Pizza vs. Cash

Look at it like this. You have two technicians who reached their productivity goals during the last pay period. One of those technicians gets a $50.00 bonus and the other gets fifty dollars worth of movie tickets. The tech who received the fifty dollars is going to "think" about that bonus check until it's passed on to his spouse, cashed or deposited in his account. Then it's out of sight … so it's out of mind.On the other hand, the movie tickets will be thought of not only until the tech goes to the theater, but throughout the entire evening of the movie the tech and his or her family will be thinking … of you.

Pizza's are also winners! When the guys and gals who deliver your parts do a great job, why not give them a gift certificate to a local pizza restaurant? These people work really hard at what they do, and if they do a great job for you, they deserve a "thank you" lunch on an occasion. Not only will it show them the appreciation they deserve, but you have my word, they'll do everything that they can do to make sure you not only get the right part the first time, but that you get that part … on time.

Think Twice Before Paying for Technical Courses

Before you pay for those technical courses you should think about this. First of all, if a tech isn’t paying for the course they’re not going to have the same level of interest in the material as the tech who’s laying out his or her own dollars. With few exceptions, people who pay for something have a greater appreciation for it than those who don’t pay. Here’s another flaw with the owner paying: As soon as the techs completed the course he or she has benefited. Not the owner. The owner can only benefit when (and if) the tech turns the knowledge into some form of increased productivity. So here’s what you should do. Tell your techs you’ll pay half of the course fee up front, they’ll have to pay the other half. Then reimburse them for their half if they’re still with you six months later. Now I know some of you are saying "Gee Cooper, I have some great employees and I don’t want to make an issue out of fifty bucks". So think about this. What I’m suggesting has nothing to do with the money yet it has everything to do with doing the right thing for the right reasons. Having them pay a portion up front allows them to have a greater appreciation for the course, they’ll get more value from it, and after they’ ve paid you back through their improved productivity, they can be reimbursed for what they paid. Your techs don’t have the cash on hand to pay for half? Do a payroll deduction over the next thirty days. Having your tech invest in their own education is more than just good business. It’s the right thing to do.

Employee Vacations in the Midddle of Winter?

IT’S NOT AS CRAZY AS YOU MIGHT THINK! With the exception of those of you in the transmission business who are in areas that receive a lot of snow during the winter months, think about this. You need to incent your employees to take their vacations during the winter months. They’ll be gone when you’re the least busy, they’ll be with you throughout the peak summer season, and profits will go up! If you do the math, you’ll find you typically lose the most income when they’re gone during a peak season, and at the same time it’s the season you can make the most. So now’s the time of the year to incent your employees to take their vacations … when you need them the least.

Looking to jack up your sales, here's a surefire way!

Here’s a sales tip that’s guaranteed to put dollars on your bottom line! Rather than having signs in your shop that promote services that your customers never were interested in buying, why not have signs that capture their interest. Here’s an example. A customer is due for a thirty-thousand mile service. He walks into an auto service center and one of the things he sees is a sign that says, "brake special … starting at $79.95". Since he has no reason to believe that he needs a "complete brake job", he shows no interest in the offer. On the other hand, if the sign were to say, "brake inspection … no charge" (or "brake inspection …$19.95") then we would get a completely different outcome. Here’s why. When he sees the sign offering the no-charge or low price inspection it prompts him to think about his brakes. Now even though he has no reason to believe he needs a complete brake job he may very well have a question or two about his brakes. He may have heard a noise in the past, he may be just curious as to how much life is left in his brakes, etc. So he looks at the service advisor and says … "By the way Bob, would you have enough time to do that brake inspection too?". And the service advisor says "We sure do Keith. Are you having a problem with your brakes?" Now before I go any further, let’s examine what just happened.

