01.20
STRATEGIES & INSPIRATION FOR AUTO CARE SUCCESS
AVOID EMOTIONAL DISCOUNTS PAGE 58
GROWTH
SPURT
MARCONI
ELICIT VALUABLE STAFF FEEDBACK PAGE 31
BECOME A COMMUNITY ASSET PAGE 54
How to handle success— and keep pushing forward PAGE 40
Know How to Grow Andy Gales, owner of Gales General Service and Gales Detailing and Reconditioning, worked from the ground up to create a profitable business with significant growth.
5
TRENDS TO WATCH PAGE 34
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01.20
VO L . 0 8 N O. 01
J A N U A R Y Family Ties Steve McAtee runs his shop, Madison Auto Service, with the help of his daughter, Alisa.
F E AT U R E
P R O F I L E
C A S E
34
40
54
62
These five trends will shift the landscape of the industry. That's why you need to prepare for them—now.
Always looking for ways to better his business, shop owner Andy Gales opened a detailing business as a way to increase CSI.
Lake Highlands Automotive in Texas was hit by a massive storm. Not content to wait for the power to come back on, the team found a way to give back to the community.
Steve McAtee, owner of Madison Auto Service, is always on the quest for more knowledge and ways to better the industry.
2025 FORECAST BY TESS COLLINS
A FINISHING TOUCH
B Y A B B Y PAT T E R S O N
S T U DY
FACING THE STORM
R E PA I R
L I F E
A TRUE GOGETTER
BY HANNA BUBSER
DON CORNETT
B Y A B B Y PAT T E R S O N
PRINTED IN THE U.S.A. COPYRIGHT ©2020 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: ANDY GALES PHOTOGRAPHED BY AMANDA MONTGOMERY
01. 2 0 / R + W / 5
TA B L E O F C O N T E N T S
J U M P
11 ONLINE
20
Industry landscape predictions
S TA R T
20 BREAKDOWN
The EV forecast
23 VIEWPOINT
12 NUMBERS
What customers want in the repair process
The telematics impact
24 SPEED READ
15 AWARDS INSIGHT Win by educating
Driven Brands acquires ATI
17 EDITOR'S LETTER
28 SHOP VIEW
Introducing ADAPT
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31 STRAIGHT TALK
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Avoid your blind spot
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50 CUSTOMER SERVICE
66 THE FIXER
Set goals the right way
Set up your check-in desk right
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53 INDUSTRY INSIDER The value of an outsider’s perspective RISSY SUTHERL AND
58 SALES+MARKETING Break your discounting habits
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New Ratchet+Wrench Podcasts.
RADIO
4 SERIES WITH NEW EPISODES EVERY MONTH.
HOW I DID IT. Series featuring a rotating guest each month. Hear about the challenges, opportunities and success stories from shop owners who found a way to thrive. New episode this month.
GROW. Series featuring a rotating guest each month. 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 marketing expert Frank Leutz. 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
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THE BOARD SOUNDS OFF
—
Ratchet+Wrench is fortunate to have an editorial advisory board made up of some of the most successful shop owners in the nation. That being said, even the best-of-the-best are looking for ways to improve and have questions. Here, we Dave Toole provide a platform for them to ask one another for feedback, Owner, Toole's Garage tips and answers. Andy Bizub, owner of Midwest Performance Cars in Chicago, asks Dave Toole, owner of Toole’s Garage in San Carlos, Calif., how Toole believes the landscape of the industry will change in the next 5–10 years. To see his answer, head to ratchetandwrench.com/theboardsoundsoff.
COMMUNITY OUTREACH
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10 Missions Media returned to the Ronald McDonald House in Minneapolis this November and had a great time helping out with various tasks.
Visit our Facebook page at ratchetandwrench.com/facebook for daily news stories, blog posts, polls and a behind-thescenes look at what goes on at 10 Missions Media, like the company holiday party.
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CORRECTIONS
In the October Awards Insight, “A Love of Repairs,” Israel Villavicencio’s last name appears incorrectly. In Rissy Sutherland’s column “Recipe for Success,” Dave Markert’s shop should be Markert Motor Works.
R+W INSTAGRAM, R+W FILE PHOTOS, LILY RISKEN
In the November story, “Determining Your Labor Rate,” the formula that Tatsu Tsuchida used was misrepresented. The correct formula is (highest paid tech hourly rate x 1.3)/.4 = labor rate.
VISIT
Learn more at www.advancepro.com ratchetandwrench.com/facebook
ratchetandwrench.com/linkedin
instagram.com/ratchetandwrench
twitter.com/ratchetnwrench
ratchetandwrench.com TODAY
01. 2 0 / R + W / 11
NUMBERS THE
TOPICS,
TRENDS,
AND
METRICS
DRIVING
YOUR
OPER ATION
THE BENEFITS OF OFFERING TELEMATICS SERVICES — Offering telematics services is still relatively rare. Only 13 percent of the Ratchet+Wrench Industry Survey respondents report doing this. The basic premise of telematics is that it can alert a consumer when his or her vehicle needs a service. Having access to this information gives power, as the customer can be directed to a preferred shop, but many shops still don’t take advantage of the technology. This could be because the technology is still relatively new and because of this, hasn’t seen mainstream adaptation yet. Those that are doing it reported in the survey that they use Verizon, Mechanic Advisor, CarVantage and Mitchell 1. Although sales did not seem to increase with telematics, those that offer the service are able to charge more while keeping customers happy. It also seems that those that offer telematics have a more positive outlook on their sales overall.
OFFERS TELEMATICS SERVICES
TELEMATICS’ IMPACT
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
DOES NOT OFFER TELEMATICS SERVICES
0%
DO YOU OFFER TELEMATICS SERVICES?
YES - 13% ARO over $600
Posted labor rate over $110
CSI over 96%
Expect sales to grow
More on the Subject View a breakdown of how to use telematics to drive business — ratchetandwrench.com/drivebusinesswithtelematics
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GETTY IMAGES
NO - 8 7 %
“TECHNET HAS BEEN AN AMAZING PARTNER FOR OUR BUSINESS. ®
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The most
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AWA R D S I N S I G H T
The Ratchet+Wrench All-Star Awards honors the innovators, leaders and difference makers pushing the industry forward.
Turning Customer Engagement into Education BY HANNA BUBSER
COURTESY DESIREÉ JEREMENKO
Strike up a conversation with Franconia Auto Repair office manager Desireé Jeremenko and you'll immediately notice that she cares. “Desireé has a warm and caring personality, plus good sales and communication skills,” Franconia Auto Repair shop owner Joe Amorosi says. Combine these traits and you get Jeremenko’s approach to customer service, which leaves the customers of Franconia Auto Repair in Hatfield, Pa., feeling confident and well taken care of. This has become a crucial part of Jeremenko’s operations as an office manager—a role in which she does a little bit of everything. What is her favorite part of the job that she has held for nearly three years? “The customer interaction,” she says, without any hesitation. Jeremenko’s people skills have cultivated a foundation of reliability and respect because she knows that repair work can be intimidating and confusing to customers who may not have a frame of reference. Here, she outlines some of her strategies for maintaining customer engagement and implementing opportunities for education.
