a willingness to be accountable to your team, your clients,” says Rogers. “It’s about empathy, integrity, and understanding it’s not about who is right, about what is right.” Basically, there’s no single way to ensure you’re an effective leader—there’s instead a checklist of items to follow on your way to becoming one. 1. Build a two-way street. The technical aspects of the onboarding process for new employees can be laid out in written form. But for a new employee to truly feel at home in a new work environment—or for any current employee to follow your lead—Cozad says you need to be open and empathetic with them. “It’s important to build relationships based on two-way conversations,” she says. “I want to hear from them, about them, their life, their interests, their history. And I share that about myself and build that relationship.” In short, “people want to be heard,” she says, and that even extends to your customers. Because of Cozad’s vision for a shop that acts as a safe space for both customers and employees, she practices the two-way-street method with anyone who walks through the door. By extension, that energy carries into her shop, where employees are open with their boss. They also feel empowered by the safe space she’s cultured, as her staff consists entirely of female employees. 2. Hold yourself accountable. As someone who’s coached shops for the last 20 years, the story has become all too common, Rogers says. “They keep trying to hire that right person, and don’t understand why the shop continually struggles, why they have the same issues over and over,” he says. “When you get past all the frustration and finger-pointing, you find that real issue that everything starts at the top.” Until Rogers stepped into these shop owners’ operations, they never once took the moment to evaluate themselves. They were too busy wondering what was wrong with everyone else to realize that those employees were never set in the right direction in the first place. “Until you’re willing to really study yourself and hold yourself accountable. You can’t make rules you’re not willing to follow,” he says. “You can’t tell your employees to not do side jobs, and then let your buddy in front of everyone. Nobody wants to follow a hypocrite.” 3 8 / R + W / 0 8 .18
Essentially: “You can’t hire the right people—you need to build the right culture.” 3. Brainstorm ideas with your team. Just a few months ago, at her weekly crew meeting, Cozad and her crew evaluated the shop’s brake inspection process, which everyone was doing differently from vehicle to vehicle. “By the end of the meeting, we decided to take more detailed steps during pre-service inspection and work through that,” she says. “That was a technician’s ideas.” In addition to being a visionary leader, Cozad exudes touches of a democratic leader, as well. She’s found that one key to receiving buy-in from employees is empowering them to offer suggestions, and then to implement those suggestions when they’ll improve processes. 4. Be an objective leader. Great technicians are hard to come by—everyone in the industry knows that. With an employee shortage plaguing the industry, a tech that can push 150 percent efficiency is a beacon of hope. But what if that tech shows up late twice per week? What if he or she doesn’t get along with half of the team? What if this individual constantly undermines your authority? Do you say anything? You don’t want to upset your star tech, right? “Whenever emotions get involved, be it fear or frustration or even joy, they cloud our thinking and allow us to make poor decisions,” Rogers says. “When your own heart isn’t on the line in the moment...it’s easier to arrive at a more objective point. What would the result be [if I disciplined this employee]? And what’s the best way to construct a foundation to lead us there?” Nobody—including yourself—should be an exception to the rules. Craft a disciplinary process that everyone must follow. By remaining an objective leader at all times, you can set a precedent for how people should conduct themselves, and construct an environment where everyone is an equal. 5. Be the face of your shop. It’s one thing to have a vision of building a safe space for automotive repair customers and employees—it’s another to convince the entire world you’ve achieved it. But as the winner of ATI’s Humanitarian of the Year award, Cozad has proven that talking the talk and walking the walk have entirely different consequences. “Everything we do is under a microscope. And when you work in [auto repair], there’s emotion involved,” she says. “It’s critical that our choices in how we interact or get involved reflects the same values we have identified as our business. You can’t say you care about people and then not care about schools in the area.” By getting out into the community and showing she cares, Cozad embodies the safe space she wishes to create for her employees. She donates her time and money to area organizations and schools, hosts fundraisers at the shop, and appears on local news stations to offer car maintenance tips. As a result, her staff is inspired to join in the philanthropy, as well.
An Ideal Workload Obviously, the goal is to work fewer hours, take more vacation, and still produce top-tier numbers at your shop, Rogers says. But before you can own a healthier work-life balance, you need to ensure your staff can function at a high level without you. So, while working over 50 hours per week—which 55 percent of Ratchet+Wrench Industry Survey respondents claim to do—isn’t necessarily a bad thing, Rogers says it could be an indication that people who work more may have less control over their shop. In fact, according to the survey, while those working a high number of hours don’t necessarily post bad numbers, they really aren’t much better—and are often lower—than their counterparts with a healthier work-life balance. To Rogers, that’s an indication that those who work less have earned the right to work less, so it’s not surprising that their businesses perform better.
Weekly Workload How many hours per week do you work? Less than 40 hours:
12%
40-49 hours:
31%
50-59 hours:
39%
60 or more:
18%
Vacation Time How many vacation days do you take per year? None:
8%
THOSE WHO WORK 40 – 49 HOURS PER WEEK *85% of the respondents who work 40–49 hours expect their sales to grow in the next five years.
THOSE WHO WORK 40 – 49 HOURS PER WEEK *72% of these respondents said they expect their sales to grow in the next five years.
THOSE WHO TA K E 16 + D AY S O F VA C AT I O N *78% of these respondents say their sales have grown over the last five years. *21% have net profit over 20 percent
1–5 days:
Annual Revenue Over $1 Million
38%
Net Profit Above 10%
52%
Average Repair Order Above $400
49%
Effective Labor Rate Above $90
37%
Technician Efficiency
23%
Technician Productivity
31%
Annual Revenue Over $1 Million
43%
Net Profit Above 10%
45%
ARO Above $400
53%
Effective Labor Rate Above $90
24%
Tech Efficiency Over 100%
16%
Tech Productivity Over 90%
21%
Annual Revenue Over $1 Million
62%
Net Profit Above 10%
65%
ARO Above $400
59%
Effective Labor Rate Above $90
54%
Tech Efficiency Over 100%
27%
Tech Productivity Over 90%
41%
Annual Revenue Over $1 million
31%
Net Profit Above 10%
11%
ARO Above $400
36%
Effective Labor Rate Above $90
39%
Tech Efficiency Over 100%
11%
Tech Productivity Over 90%
22%
20%
6–10 days:
23%
11–15 days:
22%
16 or more:
26%
THOSE WHO N E V E R TA K E VA C AT I O N *72% of these respondents said their sales have grown over the last five years *No shop owners in this category above $2.5M
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LEADERSHIP BOOT CAMP
Encouraging Feedback Chris Cozad (left) encourages her team to offer suggestions and implements them when they’ll improve processes.
S TAG E 3 :
Evaluate Yourself
1. Enlist a mentor. When asked, “What’s the toughest thing about being a leader,” Rogers just sighs. “What day isn’t tough to be a leader if you’re doing it right?” he responds. “In those moments where you’re faced with your own folly, when you realize your situation is of your own creation, that’s when you’re alone. “That’s why you need a mentor.” Whether that mentor is an industry consultant, a business coach, an area business owner or even the local pastor, Rogers says one of the most invaluable assets to you as a shop owner is someone who will constantly hold you accountable for your actions and critique you as a leader. Find someone who has proven his or her success and has great experience managing teams, who is willing to help guide a wandering, aspiring business owner. It can even be a two-way street in the form of 20 Groups or other peer networking groups, where non-competing business owners evaluate each other’s operations. Regardless of who fits into the mentor role, be sure it’s someone who can relate to your specific duties as a business owner. For instance, if you’re looking to inspire your team to embrace technology, someone who runs a business with constantly changing tech can likely offer proper guidance. 2. Read a good book. Next to Cozad’s desk in her small office is a bookshelf filled with reads that, over the years, have intermittently slightly tweaked her leadership style. 4 0 / R + W / 0 8 .18
Which has been key, as Cozad is 35 years in and her employees are nothing like the ones when she started. Everything from expectations about an employer to body language changes from generation to generation, and sometimes a good book can help keep your current. “It’s important to not get stuck where you are,” she says. “You’re always continually evaluating and learning. With technology always changing, our industry is about a commitment to learning.” As a standout option, Cozad recommends QBQ! The Question Behind the Question (by John G. Miller), which is about how to build a culture of accountability and get employees invested in your company’s growth (some of her employees have even borrowed the book from her office). “Instead of saying, ‘I don’t like the way Chris does A or B,’ or, ‘I don’t like the sway this is handled,’ they should say, ‘How can I make a difference? Do I have suggestion I can make?’” she says. 3. Build your own personal KPIs. While there aren’t necessarily KPIs that track leadership, there are certain numbers that can tell you a lot about your performance as a leader. “Sometimes you can’t tell the impact you’ve had on an employee until years after,” Rogers says. “But there are steps to take while they’re in the shop.” Just like you’d do with your technicians and service advisors, here are a few metrics to track and set benchmarks for: • How much employee turnover is there? • How many employees have been promoted? • How often are employees achieving bonuses? • How dedicated are employees to training? • What’s your employees’ general mood at work? All in all, evaluating those stats will let you know if you’re driving them to perform as a leader.