First of all, the customer just volunteered information to us about a concern he has with his car. Why? Well, since he feels he doesn’t need a complete brake job, he feels it’s worth the twenty dollars to find out what’s going on with the brakes, so he’ll be quick to spend the twenty bucks. The other thing that happened is this: He didn’t bring the vehicle in for brakes, but now were talking about brakes! That’s another win for our company. And finally, since it was the customer who brought up the brakes, not the service advisor, it’ll be an easier sale. In sales it’s always easier to sell off a customer request than a service advisors suggestion. So as an example, let’s say it’s summer, and we have a reader board with a couple of "suggested" diagnostic services.

"CHECK AIR CONDITIONING .. $24.95"
"BRAKE INSPECTION .. $19.95"
"COOLING SYSTEM INSPECTION .. $14.50"

Now the customer comes into your shop for a clutch problem, it’s the middle of summer, and as you’re writing them up they’re looking at the sign thinking … "Gee, now that I think about it, my air conditioning hasn’t been working very well. Maybe I should spend the $25.00 so I can figure out what’s going on". Then they look at you and say … "What all is included with that air conditioning test?"… and you’re off to the races! They get their AC fixed and you get happy customers, higher sales and higher profits! Do it! You can’t lose.

Never give a technician a guarantee of hours

The technician says … "I’d like to come and work with you, but I’ll need some kind of a guarantee. If you’ll guarantee me thirty hours a week we can make this work". Well, before you say yes, think about this. To give a technician a guarantee of "hours", what you are really doing is giving them a guarantee of income. Not a guarantee of opportunity mind you, but a guarantee of income. Worse yet, you are actually taking away their incentive to produce. Here’s an example. Let’s say we guarantee a tech thirty hours at $20.00 per hour. In essence, a $600.00 guarantee. So regardless as to whether or not he produces, he’s still going to get the $600.00. So the question is, why do they ask, and why do we give technicians guarantees? Typically it’s because the tech is concerned we won’t have enough work for them to generate the income they need. So, rather than giving them a guarantee of "hours", what you should do is give them a guarantee of "cars". This will give them a guarantee that they’ll have the opportunity to earn the $600.00, not a guarantee that it will be handed to them. Here’s an example of the math. If you find your average repair order contains 2 hours worth of labor, then you should guarantee the technician fifteen cars. It’s then up to the technician to turn those 15 cars into thirty hours, or $600.00. If you have a pay period where you were only able to give him 13 cars, and he didn’t reach the thirty hour minimum, then you would step up to the plate. Give him, or her, the 4 hours for the 2 cars they never had a chance to inspect and service!

When should I add a new tech?

Question: How can I tell when it’s time to add another tech? Is there some kind of formula I should use?

Answer: When all your technicians are producing at maximum productivity, as established by the industry, and you’re still not reaching your sales goals, it’s time to bring on an additional tech. Don’t try to solve poor productivity problems by hiring more people. It will only make matters worse.

Display Ads… That Work!

Here's a tip for any of you who do general repair, and it will work especially well for those of you who work on single product lines like Mercedes, Honda's, etc. Those of you who have dealerships can hit a home run with this one as well! Take out a small display ad in the used car classified section, and insert it under the column heading of the type of customer's you're looking to target. As an example, if you're looking for Honda customers, you put an ad in the section where the used Honda's are listed, and it would read something like this …

BEFORE YOU BUY A USED HONDA
Call us. We'll send you a free list of the 10
things you should look for on every used Honda.
CALL ELITE HONDA.
San Diego's leading
Independent Honda Service Center. 756-3102

When they call, this is what we'll know: First of all, they're interested in a Honda, and if they decide to buy one, they should invest in a pre-purchase inspection. So, who should they choose? You guessed it! Elite Honda! The shop that was thoughtful enough to send them the information that helped them select the right car. And yes, you guessed it, when they first called us we mentioned the value of pre-purchase inspections, we asked if they'd like us to forward some information on the service, and we sent it along with the list we promised!