STREAMLINE YOUR PROCESSES. Jeremenko has helped implement various new projects and processes at the shop. Some of those initiatives have involved making daily work at the shop simpler, such as moving more of its presence online. Jeremenko does some purchasing for the shop online, and is currently giving Franconia’s website a revamp. “It’s a little above and beyond,” Jeremenko admits of her eagerness to do a digital overhaul, but, ultimately, it makes servicing customers smoother. “I come from a sales and education background, and I believe that if you truly believe in your product and it’s a solid product, then you should sell it as such,” Jeremenko says. “And I believe in what our mechanics are capable of.” By streamlining and utilizing new digitized initiatives, such as a new digital vehicle inspection program that she put into place, Jeremenko is able to accurately represent the work that Franconia can provide, as well as make the entire process approachable for everyone involved. It helps with efficiency, which in turn makes for a happier customer base.
are completely in tune with what is being fixed on their vehicles and why. This became important to her when she noticed holes in customer understanding. Jeremenko wrote, researched and designed a tri-fold brochure about tire care and replacement for all-wheel drive vehicles because many of the customers she spoke to had a difficult time fully comprehending the topic. Her frustration with not being able to provide the full picture manifested into something physical that she could hand to customers. “The reason I became so strong-minded and wanted to make something was because trying to explain all that to a customer was a little overwhelming for the customer to swallow,” she explains. “I just handed one out the other day.” For Jeremenko, it is about meeting customers where they are. Not all customers have the same amount of knowledge when it comes to vehicle repair. She looks at each interaction as a learning opportunity. Whether it be through a tri-fold or simply a conversation, Jeremenko says that the more personalized your approach, the better.
MEET CUSTOMERS WHERE THEY ARE. Aside from helping the initial processing run smoother, Jeremenko also goes the extra mile to ensure that customers
BUILD A SENSE OF COMMUNITY. Ultimately, Jeremenko’s hope is that the shop is a place that people can trust. “The saddest thing to hear from this side
ALL-STAR NOMINEE
DESIREÉ JEREMENKO — OFFICE MANAGER FRANCONIA AUTO REPAIR HATFIELD, PA.
of the counter is that a customer has been shafted by another auto clinic,” she says. She strives to combat this by establishing a solid foundation. “It’s a two-way street,” she says. “You earn your customer’s trust, and you trust your customers.” Jeremenko’s role as office manager is steeped in customer service, so often, she is a customer’s first point of contact. She says she has noticed on some of the online reviews left for Franconia that customers comment on the high level of comfort they feel after having a conversation with her, and this is no accident. Jeremenko takes time to go through every detail that she can with each customer with whom she interacts. She thoroughly explains how the repair will be tackled, what it all means, and makes sure the customer knows what stage they are at in the process. Details like this may seem inconsequential to employees of a repair shop who know all the jargon, but, to a customer, this makes all the difference. “Some people call it a little too thorough,” Jeremenko says. “But some find it advantageous.” The customers that fall into the latter category are the ones returning to Franconia because of this community that Jeremenko has helped establish. 01. 2 0 / R + W / 15
2020
DEAL WEEK
REGISTRATION OPENS MONDAY, FEBRUARY 10
Receive the lowest prices of the year and get announcements on the agenda, speakers, reception and more. Visit rwconferencecom, and stay up to date on all things conference.
2020
September 17–19, 2020
16 / R + W / 01. 2 0
Hyatt Regency Minneapolis
EDITOR'S LETTER
The Next Step FINDING MOTIVATION TO CONTINUE PUSHING
LEAH QUINTO
Forgive me if I’m jumping to an assumption here, but both of
us, you and me, tend to be motivated through a bit of the chipon-my-shoulder mentality, right? I mean, in your case, it comes with the territory: The vast majority of successful entrepreneurs and leaders are often motivated by the doubts of others, by (perceived or real) “slights.” And let’s ignore the obvious here, too, that you work in an industry mired by negative stereotypes that you’ve worked to break day in and day out since you’ve operated your shop. At the end of the day, there’s nothing more motivating than the infuriating notion that you “can’t” do something. Ratchet+Wrench was pretty much built off that mindset. We heard the word “can’t” countless times in launching the magazine in 2012. We were told the market was too saturated with publications, that no one wants another print magazine, that we’d be no different than anyone else. Why do it? You can’t succeed. Well, it’s 2020 now. Let’s look ahead to some new challenges—and let’s take on a big one together. You likely saw the advertisement for the ADAPT: Automotive Technology Summit belly-banded around the magazine this month. And you’ll notice a new page in the magazine this month (p. 27) that teases our ADAPT content online at adaptautomotive. com. There’s an ad somewhere in the magazine, too, about it. ADAPT is our new 2020 launch, a digital-first brand aimed to deliver content about the most progressive and pressing automotive technology trends disrupting the industry—and how you, as a shop owner and operator, can better equip your business to grow and thrive in the years ahead. And that’s carried over into the event: The ADAPT: Automotive Technology Summit provides operators from all segments of the automotive aftermarket
with a unique, unmatched opportunity to learn directly from automakers and the industry’s foremost leaders. It’ll be a threeday event (set for downtown Nashville, May 31 through June 2) with presentations and discussions from the automotive industry’s foremost leaders in terms of advanced vehicle technology—OEM representatives, OEM suppliers, leaders of technology companies, and other industry leaders. We’re especially proud and excited about this launch because of how it came about: It’s our goal to answer the call of our readership to have a larger understanding, presence and voice in the future of the automotive industry. We feel an obligation to support the independent shop, and we feel that, along with Ratchet+Wrench, ADAPT can be a tool that gives you a fighting chance against the obstacles you’ll face moving forward. This is your industry. You work on 70 percent of all out-of-warranty vehicles. It’s your business that will drive this industry forward— not the tech that automakers decide to throw in vehicles. You can keep up, and you can succeed. You will. We’ll do our part in bringing you the information you need to make those adjustments, and you’ll do what you need to do to keep America moving. We’ll do it together. Let’s get started.
BRYCE E VA NS, VICE PRESIDENT, CONTENT A ND E VENT S BE VA NS@10MISSIONS.COM 01. 2 0 / R + W / 17
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J U M P S TA R T NEWS
SHOP VIE W
/
IDEAS
/
PEOPLE
/
TRENDS
28
BREAKDOWN VIEWPOINT SPEED READ
COURTESY GREEN TECH AUTOMOTIVE
SHOP VIEW
Go Green GreenTech Automotive is making a push for eco-friendly practices in the industry.
01. 2 0 / R + W / 19
J U M P S TA R T
It’s Electric: The EV Revolution The EV trend is gaining momentum—the time is now for shop owners to adapt BY A B BY PAT T E R S O N
buted its 2021 Mustang Mach-E, the company’s first all-electric SUV. And, a couple of days later, Tesla’s Cybertruck showcased for the world to see. It seems more and more companies are battling head-to-head to create an electric solution for transportation.
BY 2040,
57%
OF ALL PA S SENGER VEHICLES WILL BE ELECTRIC. *Data collected from BloombergNEF’s Electric Vehicle Outlook
Now, roughly one in 250 cars on the road is electric—just over 2 percent of the entire vehicle market. In 20 years, however, that number will become the majority. According to BloombergNEF ’s 2 0 / R + W / 01. 2 0
Electric Vehicle Outlook, 57 percent of all passenger vehicle sales will be electric by 2040. This means over the next two decades, worldwide EV sales are predicted to rise from 2 million in 2018 to 56 million. There are many signs that the EV takeover is upon us. Gaining Momentum According to Inside EVs, U.S. EV sales increased by 81 percent between 2017 and 2018, and it’s only growing from there. A 2019 Deloitte study forecasts EV sales shifting from 2 million units in 2018 to 21 million units by 2030. With these statistics in mind, automakers are now lining up to release their own set of electric vehicles. A total of 44 EV makes and models are available in the U.S., according to EV Adoption (reported in December) and more are in the works for the upcoming decade. While EV models gain traction, so is the market for the batteries that power them. The EV battery market is projected to grow from $23 billion in 2017 to $84 billion by 2025—a CAGR of 17.2 percent. Overall, Deloitte says the market will reach a tipping point in just two short years. The EV Spotlight The 2019 Los Angeles Auto Show served as a foreground for EVs, namely the
2021 Ford Mustang Mach-E, which claims to go up to 300 miles per charge. The Mach-E is Ford’s attempt to compete with Tesla and shows that there’s becoming more mainstream adoption of EVs. The Associated Press even wrote a story on how this vehicle marks the start of an EV blitz. Not to be outdone by Ford, Tesla released its Cybertruck, which, according to Tesla’s CEO Elon Musk, already has 250,000 orders (ratchetandwrench. com/teslacybertruck). These two vehicles are the center of attention, but many other OEMs have released and
GETTY IMAGES
Less than two months ago, Ford de-
according to a report by CleanTechnica. These are just a few initiatives that show companies and cities are gearing up for an increase in EVs on the road. A Smaller Carbon Footprint Rideshare companies are also starting to join in on the movement. Back in 2018, Uber unveiled a pilot program offering drivers cash incentives for driving EVs. Lyft recently joined in on the trend, too. In November, the rideshare company partnered with EVgo on its Express Drive rental program. The program, meant for Lyft drivers who rent rideshare vehicles versus driving their own, has added 200 electric vehicles for rideshare driver use throughout the Denver metro—the company’s largest deployment of EVs to date. And there are no plans to stop there; Lyft plans to add more and more EVs around the country every year. As a whole, rideshare’s popularity is hard to deny, so the fact that these companies are investing in EVs signals a trend.