HARRY ACOSTA
Once your plan is in motion and you’ve fully integrated yourself into the leadership mold, how do you know it’s working? Being effective is about more than planning and philosophizing—it’s about results. Luckily, there are a few ways to check yourself as a leader and hold yourself accountable.
The Impact of Training While training is certainly a must for your techs and estimators, training for management and leadership can sometimes fall to the wayside—with some leaders never attending training at all. The Ratchet+Wrench Industry Survey broke down training for leaders into two categories: technical and management training. Those who attend technical training at least quarterly fair much better than those with no training when it comes to almost every KPI.
How often do you personally attend industry-specific technical training?
THOSE WHO NEVER TRAIN
Never:
41%
Annual Revenue Above $1 Million
46%
Average Repair Order Above $400
53%
Effective Labor Rate Above $90
40%
Technician Efficiency Above 100%
22%
Technician Productivity Above 90%
22%
Annual Revenue Above $1 Million
47%
Average Repair Order Above $400
63%
Effective Labor Rate Above $90
49%
Technician Efficiency Above 100%
24%
Technician Productivity Above 90%
34%
Within the last five years:
18%
Annually:
28%
THOSE WHO AT T E N D T R A I N I N G Q U A R T E R LY
Quarterly:
29%
Monthly or more:
14%
Those who attend management training annually also posted better numbers than those who chose to stay in the shop:
How often do you personally attend industry-specific management training?
THOSE WHO NEVER TRAIN
Never:
14%
Annual Revenue Above $1 Million
25%
Average Repair Order Above $400
47%
Effective Labor Rate Above $90
17%
Technician Efficiency Above 100%
15%
Technician Productivity Above 90%
23%
Annual Revenue Above $1 Million
43%
Average Repair Order Above $400
49%
Effective Labor Rate Above $90
34%
Technician Efficiency Above 100%
23%
Technician Productivity Above 90%
35%
Within the last five years:
22%
Annually:
30%
Quarterly:
25%
Monthly or more:
9%
THOSE WHO AT T E N D T R A I N I N G Q U A R T E R LY
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LEADERSHIP BOOT CAMP
Enlisting the Experts While there are a large number of consultants—both within the industry and outside of it—available to shop owners, a majority of Ratchet+Wrench Industry Survey respondents choose to run their businesses solo. The KPI difference between leaders who hire coaches to hold them accountable and those that don’t is striking.
Do you work with a consultant or business coach?
WORKS WITH A BUSINESS COAC H
Yes:
42%
Annual Revenue Above $1 Million
56%
Average Repair Order Above $400
61%
Effective Labor Rate Above $90
56%
Technician Efficiency above 100%
25%
Technician Productivity above 90%
34%
Annual Revenue above $1 Million
33%
Average Repair Order above $400
45%
Effective Labor Rate above $90
21%
Technician Efficiency above 100%
18%
Technician Productivity above 90%
26%
No:
57% DOESN' T WORK WITH A BUSINESS COAC H
Going beyond a single coach or consultant, there are also 20 Groups and other peer networking systems available to just about any business owner. Similarly to those that hire consultants, shops that works with these groups tend to post much better numbers.
Are you a member of a 20 Group or other peer networking group?
WORKS WITH A NET WORKING GROUP
Yes:
38% No:
Annual Revenue above $1 Million
61%
Average Repair Order above $400
63%
Effective Labor rate above $90
61%
Technician Efficiency above 100%
27%
Technician Productivity above 90%
36%
Annual Revenue above $1 Million
32%
Average Repair Order above $400
45%
Effective Labor Rate above $90
20%
Technician Efficiency above 100%
17%
Technician Productivity above 90%
25%
61% DOESN' T WORK WITH A NET WORKING GROUP
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T O O L B OX / S H O P A D V I C E
Overcoming Slow Days in Your Shop One shop owner details his procedure in dealing with slow days in his shop From always doing full vehicle inspections to putting out welcome back specials, John Bridgwater has learned a multitude of ways to minimize slow days in his shop. Regardless, the owner of Wright’s Automotive Service in San Leandro, Calif., knows that some slow days are inevitable, and that he and his team have to find ways to be as productive as possible when they come up. During some months, like winter times and back-to-school periods, Bridgwater finds that these slow days are more prevalent than others. Bridgwater has learned to deal with these issues, and as he admits, there are still months that were a struggle, especially last year. But this year, during the normal slow periods, his shop saw a significant boost in revenue, and he attributes much of this to his slow day procedure. Bridgwater pays his employees by the hour and doesn’t send them home when they’re slow, so it’s vital that each employee is finding some kind of work in the shop to take on. Properly coping with a slow day starts from the management end of things, to make sure your staff doesn’t slack off and makes the most of their time. Bridgwater details his procedure to deal with slow times in his shop. AS TOLD TO A LE X VA N A B B EM A
1. During the slow times, start by having a shop meeting to go over the
goals for the day and the things you can do in the meantime. We try to have a shop meeting once per week anyway, but if we’re super busy, we might not have a chance to have that meeting. When we’re busy, we may have had a problem with this thing or that thing, and we can use the slow days to deal with that.
THINKSTOCK
2. Take a critical look at any equipment maintenance or upkeep that can be done. We will discuss and see if we
can put certain equipment together, and figure out a way to make that happen. Maybe we have this transmission flushing machine that we keep over on this side of the shop, and we have a draining machine and these fluids stuck in the middle. When we’re busy, of course we don’t have time to move stuff around and make that happen, so on the slow times, when we have a list of these things that
we’ve thought of during the busy times, then we’ll be able to attack. 3. Making the shop more efficient and organized is another important thing to take on. The shop needs to be clean
and organized so that when we are busy, we spend less time hunting for things. 4. Training should certainly be an emphasis during slower times—I want my
staff to have all certifications they can possibly have. We’re gangbusters busy this week, but I sent one of my guys on Tuesday to go take his smog license exam, and sent another guy on Wednesday to take his brake license exam, even though we were very busy. So, in the slow times, we absolutely make an emphasis to fill it with things like that. There’s a lot of online learning we can do, there’s always something. 5. Software updates for scan tools is always an ongoing thing. If we have a slow
day, we can go through tools, see if anything needs updating, or if we need to replace any specific equipment. 6. Service advisors should use slow days to reach out to customers that the shop
hasn’t seen in a while. Right now we use AutoVitals, and some other workflow management stuff. That does a lot of reporting, and scours the database for us. That automation helps, but it doesn’t cover everything. We can have our service advisors reach out and say, we haven’t seen you in six months, have you had your services taken care of? Also, do they not like us for some reason? If not, why don’t they like us? How can we correct that? This can be a time to have those conversations. These calls to customers often take up a lot of time, so you can make them during the slow days. Getting a hold of those customers is sometimes challenging, we’ll invite the client to call us back without leaving a detailed message: Hey, we had a question for you, some sort of a leading question or introduction. 0 8 .18 / R + W / 47
Budget Your Message How to create a yearlong financial plan for your marketing efforts BY A LE X VA N A B B EM A
Roughly three years ago, during her first
years as marketing director for Pickering’s Auto Service, Taylor Pickering planned out her marketing schedule in blocks of 3–4 months at a time. Then after those few months were over, she would see if she wanted to make tweaks or changes. She eventually found this took too much time during the year, especially as her family’s operation grew to two Denver-area shops, and Taylor decided to map her entire marketing plan out a year in advance. “After a while, we got to a point where 4 8 / R + W / 0 8 .18
we decided to do it for the whole year for expenses, and sanity’s sake,” Taylor says. As Taylor says, setting up a yearlong marketing plan is a major undertaking, and it’s without a doubt, a team effort. That’s why she works closely with her brother, Brandon, operations manager at Pickering’s, to ensure the staff is able to put this plan into action, working alongside the shop’s cash flow and historical seasonality. And it’s worked well for the shop. Taylor’s efforts and creativity as the shop’s marketing director won her a Ratchet+Wrench
All-Star Award in 2017. After joining in 2014, the shop saw massive improvements, and her agendas, events and efforts played a major role in increasing car count by 25 percent, and upping annual revenue from $2.2 million to $2.9 million over the past five years. The main key to setting a program like this up, the siblings say, is set goals for the shop, and what you want to accomplish in the following year, like a certain boost in car count, and envision how you want to make that happen while still staying in line with your company’s cash flow. The two detail seven keys to developing an in-depth yearly marketing plan.
1) Do an end-of-year analysis.
Before laying this yearly marketing plan out,
MELANIE WATSON
T O O L B OX / S A L E S + M A R K E T I N G
says. “Slowly but surely we’ll implement new things into that routine. We’ll go back and evaluate it each time.” Skyrocket Sales Upon taking over the marketing director position, Taylor Pickering (left) has helped her father, Randy’s, shops increase sales and their customer base.
2) Pinpoint fixed costs.
Fixed costs are going to be the things you know your shop will spend money on, and they need to be budgeted out first. In the case of Pickering’s Auto Service, it’s the marketing salary, and benefits of the marketing director. In case of other shops, these fixed costs might be consultant fees for a marketing company.
3) List everything you expect to buy.
