Shop Owner, January, February 2014

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 Avoiding Customer Disservice

 Defining 2014 Goals

 Embracing E-communications

January/February 2014

Mark’s Auto Service ‘We Fix It All’ Motto Drives Shop’s Success

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®

January/February 2014

Shop Profile

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22 Mark’s Auto Service, Rockford, IL

Features 6

Shop Profile: Mark’s Auto Service

Technology: -Leveraging Inspection Reports

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34 Executive Q&A, Part 2: -Up Close With Art Blumenthal, Aftermarket Business Broker 48 E-Communcations -Boosting Customer Engagement Executive Q&A: Art Blumenthal

Sponsored by

E-Communications Boosting Customer Engagement

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®

Departments 14

Shop Owner Staff Publisher

Jim Merle 330.670.1234, ext. 280 jmerle@babcox.com

Editor

Mary DellaValle, ext. 221 mdellavalle@babcox.com

Executive Interview: Max Dull, MAHLE RTI

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Leadership: Reflection Guides Actions

Graphic Designer

Kelly Gifford, ext. 249 kgifford@babcox.com

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Shop Management: Defining 2014 Goals

Advertising Services Director

Cindy Ott, ext. 209 cott@babcox.com

Contributors

Chris Crowell, ext. 268 ccrowell@babcox.com

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Customer Service: Avoiding Customer Disservice

Tim Fritz, ext. 218 tfritz@babcox.com Andrew Markel, ext. 296 amarkel@babcox.com Ed Sunkin, ext. 258 esunkin@babcox.com Director of eMedia/ Audience Development

Brad Mitchell, ext. 277 bmitchell@babcox.com

Subscription Services

Maryellen Smith, ext. 288 msmith@babcox.com

Babcox Media, Inc.

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3550 Embassy Parkway Akron, OH 44333-8318

President

Bill Babcox bbabcox@babcox.com

Vice President/ Chief Financial Officer

Greg Cira gcira@babcox.com

Vice President

Jeff Stankard jstankard@babcox.com

Controller

Beth Scheetz bscheetz@babcox.com

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In Memoriam

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|Shop Owner|January|February 2014

Founder of Babcox Publications

Edward S. Babcox (1885-1970)

Chairman

Tom B. Babcox (1919-1995)

䊚2014 by Babcox Media, Inc.

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|Technology|

by Uwe Kleinschmidt, CEO, AutoVitals

New Data To Analyze Your Business With A Positive Impact On Your Bottom Line

With the increasing ability to collect data electronically, shop owners are sitting on huge piles of data relating to various facets of shop operation. What are the best ways to comb through the data and determine the metrics that describe the productivity and efficiency of your business and allow you to impact it?

Since looking at raw data often covers up the real trends and is highly time consuming, business owners should be looking for ways to:

1. Define the metrics important to run the business; 2. Know what values represent the range between “below expectations” and “outstanding performance;” 3. Select the low hanging fruits, which promise the best bang for the buck results in the short term; and 4. Explore new metrics, which are made possible through better methods of capturing data.

Inspection Reports With the introduction of digital inspections, new types of reports are possible. What was once hidden, or extremely hard to get, is now obvious and can be used to determine: Technician effectiveness; and consistency of

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Chart 1

inspections.

Let’s take a look at a snapshot of a technician effectiveness report from one of our clients. See Chart 1.

This report lists by inspection type, technician (here 3 techs sanitized to 1, 2 and 3) and what percentage of topics inspected resulted in a recommended action.

Let’s start with the overall shop numbers. Out of 1,490 appointments in three months, 874 appointments included a courtesy inspection.

The shop owner can immediately assess whether his or her policy of performing courtesy inspections is followed or not.

The next potentially interesting conclusion is whether or not the habit of pencil whipping (the repeated checking off of inspection topics without performing an inspection) is present for any or all technicians.

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If it’s a habit, a significant number of inspection topics would show consistently low numbers of recommended actions. If this is not the case, it indicates that the techs are motivated to perform the courtesy inspection.

Now let’s explore individual inspection topics for individual technicians.

Windshield Wipers: Tech 2 recommended only half of the recommended actions, compared to Tech 3 (see Deviation 1).

Battery Check: Tech 2 recommended only a little more than one-third of the number of recommended actions, compared to Tech 3 (see Deviation 2).

Assuming both technicians inspect the same Year/Make/Model (YMM) and odometer readings across the

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board, there is clearly a different quality standard for Tech 2 than for Tech 3.

The shop owner can now determine the difference and adjust accordingly.

One way of finding out the reasons for the significantly different values might be the tech’s attention to detail or procedures used. The time needed for the inspection plotted for both techs might reveal great information about the root cause of the difference.

It definitely shows: • The consistency of time taken for the inspection; and • The trend of whether policy changes or the introduction of new tools changes the duration of the inspection.

See another portion of a different report in Chart 2, which lists technicians’ time needed for an inspection sorted by YMM and technician. Note that the technician doesn’t need to clock time for the inspection. The soft-

ware on the tablet used for the inspection automatically detects periods of activity and inactivity and determines the correct duration.

Filtering by technician and YMM allows owners to compare each technician’s inspection efficiency, and filtering by YMM allows owners to compare duration by YMM. As you can see, this is just the start of finding meaningful data trends, enabled by digital inspections. Techs’ adherence to policies can be monitored, and highly efficient technicians can be used to set standards for all technicians in the shop or group of shops.

Motorist Retention Rate Another very important area of reports, with tons of data and different definitions, is the customer retention rate. See Chart 3 on page 10 for a

The software on the tablet used for the inspection automatically detects periods of activity and inactivity and determines the correct duration of the inspection.

Chart 2 www.ShopOwnerMag.com

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Chart 3

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The next level of detail is comparing key business metrics per month. These key metrics contribute to the retention rate. By breaking them down per month and also comparing them to the best shop in the network, seasonal trends can be eliminated (e.g., the lower number of new customers in November due to Thanksgiving, etc.) and concrete conclusions for one’s shop are possible. Positive (or negative) trends represent the results of the measures taken. SO

business summary that determines the retention rate and other important metrics for a shop’s business.