plan on releasing EVs in the near future; the Audi e-tron, Mercedes-Benz EQC, BMW’s electric Mini Cooper and Porsche Taycan, to name a few. Jaguar Land Rover has said that its entire f leet of new vehicles will be electric or hybrid starting in 2020. BMW says that 12 all electric cars and 13 hybrids will be on the market by 2025 and GM will develop at least 20 new all-electric vehicles to launch by 2023. With more vehicles types and price models to choose from, consumers will have more EV options, which will increase their presence on the road.
Source of Power With more EVs to drive, there’s a greater need for charging stations. ChargePoint, an EV charging network, is adding an average of more than 2,000 charging spots each month in 19 different countries. EVgo, another EV charging network that’s currently in 34 states, recently expanded its charging stations by 40 percent in California. The city of Los Angeles itself hopes to install 25,000 EV charging stations by 2025, up significantly from the roughly 2,000 it has today and New York announced a $250 million investment in DC Fast Chargers to be installed at JFK,
Power Struggle For many vehicle owners, the choice to own an EV is based on gas prices and the affordability of the vehicles. Right now, many EVs are out of the budget for many. However, if gas prices increase—which is largely determined by policies, such as emission standards— the cost to own an EV could soon be equal to or less than a gas-powered vehicle. Currently, the Trump administration is at odds with certain states (California, in particular) on fuel efficiency standards (reported in December). The final decision could impact the overall sales of EVs in the U.S., and is something to which shop owners should pay close attention. 01. 2 0 / R + W / 21
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J U M P S TA R T
Win with Walkarounds Processes like vehicle walkarounds help elevate the customer experience BY TESS COLLINS
In its inaugural study, the J.D. Power U.S. Aftermarket Service Index evaluated customer experience in general maintenance and tire replacement segments by surveying 12,000 customers on their service experiences. The overall finding was that satisfaction increases when service advisors perform consistent service processes, such as vehicle walkarounds or followup phone calls. However, these processes aren’t regularly implemented in the service process. Vehicle walkarounds, the second-most influential KPI for customer satisfaction (behind getting service done right the first time) only occur 72 percent of the time for general maintenance. When it is done, satisfaction scores improve 49 points. Follow-up calls bring satisfaction up 28 points, but are only made 33 percent of the time. Why are these processes so important? “It’s the personal touch and process steps that are the differentiators between a good experience and a great experience,” Chris Sutton, vice president of automotive retail for J.D. Power, says. Sutton shares his thoughts on the study and what independent automotive repair shop owners can learn from it.
What was the finding in the study that surprised you the most? I think, for me, our assumption was that things like price and convenience would be the drivers and that brands that did this best would do best overall. That wasn’t necessarily the case. My biggest surprise was the importance of time it took to complete service. I think customers are telling us that this is the basic cost of entry and that they expect that to be done well. Following up and any type of walkaround was something to which vehicle owners also responded very well. Fixing it right the first time was a huge differentiator—over 200 points— but I would have expected that it’s usually done successfully. Another surprise was price. It was important, but it wasn’t dramatically more important to customers than the time it took to get work done— they had a fairly equal weight.
I look at walkarounds as one way that you can engage the customer. You can greet the customer at the vehicle and give a thorough explanation of the work that’s being done. It’s the great experiences that get customers online to get great ratings and reviews.
So, the study found satisfaction increases when vehicle walkarounds are implemented. Why are walkarounds important?
Another factor that customers seemed to appreciate was the follow-up call. Why are these calls not being made?
How can a shop owner make sure processes like walkarounds are happening in the shop? There are a couple of things. The study found that a little over 50 percent of customers make an appointment. That’s a benefit because it gives the shop time to properly structure that appointment and give them time to do it right. So, if they can schedule appointments, they need to do it. Shop owners also need to educate staff members that customers respond well to walkarounds. It comes back to customer experience and building trust.
I think it’s the perception that a followup call is somewhat of a nuisance to a customer. I think what we’ve seen is that customers respond well to it if it’s made as a token of appreciation. So, for example, “we appreciate you business, thanking you for coming in,” rather than a sales pitch. In order to ensure that follow-up calls are happening, shop owners should take advantage of a CRM or other type of system that monitors this. How can this information be used as a way for independent repair shops to compete against quick lubes and dealerships? You have to meet the customer’s expectations and be convenient—that’s just the price of entry. To distinguish themselves, it’s about finding stuff in their local market that can set you apart. One of the things we wanted to look at in the study was the tipping point of when customers stopped going to dealerships. We knew the warranty period would be significant, but we also saw that customers that had vehicles that were 10 years or older only had a very small percentage of customers that went to dealerships. That’s a very competitive advantage for independent shops. That being said, you still have to meet the customers’ expectations. Another surprising finding was how much customers want Wi-Fi. If you don’t have it, get it, and if you do have it, communicate that you have it. Customers respond well to walkarounds, text updates, follow-up calls and any type of amenities. So, when it comes to competing, ask yourself, “What can we do to differentiate ourselves that’s beyond the basic?” 01. 2 0 / R + W / 2 3
J U M P S TA R T
Driven Brands Acquires Automotive Training Institute The Automotive Training Institute (ATI), a coaching and consulting company for the automotive industry, has been acquired by Driven Brands, according to an email the company sent to its vendors, obtained by Ratchet+Wrench on Nov. 19. A message from Richard Menneg, president of ATI, to vendor partners, states the following: ATI’s lifelong focus has always been to help our members realize their profits and dreams with the best coaching and training available. Providing a highvalue member experience has been our top priority. But for years we have also believed that in order to take ATI to our next level we needed and wanted help. Our choices were to partner with either a strategic company that could leverage what we have accomplished in consulting
and training or a private equity firm that could infuse capital to help us grow organically. We chose strategic. We are very excited to share with all our preferred suppliers that we have been acquired by the largest aftermarket strategic company in the automotive and collision industry, Driven Brands in Charlotte, N.C.. Driven Brands is the franchisor for 2700 family-owned collision and repair/maintenance centers in the US and Canada. They are branded as CARSTAR, Meineke, Take 5 Quick Lube Centers, ABRA, Merlin, MAACO, Econo Lube N’ Tune. They also own 1-800 Radiator who many of our members already do business with. With Driven Brands as our new partner, ATI is positioned for unbelievable growth. All of us at ATI are excited and positive about the future with our new partner.
We see this as a significant opportunity which provides ATI with resources, global buying power and industry reach, positioning us to even better serve our members and preferred suppliers. ATI will continue to operate under the ATI name, with the existing management team, with headquarters in Linthicum, Md. Our Preferred Supplies are as important as ever to the success of ATI and our membership. We look forward to partnering together in an even bigger way in the months and years to come. A few hours after the email was obtained, Menneg reached out to Ratchet+Wrench to comment. “This is a plan that was years in the making for us. We have 1700 members that are a part of our program, we’ve got 141 associates here. We do really great work coaching and training for members of
Modern vehicle data:
YOUR JOB DEPENDS ON IT. But vehicle manufacturers want to control it. They want to control how much maintenance and repair data you get, when you get it, and how much you pay for it. They want to deny you access to the data you need. They want to put you out of business. But if consumers control their own vehicle data, they can choose their technician. Support consumer control of vehicle data. Because when consumers have safe and direct access to their vehicle’s data, everybody wins.