After you have planned out fixed costs, it’s important to list everything you plan to buy for the upcoming year. Taylor’s list includes everything that needs to be bought for advertising campaigns, promotional items, and branding items like pens or business cards. While a shop might not be able to plan out this in-depth in its first year, it’s important to at least have a rough estimate to plan out your cash flow. This list should include the planned cost and quantity of promotional and branding items. For instance, if they need company water bottles, she lists the quantity needed, the cost per item, the total cost and averages out the cost per item. Additionally, the Pickerings put down the estimated cost of each event, which includes promotional cost, event cost, and your estimated attendance based on info from past events.
which they do in December, the Pickerings say it’s vital to sit down and do an end-of the-year analysis. In this end-of-the-year analysis, the Pickerings say you should look at where your advertising has been at in the past, and what type of ROI you received from your previous marketing efforts to see what worked and what didn’t. Often, this means going outside of QuickBooks to see what you spend in each area, like retention advertising, customer acquisition and promotion. Then throughout the year, you need to make sure you stick to it, and pay close attention to budgeting and cash flow. “I have probably a list of 15–20 things that I’d love to do with my ad budget … I haven’t gotten to the point where we have the cash flow available to do that,” Taylor
4) Plan out your advertisements, and track ROI.
When planning out your advertisements, it’s important to focus on narrowing down your goals and what you want to achieve in the upcoming year. In the Pickering’s plan, advertising items for each month and season, like mailers and service reminders, are mapped out with invoice dates, drop dates, quantities and total cost. The staff at Pickering’s works together to track the ROI on these marketing efforts throughout the year, to see what’s working and improve the success of the plan from year to year. “We’re working diligently with our service consultant team to track how customers hear about us, coupon codes for everything. We constantly try to monitor that,” Brandon says.
Brandon has his point-of-sales team, along with Kukui and Google Analytics, track where customers came in from, and how calls were converted. That way, if a specific plan or campaign doesn’t work out over the year, they can make note of it for next year’s planning.
5) Have enough cash flow on hand for busier months.
Taylor says her entire budget is based on seasonality, which took roughly 6–8 years to find out the slowest and busiest times for the shop. She says it’s vital to stick to this to make sure you have enough cash flow on hand for some of the busier months, and advertise enough to get people in the door on the slower months. “We really looked at seasonality of revenue, which dictates what our cash flow positions are,” Brandon says. “We do the bulk of our printing in the summertime. The first quarter is usually the slowest quarter, so it’s not the time to be doing extra printing, mailers, anything like that.”
6) Make sure specials don’t coincide.
She has a specific section in her marketing expense schedule for seasonal specials, like Christmas cards, back-to-school specials, and fall winter and spring specials. Still, it’s a balancing act to make sure these seasons, events and promotions don’t coincide with each other. Each special lasts for a specific period of time (around a month and a half or two months) and her schedule makes sure these don’t overlap. For instance, Taylor says, if you know your shop has a big direct mail drop on first of the month, you don’t want to distribute a big coupon around the same time.
7) Keep an eye on it throughout the year.
Even if you have an in-depth, full-year plan decided, you should still keep up with your plan throughout the year. This not only allows you to stay on track, but it helps when you plan for next year’s budget. “It’s not planning the whole year out and going on autopilot,” Taylor says. “It’s constant checking, verification, making sure you’re holding people accountable.” Additionally, Brandon says it’s vital to keep up with your vendors and be aware of any contracts throughout the year to make sure they deliver on what they promised. 0 8 .18 / R + W / 4 9
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Columns
INDUSTRY INSIDER Rissy Sutherland
Rissy Sutherland has opened more than 400 shops in her career as the executive for nearly a dozen automotive brands and the founder of Honest-1 Auto Care. She is one of the industry's foremost experts in shop operations. sutherlandrissy@gmail.com ratchetandwrench.com/sutherland
FIND YOUR NEXT STAR TECHNICIAN A new source for recruiting talent
FUE VANG, THINKSTOCK
Last month, I took a look at how one shop
approaches recruiting. But one of his other sources leads into another part of our story on a company that is trying to solve our recruiting issues. That company is Find a Wrench, which Jay Goninen founded. Jay grew up working in his family’s automotive shop in Wisconsin. He found his skillset to be better served in the management roles, but he kept coming into issues regarding recruiting good technicians. He tried recruiting companies, which was a good solution for other businesses but the pay rates and knowledge needed for properly recruiting in our space always led to frustrations on both sides. Jay knew from recruiters that the need for boots
on the ground, industry knowledge and the fee structure prohibited owners from really being able to utilize this opportunity. Jay then decided to combine industry knowledge, high-quality recruiters and an affordable fee structure to found the company called Find a Wrench. With the industry and experienced recruiter knowledge, they found that a one-size-fits-all strategy was not the right answer. Therefore, they looked at how technicians of all ages and expertise looked at information or found new jobs. They created a combination program of boots on the ground, Facebook, texting, automotive sites, career sites and proactive calls to go into a market and actively re-
cruit for the technicians needed for shops. One of the best tools they found was through Facebook. According to Jay, there are over 2.2 billion active users each month and using ads that grab people’s attention has been one great solution for recruiting. They work to target the right demographic and get consistent results with the right campaigns. However, many shop owners will spend money in the wrong areas and take time away from much-needed operations. Jay said that many shop owners don’t put out ads or employment opportunities on their own websites. Today, most valuable potential employees will start their research of your company on the website. 0 8 .18 / R + W / 51
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INDUSTRY INSIDER / RISSY SUTHERLAND
If there’s not an easy way to find open positions, then the search will end right here. The second-biggest mistake that shops make is that they stop recruiting when they are slow and start recruiting when they are really busy. This is the worst approach to take. You need to be recruiting all the time but especially when all shops are slow. This is when technicians are looking because that’s usually when they may not be getting the hours they want and are more willing to look at other options. If you are busy and your competitors are busy, the technicians you want are probably getting more than enough hours. Also, when you are finally blown out, you don’t have time to recruit or train the right way. So, you are potentially setting up a new technician to be thrown in the fire and possibly have cultural issues along the way, which will perpetuate a bad reputation in the area and kill future recruiting (we all know it’s a small world). Jay said that if you just plan to recruit with a basic focus on pay, then you probably won’t recruit well in your area. All techs want a fair pay plan with great opportunities for a lot of hours. However, they can get that anywhere; so why are you different? Technicians want options for pay on billable hours, benefits, days off, great reputation shop, investment in training, engagement to grow the business, fair pay for hard work and more. The main thing to remember is that you need to know all pay plans, reputations and benefits that are being offered in your area, find out what’s important to each of the potential candidates you are talking to and then figure out how to think outside the box to help them accomplish those goals at your business. Jay does suggest that you should be involved in your community and in front of future talent. You should be a known face at tech schools, unemployment office, the military recruiting groups in your area, and at some vendor training programs. Each community is different, so by being active in all facets, you will have a chance to touch every possible manager and technician in your area. Finally, beyond using Find a Wrench’s full recruiting program, owners can take advantage of the new assisted self-recruiting program. This hybrid plan means they will post ads on all networks, weed through the candidates and only provide owners with
resumes that meet minimum qualifications. The main thing to remember is that recruiting never ends and a one-size-fitsall approach won’t work. Employees are different ages, have different goals, come to you from different places, and want different options. If you are active in your community, consistently recruit every week, offer flexible pay/benefit plans
based on technicians goals, then you will probably be better than 60 percent of the shops in your area. However, if you plan to engage your team, train your team, get involved in the community, and become the place where people want to come to work, then you will be in the top 99 percent of shops in your area and recruiting issues will be a thing of the past.
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BY A LE X VA N A B B EM A P H O T O G R A P H Y BY TA R I G U N S T O N E
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One shop overcame major diagnostic learning curves when implementing European vehicles
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aving an in-depth diagnostic process was something in which Olympia, Wash.-based Terry’s Automotive always found pride. However, the shop and its technicians tended to shy away from European vehicles, believing the diagnostic process would be too challenging for its managers and technicians to learn. Roughly six years ago, more and more European vehicles started showing up in the neighborhood, and it no longer made financial sense for the shop to continue turning these vehicles away. However, that meant the staff, including performance shop manager Will Honemann and owner Robert Holmstrom, had to go through a major learning curve. The staff had to learn the diagnostic side of these European vehicles to figure out how to service the vehicles while making sure the shop continued to run efficiently. After working through a learning curve of getting acquainted with the new software, Honemann is now at the point where he can confidently tell customers that he should be able to do a full diagnostic process on the cars within an hour. Additionally, Holmstrom says the shop’s foray into European vehicle has increased revenue in the diagnostic and driveability end of the business by roughly $125,000–$150,000 annually. “It’s always a learning curve, with new cars, new techs,” Honemann says. “But once you have that learning curve down, it allows you to bring in more things, and really win long term.” It all happened by training a staff that could effectively diagnose these cars, charge correctly, and communicate the importance to the customer and why charging for diagnostics is necessary.
