After last month’s column on the importance of increasing hours per repair order for repair shop success, it occurred to me that a follow up might be in order.
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I recently attended an ASA conference and listened to Vin Waterhouse — which offers financial solutions for repair shops — deliver a passionate plea for shops to take a serious look at how they sell their work. I had been sitting next to a young shop owner, and we were sharing ideas about making his business profitable. Something I tried to get my friend to understand was that his hours per repair order indicated he was running a fix-it shop. Simply put, his techs nail down the customer’s prime item, repair it and send it back to the streets of Denver, leaving necessary maintenance unperformed or even unidentified to the customer. Fortunately for me, Waterhouse’s presentation reinforced that idea. The question that remained afterward was how do you make the shift from an activity-based relationship to a real partnership with your customers? Making the shift to working on fewer cars for the same or better dollars is not an overnight change. There are several internal and external issues that may have to be resolved. Let’s start with the internal issues, as we have the most immediate control over those.
The single biggest obstacle to more hours per RO is probably sitting right on top of your shoulders. Many shop owners feel that offering to thoroughly inspect a car for maintenance and reliability needs is somehow dishonest or that upselling needed work is wrong. Let me assure you: for the one customer that might decline your offer, there will be many more who are hoping someone will tell them how to take care of their car. Women customers are expert buyers (I hate the word consumer). They understand the value of making things last, and they put a good deal of value into knowing that they have a reliable vehicle. You are not taking advantage of women customers by offering to perform services they need. You are making a huge mistake, which could lead to the end of your relationship with them, if you do not offer to take care of the things they worry about. When you and your employees stop thinking like you think and start thinking like your primary customers and decision makers, you will start offering maintenance inspections on a regular basis. I suggest that you do not perform them for free. Just like you, customers recognize that something free is either worth nothing or has strings attached. Charge for a thorough inspection and offer a complete estimate of the needs, prioritized in the event that the customer is unable to buy all the work at one time. This effort with our existing customers brought our average RO up to 3.4 hours in the first month more than 20 years ago. You will also see your retention rate go up. So what if you do all these things and get consistent turn downs or “Let’s just fix the turn signals?”
The external issues take a considerable amount of effort. If your customer base does not value quality service, you have to look for better customers. They are out there, but they will probably not knock your door down on a single Valpak coupon. In fact, these customers need to see that you are serious. Quality customers need some time and a good reason to bring their business to you. This is where your best and least expensive start-up technique is to ask the customers you already have to make introductions for you. Referral programs work really well if you reward both sides of the equation — your existing customer for the referral and the new one for letting you have a chance. There are plenty of books that will give you all kinds of ideas on how to reward customers. If you want to get a better handle on the types of customers who will help you the most, I recommend the old, but still reliable, book by Malcom Gladwell: “The Tipping Point.” As an audio book, it will take about 3 hours to listen to.
Running a more relaxed and profitable business is possible, even for the most hardcore chaos creators. The payoffs are better health for your entire staff, lower equipment failure, better customer retention and enough energy left over after work to enjoy your family. During the first and last quarter of the year, there are several excellent training opportunities at trade shows. If you want to embrace this type of strategy, leave the shop, attend and actually sit in a class and participate. Avoid the classes that scream about car count. You already know that. There are many expert trainers who will show you how to make the most of what you already have.
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