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Protect your job. Demand direct access. THE PETITION 1 SIGN at yourcaryourdata.org, or scan the QR code below.
MATERIALS 2 GET at autocare.org/telematics or
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independent repair shops and collision centers in the U.S. and Canada. We wanted to be able to continue to grow and continue to be able to offer increased services for our members to be able to develop more content and grow,” Menneg said. Driven Brands and its reach will allow ATI to do that, Menneg explains. “They have lots of brands and lots of reach and lots of buying power,” Menneg said of Driven Brands. “They acquired us for what we do and how we do it and we were interested in the way they could help our members grow even more and we could provide a better service for them.” “There is no change in our management team,” Menneg continued. “We’re still ATI out of Baltimore, Maryland. We’ll still going to get up every single day and do exactly what we do but with greater resources to be able to offer more value to our members.”
The following statement from Driven Brands was sent the day after the news broke. “We are excited to add ATI to the Driven Brands family and to support their focus on helping members realize their profits and dreams with the best coaching available. Driven Brands is committed to doing what it can to assist ATI in their pursuit of this vision by looking for ways to support their efforts while maintaining ATI’s independence as an operating entity. To that end, no changes are planned with respect to ATI’s mission, strategies, or management teams at this time.” Ford’s Fully Electric SUV Unveiled The 2021 Ford Mach-E was unveiled Nov. 17 in Las Vegas, per a report by CNBC. Ford CEO Jim Hackett said the Mach-E will feature a new, hands-free
driver-assist system that is expected to compete with Tesla’s Autopilot and Cadillac’s Super Cruise systems. The company plans to activate the system through an over-the-air update. NHTSA Investigates 12th Tesla Crash The National Highway Traffic Safety Administration (NHTSA) said it will investigate a 12th Tesla crash, reported Reuters. During the crash, a Tesla Model 3 rear-ended a parked police car in Connecticut while engaging on autopilot. The agency’s special crash investigation team has inspected 12 crashes involving Tesla vehicles where it was believed Autopilot was engaged at the time of the incident. NHTSA has completed two crash test reports including a 2016 fatal crash in Florida and a prior crash where Autopilot was ruled out.
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Shop of Tomorrow The top 10 advanced vehicle design technologies that every shop owner must be acquainted with in 2020. Read more at adaptautomotive.com/10technologies
THE ADAPT INTERVIEW In the first installment of the ADAPT Interview, Fred Iantorno, vice president, IoT, VeriFacts Automotive, discusses the latest emerging technologies and breaks down how the Internet of Things will impact operations. adaptautomotive.com/interview
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J U M P S TA R T
GreenTech Automotive BY TESS COLLINS PHOTOGRAPHY COURTESY GREENTECH AUTOMOTIVE
1 / Going Green In 2009, Nate Boemler opened GreenTech Automotive, a shop that was painted bright green as a way to promise its customers a “green shop” experience. The problem was, at the time, he wasn’t quite sure what it meant to be “green,” Boemler says with a laugh. Once he decided his business model, he came up with a plan that included green initiatives. “When we opened, there wasn’t a good outline of how to be a good green shop,” Boemler says. “We had to do research and look to see where we could make the biggest impact.”
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2 / Words to Live By “It’s great to be a green shop, but it would be [even better] if everyone just did it,” Boemler says of the processes that GreenTech Automotive uses that are reflected in its motto, “A Clean Approach to a Dirty Shop.” “It will be a lifelong journey for us to try to change how people think of auto shops and how techs do processes in the shop,” Boemler says. One example of how GreenTech does this is its shop floor cleaning procedures, which is outlined by the State of California’s Green Station program. Rather than using a ton of mop water, the shop wipes everything—oil, antifreeze and other fluids—off the floor before it’s washed to ensure the least amount of oily and hazardous fluids get mixed in with the mop water. Boemler refers to this as the “dry mop” process.
3 / Saving Where it Counts Not only are the green practices good for the environment, they’ve also been good for the shop’s bank account. Boemler says many shop owners have a misconception that going green is expensive. Many of the practices are actually very inexpensive, and, in the long run, it saves money. Simple changes, like turning on energy-save mode on electronics, can pay off in a big way. Another way to save is the shop’s upgraded, energy-efficient lights and sky light, which enables the shop to use natural light on sunny days. “You can save a ton of electricity by paying attention,” Boemler says. Between electricity and garbage, Boemler says he saves at least $500 per month using green methods and, at $70, his water bill is much less expensive than his own home’s.
4 / Constant Reminders From the green exterior to the logo, everything about the shop screams “green,” so it only makes sense that its waiting area—as well as the shop floor—has plants. “I’m a green thumb kind of guy,” Boemler says. Boemler loves the plants so much, he even takes care of them, despite the fact that he’s the boss. The plants, as well as the dedication of the staff to environmentally safe practices, serve as a way to reverse the negative stereotype that has been created of the industry. “We want them [customers] to see we’re different,” Boemler says. 2 8 / R + W / 01. 2 0
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1 HAVE AN OUTSTANDING SHOP? Send a few photos and a brief description to submissions@ratchetandwrench.com and we might feature it here.
SHOP S TAT S Owner: Nate Boemler Location: Santa Rosa, Calif. Size: 4,000 square feet Staff Size: 6 (owner, service advisor, 2 techs, 2 office staff) Number of Lifts: 4 Average Monthly Car Count: 180 Annual Revenue: Just under $1 million
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Columns
STRAIGHT TALK Joe Marconi
FEEDBACK FROM THE TRENCHES When an employee speaks up at a meeting, don’t shut him or her down
GETTY, MICHAEL HOEWELER
“Why are we discussing these issues
when the people who need it the most are not here? We’re not reinventing the wheel. We get it. But the ones who don’t get it need to be here, too.” Those were the words spoken by one of my service advisors during a recent meeting. We were discussing quality issues and ways to improve overall production, which, we determined, would improve sales and profit. I listened as Tommy (not his real name) continued for a few minutes. I could hear the frustration in his voice, so I let him speak until I felt he expressed all his feelings to the group. I am a firm believer in holding regular meetings. And, while there are times when the group gives me feedback, rarely does anyone voice their opinion with such passion and intensity the way Tommy did that day. Drawing on experience, I thanked him for his openness and honesty. I also asked him if we could continue this discussion in the morning in private. He agreed. The next morning, I paged Tommy and
asked him to come to my office. I thanked him again for his openness and asked him to elaborate more on what he said the night before. Tommy hesitated at first, but slowly began to tell me his frustrations. It really boiled down to the level of commitment from a few techs. Tommy spoke in length about what he would like to change in the shop, and again repeated that we’re not reinventing the wheel. His words were clear and on point, “Joe, we all know what to do. We all know our goals. And we all know when we perform to the level we are supposed to. So, I just don’t understand why all of us can’t meet those expectations.” Tommy’s insight into the work environment and the dynamics of people’s behavior was perhaps deeper than he even realized. When people within an organization feel that some of their coworkers are not pulling their weight, animosity begins to set in. Essentially, your top employees want to make sure that everyone is committed to the company’s success and doing their very best for the greater good of the team.