Initially, two very important metrics are listed for the shop in question: 1. How many first-time customers visit the shop as a percentage of total visits, and how many of those return for a repeat visit?

2. How many of the repeat customers follow the shop’s advice for preventive service intervals? We call that the retention rate.

As shown in the chart, these numbers are really put in context when compared with a reference or goal, like with the results of the best shop in the network. The best shop is not one shop based on all metrics. It’s the best result per metric combined together to represent “the best shop in the network.”

Compared over hundreds of shops, these reference metrics become a real guide for the individual shop owner who wants to improve his or her business.

Uwe Kleinschmidt is the CEO and founder of AutoVitals in Santa Barbara, CA. The company’s Web-based services focus on the independent automotive repair industry.

AutoVitals’ products facilitate highly effective Concierge Auto Repair services, covering all aspects of the service advisor’s interaction with prospective and existing customers. Highly effective and optimized websites, workflow support in the shop, as well as customer retention and social media services are just a few ingredients. He can be reached by visiting www.autovitals.com or calling 1-866-949-2848.

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Corporate|Spotlight|

WIX Filters: A Tradition of Innovation WIX® Filters, which celebrates its 75th anniversary in 2014, provides its customers with premium quality filters designed to exceed their performance demands for both domestic and foreign name plate coverage. Whether it’s for automotive, diesel, racing, agricultural or industrial applications, WIX features the latest advancements in filtration technology.

WIX’s global presence and commitment to manufacturing excellence and innovation are reflected in state-of-the-art applications, such as the XP line of high premium air filters; deep pleat panel air filters that improve on OE designs; the first combination by-pass and antidrain back valve; BioShield® 75-treated cabin air filters for cars and light trucks; and nine pleats per inch pleating technology that allows the WIX premium LD air filters to trap and hold more dirt.

In addition, since the early 1960s, generations of motorsports champions have driven to the winner’s circle with WIX Filters, the No. 1 Filter in motorsports. Today, the racetrack continues to serve as a grueling testing ground

for scenarios involving high temperatures, fluctuations in pressure and rapid breakdown of engine oil. WIX engineers work side-by-side with the best crew chiefs and engine builders in motorsports, including Richard Childress Racing, applying their research in the ultracompetitive world of NASCAR racing to the everyday demands of light- and heavy-duty consumer and commercial usage.

For more information, visit www.wixfilters.com. WIX is on Facebook at facebook.com/wixfilters, on Twitter @WIXFilters and on YouTube at youtube.com/TheWIXFilters.

WIX Filters www.wixfilters.com ADVERTISEMENT

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Executive|Interview|

Max Dull

General Manager, MAHLE Tool & Equipment Division Max Dull joined MAHLE Clevite, Inc. in 2013 and serves as the general manager of the company’s newly formed division to address the tool and equipment industry. Through its RTI brand, the division develops and distributes automotive maintenance equipment including air conditioning service, fluid exchange and nitrogen tire inflation systems into the repair shop equipment sector of the automotive aftermarket. Before joining MAHLE, Dull was a business consultant assisting manufacturers and distributors in the automotive aftermarket. He spent many years running Beck/Arnley, an import parts company in the automotive aftermarket. He was vice president and general manager of the company when it was owned

by Dana’s Under Hood Group.

It has been a year since MAHLE purchased RTI Technologies from Bosch. Tell us how the integration has gone and what future plans are in the works for the new tool and equipment division of the company?

I believe that an acquisition like this has to be looked at in phases; in this case we are working through three phases.

The first phase is complete.

That consists of transitioning systems and procedures to the MAHLE format. While providing many benefits and easy to implement in some cases, it was more challenging in other areas. For example, we first had to upgrade the IT infrastructure in our York facility in order to migrate the RTI data to the new

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MAHLE systems. These transition projects were completed mid-2013, which set the stage for the second phase of the integration: Growing Sales.

One may look at our position in the marketplace and see it as challenging. I look at it and see opportunities unrivaled in other parts of the industry. I have enjoyed success over the course of my career working with businesses that had much promise, but for whatever reasons were not reaching their full potential.

It all starts with building a solid team, with common goals and a clear vision.

Next comes listening closely to the voice of the customer to enhance our programs. Our new team is committed to making MAHLE RTI the thriving

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cornerstone of the new Tool and Equipment division of MAHLE Aftermarket Inc. here in North America.

The third phase, and possibly the most exciting, is the expansion of this segment of our business into new products and new markets. MAHLE has made clear its intention to be a major player in the Tool and Equipment industry and the actions it has initiated globally offer proof that its intentions are not based on shallow words.

Simply said, MAHLE is committed to this industry and while we can’t disclose specifics on some of the projects right now, we know that 2014 is going to be a very exciting time as we move through the final phases of building our new division and begin implementing our strategic plans that will ensure a strong future.

We have heard many stories regarding personnel changes at MAHLE RTI; can you shed some light any of these changes?

When MAHLE took ownership of RTI Technologies in January 2013, it inherited a group of great people who

were very adept at manufacturing the highest quality products within the tool and equipment industry. The personnel changes we recently made are focused on leveraging the vast resources now available under MAHLE ownership, which will enable us to become more efficient internally while at the same time enhancing support for our distribution partners, which all leads to greater customer satisfaction.

One of the most significant advantages that MAHLE brings to the RTI business is providing the resources of a multi-billion dollar global technology and manufacturing organization, while at the same time allowing us to retain the advantages of a smaller, agile company that can respond quickly to market changes and customize products for unique situations.

The previous leadership team did a great job in positioning the RTI Division with all of the vital foundation for success moving forward. Taking those building blocks and using them to chart a course toward sustained, longterm growth for us and our customers is the next step that we are prepared to take immediately.

What are RTI’s strengths that MAHLE will build upon?

When I assumed the General Manager position in October, the one thing that I knew was that the RTI product was very well respected within the Tool and Equipment industry.

Having been a “parts guy” for most of my professional life, I had to venture back to the days when I had a repair shop,

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MAHLE RTI equipment is an investment — an investment in the peace of mind in knowing that our equipment will perform to standards longer and better than any machine in the market today. back in the days when they were called repair shops or garages, instead of today’s modern service provider. I knew how important reliable equipment was then. If equipment was not functioning, vehicles were not getting repaired, and revenue was being left at the door.