THE BACKSTORY
Robert’s father, Terry, started Terry’s Automotive in 1980 with one 7,500-squarefoot main building. Ten to 12 years later, he opened another building, grew the business, and focused on alignments, and front-end parts. Five to six years after that, the shop grew even more, and opened up its performance building, which Honemann now runs. The 4,000-square-foot building has four techs, and focuses mainly on driveability and diagnostic work. The staff tells customers the shop will 5 6 / R + W / 0 8 .18
start with an hour for diagnosis, at a labor rate of $112.75, and from there, they sell more time depending on the problem. Up until this year, the shop charged $102.95 per hour, but increased the cost to catch up with the ongoing cost of doing business, and account for technican’s time. “We start there, and make sure the customer knows it’s going to be up to an hour’s charge for diagnosis,” Holmstrom says. “We won’t go over that without talking to them.” For any customers who dispute the charge, Honemann says there are other shops in town to which they can take their car.
“Sometimes you have to stay away from the headache,” Honemann says. “If I have somebody who’s that cheap, I don’t want them here anyway.”
THE PROBLEM
Roughly five years ago, the European market around Terry’s Automotive started growing exponentially, and Honemann saw the surrounding customer base transition more from a domestic market to European market. In sending European cars away, Honemann and Holmstrom knew the shop was missing out on a major moneymaker,
TERRY’S AUTOMOTIVE Location: Olympia, Wash. Owner: Robert and Tod Holmstrom Size: 17,000 square feet (combined three buildings) Staff: 25 Average Monthly Car Count: 779 Annual Revenue: $3.5 million
A Move to Adapt When more European vehicles started showing up in the area, the staff at Terry’s Automotive had to invest in new equipment and training.
so they decided to pivot and make an investment on servicing any vehicle that came through the shop. When the local Volvo dealership closed down, the shop faced an even bigger influx of cars, and Holmstrom knew the shop had to pivot. “That’s when we really started getting into computer programming, reflashing, Volvo software and kind of grew from there,” Holmstrom says. “From there, we did more BMW, Mercedes software, things like that.” Implementing this new service put a damper on productivity, as the techs had
to learn the process, with which they were unfamiliar. Not only did the European cars require a different scan tool software package, but the technicians also had to work around the new software, and learn how to diagnose the cars. They had to work through some bumps in the road, productivity wise, and make a long-term investment.
THE SOLUTION
The shop’s investment in the equipment to service these vehicles was the easier part, according to Holmstrom. Each technician owns
his or her own scan tool, with brands from Snap-on, Autel, and Matco, which ranged from $2,000–$4,000. Additionally the business bought equipment to do computer flashing and reprogramming, like a new laptop, and battery charger, roughly costing $3,000. The bigger investment was on the staff’s time. Honemann and his staff found that some scan tool brands were easier to adapt to than others, and some repair information databases varied in quality, as well. To get past this, here are Honemann and Holmstrom’s four keys to making this work: 0 8 .18 / R + W / 57
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Keep techs motivated:
Initially, Honemann saw some resistance from his techs, but he pushed through and stressed how much of a moneymaker it would be for the shop, and the technicians. He kept scheduling the repairs, and convinced his service manager to take on more and more of the vehicles. Honemann has productivity bonuses where he wants to see each technician reach $20,000 in sales per month. The techs are paid hourly, but if they reach the $20,000 benchmark, they reach a bonus. “When they’re doing well, they get paid well, too,” Honemann says. “There’s times where a guy might get a $1,000 bonus for the month.”
Invest in training:
Training was a major part of this transition, as well. The shop sent one technician who solely went to training on how to handle these diagnostic systems, so he could be the go-to guy. Apart from the one tech who was trained in diagnostic processes, the shop sent many techs out to ACDelco and NAPA training.
A Learning Curve The European vehicles that Terry’s Automotive was now servicing required new tools that the techs had to learn to adapt to.
Sell it to customers:
Communicating with customers is key for all diagnostic issues, but especially when working through a new diagnostic process. While the shop almost never goes past its typical one-hour diagnosing process, there are times when the technicians might see something unusual, and have to take more time to pinpoint a problem. “You have to tell customers what’s going on,” Honemann says. “Just say that we’re looking at it, we’re trying to help; usually they respect that. It’s a balance; you have to make money, have to be able to take care of your other customers.” Occasionally the shop had to bite the bullet and cut the charges, like charging one hour of diagnosis time on a car that took three hours, but Honemann says that was very rare. With the training that it takes, Honemann and Holmstrom say it’s important to charge for their technicians’ time, and they make sure to communicate that with each customer.
Don’t overlook the simple things:
Even when going about this diagnostic process, Honemann says you can’t overlook the finer details that may even cut down or eliminate the need for your shop to do a full diagnostic check. 5 8 / R + W / 0 8 .18
It’s important for the service writers to get as much information from your customers as you can up front, with an in-depth work order. From there, a technician should do a visual inspection, walking around the vehicle and seeing if anything looks out of place. “Half the time you get so involved with technicality of stuff, you miss things right in front of your face,” Honemann says. “You have to ask yourself: Does it smell funny? Does it sound funny?”
THE AF TERMATH
Over the last several years, after settling in to servicing European vehicles, Holmstrom estimates the shop jumped its average ticket by roughly $150. “Once you get past that initial learning curve, you realize there’s plenty of money here. We were pushing away a lot of things,” Honemann says. “Sometimes you take a bit of a loss to get that education to really win long term.” In going through this process, the shop
has developed a new-found confidence on diagnosing all vehicles. “In the last 12 years, only a handful of cars that left here that did not get fixed, did not get repaired, didn’t have a solid answer on what was wrong with it,” Honemann says. “If we can’t fix it, it’s done.”
THE TAKEAWAY
Honemann says his shop’s newfound focus on European vehicles and its diagnostic process has paid off dividends for his shop’s bottom line and technicians, but most of all, for its customer base. “Ultimately I want to be able to do as much as we can for the customer. When you can do something that nobody else can, you have that customer for everything else,” Honemann says. “If you fix a problem that four other shops couldn’t take care of, chances are they’re going to bring it to you for the oil changes, and the gravy money-making jobs, as well. Then they’re probably going to tell a dozen people.”
Measuring the Effectiveness of your Marketing Efforts with the Kukui Dashboard For shop owner Kim Auernheimer, the Kukui Dashboard has increased the flow of new clientele as well as determined what marketing processes are successful
J
ust because a website looks nice doesn’t mean it’s effectively helping the shop find business. For CS Automotive shop owner Kim Auernheimer and her husband and co-owner, Rob, their website was user friendly and informative for the customer, but on the back end, lacked specific background information, such as how a customer landed on the shop’s webpage. In order to better understand what locations the shop is reaching out to, customers were approached during their in-person visit, but even that was difficult to track for Auernheimer. “Anytime the customer made a new appointment, we always asked the source, ‘How did you hear about us,’ and we always got, ‘Oh, my friend told me,’ or, ‘Oh, I heard about you online,” Kim Auernheimer says. “Well, online could be so many different avenues.” Without knowing what platform was used to find the shop, marketing for a certain audience was rather difficult. A few years down the road, Auernheimer attended a marketing session held during a WORLDPAC SMART GROUP quarterly meeting where she discovered Kukui, a company that created the “Kukui Dashboard.” The Kukui Dashboard is a system that monitors all aspects of data from a shop and allows owners to view what the shop’s revenue is, how effective specific marketing tools are, as well as shop specifics such as how often phone calls are answered in the shop, which Auernheimer wasn’t able to do before. By just logging into the dashboard, she is able to see what advertisements are working and how to finance marketing programs accordingly. “They had everything to let us know how effective our website was [and] who we were reaching out to through SEO,” Auernheimer says. “Without hesitation, we went with Kukui because we knew that they had what we needed in order of tracking and marketing tools.” The Kukui Dashboard enables a shop to gain perspective on what processes are working. With the ability to track a certain demographic, determine what marketing tool helps gain the most customers and let shop owners know the fallout of an unanswered phone line, the Kukui Dashboard is a one-stop shop for all users.