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 01. 2 0 / R + W / 31
STR AIGHT TALK / JOE MARCONI
FAST TRACK YOUR BUSINESS S P O N SO R E D BY: ®
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D O IN W A A NL N P O D P A R S D O T ID O FO R A E R N S F D F R iO O EE S R
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We also need to remember that people look at things from their own perspectives. And their perspective becomes their reality. The key thing is to keep the lines of communication open, learn from each other and try to view different situations from the viewpoint of others. After nearly 30 minutes of discussion, it was time to give Tommy my input on how I viewed the situation. I let him know that, while not everyone will be in total agreement with how he views these concerns, he has made a giant step forward at letting me know the issues we have in the shop. I then asked Tommy, “Out of our 16 employees, how many people in your opinion, without giving me any names, do not live up to the expectations of the company?” Tommy thought for a moment and replied, “Well, when I think about it, just a few. Two, maybe three.” Here was my opportunity to bring logic into a very emotional discussion. “So, what you are telling me is that the majority of your coworkers do live up to the company’s expectations and do a quality job?” Tommy replied, “Yes, I didn’t see it that way.” I let Tommy know that I would take his ideas and implement them into my strategy to improve the work environment. He appreciated the fact that I listened to his concerns. Here’s the bottom line. When a person speaks up like Tommy did— listen to them. Don’t shut them down. They are expressing more than their frustrations over a few of their coworkers. They are giving you reallife, from the trenches information. And although it may be from their perspective, their viewpoint can give you valuable information that will help you and your company improve. Even a few people not pulling their weight can be enough to affect morale. And others may be feeling the same way. What you don’t want are “yes” people who merely agree with you because you’re the boss. No matter how uncomfortable it may be, welcome feedback and criticism from your key people. We also need to listen more and speak less. And most of all, we need to understand that the solutions to our problems don’t always have to come from us. Sometimes, an employee’s outburst is just what we need to put things in the right perspective.
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Annrew Minkaer from Bavarian Motor Repairs Like thousanns of shop owners before him, Annrew Minkaer starten his shop with absoaute confnence in his technicaa abiaities but aittae frst-hann eeperience on how to run a business. In 2011, Andrew left his role as a Certifed Master BMW Technician to go back to school for engineering. To help pay his tuition, Andrew started his own auto repair shop: Bavarian Motor Repairs. Once the ‘be your own boss’ seed took root, there was no turning back. Since day one, Andrew has focused on delivering the highest level of service to BMW, Mini, and Rolls-Royce owners in the D.C. area. Now, he is growing his business by connecting his team and his customers, tracking his shop’s metrics, and scaling his garage from the ground up.
CONNECTING WITH MY CLIENTS Last August, we decided to be more intentional when it came to growing Bavarian Motor Repairs. Our goal was to communicate with our clients faster and with more clarity so that we could provide better service, which resulted in higher dollar ROs. A big part of accomplishing that goal was switching to a cloud-based shop management system, like Tekmetric.
When you can show clients the problem on their own terms, and give them a choice, it grows your ARO and your business. Engagement with our clients has to be high caliber and proactive throughout the entire repair process. Èrom the second they drive onto our lot, we walk out to their car, greet them, and begin documenting their concerns to make their visit as personaliºed and e¹cient as possible. Once we’ve made that personal connection, our shop management system really shines with DµI, messaging, and lightning-fast estimate approvals by text or email.
TRACKING MY NUMBERS When I can measure how valuable my business is, I have more opportunities to pass that value on to our clients. We track this value by looking at our numbers: door rate, effective labor rate, parts and labor margins on each RO, service advisor close ratios, ìP dollars and the many other ÷PI’s that Tekmetric tracks and puts in front me. Being able to measure our success is one thing, but quickly identifying our
S H O P P RS OH F IOLPE S T A T S
Bavarian Motor Repairs Owner: Andrew Minkler Location: Capital Heights, Maryland Staff: 3, +2 Ancillary Average Monthay Car Count: 50 ARO: $1,670 (Up $500 in 1 year)
Number of Bays: 3 Shop Management System: Tekmetric
shortcomings and new opportunities for innovation is what has led us to grow our profts.
SCALING MY BUSINESS We are actively expanding our shop, adding an additional 2,500 square feet to accommodate four new bays. As we expand, it’s critical that we have a cloud-based system that seamlessly grows with us. I can attend a 20 group, meet with my business coach, spend time with my family, and still have access to my shop from my phone. Anywhere access gives me the confdence to let my staff grow into their roles.
Communicate your vision to your team and invest in the right people and technology to make it a reality. If I could go back to six years ago, I would tell myself, "Any one thing you do well is not enough". You need to team up with others that will help make your vision a reality. I hired a professional coach who taught me that I couldn’t manage what I wasn’t measuring. I joined a 20 group, upgraded to the best SMS I’ve ever used, and now I’m running a business that feels grounded with direction and purpose. I’m eternally thankful to our clients, my world-class staff, and companies like Tekmetric who work tirelessly alongside us in pursuit of something greater.
Visit Tekmetric.com/shop-spotaight-bmr to read the full story. For more information about Bavarian Motor Repairs, visit BavarianMotorRepairs.com
xxxx 2019 01. | fenderbender.com 7 20 / R+W / 33
The top trends to watch in order to stay competitive in the near future
virtual reality // e-commerce
consolidation // telematics // electric vehicles //
By Tess Collins
3 4 / R + W / 01. 2 0
elcome to 2020. It may look different than you pictured. There are no flying cars—yet. But, that could all change in the next five years—in 2025. So much has changed since 2015, it’s hard to say what the automotive industry will look like in the next five years. That being said, the time to prepare for the future is now. Rideshare, autonomous and electric vehicles have been a major topic at industry events and within the pages of this magazine. Their presence threatens the landscape of what our readers do. Today’s consumer is more informed than ever, and comes with higher expectations, meaning businesses need to adapt. With a shift in vehicle ownership and the type of vehicles consumers are buying, paired with growing customer demands, shop owners need to pay attention—or go extinct. These next few pages highlight five trends that shop owners need to pay attention to and adapt their business for—consolidation, telematics, EVs, virtual reality and e-commerce. Are you ready for these? If not, start reading. 2025 is just around the corner.
consolidation // telematics //
electric vehicles // virtual
reality // e-commerce
5 IDEAS FOR THE NEXT 5 YEARS
Consolidation
GETTY IMAGES
Why it Matters: According to Jim Lang, president of Lang Marketing, the number of non-dealer light vehicle repair outlets fell by 2 percent between 2013–2018 (information gathered from the 2020 Lang Aftermarket Annual). Within this number, the number of chain outlets remained roughly the same, while independent outlets fell nearly 4 percent over this time period, resulting in a decline of roughly 5,000 service stations and garages. This shows an increase in chain outlets and decrease in the presence of independents. How to Prepare: Dan Bauer, managing partner of Murphy Business, has been working on business transactions for 22 years and during this time, the biggest mistake he sees business owners make is not preparing for the day that they sell. “They leave a lot of money on the table,” Bauer says. Most business owners don’t prepare because they have the mentality that they’ll be there forever— that’s not the case. Bauer encourages shop owners to prepare for the future today no matter what they decide to do with their shop after they retire. Be it passing it to a family member, leaving
it to a shop manager, going through a private buyer or consolidating, shop owners will have the most success if they get their ducks in a row ahead of time: Talk to an accountant. According to Bauer, this is the most important step. Sit down and explain your plan. Let the accountant know your timeline and set up and prepare for taxes. Keep an eye on everything. Bauer says shop owners should prepare for the day they sell on the daily, keeping an eye on key numbers by watching the books. Staying on top of equipment and staffing is also
key because that will help earn more money in the actual sale.
is minimal as they’ll usually bring in their own management.
Get a team together. Bauer advises getting an investor, broker, accountant and anyone else necessary to get your selling plan in order. “You should have everyone looking at what your best interests are,” Bauer says.
Future Outlook: Bauer does not think consolidation will be the death of the independent. He believes there’s still major opportunity for indys, they just need to prepare for the future of their businesses today so they’re not stuck doing something they didn’t want to do or leaving money on the table.