This is the core principle that transcends every person, every function, and every philosophy here at MAHLE RTI. Quality is the foundation upon which everything else is built. Sales, Marketing, Engineering, and even Accounting all have a stake in what we call the Quality Credence — the belief that superior quality, delivered at the right price, followed up by the right service after the sale is a proposition that customers do not have to sacrifice.

MAHLE RTI equipment is an investment — an investment in the peace of mind in knowing that our equipment will perform to standards longer and better than any machine in the market today.

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Because you supply equipment to the air conditioning (A/C) segment, can you tell us what’s new in the A/C market worldwide?

Without a doubt, one of the most

frustrating things going on in our business is the debate regarding the next generation of coolant. There is no disputing that 134a is in the “phase out” period, but the industry has not yet committed to a clear declaration regarding its replacement.

MAHLE RTI is ready, willing, and able to deliver the products required to service cooling systems in the future. Should the industry decide that 1234yf is where the future lies, great, we are there today. Should the industry move forward with CO2 as is being tested right now in Europe, or if it goes to a blend of 134, 1234, and CO2 combination — we are uniquely equipped to deliver on those as well.

The MAHLE RTI engineering team are experts in the industry — serving on a variety of committees and task forces in all different capacities. A benefit to this volunteer service is that it helps keep us abreast of any developments in the refrigerant race. Their expertise, combined with the size and make-up of MAHLE RTI, provides our organization with technology, infrastructure and agility. Our people are empowered to move forward in the way that is best for our customers and our business. SO

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|Leadership|

by Vic Tarasik, owner, Vic’s Precision Automotive

Guide Your Actions With Reflection The Past Can Be A Springboard For The Future

At the end of every year, I reflect on the events that transpired over the past 12 months that pertain to my business and personal life.

Reflection can have a powerful impact on how you act in a similar situation you may encounter in the future.

As you replay the events in your mind, you get the opportunity to insert different actions, words and potential outcomes.

I look at reflection as an essential part of the planning process for the year ahead.

Attitude, a key component of your behavior, can complement your reflection efforts or detract from them, steering you toward smooth or rough sailing.

As I reflected back on 2013, I looked at some of the opportunities and serious challenges I had, along with how I responded to them. I thought about my

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attitude during the challenge and the overall outcome. As I did this exercise, I was reminded of a parable which, after thinking about it, has helped me to adjust my course for the coming year.

There was a wise old man who lived high up in the Himalayan Mountains and, every so often, he would make the long, rough trek down to the village in the valley below.

The villagers looked forward to seeing his stooped-over body as he would hobble into the town square. There, he would entertain passersby and he always drew a crowd while he performed their favorite magic tricks and other feats of wisdom he had mastered over his many years.

Many speculated on his age, as he was rumored to be well over 100 years old. The villagers looked forward to one of his tricks more than any other though; the wise old man

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had an uncanny ability to identify the contents of their pockets and boxes, and even what they were thinking.

In all of his years of coming to the village, he was never wrong in his predictions. Some of the young boys in town knew this, and they were determined to trick and discredit the wise man the next time he came to town. As part of their plan, they trapped a small canary.

As the wise man was in the middle of the villagers’ favorite trick, one of the young boys stepped out of the crowd ready to discredit him. The man gazed at the boy and invited him forward. The boy had the canary cupped in his hand, so the wise man

spoke to him softly, “Whether the bird lives or dies, it will be as you wish!”

And so be it. The “it will be as you wish” motto can be that rudder that steers us away from conflict with an employee, customer or vendor. It can also steer us toward a new fleet opportunity, or maybe a new employee or other opportunities that will impact our shop’s bottom line!

This story speaks to me such that my attitude and the environment it creates are my choice. While I may not have control over a certain circumstance, I do have a choice regarding how I handle it and how I can influence the outcome. I have a

“It will be as you wish!” could not hear or see the little bird.

The young boy had devised a plan, and he was sure it would trick the wise old man. He stepped up confidently and said, “Old man, what do I have in my hands?” The old man replied, “It is a yellow canary.”

With a feigned smile, the boy responded, “Yes, you are right!” The boy now knew that his plan was going to work. He asked the old man, “When I open my hands, will the bird be alive or dead?” His plan was if the old man said it was alive, he would crush the bird before opening his hand revealing the dead bird. If the old man said it was dead, he would open his hands and let the bird fly free. In the boy’s mind, he had him.

The old man appeared to be stumped. As he stroked his beard, he stared at the ground as the crowd looked on. The old man then looked up and gazed back at the boy and

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choice in what example I set for my team, the behavior I exemplify and what behaviors I want replicated around my shop. The attitude I project has a huge outcome on everything and everyone around me, and I want to be known as the one to go to when someone needs answers.

For 2014, my motto is, “It will be as you wish,” and my plan is that no matter what comes my way, I’m capable of overcoming it, and I will come out on top.

How about you?

Will you choose to have the year as you wish? SO Vic Tarasik is the owner of Vic’s Precision Automotive, The Woodlands, TX, a 30-year industry veteran and long-time 20 Group member. His 10-bay, 7,000 sq.-ft. shop specializes in customer service, in addition to expert vehicle repairs. Vic can be reached at vic@vicsprecision.com.

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“We fix it all, right here, right now!

That means we do not turn anyone — or any job — away.”

Mary and Mark Butitta, Owners

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Shop|Profile|

by Debbie Briggs, contributing writer

Mark’s Auto Service Staying Modern While Remembering The Past

In a society that is increasingly becoming accustomed to instant gratification (you can find just about any information with a quick Google search), it should come as no surprise that the motto at Mark’s Auto Service in Rockford, IL, is, “We fix it all, right here, right now!”

“We focus on the promise of ‘yes,’” says Office Manager Tad Butitta. “That means we do not turn anyone — or any job — away.”

“Our customer base is primarily domestic cars and light trucks, but we do see a large amount of Japanese and European cars,” Tad continues. “We complete everything from tires and alignments, to swapping out engines and transmissions.”