Utilizing the tool Through the Kukui Dashboard, CS Automotive has been able to discover where customers come from and how to better understand the back end of their website. With the ability to focus on different elements of a business—ranging from how many customers are coming into a shop based off of a Facebook ad to how often phones are answered on a daily basis—the Kukui Dashboard allows shop owners to evaluate which processes are worthwhile in a shop. CS Automotive LLC began using the Kukui Dashboard in 2013 and hoped to understand how their website was bringing in customers and work to continue the shop’s overall progress. “We were at a point in our company to change how we were doing things and Kukui was part of that pivot to take our business to the next level,” Auernheimer says. Once familiar with the program, the busi-
ness began to pick through and maximize the dashboard’s data. “The Dashboard is basically a one-stop view of the health of our business; it even shows us our lead to actual conversions for AdWords and organic SEOs,” Auernheimer says. According to Auernheimer, up to 42 percent of those who use the shop’s AdWords and organic SEO have become new customers. The Dashboard also reveals that CS Automotive LLC is ranked in Kukui’s top 20 on the lead to customer metrics. “We know that what we’re doing is working with the SEO and the AdWords and that our page is working,” Auernheimer says. Investing in successful marketing methods Future marketing methods are now easier to capture for the shop using the Kukui Dashboard. The device measures the amount of
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leads from different sources such as Yelp, Bing, Facebook, and then determines where online advertisement lacks or has development potential. “I love the performance metrics,” Auernheimer gushes. Auernheimer has been able to monitor the lead conversion rate for Google AdWords and look into why a conversion is dropping or rising. “The AdWords has been our focus more recently,” Auernheimer says. “We are a Yelp subscriber, so I’m constantly looking at how many leads we have and how many new customers we have from the lead conversion—at a glance, we can decide if Yelp is the way we need to be spending our money. “It definitely helped us at a glance know that the pivots that we were making when we brought Kukui in were right. When we did make a wrong [decision], it was very easy for us to correct that part of it and then change it.” Refining the routine The dashboard measures what occurs inside the office, too. According to Auernheimer, small details such as a customer email addresses and reminders, rate of answered phone calls, leads developed from organic searches, new customer count and customers who came from leads, are all calculated. Utilizing the Dashboard to determine results has provided a more accurate and faster route for Auernheimer, she explains. “It’s pulling information from our point-ofsales system and with one glance, those numbers are available to me. I think it makes it much more accurate and then you can immediately see the results,” Auernheimer says. “That’s what’s surprising to me: how easy it is. “It gives me an overall health check of how we’re doing.”
IF YOU WOULD LIKE TO LEARN MORE ABOUT THE PROGRAMS KUKUI HAS T O O F F E R , V I S I T T H E I R W E B S I T E AT W W W.KUKUI.COM/ADWORDS, OR C A L L 8 7 7. 6 9 5 . 6 0 0 8
Your customers will love it. And love you for it. Get to know SiriusXM® Service Lane for Shops. The Service Lane for Shops program gives a FREE 2-month trial subscription to your qualified customers at no cost to you. It’s a great and easy way to thank them for their loyalty. Your customers will enjoy our All Access trial, getting over 150 channels in their car, at home and on the go.
Hailee Steinfeld on
It doesn’t cost the shop anything, people are getting a benefit, and it’s a win-win situation that way. Ed Farrell - Dudley Automotive Services, Arlington, MA.
Here are just a few more things about the program: The program is sponsored by SiriusXM.
Once you’re enrolled, we’ll do the work.
That means we’ll take care of the benefits of this program at no cost to you or your customers. And no credit card is required from your customer to enjoy the free 2-month trial. No strings attached. See Program Details below.
Once you’re in the program, nothing else is required from your shop. SiriusXM will notify the eligible customers of their free trial and manage the vehicle trial-activation process. No shop promotions, activations or notifications to customers are necessary.
Enroll Today! Just visit siriusxm.com/MyShop or call 1-844-826-4770. Program Details: SiriusXM Service Lane for Shops program currently offers a complimentary 2-Month trial subscription (a $20.99 monthly savings) plus complimentary activation (an additional $15 savings) of the Sirius or XM All Access programming package to qualifying customers with a factory-installed satellite radio. Non-qualifying vehicles include those with active or recently active SiriusXM satellite radio service subscriptions or trials. Service Lane complimentary trial terms of service subject to change. © 2018 Sirius XM Radio Inc. Sirius, XM, SiriusXM and all related marks and logos are trademarks of Sirius XM Radio Inc. All other marks, channel names and logos are the property of their respective owners. All rights reserved.
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Develop a Robust Rewards Program How to design a simple program that keeps customers coming back BY A LE X VA N A B B EM A
THINKSTOCK
Cindy Hunter and her husband, Doug,
owner of Hunter’s Garage in Hyde, Pa., found that their otherwise loyal customer base often performed their own oil services, and certain customers only came in for their annual check-ups. Due to that maintenance neglect, Cindy and Doug found these customers often ended up with all kinds of repairs needed to pass their state’s inspection.
“We were wondering, how could we make this a less painful experience, and also be able to monitor their vehicle and give them a check-up on a more regular basis?” Cindy, the office manager at Hunter’s Garage, says. The solution for the Hunters came through a rewards program, implemented in early 2018. It’s called the VIP Gold Maintenance program, and it offers $5
off every oil change, and an additional 10 percent off select maintenance services, like four-wheel alignments, tire rotations, transmission flushes, and new wiper blades. After implementing the program in January, which has over 80 members so far, Hunter says customers were much more willing to stop in for routine repairs. In an effort to boost customer retention, 0 8 .18 / R + W / 61
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and get more quality referrals, Matt Lachowitzer out of Fargo, N.D.-based Matt’s Automotive Service Center started a rewards program with similar customer retention goals. His was a loyalty card that puts 3 percent of any customer’s repair services back onto their card, which can be redeemed at any time. When referring a customer, the referrer will get $20 put onto their card, as well. From creating materials to planning your discounts, the two detail how to construct a robust rewards program that keep customers coming back.
cost around $500. Lachowitzer says it’s important for his cards to be branded in full shop colors, but for a company looking into this, the cost could be around $200–$300 for 500 cards. Hunter already had a vinyl cutting machine to create shop sweatshirts, which cost $500, and was taken out of the shop’s marketing budget. She then pays just $2 for sheets of vinyl to create the VIP decals that go on each member’s back window. Hunter wasn’t sure how effective the program would be starting out, so she makes the decals as they’re needed.
Pinpoint your main goal.
Plan out your discount.
For Hunter and her rewards program, she had to plan it out for six months before it went into action. She assessed the type of vehicles that came into the shop, and what the shop needed to do to increase car count, and address services and repairs customers were neglecting. Hunter’s Garage was in a rural area, many customers were doing their own oil changes, or getting them done at cheaper quick lube shops. Hunter wanted to create an incentive for those customers to come in, get those oil changes, and get other routine maintenance like tire rotations and brake flushes. For Lachowitzer, the main goal was to reward loyal customers for coming back, and give them an added incentive to bring in new quality customers. He first started with a punch card system, which shifted into an inexpensive gift card, and then the branded loyalty card. After implementing this program, he’s given out over 1,500 cards, and has had 12–15 referrals per month since its implementation. “The key is to start simple, and don’t overthink it,” Lachowitzer says.
Be smart about your investment.
Both shop owners say it should be a small investment to create your cards, decals, or whatever items you’re creating in a program like this, and it’s important to be resourceful. Lachowitzer produces about 500 branded cards per year, which 6 2 / R + W / 0 8 .18
Initially, Hunter was wary about doing a discount rewards program, as she didn’t want to attract customers wanting the cheapest services. But she had confidence in her customer base, and eventually decided that discounts like these would be the best ways to get customers through the door. “There are three factors that limit people’s abilities to do this on vehicles,” Hunter says. “Convenience, cost, and lack of knowledge. If I can get them in the door, we can offer them that discount, we can help them better take care of vehicles so that they’re happier, and we can educate them on status of vehicles on a regular basis.” It’s already seen a return for Hunter so far, as she’s seeing members coming back for oil services and finding more repairs that need to be done through digital vehicle inspections. For Lachowitzer, planning the discount was a matter of doing simple math on what it costs to keep a customer. “It was just a matter of playing with how much it costs to get a new customers through advertising,” Lachowitzer says. “We just kept tweaking it until we found the balance.”
Make sure staff is on the same page.
Both Hunter and Lachowitzer say there should be some training required for the staff to be on the same page about programs like this.
Hunter got input from the techs and owners to make sure the benef its of the program ref lected the benef its that would most help customers. When it was installed, she made sure that all technicians and service advisors were on board with what the program was, how they can program VIP customers into their digital vehicle inspections, and what discounts they should be expecting. Lachowitzer says one of the biggest keys to the success of this program is to make sure service advisors are aware of how the program works. If the shop goes a month without seeing a lot of referrals, he makes sure to mention it to his service advisors to make sure they’re bringing the program up to customers.
Plan to promote it.
When initially starting the program, Hunter promoted it to customers through flyers, given out after a repair is completed. She also distributed these flyers to local businesses, including the ones Hunter’s Garage has as fleet customers. It also was promoted on the shop’s Facebook page, and through Google ad posts. She soon found customers calling the shop, and specifically asking to be signed up for the VIP program. To be a part of the program, each customer must put a Hunter’s Garage sticker on their back window, which works as its own form of moving promotion.
Be willing to evolve and change.
As Lachowitzer has learned in the six years of his program, as it has evolved from a punch card into the loyalty card program the shop has now, he’s realized the importance of being able to evolve. Over the years, Lachowitzer has realized the cards were kind of an awkward item for customers to carry around, and many of them would lose them and lose their entire balance along with it. So starting at the end of the year, Matt’s Automotive will ditch the cards, and put the reward’s program on each customer’s account.