Consider your options. Consolidation is not the only route to take. If a shop owner decides to sell to an outside buyer instead of leaving the shop to someone internally, the choices are a private buyer or a consolidator. The benefits of going with a larger company, Bauer says, are that the transition
More Information: To learn more about the state of the automotive repair landscape, including trends in consolidation, request your copy of the Lang Aftermarket Annual 2020 at bit.ly/langaftermarketannual2020. 01. 2 0 / R + W / 3 5
consolidation // telematics // electric vehicles // virtual reality // e-commerce
THE TREND:
5 IDEAS FOR THE NEXT 5 YEARS
THE TREND:
Telematics Why it Matters: In 2018, the Right to Repair Coalition relaunched due to telematics and the advantage that it gave to dealerships. At the time the Right to Repair law was passed in 2013, access to information through telematics was not an issue. In 2020, it is. Independent shop owners need to be aware that the dealerships have access to information that could steer customers away from the independent shop. How to Prepare: In order to create an ongoing relationship with customers, independent shop owners need to look at online and mobile applications created by the aftermarket that will allow them to compete with the OEMs, Bill Hanvey, president and CEO of the Auto Care Association, says. For those shop owners that are doing this, Hanvey provides a few ways to use it as a differentiator. Improve customer service. Utilizing telematics can provide a seamless, smooth, customer experience that alerts customers immediately when their car needs to be repaired, Hanvey says. “Shops can use the opportunity to automatically schedule the repair, order the parts, keep it convenient for the customers and increase trust and rapport through this process—a big differentiator,” Hanvey says. 3 6 / R + W / 01. 2 0
Branch out. Fleet work can benefit in a large way from telematics. If shops have the capacity to do so, Hanvey suggests reaching out to fleets with this offering. It will help increase revenue opportunities. Future Outlook: Information is power, and if independent repair shops do not have their customer’s information, that power will go to the dealerships, warns Hanvey. If the playing field is level, this access to information can improve the overall experience for customers as well as the automotive industry as a whole. More Information: To learn more about how to make telematics work for your shop, check out this 2017 Ratchet+Wrench story at ratchetandwrench.com/telematicstrendline.
RIGHT TO REPAIR
A timeline—from inception to relaunch— of the Right to Repair Coalition
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Members of the independent auto repair community in Massachusetts join forces to collect signatures
2 01 2
The signatures were turned into local registrars for consideration for 2012 ballot as initiated state statute, which led to a successful ballot vote
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The 2013 Automotive Right to Repair Law was passed in Massachusetts, making it the first state to adopt the law
2 018
The Right to Repair Coalition relaunches due to telematics
Electric Vehicles Why it Matters: In September 2019, Daimler announced that it would stop developing new internal combustion engines to focus on electric cars. Prior to that, in March 2018, Nissan announced its plans to sell 1 million EVs annually by 2022. These are just two examples of moves made by OEMs that signal an overall trend in the industry moving toward EVs. How to Prepare: “If shop owners aren’t doing hybrid cars, they are missing the boat,” Craig Van Batenburg, CEO, Automotive Career Development Center, says. Even though it may not seem like EVs are taking over, hybrids already make up a significant portion of vehicles that are on the road today, so Batenburg says an understanding of those is essential, and once you have that, you’re well on your way to understanding EVs. “If you know those, you know EVs, just throw the engine out,” Batenburg says. EVs do not need maintenance as frequently as gaspowered vehicles, meaning there will be less work to do, which means the shops that will survive in the future need to find a way to be attractive to EV customers. Here are a few action items to take right now to help you stand out in the future, according to Batenburg. Buy an EV website. Batenburg says to buy a domain for your area with hybrid or EVs in it right away so people will find
you. For example, if you live in Ely, Minn., purchase ElyHybridRepa irs.com, Batenburg says. Get that real estate before someone else in your area does. Gauge staff interest. The next step is to get your staff trained in actual hybrid/ EV repairs. Gather your staff and ask for one or two volunteers that are interested in this and send them off to the necessary training. They can then come back and teach the rest of the staff. Advertise like crazy. Once you’re ready, get the word out, Batenburg says. Once people start to bring their vehicles in, your staff will become more confident in working on this type of vehicle and gain more knowledge, which will in turn bring in more customers. Future Outlook: “We can’t continue to keep doing what we’re doing. Shops will be fine—but there will be a lot fewer,” Batenburg says. If the price to purchase an EV begins to level out with the price to purchase a gas vehicle, there will be a shift in the type of vehicle that is on the road. And, if internal combustion engines cease, shops that haven’t prepared to fix EVs will find themselves in a difficult situation, Batenburg explains. More Information: For answers to common EV questions, check out ratchetandwrench.com/ecommercetrend. 01. 2 0 / R + W / 37
consolidation // telematics // electric vehicles // virtual
reality // e-commerce
THE TREND:
5 IDEAS FOR THE NEXT 5 YEARS
THE TREND:
Virtual Reality
Why it Matters: Less than 2 percent of those entering the automotive industry are between the ages of 18–23, according to Shawn Dupuie, solutions design manager at Bosch, based on a survey of 4,543 participants in the industry. The majority of the workforce is aging, and the technician shortage is at an alltime high. Not only that, but vehicles are becoming more advanced than ever before, making today’s technician’s look more like engineers. Virtual reality (VR) can be used as both a recruiting and cost-effective training tool, Dupuie says.
How to Prepare: “Most of our customers are coming to us and saying they’re having a hard time recruiting new techs that want to work in the industry,” Dupuie says. “How can you [Bosch] help us? VR.” Virtual reality is appealing to younger generations, as many have grown up with it and have come to rely on it. It can be used as a recruitment tool, Dupuie says. Not only that, but it has cost-saving benefits for shops. It’s an effective training tool that allows staff to get safe training from a remote location that they may not otherwise have been able to attend. For example, Dupuie gives the example of an OE doing training on engines. Rather than purchasing 100 engines to work on, VR headsets allow technicians to work on the engines without actually having one physically in front of 3 8 / R + W / 01. 2 0
them. Not only that, but VR doesn’t require the space that certain training requires. Right now, the majority of VR training is available for OEs and dealerships, but independents are still able to reach out and request it. Bosch is also currently working on a training subscription model, which will allow independent shops to do VR training with a monthly fee if they have the VR headset. Dupuie anticipates this will be available sometime in 2020. Here are a few of the benefits of taking advantage of VR training: Information Retention Dupuie says that what they’ve found technicians retain knowledge better with VR. “We’ve found that most people retain 10 percent of what they read, 50 percent of what they see and hear and 90 percent of what they do— we’ve had a high success rate of retention [with VR training],” Dupuie says. Cost Savings Although the investment may seem steep up front, VR means you don’t need the physical
materials to work on, so down the line, it’s actually more costeffective, explains Dupuie. On top of that, staff can actually stay in the shop rather than racking up travel expenses to go to a training session. “It’s expensive to send them away to training, so when they can do one-hour blocks in the shop, it’s costeffective,” Dupuie says. Effective Marketing “Being able to offer it is huge,” Dupuie says of the benefits for attracting both customers and employees. VR is attractive to younger generations, which makes it an appealing recruitment tool for shops to offer as part of a benefits package. Marketing this to customers also helps show that your shop is on the cutting-edge of technology, Dupuie says. Safety With more advanced and complex vehicles, repairs are getting more dangerous, especially if a technician is unfamiliar with it. VR training offers a safe environment to practice the repair and become comfortable with
it because they’re actually performing it, says Dupuie. Future Outlook: “In the next couple of years, it will become more readily available to independents,” Dupuie says of VR training. Dupuie believes that VR will change the way training is done over time and that independent shop owners need to start doing research on it and taking advantage of it today to prepare for it becoming more mainstream. One way to do this is to become acquainted with the equipment, he says. Go out and buy a VR headset and become familiar with it. Another tip is to contact a company that offers VR, such as Bosch, and share the pain points that you have with training so they can help find a solution. More Information: For a look at how a few OEMs are using VR training, check out this article by Jasoren, a software development company that works on applications for VR, at bit.ly/VRtraininguses.
consolidation // telematics // electric vehicles // virtual reality // e-commerce
THE TREND:
E-Commerce Why it Matters: According to a study by Sana Commerce, buyers purchase an average of 75 percent of their products online. 25 percent of those polled want easier and faster checkout, repeat ordering and quicker delivery. On top of that, over one third of buyers would choose a vendor if they offered them the ability to place, pay, track and return orders online. For shops that sell—or are thinking of selling—parts, an ecommerce presence is key. How to Prepare: According to Giuseppe Ianni, VP of sales, North America, from Sana Commerce, even though customers are increasingly online, the auto industry is still heavily lagging. And, the majority of those that are online, most only have a commerce 1.0 solution, he explains. What he means by that is that the platform is not personalized to the customer and is often not streamlined, causing more problems than solutions. The reason many are not online is because the task seems daunting, explains Ianni. However, there are tools that can help with the process and Ianni believes its a necessary step to connect with today’s consumers. “They [business owners] have an option and a way to better meet consumers’ demands through e-commerce,” Ianni says.