A family-owned and operated business since 1949 (currently run by owners Mark and Mary

Butitta), Tad says he grew up in the shop but initially made the choice to follow a career in retail store management.

“My father took the business over in the early ’80s from my grandfather,” Tad explains. “At 18, I realized that I didn’t want to work on cars and preferred working with customers. At the time there was no room for me in the office, so I started a career at Best Buy. I was there for nine years, ending my tenure as a store manager.

“It was the perfect time to go

All photos courtesy of Tom Guschl www.ShopOwnerMag.com

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Tad Butitta (foreground) and Terry Smith.

back to the shop, and I returned in 2012 to help my father run the business.”

Planned Productivity To be able to follow through on Juan Sen a their promise to “fix it all,” Tad says the shop is currently divided into three main work areas to allow for flexibility and to maximize repair space.

While it may “The main area has nine lifts and sound contrary to traditional business two flat stalls, with a long middle strategy, Mark says they also decided drive that techs will also utilize as to plan for future growth by hiring work area when we’re extremely additional techs ahead of time. It’s a busy,” Tad says. “We have our wheel gamble that has paid off for the and alignment room with one alignsuccessful shop. ment rack and two flat stalls. Finally, “We over-staffed techs to accept a higher car count,” he says. “It sounds we have a large room with a flat stall where we work on large and counterproductive to have more techs heavy-duty trucks — or we can fit than needed, but we had a vision to make our $500,000 company a three cars.”

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The team at Mark’s Auto (L to R): Shane Page, Chase Aase, Tad Butitta, Mark Butitta, Terry Smith, Jeff Johnson, Juan Sena and Keith Fish.

“We over-staffed techs to accept a higher car count. It sounds counterproductive to have more techs than needed, but we had a vision to make our $500,000 company a million-dollar company.

So we staff like one.”

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million-dollar company. So, we staff like one.

“We needed more techs available to accept the walk-ins from our mailers,” he continued.

“Additional staffing has allowed us to be extremely productive and offer a speed of service that no shop around can touch.”

That vision paid off, as the shop finished 2013 at $1.1 million — “the highest revenue we’ve ever seen,” Mark says.

Top-Notch Education At Mark’s Auto Service, it’s not just the four techs who are ASEcertified, but the office staff, including Tad, hold that designation as well. According to Mark, everyone should have an indepth knowledge of the cars that

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will be serviced at the shop.

“Everyone has some designation of ASE certifications, with three who are Master-certified (including Mark),” Tad says. “There is only one general service employee who has none, but he has tests scheduled for early this year. All of us in the office are certified, even though none of us touch any cars. The goal is for every employee to be Master-certified by the end of the year.”

Finding and recruiting employees hasn’t been much of an issue for Mark’s Auto Service, a CARQUEST Tech-Net shop, with the tenure of one employee totaling 37 years and another 17 years. Still, others who left during a downturn in business are back.

Tad attributes the longevity to strong, but fair, leadership.

“Every single employee will tell you Mark is one of the most generous bosses out there.” Tad says. “He can be demanding for results and speed of

service, but he is more than accommodating when someone needs time off or has any number of special requests. My father always goes above and beyond for his employees.

And successes are celebrated by all, a practice that helps boost shop morale and keeps everyone striving toward the same goal of profitability.

“We had our second $100,000 month in May 2013,” Tad continues.

“The last time we saw revenue that high was June 1995! We threw a shop party to celebrate, and now we take the entire shop out every time we hit $100,000, which has been almost every month since then. We also buy the shop lunch on Saturday for every week we hit $18,000 in revenue.”

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Customer Focus That same appreciation is extended to the shop’s customer base, with attention paid to details regarding waiting

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room amenities and periodic updates of the building and age Shane P grounds.

“Customers love our speed of service, with most repairs getting done same day,” Mark says. “They also like the comfortable waiting room, where we have free beverages like Starbucks coffee from our Keurig coffeemaker and Coke and Pepsi products. And, of course, we offer free WiFi and cable TV.” Mark says they put up all new signage last year, and next year plan to redo the landscaping around the property. They even plan to expand their parking lot to accommodate more cars. In addition, the shop’s general service employee stocks and cleans the waiting area nightly, adhering to the ABCs: Always Be Cleaning. And customers definitely appreciate it.

“Every customer we bring through the shop, or even the office, says, ‘Your shop is cleaner than most shop waiting rooms!’” Mark says.

“Not many people want to go to a shop where they feel dirty just sitting in the waiting room.”

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Keith Fis

h

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Attracting Customers While word-of-mouth was its primary form of advertising for 60 years, changes in technology — and how people are finding their repair shop — prompted Mark and Tad to explore different avenues for marketing. They credit the 20 Group they joined in 2011, Gary Gunn’s Turnaround Tour, for providing them with new and innovative ideas to spur customer growth at the shop.

“Word-of-mouth allowed us to pay the bills, but we really could not grow as fast as we wanted to with just that,” Tad says. “We believe our growth has come from a marketing idea we heard

but we believe our speed of service and atmosphere is really what retains our customers.”

Remember how easy it is to find what you’re looking for with a quick Google search? Tad says the importance of a strong online presence is only increasing for businesses today.

“We know most customers are googling ‘auto repair’ in the area,” he says. “You have to rank high on the search engines. I feel we do this based on our reviews and the length of time we’ve had a website. We’re getting customers scheduling appointments through our website about two times a week currently.

“Additional staffing has allowed us to be extremely productive and offer a speed of service that no shop around can touch.” in our 20 Group, which was direct mail (we use Go-Publishing).

“We send out more than 10,000 flyers a month with a couple coupons on them,” he explains. “This really brings the oil changes in, but we have been able to convert so many of those customers into lifetime customers.”

The shop’s positive online reviews are a testament to the shop’s professionalism, and they also serve as a means of bringing in new customers.

“We have more reviews online than any other shop in the area,” Mark says. “We have more than 250 four-plus star reviews. Most shops don’t even have five reviews and most are negative. Customers often bring this up as a way of finding us,

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Without that functionality, we may never have seen those customers.