AT AUTOZONE, EVERYTHING COMES DOWN TO ONE PHRASE:
AUTOZONERS ALWAYS PUT CUSTOMERS FIRST! Since 1979, AutoZone has stayed true to its Pledge and has consistently helped take care of people who take care of cars. What started out as a single location in Forrest City, Arkansas, has expanded into the country’s leading retailer and a leading distributor of auto parts and repair software. AutoZone now serves customers in all 50 states, the District of Columbia, Puerto Rico, plus stores in Mexico and Brazil and is also comprised of ALLDATA—the leading provider of OEM repair information and software. AutoZone’s reach may have changed drastically, but the one thing that has remained the same is its humble roots and its commitment to the commercial customer. AutoZone employs more than 87,000 people—known as AutoZoners—who each understand the Pledge to provide exceptional customer service and see it to fruition. Every single AutoZoner understands the importance of providing for the commercial shop through quality parts and exceptional service. Inside this section, you’ll read how AutoZone came to be what it is today, and how through a focused commitment to helping people who take care of cars—from professionals to DIY customers—we put our customer first Pledge into everything we do.
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AUTOZONE HERITAGE TIMELINE
The first Auto Shack opened on July 4th, in Forest City, Arkansas. First day sales totaled $300.
1979
1981
The commitment to customer service takes its next step with the awarding of our first Extra Miler Award given to Memphis store manager, Darren Reltherford. This award is the highest recognition AutoZone employees, better known as AutoZoners, can receive. This award continues to be presented to AutoZoners who go above and beyond to provide customers with WOW! Customer Service.
Auto Shack opened an Express Parts warehouse in Memphis, Tennessee allowing customers to order thousands of "hard-to-find" parts not stocked in our stores. Today, this service evolved into our Vendor Direct Parts (VDP) program.
1986
1987
AutoZone introduced the first electronic catalog in our industry, replacing the racks of paper catalogs, and improving our customers experience with faster service and simplifying the look-up process. This was an industry game changer. Auto Shack officially renamed AutoZone.
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We became the first auto parts supplier to register warranties in a national computer database, helping provide efficient and effective service and offering an added resource to professionals.
1991
1996
In a quest to provide better customers service, DataZone opens to support our Commercial businesses through a wide range of activities.
AutoZone Commercial begins with a program specifically designed for Automotive Repair professionals. AutoZone acquires ALLDATA, the first online OEM repair information company to be able to service the needs of professionals better.
2000
2002 The Hub store is developed to provide customers with access to more parts and speedier service.
AutoZone founder, Pitt Hyde, is inducted into the Automotive Hall of Fame. Pitt set a standard as the first aftermarket retailer in the Automotive Hall of Fame.
2004
Z-net®, AutoZone’s digital catalog is launched. Z-net® provides one click repair guide information, product images, specifications and troubleshooting, making it easier, faster and more accurate to meet the increasing demands of the professionals’ customers.
2007 AutoZonePro.com launched to provide an easier, faster and more accurate way to order parts and have immediate access to availability and management tools.
2008
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2012 AutoZone surpasses $1B in Commercial sales
AutoZone opens the 4,000th Commercial Program location to be able to quickly and effectively service shops across the US.
2014
2017
AutoZone Surpasses $2B in Commercial Sales, in just 5 years, sales with automotive professionals doubles.
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BILL RHODES CHAIRMAN, PRESIDENT AND CEO, CUSTOMER SATISFACTION AUTOZONE
AUTOZONE CEO EMPHASIZES DEDICATION TO PROFESSIONALS AutoZone Chairman, President and CEO, Customer Satisfaction, Bill Rhodes speaks with pride when it comes to all that AutoZoners have accomplished since he assumed the role in March 2005. With AutoZone’s ability to offer an extensive array of parts, including late model, specific programs/services for auto repair shops and even software solution through ALLDATA, the growth opportunity is endless.
and as we leverage our culture and expertise, we are confident we will be the best service provider in the industry. In addition, many DIYers do the light jobs themselves but leave the more complex and time-consuming jobs to the professionals, so we’re able to act as a source of referrals to those customers.
MANY BUSINESSES START WITH A VISION. WHAT IS AUTOZONE’S? We have a Pledge! It’s a Pledge to our customers and our AutoZoners. We’ve worked for years to live up to our Pledge, and we remain intensely focused on our commitment to the customer experience, whether in our retail locations or in repair shops.
HOW DO YOU MEASURE YOUR SUCCESS AND WHETHER OR NOT YOU’RE DELIVERING THIS? We measure our success based on the satisfaction of our customers. We are constantly seeking feedback from our customers and working diligently to earn trusted partner status with them. At the end of the day, if we deliver on our promises, shops and ultimately, their customers will be satisfied. Satisfied customers equal repeat customers who also spread the good news by word-of-mouth!
HOW IS THIS COMMITMENT/VISION CARRIED OUT? We pride ourselves on our culture. It’s a culture focused on providing “WOW!” Customer Service, a culture of solving our customers’ problems, a culture of serving others, and as previously mentioned, a culture focused on fulfilling our Pledge. WHAT ARE YOU DOING TO GROW THE BUSINESS IN THE FUTURE AND HOW WILL THAT IMPACT PROFESSIONALS? We are continuing to enhance many elements of our professional offerings. First and foremost,
we have substantially improved our parts availability over the last few years. We have improved our store assortments, enhanced our Hub store placements and have approximately 25 MegaHubs across the country that give our customers access to 100,000 parts on a sameday basis in many markets. We are intensely focused on leveraging our amazing culture to ensure our customers receive the right parts at the right time. WHY SHOULD PROFESSIONALS DO BUSINESS WITH THE LEADING RETAILER? We believe that what matters most to our professional customers is inventory availability, speed of delivery and ease of doing business. Not only do we pass on this efficiency in speed to our customers, but also because of our volume, we are also able to provide the best quality parts at the best price. As we deliver on that commitment, we are confident we will earn professionals’ business. We pride ourselves on delivering superior execution,
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WHAT ADVICE WOULD YOU GIVE A PROFESSIONAL SHOP AS KEYS FOR SUCCESS? First of all, I would ask them for their advice. They are the experts! But, I would share with them that our experience is that, while at times, this business can seem complex, ultimately, it’s the simple, repeatable things that matter. Treat your customers the way you want to be treated, install quality parts and hire great people and inspire and motivate them. And, of course, buy all your parts and products from AutoZone!
the end of a long day is a comeback vehicle. When selecting a supplier, shops need to make sure that they’re choosing a company that values quality above all else. Duralast parts, only sold at AutoZone, are engineered to meet or exceed OE performance and go through rigorous testing to ensure they meet the Duralast quality standards. Not only can shops rely on parts from AutoZone, they’ll also be able to ensure their own customers that they are providing high quality parts at the best possible price, which is a win-win.
CREATE A BETTER CUSTOMER EXPERIENCE WITH AUTOZONE Shop owners have a lot on their minds. From getting repairs out on time, monitoring staff to budgeting for new equipment, the last thing that he or she needs to run into is a delayed part delivery that results in an unsatisfied customer. The suppliers that a shop owner chooses to work with are a reflection on his or her own shop. The way that the supplier treats its shops will directly correlate with how its technicians are able to provide for their customer. To put it simply, a faulty part that is delivered to a shop will result in a poor repair from a technician and end with a dissatisfied customer. Because of this, shops need to be extremely selective when it comes to choosing a supplier. Shop owners should figure out what’s important for them to demonstrate to their customers, and then choose a supplier that can provide and deliver those results. Shop Owner Nate and Service Advisor Richie, at Bronx Auto Service, who purchase 90 percent of their parts at their shop through AutoZone, share how partnering with AutoZone and ALLDATA has helped them provide for their customers and because of that, become a more successful business. “With [AutoZone and ALLDATA] we have basically the same information as the dealership,” Richie says. That means they know what the dealerships generally charge and can be competitive.
1) THE FASTER THE BAYS THE MORE OPPORTUNITY FOR PROFIT “Everybody’s in a rush, getting parts quicker, saves time, gets the car fixed faster, makes the customer happy and you can get another car in the shop,” says Bill Rhodes. According to Rhodes, inventory availability, speed of delivery and ease of doing business helps do that. For Richie, AutoZone’s staff has helped locate parts over the phone and eased the strain of tracking down parts. “They’re excellent, they’re very courteous on the phone,” Richie says. “They’ll do anything to
help get you the part. If they can’t find the part, they’ll outsource it so you can get the part in an hour,” Richie says. AutoZone has also increased its available parts to customers with the addition of 25 MegaHubs—stores that carry up to 100,000 SKUs that supply surrounding stores with inventory multiple times per day—across the country. This ensures that AutoZone shops will get the parts they need when they need them. 2) YOUR BUSINESS THRIVES OFF OF TRUST & REPUTATION The last thing a shop owner wants to see at
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3) DELIVER A DEALERSHIP EQUIVALENT EXPERIENCE Customers are looking for a sleek, dealership experience when they enter the doors of an auto repair shop. AutoZone recognizes the difficulty shops face when it comes to providing a topnotch experience and has made it a priority to help its technicians provide that. Without the assistance of AutoZone, providing customers with quality parts that are OE-equivalent would be a challenge, Nate says. Justin Pons of Pons Auto, says that AutoZone is the best service that he’s ever seen from a “chain store” and that his commercial manager and delivery driver from AutoZone have helped make his shop what it is today. “Their customer service is like no other,” Pons says. “I’ve been running the shop for 10 years and ever since I’ve been here, we’ve been using auto parts from AutoZone and we’ve never had a situation,” Nate says. “It’s been 10 years for a reason.” With a focus on customer satisfaction and growing a shop’s repair business, companies like AutoZone aim to be more than just a supplier by looking for ways to improve the experience of its professionals and maintaining a dedicated investment in helping grow their business. “We recognize that delivering on this commitment across 50 states, several countries and more than 87,000 AutoZoners is always an aspiration that is never fully achieved,” Rhodes says. “We continue to strive for it every single day, in every single customer interaction.” Partnering with a supplier like AutoZone can provide many benefits to your business. Not only will technicians be able to provide a better customer experience, they’ll also be able to turn work out quicker which will ultimately retain and drive a loyal customer base.
nonprofit organizations like the Techforce Foundation and the Automotive Aftermarket Charitable Foundation as well as providing financial aid to a number of different programs. Its website even has a place to request charitable contributions.