Here are a few tips for getting started in e-commerce. Embrace technology. The first step, according to Ianni, is to take note of where you’re at today and make a commitment to getting started. Begin by getting all of your data compiled. Begin collecting SKUs and coming up with a system to move inventory online. If shop owners are able to invest and put the product into one database, Ianni suggests doing that, as it’s a much simpler way to get the inventory online. Find a system that works for you. Ianni suggests finding a single stack solution—which means all of the data that is needed, such as SKUs, make, model, year, etc., is all managed in the program. To find the best one for your business, Ianni suggests reaching out to a company to
get a trial of the product. The trick is to test the product out and think of how it will work 3–5 years down the road rather than just seeing how the functions work for you today. “Look at the usability and the transparency [of the system] in terms of data,” Ianni says. The growth plan of your business is another factor in determining what system you will use. For example, if you plan on adding or acquiring new locations, you may want to ask how the system will synch up inventories. Find someone to manage the data. The first step is getting online, the second step is keeping that site running smoothly. Ianni suggests having a dedicated person that owns the data and makes sure to manage it all in one place. “Don’t manage data twice— find a system that will allow you
to manage it once and find a primary owner that manages one set of data,” Ianni says. Too many systems in place and too many people in charge is what causes hiccups, Ianni says. Avoid having too many cooks in the kitchen when it comes to your E-commerce site. Future Outlook: Ianni believes that in the future, there will be a shift toward automation and e-commerce is a way to increase revenue and be more efficient. He suggests taking a holistic look to your business and taking stock of what you already have in place and what you will need to have in place to survive in the next few years. More Information: This 2018 article (ratchetandwrench.com/ecommercetrend) from Ratchet+Wrench will provide more information on ecommerce trends in parts ordering. 01. 2 0 / R + W / 3 9
CONSTANT GROWTH How one shop owner has cultivated a continuously growing business BY A B BY PAT T E R S O N PHOTOGRAPHY BY AMANDA MONTGOMERY
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Winning Drive Since opening his shop in 2009, Andy Gales has grown his shop every year since to an annual revenue of $1.1 million.
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C O N S TA N T G R O W T H
GALES GENERAL SERVICE CENTER, GALES DETAILING & RECONDITIONING
Growing up, shop owner Andy Gales had a natural-born ability to fix anything; he was referred to as “Handy Andy,” always tinkering around with anything he could get his hands on. Naturally, he put his talents to good use and decided to later join the auto repair industry. And, a short time into his career, he wanted to open a repair shop of his own. “I knew I always wanted to do my own thing,” Gales says. “I worked for somebody else for a bit and basically, I said ‘I can do that, too.’” To start his own business, he needed a facility to hold it all together. With a 3,500-square-foot building, one that had been vacant for years, he began constructing his business from the ground up. Gales said it was all possible because the building’s seller took a chance on him and gave him six-months of rent, free of charge. “He said, ‘If you fix it up, I’ll waive six months for you,’ and I kind of just started from there,” Gales says. After opening up his shop in 2009, Gales found a lot of success. The first year, Gales’s auto repair shop did $250,000 alone with a total of five employees, including Gales and his wife, Nadia. And since then, the shop has grown every year—the shop is now at $1.1 million. And as the years went by, he constantly found ways to grow what he had built, first by adding loaner vehicles to his shop’s services in 2016, bringing more in as needed—the shop is now up to 10. “I always wanted dealership appearance, family experience,” Gales says. “I looked and researched every possible shop I could and I kind of just took what they had and made it better.” That’s the kind of shop owner Gales is—always striving to be better. Since opening up Gales General Service Center over 10 years ago, Gales has accomplished many feats in his career, including winning the Best of the Best Auto Repair Shop in the Saginaw, Mich.-area for 42 / R + W / 01. 2 0
three consecutive years. Because of his success and his drive, he has constantly been able to grow his shop. An opportunity to grow presented itself a few years ago. With the shop’s weekly car count reaching over 100 in a four-bay shop, things started to become stressful and confined; he wanted a better workspace for his employees, knowing this was his shop’s time to move to bigger and better things. So in 2017, he moved his shop to a larger, 8,000-square-foot space and three more bays to work with just a half-mile down the road. From this move, the business kept growing. The shop’s revenue increased by $200,000 without changing any of his current prices. Expanding the Operation With the business doing well, he still had a minor detail to take care of. Because Gales is in an area where real estate comparables—price comparison between similar homes in the same area—are very low, selling his original building wasn’t really an option in his book. He knew he had to do something with the retired space instead of putting it on the market and selling it below its value. When servicing cars, customers would always ask Gales about his detail offerings, or if he knew anyone that specialized in detailing. Originally, Gales subbed out the detailing service, but he didn’t like the results he got from it. “I am an extreme perfectionist; I like clean cars,” Gales says. “If you’re going to service it, you might as well be able to do it all.” So, he figured out the only way he could get what he wanted was to do it himself; this way, he could control how it was done himself. “In auto repair, it’s very hard to get gratification,” says Gales. “In detailing, you can actually see the before and after difference. You get that ‘wow’ factor when you look at your car, where repair—it just drives as it should.”
Location: Saginaw, Mich. Repair Shop Size: 8,000 square feet Detail Shop Size: 3,200 square feet Staff Size: 11 Lifts: 7 Repair Shop Average Monthly Car Count: 240 Combined Annual Revenue: $1.23 million
Eye for Detail Customers appreciate a detail service—a fact Andy Gales learned when his customers began asking him about it.
TIPS FOR WINNING DETAIL After studying detail shops, Gales learned how to provide the best possible service
SHOW YOUR APPRECIATION
ADD EXTRA OFFERINGS
Gales noticed a lot of detail shops never left thank you cards, water bottles with their logo, or other incentivized gifts. Simply adding in a sample product to show you appreciate their service will help set you up for a future service.
Gales says dealerships would simply clean your car and nothing else. He says his detail shop gets out of this comfort zone by painting trim, applying ceramic coatings, dying fabrics and carpets, even repairing cigarette burns. “Independent detail shops take clean to the next level of refreshing, restoring, and renewing the vehicle,” Gales says.