“We also just upgraded our site to a mobile site,” he continues. “I feel this is critical. I’ve had customers come to us just based on that.”

Mark sums up his philosophy for business in this way: Have the right people with the right tools, and offer training programs for every employee from the owner on down. Add in customer service and consistent written and followed processes, backed by followup and accountability, and you have a recipe for success.

It’s that focus on meeting the changing needs of customers that will keep Mark’s Auto Service profitable for many years to come. SO

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Shop|Management|

by Bob Cooper, president, Elite Worldwide, Inc.

Set Your Shop’s 2014 Goals

Then Inspire Team Members To Ensure You Effectively Accomplish Them There are a number of things you’ll need to do to ensure that 2014 is your shop’s best year yet, but none are more important than setting clearly defined goals that are critical to your success.

Most shop owners understand the importance of setting goals but are lost when it comes to the rationale for setting their goals, how challenging the goals need to be, and the types of goals that need to be set.

This article will address each of these considerations to help you get your shop on the right track for 2014 and beyond!

When it comes to setting your long-term goals, the best advice

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I can give you is to make sure they all align with your core beliefs and that they are challenging enough to inspire you.

As the leader of your company, you’re not only responsible for setting the goals, but it’s your job to inspire your entire team as well. I’m sure you will agree that you can’t inspire others if you are not inspired yourself.

When setting your short-term goals, make sure they are

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realistic. In a business environment, the purpose of short-term goals should be to bring out the best in people, keep them motivated and inspire them to think differently, all at the same time.

Accordingly, they should be just out of reach, but not out of sight. The results of studies carried out at Harvard University indicate that shortterm goals need to be reached only 51% of the time for them to effectively change the way we think, and if they are reached more frequently than 80% of the time, they are not challenging enough.

Whenever possible, you should

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break your annual goals down into quarterly, monthly, weekly and daily goals. If for no other reason, when technicians and service advisers go to work each day, they should know precisely what needs to be accomplished by the end of the day in order to view their performance as a success.

Another good thing about daily goals is that if the goal is reached, the employee will go home feeling like a hero, but if it’s not, the employee will have another opportunity to reach the goal the very next day. If your shop breaks down your goals to only monthly targets instead of daily ones, and the goal isn’t reached, then your

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In a business environment, the purpose of short-term goals should be to bring out the best in people, keep them motivated and inspire them to think differently, all at the same time. employee will have to sit with that failure for an entire month instead of getting the opportunity for redemption the very next day.

Since determining what types of goals to set can be quite a challenge, here’s a list of thought starters that you can use to ensure that your shop is on the right track moving forward.

1. Long-term growth goals that may include diversification, expansion or additional facilities.

2. Long-term real estate goals that may include acquisition or mortgage reduction.

3. An annual sales goal that includes the financial growth of your business.

4. Monthly and quarterly sales goals that are seasonally adjusted.

5. Marketing goals that include the acquisition of both new customers and market share.

6. ARO goals that are predicated on complete, professional vehicle inspections.

7. Car count goals that are predicated on your annual sales goal and your ARO goal.

8. Gross profit goals.

9. Productivity and efficiency goals for your technicians.

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10. Closing ratio goals for your service advisers.

11. Customer satisfaction goals.

12. Customer retention goals.

13. Operating expense goals that are predicated on past performance and projected budgets.

14. Income goals.

15. Debt reduction goals.

16. Goals that are relative to any exit plan or succession strategy.

17. Career development goals.

18. Personal development goals.

Set goals that inspire you, never put money ahead of people and follow the advice in this article, and you’ll be well on your way to building a business that will thrive for years to come! SO

Since 1990, Bob Cooper has been the president of Elite Worldwide Inc., www.EliteWorldwideStore.com, an ethics-based company that helps both struggling and successful shop owners take their businesses to new levels through one-on-one coaching from the industry’s top experts. The company also offers shop owner sales, marketing, and management seminars, along with service advisor training. You can contact Bob at contact@eliteworldwidestore.com, or at 800-204-3548.

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Buying|Selling|An Aftermarket Business

by Mary DellaValle, editor

Executive Q&A, Part 2 Art Blumenthal MBA, CBI Nationwide Automotive Aftermarket Business Broker In the second of a two-part series, we delve deep into the process of selling a business by interviewing Art Blumenthal, nationwide automotive aftermarket business broker, who provides business valuations, exit planning and buying and selling adviser services.

Part one of the executive interview appeared in the November/December issue of Shop Owner.

What affects the selling price?

Many business owners would like to receive an “all cash” offer, especially if they’re retiring and choosing a lifestyle that demands a complete financial and legal separation from their business. Fortunately, I have re-

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lationships with many buyers who have the financial resources to make all-cash deals and close the transaction in a relatively short period of time.

As a general rule, however, buyers who are in the unique position to make an all-cash offer without a contingency for thirdparty financing will strive for a discount in the selling price.

If a business is priced right and profitable, a good broker should be able to get it “prequalified” through a national bank with an SBA guaranty, including supplemental funds for the buyer’s working capital. The financing pre-qualification gives your business a decisive edge in advertising the business, as buyers will recognize that their equity contribution will be leveraged into the ability to purchase a larger and profitable business.

The market is very good right now for securing 75-85% financing for a business acquisition. A

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broker with solid connections with a national bank and the knowledge of how to get it approved, processed and closed is an invaluable resource for helping a seller achieve his objectives of “cashing out” at the settlement table and avoiding risky seller financing.

A second critical factor is the quality of the information provided to a prospective buyer. The value of the assets and cash flow generated by the business must be provable and verifiable. A professional business broker will be able to assist the business owner in arriving at these values.

The third most important factor that affects the sale price of a business is whether there is competition among prospective buyers for the business.

Competition creates higher selling prices. When a business owner asks for more than the Fair Market Value for their business, or does not offer reasonable terms, there will be few, if any, buyers interested in acquiring the busi-

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ness. On the other hand, when a business is priced realistically and with proper terms, multiple buyers are likely to pursue acquiring the business. A buyer who knows there are other buyers competing for the business will be motivated to offer the price being asked to ensure he does not lose the business to another buyer’s better offer.