A LOOK INSIDE AUTOZONE’S CULTURE With an operation inspired by family values, AutoZone strives to be a company where its customers—people who take care of cars—come first and where exceptional performance is a daily goal. In order to further create successful opportunities for both its staff members and customers, AutoZone abides by a series of Values that, at the core, outline the Pledge that drives the entire company: AutoZoners always put customers first! We know our parts and products. Our stores look great! We’ve got the best merchandise at the right price. “We pride ourselves on our organizational culture,” says Mitch Major, AutoZone’s Vice President, Commercial Support, Customer Satisfaction. “We share that Pledge at the beginning of our meetings as a way to continually remind ourselves that if we live up to that aspiration, we as a team will be successful.” Those guiding principles ensure that the company’s commitment to excellent customer service, trustworthy advice and continuous improvement is a focus for every AutoZoner. Among the Values that define what being an AutoZoner means are the following:
PUT CUSTOMERS FIRST. Exceeding customers’ expectations is the first Value for a reason—it drives all others. It’s the foundation of AutoZone’s approach as a company, one based on providing “WOW!” Customer Service and Going the Extra Mile. It’s about understanding your customers’ needs and working to create solutions to their problems. “It starts with everyone’s title including ‘Customer Satisfaction,’” says Joe Sellers, Vice President, Commercial Sales, Customer Satisfaction. “On store visits and shop sales calls, we all lead by example by putting professionals first.” A few examples of this are AutoZone’s ondemand delivery, where parts can be delivered to your door within minutes and its Shop Referral Program, where AutoZone will refer consumers to its commercial shops. “Many of our retail customers turn to us to help 6 8 / R + W / 0 8 .18
them identify highly reputable shops to service their vehicles when they need assistance,” Bill Rhodes says. “As a result, we have the opportunity to be a source of referrals for our professional customers and the end consumer knows that they will receive great service from these technicians who will be using high-quality AutoZone parts.” CARE ABOUT PEOPLE. Creating a culture of caring naturally begins with treating people with dignity and respect. However, caring also comes down to demonstrating concern for others, your community and your customers—on a consistent basis. It’s not enough to exhibit care on occasion; for AutoZone, exhibiting care is a daily commitment that began with the founders. AutoZone’s founder, J.R. “Pitt” Hyde III, started AutoZone with a commitment to philanthropy. Today, the AutoZone Charitable Program supports
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STRIVE FOR EXCEPTIONAL PERFORMANCE. Becoming the leading auto parts retailer for nearly 40 years didn’t happen on accident. That ascension occurred due to a focus on acting in a manner of the highest standards, using resources wisely and creating a culture where strong initiative, acting quickly and improving offerings is the foundation. “We’ve done a lot of work over the last few years reinforcing in our organization what matters most to professionals,” Major says. “And, while it’s easy to see the market we serve as complicated, at the end of the day, what we do comes down to a few key deliverables: having the parts our customers need close to their shops so we can deliver them quickly and provide a customer experience that is as smooth as possible. We are working hard to improve all of those aspects of our business and continue to invest in that direction.” AutoZone recognizes its AutoZoners that go above and beyond for its customers through its Extra Miler recognition program. One of the Extra Milers is Jacob Jaramillo, CSM at AutoZone. By highlighting the benefits of AutoZone’s 100 percent labor warranty and availability of products, he was recognized for being able to get a shop better service than it had with another national chain. HELP TEAMS SUCCEED. Within the company itself, helping teams succeed is based on actively contributing to team goals, being a supportive team member and seeking opportunities to lead. “We measure our success based on feedback from shops, as well as our ability to earn trusted partner status with customers,” Sellers says. “We work closely with our customers to help them better serve their customers and, in turn, AutoZone benefits from the partnership.” Within your shop, putting customers first is a top priority. Because of that, it makes sense to partner with a supplier that has stayed true to this same value, despite massive growth. AutoZone will make your shop’s needs a top priority and allow you to best service your own customers.
WE’VE GOT YOUR BACK, SO YOU CAN FOCUS ON YOUR CUSTOMERS
AutoZonePro.com ©2018 AutoZone, Inc. All rights reserved. AutoZone, AutoZone & Design are registered marks of AutoZone IP LLC or one of its affiliates. 0 8 .18 / R + W / 6 9
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Columns
THE BOTTOM LINE Mitch Schneider
THE GHOST OF COMMUNITY PAST The benefits of affiliating with industry associations
THINKSTOCK, MICHAEL HOEWELER
It started informally. A few shop owners
getting together in the early ’90s through our local chamber of commerce. Unfortunately, the relationship with the chamber didn’t last all that long. As I recall, the breakup had a lot to do with external rules and regulations that most independent shop owners don’t generally understand or appreciate. I can’t tell you much more about the group than that. Not beyond how much I really enjoyed the meetings and being with the other shop owners. Being together felt good. It felt natural, almost therapeutic. Getting to know each other as small business owners struggling to succeed, not just as competitors in a highly competitive market, made it a lot easier to pick up the phone to call for help, borrow a piece of equipment or share a bad day. I didn’t start the group. I didn’t lead it. I was just a passenger on that train. But, it was a train I really enjoyed traveling on and I think it would be safe to say everyone felt that way. I’ve written about the importance of this elusive concept of community before. I pointed out the critical impact hanging out with other shop owners can have on your business. Shop owners who actively meet with other shop owners to talk about business related problems and opportunities just plain do better. They make more money, generally with a lot less effort! They overcome obstacles with more confidence that comes from the shared experience of others who have overcome the same obstacles. And, they achieve their goals and objectives more quickly and with less anxiety, because other members of their community have marked the path. They enjoy a better quality of life as well, made better by the active and voluntary contribution of the shop owners involved in their community.
This is not a new and different appreciation of the need to participate with other shop owners. Thanks to my father’s example, that commitment has stayed the same throughout my entire career. He was a member of his local association of service station operators in New York and one of the first things we did after opening our service station in Santa Monica, was join the Automotive Service Council of California. We continued our membership in ASC-CA when we opened in Simi Valley, and augmented that state and local involvement with a membership in the Automotive Service Association. Our involvement in community went beyond that when we started working with a company that coaches automotive service businesses like ours and joined a 20 Group. So, my commitment to the concept of shop owners working together to elevate the industry and their position within it hasn’t changed at all. I’ve just achieved a new and different perspective. The same perspective that forces you out from under the hood of the vehicle you’re working on, to work on your business instead of just working in it. What has changed is the anger I feel looking at an industry in which so few shop owners are willing to affiliate with or participate in anything. A number that, if increased, would and could change the entire landscape of the industry. Suspend your current reality and walk with me for a moment. I want you to see this industry through my eyes. I want you to see an industry in which shop owners are willing to communicate, participate and share. There was a group of shop owners that decided it would make more sense to work together than to go it alone. They formed a holding company that took on the responsibilities of negotiating for
Mitch Schneider is a fourth-generation auto repair professional and the former owner of Schneider’s Auto Repair in Simi Valley, Calif. He is an industry educator, author, seminar facilitator, and blogger at mitchschneidersworld.com. mitchs@schneidersauto.net ratchetandwrench.com/schneider
uniforms, insurance, tools and equipment. They even managed employment by hiring and then leasing employees back to their individual shops. Did working together work? It worked well enough for the holding company to open a sixth shop! There was an association of shop owners in another city that purchased shares in a parts warehouse that resulted in deeper discounts and year-end dividends. That’s in addition to the exponentially better financial performance affiliated shops enjoy in contrast to non-affiliated shops. In each case, I brought those ideas back to my community hoping at least five other shop owners consider working together at that level. Unfortunately, it was another instance of “I/me” triumphing over “we/us.” But, I still ask myself what would have happened had we started a holding company or purchased the local parts store up for sale at the time. What could we have accomplished working together that escaped each of us working in isolation? How far could we move forward as an industry if just half of us affiliated with a state, local or national association? Where could you be if you joined a coaching consulting company? Where would you be if you combined your knowledge and experience with the knowledge and experience of 20 other shop owners just as committed to their success as you are to yours? 0 8 .18 / R + W / 71
“I STUMBLED UPON OUR LOCATION BY ACCIDENT, BUT IT’S A BEAUTIFUL TASTE OF COUNTRY. ” Repair Life
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L A R R Y WAT S O N
PHOTOGRAPHY BY SHEILA CARSON
Pastoral Living Larry Watson’s shop is on a 15-acre piece of property in the middle of a valley and mountains— but only 10 miles away from the city where most of his customers live.