Before you tell a customer a car isn't worth fixing…

Back in the 1960's I looked at a lady who was at least seventy years old and told her that her $300 car that needed $800 worth of work wasn't worth fixing. She looked at me, her eyes teared up, and she said … "How dare you say that! This car is the last car my husband bought for me before he died!" Two things happened that day. One, we fixed her car. Two, I learned an important lesson in sales. That lady taught me that there's often a far greater value to a vehicle than its "economic" value. I call it the "emotional" value.

So before you plan on telling someone that their vehicle isn't worth fixing, think about asking them this question first … "Mr. Fath, do you have any emotional ties to this car?" And after they ask why you're asking, tell them this … "Well, the reason I'm asking, is economically, the car's not worth fixing. On the other hand, if you have any sentimental ties to the car, then you might want to consider going ahead with the repairs. Would you like me to tell you what we found?" Try it. The only way you can lose is by not asking.

Want to Control Theft? Do this…

There’s a lot to be said about ethics. Rather than buying bigger locks, you need to hire the right people. Make sure you call those business and personal references. You should also look into pre-employment screening services and psychological profiling services. Other ways you can control theft is by making sure the people who do your inventory aren’t the same people who could abuse your inventory! You should also make sure that the people who collect the dollars aren’t the same people who reconcile your books. Last but not least, watch for signs of drug abuse. Drug abuse leads to addiction, and addiction causes people to do things they ordinarily would never do.

A Sales Tip from the World's Leading Retailer

Just a few short decades ago a man by the name of Sam Walton opened up his first retail store in rural Arkansas. Today that company has grown into the worldwide giant Wal-Mart Corporation. There are a lot of lessons we can learn from the late Sam Walton, yet none are more valuable than his marketing genius. And although Sam is no longer with us, his legacy and his marketing skill lives on in the company he founded. What I’d like to do is share one of the marketing strategies that works wonders for them. You’ll find there’s a great marketing lesson in this story we can all benefit from. For those of you not familiar with the company, Wal-Mart is a U.S. based price discount company that sells household items, clothing, some auto accessories, hand tools and electronic items. As many of you here in the states may know, it wasn’t long ago that Wal-Mart began offering discounted oil services at their retail stores. And I’m sure most business people here in America felt the objective was simple: what Wal-Mart wanted to do was get people into their stores so they could spend some money while they waited for their car to be serviced.

Although I believe that’s a part of their plan, I don’t believe it’s the heart of their plan. Here’s why. If the intent is to use the oil services as a "sales" tool, then they’re spending a lot of money to promote a single, retail sale. On the other hand, if you look at what they’re doing from a "marketing" perspective, then you’ll see their plan is true genius. The people at Wal-Mart are bright people, and they know that it’s hard to persuade a customer of a competitors to come into their store. Generally speaking, they offer the same products as their competitors. Their prices are competitive and so is the service. So what Wal-Mart has done is offer an unrelated service (their oil services) designed to attract new customers to their location. Once the competitors customers are at Wal-Mart oil service location, they then have a potential customer for their retail operation. Since the oil service will take twenty to thirty minutes, the customer typically walks into the retail store, and then Wal-Mart has what every retailer dreams of: a captive marketing audience. They realize that if the customer likes what he or she sees, then it’s not important that they make any purchases during that initial visit. The sale that’s being made is much more long term and certainly more profitable than the sale of pocket radio: it’s the sale of Wal-Mart. If they do a good job, the customer will return, over and over again.

I’m convinced Wal-Mart is using their oil services as marketing tools. I’m also convinced you should do the same. So if you want to build a great business, then take a page from Wal-Mart. You need to use your oil services as marketing tools. Not as profit centers. Those of you in the transmission business need to take the same approach. You need to use transmission fluid changes and other maintenance services as marketing tools too.

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Bob Cooper has functioned as a business developer, an owner and an operator of some of the most successful auto repair shops in the North America. Bob's company, Elite Business Services provides management consulting to the industry and offers shop management information and "Success Tools™" on his website at www.elitebusinessservices.com.

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