What does a seller need to do to help sell the business?

The first thing you need to do is offer the business at a realistic price and with reasonable terms. You need to provide as much information as possible to the broker so a professional marketing package, including a business profile, can be prepared. The quality of the business profile will greatly enhance the “saleability” of a business. For each business that I represent, a 30-50 page “Confidential Business Review” is prepared, which contains the financial, operational and historical information

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about the business. Informed buyers make better offers. Other things a seller can do are: • Keep your foot on the gas to maximize sales and profitability.

• Keep the business clean and organized (on paper and in person), so potential buyers will like what they see.

• Liquidate or set aside obsolete inventory and unneeded equipment before you place the business on the market.

• Notify your broker of any material changes in your business.

• Forward monthly financial state-

can advertise your business while maintaining the confidentiality of your business name and specific location.

The last thing you want is a big “For Sale” sign placed on the building.

On average, most businesses are sold within four to 12 months.

Because I specialize in representing automotive aftermarket businesses, I’ll immediately notify the candidates in my buyer database who might be interested in your business. I represent a number of multi-location automotive enterprises that have identified target markets for expansion.

Many of these large buyers can

A business broker can advertise your business while maintaining the confidentiality of your business...The last thing you want is a big “For Sale” sign placed on the building. ments to the broker as soon as they are completed.

• Avoid direct price negotiations with the buyer. Have confidence that your broker will get you the highest possible price.

• Understand that the buyer may be lacking in automotive experience and self-confidence. Avoid telling the buyer that you have been the key to the success of the business because the buyer needs to think that he will be capable of growing the business after the sale.

How long will it take to sell the business?

Due to the confidential nature of a business sale, it typically takes longer to sell than a house or commercial real estate does. A business broker

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proceed quickly and do not require seller or third-party financing. I consistently search out new potential buyers and many are approaching me looking for business opportunities. The next one may be a perfect candidate to purchase your business.

What fees do you charge to sell an automotive aftermarket business?

I charge a “Success Fee” for selling your business, which is a percentage of the sales price, typically in the neighborhood of 10% to 12%, depending on the value of the business. When real estate is also involved in the sale transaction, the standard 6% selling commission is applied. The details and terms are specified in the Listing Agreement. The Success Fee

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percentage varies based upon the size of the deal and there is a minimum fee on smaller transactions. While many brokers require an upfront retainer fee to list a business, I’m success driven and, therefore, I do not require any upfront fees for clients who make a commitment to give me the opportunity to sell their business at a fair market price.

How long is the seller expected to train the new buyer?

The level of training is dependent on the complexity of your business and the level of expertise of the buyer. Usually, two weeks of full-time training is appropriate, with follow-up telephone consultation, as needed, for a few months.

Of course, if you’ll be leasing a building or offering seller financing, it’s in your best interest to ensure that the buyer is well trained in your business.

What is your step-by-step process for selling an automotive aftermarket business?

1. Consultation At the initial conference, I’ll ask you to confidentially share with me your goals and motivation for selling. I’ll review with you a proposed detailed process for the sale of your business.

We’ll get to know each other and hopefully reach a comfort level for proceeding further. There is no charge or obligation for the initial consultation.

2. Obtaining the Facts Using an efficient and organized process, which I’ve developed and tailored to best suit automotive aftermarket businesses, I’ll gather information concerning company history, financial status and other pertinent data for the evaluation of your business.

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3. Valuation I’ll prepare an analysis to determine the range of the “most likely selling price” of your business, which will be used to justify the price to all prospective buyers or lenders. Determining the most likely selling price for an automotive aftermarket industry-specific business is a valuable skill that I offer my clients. In many cases, the “most likely selling price” I determine is actually higher than the selling price the seller initially had in mind.

4. Listing Agreement With your complete understanding of the process, you and I will execute a Listing Agreement. This document allows me to proceed with the marketing and sale of your business and details the mutual understanding of the representation.

5. Business Profile To market your business, I’ll prepare a discreet summary profile of business information. This information is used to create awareness and interest in your business to potential buyers, without disclosing your company name or specific location. A much more detailed “Confidential Business Review” is sent to seriously interested buyers, once they sign a Confidentiality Agreement and Buyer Profile and have been financially qualified. Included in the Confidential Business Review is a more complete presentation of the history of your company, description of facilities, competition, description of products/services offered, your reason for selling, employee information, financial data, your firm’s strengths and a justification of the purchase price.

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6. Marketing Strategy and Plan I’ll develop and execute a customized marketing plan to sell your business as quickly as possible and for the maximum selling price.

I’ll immediately publicize your business to the network of potential buyers that I’ve created over the past 30 years, as well as buyers who are on record as looking for a business in your area and nationally.

Your business will be advertised in

multiple Internet listing services and other appropriate trade publications and media. I’ll keep in frequent contact with you, advising you of all responses regarding buyer inquiries, calls, interviews and potential site visits. If you wish, we can schedule a weekly conference call to review progress.

7. Buyer Qualification I’ll carefully screen all prospective buyers before they have access to any information about your company. All buyers must complete an information

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profile, including their background, experience and financial capabilities. The buyer will also be required to sign a Confidentiality Agreement prior to receiving any confidential information.

8. Offer to Purchase A seriously interested and qualified buyer will be scheduled to tour your business. This is your chance to show the prospective buyer your facilities and discuss the strengths of your enterprise.

To the extent that you might be offering partial seller financing or leasing your building, this is also the time for you to ask questions and gauge the buyer’s capability to run your business successfully.

This is your opportunity to speak with the prospective buyer directly. I’ll then provide guidance to the buyer and work with him/her to prepare a written Offer to Purchase, which details the terms of the transaction.

9. Negotiation I’ll review the Offer to Purchase with you, and together we will formulate a negotiation strategy, which I’ll then orchestrate between you and the buyer. I will offer recommendations to reach a win/win deal and provide guidance as needed in areas such as creative financing, non-compete agreements, employment contracts, etc.

10. Financing I’ll introduce the buyer to multiple lending sources and assist with the application and underwriting process.