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R E PA I R L I F E / L A R R Y WAT S O N
RAINBOW AUTO SERVICE LLC
Location: Bellingham, Wash. Owner: Larry Watson Size: 2,000 square feet Staff: 3 full-time (including owner), 1 part time Average Monthly Car Count: 100 Annual Revenue: $500,000
arry Watson, owner of Rainbow Auto Service LLC, was driving his Volvo across the country when he stumbled across a peaceful pasture outside of Bellingham, Wash. A former New York city boy, Watson was looking for a new, quiet place to land and possibly even work on cars. Watson worked at a body shop for his first job and found that Volvo owners were people that he wanted to work with and assist. “I worked on anything that would pay the bills in the early days, but I noticed that the Volvo people really love the car,” Watson says. “It’s so much easier to work for someone that loves the car.” Watson started Rainbow Auto Service LLC, a Volvo speciality shop in 1978 because of his love for Volvos, and more importantly, his love for helping those owners. His first Volvo was a vehicle that took him across the country and provided him with so many life experiences, he says. Ultimately, Watson wanted to provide customers and employees the same sense of satisfaction when they visited Rainbow Auto Service LLC. “Cars are one thing, but people are a little bit more complicated,” he says. “That’s why I do my best to keep my staff trained and comfortable with the process, as well as make my customers comfortable with their car problems.” AS TOLD TO KILEY WELLENDORF
In the morning, I step out of the house
and make my way down to the shop. My wife and I live on the property where our shop is located and it really does feel like an escape from the city life. I stumbled upon our location by accident, but it’s a beautiful taste of the country. Our building is seated on a 15-acre stretch of land that is split evenly by a pasture and a forest. The land is located on a valley and behind us we have mountains, so it’s a pretty spectacular view. My wife and I garden, so we grow vegetables as well as flowers. Out front, we typically have cattle that roam and munch on the grass. 74 / R + W / 0 8 .18
I’m usually there at 8 or 9 a.m., depending on what we have going on for the day. You can find me in the front of the
shop looking at the calendar and organizing my tech’s tasks for the day before they show up. I have a desk, but I usually walk around 3–5 miles per day, according to an app on my phone. I get my exercise. My employees will trickle in after me in the morning. I’m not a be-here-at-8-a.m.-oryou’re-fired kind of guy. The guys usually roll in one after another, which allows me to speak with each of them and hand out his or her task before they start the shift. It’s nice that they come in at different
times because I’m able to assign them to their own projects right when they arrive. The shop started out with one-half of a bay, and I built my shop one-half bay at a time, really. Today, we have around four bays, which are all stationed in different buildings. People might think it’s odd, but it allows my employees to play their own music and feel at ease in their workspace. Even though it’s a job, we want our employees to feel at ease while they’re working. Everyone operates differently throughout the day. There really isn’t a set time
for lunch; we all just eat whenever we’re hungry. If I need something to eat, I’ll walk to the house and grab a quick bite to go. I eat around three small meals per day because I want to stay energized. I don’t really do staff meetings; that’s not my thing. I probably should, but I have never operated that way. Right now, I have two full-time positions, a part-time guy, and then there’s myself. My wife is incredibly talented and works on the payroll, billing and all-around financial planning. Everyone on staff is really close, almost to the point where I joke that it’s a distraction. Typically we’ll have an intern around the shop who comes from the local Bellingham technical program. When interns are here, I take my mentor role very seriously, and many of our interns have worked full-time for me afterward. I would say my guys are all unique and talented, and
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R E PA I R L I F E / L A R R Y WAT S O N
Down Home Feeling It was purposeful for Larry Watson’s shop to embrace the country feel of his property.
I’m happy to have them aboard. We see around 3–4 Volvos per day, so everyone gets the chance to handle cars. We have a guy who is in his 60s who is both an artist and a technician. He comes into our shop at noon each day and will stick around until 8–9 at night. Everyone on board is very versatile, so we have guys tending to different aspects of the shop. Lately I’ve been tending to more in the shop, but my wife would like to see me walking through the door at around 7 p.m. each night. We just take pride in what we do, and we’re all looking for ways to accommodate customers that visit the shop. Since we are located less than 10 miles outside of the city, we’re able to ride along with our customers on our empty roads to listen for the problem with their vehicle. We try to assist our customers in
traveling out to our shop, as well. There are two cars on hand for customers who need a ride home and there have been instances where I’ve had customers visit from far away and I’ve personally taken them to the train or airport. We provide information for nearby bus stops, as well. Sure, it would be easier to be located in town where everything is close by, but our customers are able to get a break from the city when they venture over to us. We have customers that have hung out with the cattle, teachers that use our picnic table to grade papers while they wait for their car, and we’re in the process of getting hammocks. It’s all about being a shop that they trust and a place they can go to relax. 76 / R + W / 0 8 .18
For the most part, customers are impressed by our services and location.
Ninety-five percent of what we do at our shop is focus completely on Volvos. Some of the staff members that came onboard previously had Volvo training, and we’ve had others that had to learn as they went. While we’re a speciality shop, we actually have frequent flyers at our business. I’ve learned that Volvo owners are a special crowd; in my his-
tory, I’ve had Volvo owners bring their baby in to the shop, only to have their child later take the car to college. Volvo owners often stretch out work and focus on one repair at a time instead of multiple. The town we work on is full of Volvos, so our location offers customers a mini vacation. I’ve noticed the owners really love their cars, and I strive to make their experience at our shop one that brings nothing but ease.
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Columns
THE FIXER Aaron Stokes
CALL COUNT AND CAR COUNT A focus on repeated training will shape how you interact with customers—and gain business
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the counter had the answer at every turn. He absolutely nailed it; picture-perfect call. Every time I asked for a price or tried to get him to mess up, he stuck to a great approach. He asked my name at the beginning—first and last—and he asked me for my phone number in case we got disconnected and he needed to call me back. He repeated my name naturally throughout the conversation. He thanked me for my call. I’ll get into some phone tips in my next column, but this guy had it all down. It was really, really impressive, and this was a small shop where the counter was flooded with work and calls. There was another shop I called where the service advisor recognized it was me and gave some of the good-natured ribbing right back to me. It had the room in hysterics, but it also served as a great example of someone with a great mindset at the front counter: He approached every call and interaction as a challenge, and his competitive nature made him focus and stay on task. It’s an important aspect if, say, you have competitors that may call from time to time to fish out information about how you operate. Hint: There’s no need to deceptively call competition. If you ever want to understand a competitor’s status, simply get two oil changes there a week apart. The difference in the two RO numbers will tell you how many vehicles they service each week, and you can figure out the rest. But, really, why waste the time checking on competitors? Maybe we should check on our own shops? Well, that’s what I did to close out this session. I called one of my shops. No one answered. I called again. No one answered. I called a different shop, and a new employee answered. She gave me our labor rate over the phone. I called another one of my shops. I got a
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
range for the labor rate and the complete price of a brake job. Not good. I was embarrassed. I push and push with my teams to keep training and still, those were the very real results of those test calls. This isn’t anything against my team. This is on me, and it’s on all of us whenever things like this can happen. Our teams will fail to the highest level of preparation. If we don’t see that and focus on that at every moment, it will cost us big. The most costly mistake is that the car never shows up, not that the car shows up and we sold it wrong. Think back to those numbers, and don’t you think we can add 10 percent to the number of jobs sold just by focusing on improving our phone skills? The first impression on the phone is the most important interaction we have with customers. We can’t fail at that. My team’s going to train harder and focus more. While we won’t ever be perfect, we can always get better.
FUE VANG
OK, let’s start with this premise: No one is perfect. This goes for every aspect in life, but for the sake of this column, we might as well just limit the conversation to all of us running our shops. And, boy, I had a nice, humbling reminder of that just a couple weeks ago. I was just wrapping up one of the most tiring but personally satisfying weeks of my life. I presented roughly 15 times over the course of a week to about 150 shop owners—broken up into two groups. In one of my last sessions, we discussed the connection between call count and car count. I like breaking down numbers, so that’s how I started things off: Looking at one of my shops, we saw that the location received about 3,500 calls per month. Dig deeper, and about half of those were inbound calls about appointments and service. (The other half is a mixture of calls with parts vendors, callbacks to and from customers, additional sales calls, etc.) So, at the end of the day, you could say about 1,200–1,500 calls per month were opportunities for our shop to gain work. And here’s the final important number: Of those, about 275–300 became customers. Now, that number’s not the humbling part of this story. That’s a pretty similar number across all my shops. I brought in those numbers to make a point: If we just focused on improving our work on the phones and capitalize just a smidge more, how much would that affect our car count and revenue? The answer is a lot. A whole lot. So, to push the point further, we picked some shops in the audience and starting call their shops on speaker phone, me acting as potential customer Bob Smith with an issue on my truck. The results ranged a bit—from extremely impressive to wildly entertaining. One shop owner in attendance, his guy at
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