Securing optimal bank/SBA financing is key to “cashing out” at closing with minimal or no seller financing.

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11. Closing Once you’ve accepted the buyer’s offer, a tentative closing date is set. I’ll work with all parties involved to ensure that all tasks are accomplished smoothly for the transition to new ownership. During a defined time period, the buyer will perform a due-diligence process to validate the business information that has been disclosed.

Any hitches in the process will be addressed promptly and professionally.

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several of my own Midas franchise stores, as well as the Aftersoft VAST POS software business, I understand that the process can be intimidating.

Selling a business in today’s economy is especially challenging, but there are tools and techniques to make sure you get the best possible price for your business — a just reward for the years of sweat equity that you’ve invested in developing products/services, a customer base, a reputation and profits, all of which contribute to building a valuable automotive business.

With my nationwide affiliation in IBBA (International Business Brokers Association), my business offerings are regularly presented to numerous potential buyers looking to relocate or expand into your area.

The ideal outcome will be a “win/win” for both the seller and buyer. I’m happy to provide references for the sellers that I’ve had the privilege of representing over the years.

Many of these sellers have been featured in a series of case studies published in Shop Owner.

Most importantly, I will listen to you in order to determine your goals and how I may help you achieve them. I’ll guide you through all of the complex steps required to sell your business.

SO

How would you summarize your role in selling an automotive aftermarket business?

The decision to sell your business is one of the most important decisions of your life. Turning your operation into cash is a complex matter involving a number of variables, many of them unique to your business and to the aftermarket industry. Additionally, you’re facing an uncertain economy, unbridled competition and sophisticated buyers.

Establishing a relationship with a professional business sale intermediary with decades of experience in the automotive aftermarket and hundreds of buyer contacts increases the likelihood that your business will sell in less time and for a higher purchase price.

If you’re considering selling your auto service business, I can help you maximize the value by creating a specific marketing strategy and package customized for your business.

My business intermediary services include providing a valuation of the most likely selling price, finding and screening buyer prospects, assisting with the negotiations and coordinating the closing.

I provide competent and experienced professional guidance every step of the way. Having bought and sold

Leveraging more than 30 years of experience as both an aftermarket business owner and aftermarket technology executive, Art Blumenthal LLC provides business intermediary and advisory services to both buyers and sellers of industry businesses of all sizes. Art is a member of IBBA (International Business Brokers Association, Inc.). For more information, or to initiate a no-obligation confidential consultation, visit www.art-blumenthal.com.

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by Steve Ferrante, CEO, Sale Away LLC

Customer|Service|

Avoid Customer Disservice

Lay The Foundation For World-Class Customer Service There’s a lot of talk about the importance of providing quality customer service and superior customer experiences to improve customer loyalty and sales. In fact, these topics are the primary elements of my training and consulting practice for the tire and auto service industry.

On the flip side, there’s relatively little dialogue about the aspects that turn customers off, harm customer relationships and can ultimately have customers not only leave your business for a competitor, but do so while complaining about your business to everyone with whom they come into contact.

Allow me to provide you with a very personal experience. Not long ago I returned home from a family vacation in sunny San Diego. I didn’t know (or expect) it going in, but left with plenty of examples of what not to do when providing proper customer service.

First, please know I’m removing the name of the resort we stayed at because this is not intended to slam them directly, but rather learn from their mistakes and ensure

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you’re not doing the same at your auto service business.

First Class Experience?

First of all, this was not a bargain basement motor lodge.

It was a high-end, “luxury resort” that advertises “firstclass” vacation experiences.

Sounds wonderful, let’s go!

Traveling with another family,

we required two separate rooms. Using a special credit card promotion, I was able to secure a desirable “free room upgrade,” with a favorable

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savings of $50 per night.

On the online reservation return receipt, I noticed that room upgrades are “based on availability,” so I promptly called the hotel for clarification and was told to call back a week before traveling and they could reserve the room upgrades at that time.

Enter Patsy. Patsy and I had a wonderful conversation, and she was most helpful saying that my room upgrades were “all set” and would be waiting for us when we got there.

So we got there and, lo and behold, found that was only half true. Seems only one room was available, the other was not. Not particularly good news and not what we were expecting. I explained my previous “all set” call with Patsy. The reply from the front desk was: “Patsy is in reservations, she doesn’t upgrade rooms.”

Let me see if I have this straight — Patsy is in reservations and she doesn’t manage reservations?

You would think the person most

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empowered to manage reservations would be the person whose job it is to interact with customers on their reservations line, right? Evidently, wrong. So much for being “all set.”

Lesson 1: Be accountable. A big part of delivering great customer service is assuming responsibility and standing behind your commitments.

Auto service professionals already have their work cut out for them to gain customers’ trust. Broken commitments are a warning sign of mistrust that can seriously jeopardize the health of a customer relationship.

Also, if you empower employees to do a job, allow them the opportunity to do that job. Patsy was told she was in charge of reservations, but wasn’t permitted to do that job, creating an unnecessary problem for customers.

You will never see this type of “it’s not her job” finger-pointing at the elite customer service establishments. They focus on making it right for the exter-

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nal customer, not on who made it wrong internally.

In any event, it’s up to the service provider to take ownership of each customer’s transaction and see to it that they are well taken care of from start to finish.

Looking to Eat Now in the room, we realize there’s no silverware, glasses, plates or any other utensils in our kitchen. So, I called the front desk. Remarkably, the first response was “many guests bring these household items with them.” We traveled across the country from Boston to San Diego with two kids and four suitcases. Did they actually expect us to pack our kitchen items as well?

Lesson 2: Never make your customer feel like they did something wrong. When a customer feels like

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they’re being accused of wrongdoing, they typically get defensive, annoyed and uncomfortable. Obviously, these are not the best emotions for positive customer relations. Never make the issue, the issue. Focus instead on what you can do to help the customer.

Done properly, the front desk staff should have replied with something like, “I’m sorry to hear that, we should have asked you upon making your reservation if you would like us to supply the kitchen with these items; I’ll see that this gets taken care of right away.”

Continuing Saga Amazingly, after that call no kitchen utensils were delivered. A few hours later, I called the front desk again.

Each time, the staff member on the other end of the line was polite, helpful sounding and ensured us it would be taken care of in short order. But

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nothing happened.

The next morning, while staring at our dry cereal, we decided to physically go to the front desk. Once again, the smiling staff member entered the information into “the system” and ensured us that the utensils would be sent up

don’t fulfill your commitments and meet customer expectations then the net effect is greatly diminished.

Customers will ultimately view the gestures as insincere, and you’ll end up with an unhappy customer.

Unfortunately, we experienced at least a couple more similar incidents of customer disservice that week. Clearly, there is a disconnect between what staff members are demonstrating/saying (their behaviors) and what they’re doing (their actions and execution) to the detriment of this vacation resort.

The old adage is true: Actions speak louder than words. Saying it is not the important part. Doing it is. right away.

When nothing materialized, a few hours later I made a “last call,” to make it clear that we were beyond displeased, had no faith in anything they said to us and asked which manager to speak with if nothing happened after that call either. That’s all it took to get some kitchen utensils at this “luxury resort.”

True world-class customer service can only come from a unity between saying and doing, and it’s imperative that your customer-interacting employees effectively manage the whole process.

After all, remember this famous Ben Franklin quote: “Well done is better than well said.” SO

Lesson 3: It’s not what you say, it’s what you do. The old adage is true: Actions speak louder than words.

Saying it is not the important part.

Doing it is.

Many people think providing great customer service is being friendly, polite and smiling a lot. That’s essential, but it’s only part of the total equation.

You can smile all day, but if you

Steve Ferrante is the CEO of Sale Away LLC and has more than 20 years of successful sales, sales management and sales training experience. He is the producer and host of the Pinnacle Performance sales and customer service training program that helps independent tire and auto service businesses improve customer relations and produce greater sales results. Steve can be reached at 866-721-6086 ext. 701 or steve@saleawayllc.com.

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E-Communications

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by John Volz, Jr., co-owner, Volz Bros. Automotive Repair

Sales|Marketing|

Embracing E-Communications

Pays Huge Dividends in Customer Satisfaction And Engagement The way customers prefer to communicate is changing, and there are great opportunities for every business owner to reach them more efficiently through E-communications. Email, social media (Facebook/Twitter) and texting are just a few of the electronic communication channels we use that benefit both our customers and our shop.

Not only do various electronic communication sources enable you to interact with your customers more efficiently, they also allow you to market to your customers more cost effectively than previous methods.

In order to start marketing via email, we first had to build an email list. We’ve found that asking customers for their email address at the time of payment to be the most effective approach. Many of our customers liked the idea and willingly provided their email information, while some were more reluctant. We found that if we took the time to explain the advantages of email correspondence, many of our customers embraced the approach.

Email correspondence enables us to send customer invoices and service reminders electronically, therefore cutting

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down on paper usage and making it easier for our customers to track their service history.

Our customers began to see the convenience of corresponding via email and, in no time, we had a fairly comprehensive list.

Advantages of Using Email Customer feedback on email correspondence has been positive. We realize that our customers lead busy lives and email is a fast, effective approach to communicating.

Customers are able to read and respond to emails during nonbusiness hours, making communication more efficient, and, in my opinion, more likely to occur.

One feature customers really appreciate is electronic service reminders. Customers are able

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to quickly review upcoming services and make an appointment with a few simple keystrokes.

The entire process saves our customers time and the hassle of having to call in to make a service appointment during normal business hours.

Another great feature of email communication is the ability to keep our customers informed of upcoming company events. We are very involved in the local community and we regularly participate in local fundraisers and sponsorship opportunities. We realize that not all of our customers participate in social media, such as Facebook, which is typically the primary form of communication for things such as fundraising events, flyers and other community activities. Email has proven to be a very efficient way to communicate with customers and affords us the opportunity to build our brand by keeping customers updated on company activities.

Email is also a great way for our customers to reach us after work hours. We receive and review all of our emails after hours and on weekends. Recently, we had a new customer contact us over the weekend through our website, which is then distributed to the company email. He said his daughter was in town for the weekend and was having problems starting her car. He also said he was

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having her car towed in over the weekend and that he would appreciate a call first thing Monday morning because his daughter needed to get back on the road as soon as possible.

I logged onto our remote security cameras to ensure the car was at the shop and went in to check it out. It ended up being a simple battery problem that we fixed, so we called our customer Saturday afternoon to let him know it was ready for pickup. He was ecstatic and impressed by our swift response. This new customer continues to tell everyone who will listen about this experience with our shop; you couldn’t afford to pay for that kind of advertising.

Social Media Savvy Social media is another way to engage customers. It’s estimated that 53% of people in the U.S. have a Facebook account. Facebook is a great way to have a constant, real-time dialog with your customers. I’m amazed at how much interaction we get on our Facebook page on a daily basis. Customers love it.

We use this channel of communication to talk about what we’re doing in our community and what we’re working on in the bays, and it gives our customers a fun way to

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We use Facebook to talk about what we’re doing in our community and what we’re working on in the bays, and it gives our customers a fun way to interact with us.

interact with us.

We recently did a fundraiser on our Facebook page for our local homeless shelter. With the help and support of our customers and friends, we were able to raise $3,500 for the shelter in just a few days. Not only did it engage our customers, but it also

helped us to make many new connections. The other great feature is the ability to reach friends and family of existing customers who already follow our Facebook page.

Oftentimes, when I ask new customers how they heard about us, it’s through our Facebook page. So, the impact of having a Facebook presence is very visible and powerful.

E-communication has been a great tool for us in more ways than one. It has streamlined communication with our customers and made interaction easier and more efficient. Embracing the challenge of e-communication has evolved the way we operate and has become a vital interactive tool for both our business and our customers. SO

John Volz Jr. is co-owner of Volz Bros. Automotive Repair in Grass Valley, CA, which has been in business since his father started it in 1982.

The 15-year automotive industry professional has a background in management and technology and takes pride in a customer-centric business approach to automotive repair. Volz Bros. specializes in Subaru (the shop’s primary specialty), Toyota, Honda, Lexus and Acura.

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