To create a successful detailing business, Gales needed something which to build off. He looked at the top detailing shops, personally taking his vehicles to them to see what he liked and what he didn’t in order to make his shop even better. And thus, Gales Detailing & Reconditioning was born in January 2019, where Gales says it’s added 10 percent growth in revenue to his overall operation. “You can easily sell detailing through the auto repair shop,” Gales says. After every service, the shop simply puts a flyer in the customer’s car to let them know about the detail offerings. A lot of customers use both of his services, but if they don’t, he gets an array of customers no matter the job. “Some people don’t like to use us for repair and we are still able to get them as a customer for detailing,” Gales says. “It works hand-in-hand.” Devoting to Both Sides When it came to updating his business plan to fit in the new operation, he decided it was best to keep the two businesses separate from one another. “If you keep them separate, it’s more organized,” Gales says. “You can control it more.” Adding another business on board also meant adding new tasks to manage. To efficiently manage the two, Gales holds weekly meetings and has a very strict quality control process. Along with this comes having clear goals in mind. His team’s goal for 2019 is to beat sales by 10 percent, and they carry this out by setting goals every quarter—three, six, nine, and 12-month goals. Gales starts his days off at the auto repair shop, where he and his crew do all of the paperwork before the shop opens. Throughout the day, he swings by the detailing center to check-in, visiting about three times per day to keep morale up and make sure
everything is running smoothly. And thankfully, it’s easy to do with the detailing shop just a half-mile down the road, which makes devoting equal time easy for the business owner. Growing with the Times As Gales has physically grown his business, that doesn’t stop him from wanting more. Gales is always looking for new opportunities, whether its physical growth or improving operations. As he considers himself as a millennial, Gales is committed to keeping up with the latest technology and tactics. Social media was an easy place to start, adding in more engagement with his customers. To help manage this, he hired a marketing coordinator, whose only job is to control the shop’s social media. “With success, we are growing with the times, where a lot of repair shops are not,” Gales says. “Our business is ran on word-of-mouth and social media, that’s it.” And Gales says doing so has been a major success. Utilizing Twitter, Facebook, and YouTube, the shop posts its own educational videos and tutorials, giveaways, and lots of lighthearted posts to engage with customers. For Halloween this past year, the shop had an iconic mascot, Wiz Casper, a “ghost kid” who likes to hide in the shop, trick-or-treating in the lobby, singing “Monster Mash” and just so happened to sneak into most of October’s social media posts. This, of course, was all in good fun. “Success comes from having fun with auto repair,” Gales says. “People like to see real people.” So this leaves the question then: how do you know if it’s the right time to grow your business? Get an idea, make it happen, and roll with the punches. “You don’t really ever know. The hardest part is just getting started,” Gales says. 01. 2 0 / R + W / 4 3
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$1.7 Million Profit Reasons to Focus on Your Shop’s Culture Precision Auto in Germantown, Maryland is a third-generation repair shop that has seen their profits increase by 1.7 million over the last 7 years. They attribute this success largely to their focus on building and maintaining a strong culture. Their culture is called The Precision Way and it encompasses a set of goals, values, behaviors, principles and practices that have become part of life, in and out of the shop. Bud Wildman is the founder of Precision Auto, a husband, father and a great leader. “If you build the right company culture and your people all believe in it, you have this tremendous energy that flows right through the shop, right into the office and right out the front door to the customer. In our customer reviews, they aren’t talking about getting their cars fixed, they are talking about the experience.” Jackie has been married to Bud for 37 years and has seen a significant transformation. “Most of the people who go into the automotive business are technicians. You know how to fix cars. You’re good at fixing cars. You happen to be a person who likes people too, so you’re good with people. So, you decide one day, hey, I’m going to go into business for myself. But you don’t really know what you are doing, how to train people, how to lead them and make them go where you want. What ATI did for Bud was turn him from this technician, with potential, to a great leader who can truly motivate people.” Andy Wildman, their son, will eventually take over the business with his wife Jessica. They will continue defining their business as more than
Precision Auto has become a two-time ATI Top Shop of the Year winner, outperforming some of the best shops in North America.
just car repairs. Andy says, “It’s hard for some people to imagine what the culture of a business is or means. It’s the spirit of the business. Yea, you got your numbers, the services and the building. You can put your hands on that kind of stuff and see it and feel it. The culture is much more emotional, more motivating, it’s a shared belief system that we all have. We come to work wanting to strive to be our best both for Precision Auto and for ourselves. Culture of a business is a never ending, evolving element that we all share. Everyone shows up happy, we get along very well in the sense that we are all friends or family. It is such a positive experience here, in our personal lives it just radiates that way too! We are not just working to live. Our work is our life and we take so much pride in it because we give our full selves to it. It’s really pretty cool.” The Precision Auto Way is printed on a fold out card carried by the
employees and discussed at least once a week in meetings. There are 24 points, simple guidelines and reminders to help shape their daily work experience. “Do the Right Thing”, “Check the Ego at the Door”, “Honor Commitments” are a few examples. Developing a culture for your business isn’t an easy or immediate endeavor. Bud learned what he needed to know by watching what was happening at ATI. He says, “What ATI was creating, I wanted that. I wanted that bad.“ Bud and Jackie are part of ATI’s continuing education program. Regarding Bud and ATI, Jackie says, “Through this journey, he has become a much better contributor to the community, he is a much more polished leader now, at home and here. He has just gotten more refined from all their coaching and training. Even though we take a lot of classes, ATI is constantly one step ahead of us. And they are always looking to make us better. Bud and I decided
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It’s hard for some people to imagine what the culture of a business is or means. It’s the spirit of the business. - Bud Wildman
Bud, Andy and Jackie Wildman of Precision Auto 15-Year ATI Members long ago in order for us to be able to leave the business to Andy, he had to buy into ATI and he had to continue with them. That was part of the deal.” Andy says the ATI experience is setting him up for success. “A huge benefit that I find at ATI are the peer groups that have similar businesses. It is so valuable for me to bounce ideas off people in similar circumstances and ask their advice. It’s coming from an unbiased source, and to me, that is one of the biggest advantages of ATI. My group is called “The Second in Command” designed for people like myself who are next in line to assume leadership.” Bud knows that all good leaders have great support around them.“ I always will be a member of ATI, and I know that as my son and daughter in law take over the business, they will always be a part of the ATI family.”
Measuring Success “During my first few years, I thought the numbers weren’t that important. After an epiphany with my 20 Group, where they hounded me about my numbers, I started paying attention to the ATI Key Performance Indicators and the ATI profit model with the help of my coach. Once I really understood my numbers and what I needed them to be, I shared this model with my service writers. My entire team started working together to ensure that our numbers met or exceeded ATI standards. We started seeing profits that we never dreamed possible. Since that time, I’m proud to say that Precision Auto has become a two-time ATI Top Shop of the Year winner, outperforming some of the best shops in North America. The results achieved and the success that we are enjoying would not have happened without ATI.” – Bud Wildman
FOR MORE INFORMATION Learn about ATI’s business consulting and coaching services, visit www.autotraining.net/rw0120
Congratulations to the 2019 Ads of the Year W E AS K E D YO U , O U R R ATC H E T + W R E N C H R E A D E R S , TO PICK YOUR FAVORITE AT TENTION- GET TING , INFORMATIVE AND MEMOR ABLE ADS.
Winners were chosen from eligible national print ads in the August 2019 issue. Participating advertisers include: Advance Professional, AUTEL, Automotive Training Institute, AutoZone, Castrol, Factory Motor Parts, Ford Motorcraft, Jasper Engines & Transmissions, KUKUI, Mail Shark, Mitchell 1, MobileSoft, NAPA AutoCare, NAPA AUTO PARTS, Nissan, OEConnection, Parts Plus, SiriusXM, TechNet Professional Automotive Service, Volkswagen and WORLDPAC.
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M A K E
M O N E Y / S A V E
M O N E Y / W O R K
S M A R T E R
SHOP ADVICE CUSTOMER SERVICE CASE STUDY SALES+MARK E TING
Sending a Message Lake Highlands Automotive is heavily ingrained in the Dallas community. One way it’s been able to do this is by posting messages on its sign for all to see.
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SARAH WARE
CASE STUDY
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T O O L B OX / S H O P A D V I C E
INVOICE $ $ $ $ $ $
DISCLAIMER
Avoiding Liability How to protect your business if a customer declines a needed repair Picture this: A customer comes in your shop to get new rotors. While you’re completing the job, you notice the rear brake pads are slim to none, making the vehicle unsafe to drive. You alert the customer of the issue and they kindly decline the service, saying, “I’ll bring it in another time.” About a mile out from the repair shop, the customer’s brakes give way, causing them to get into an accident. As an auto repair shop, will you be held responsible? And, what if the customer comes back and blames you for the accident when you told him or her the issue and recommended it be fixed? How can you not be held liable? Growing up as a technician in the industry, William Ferreira knows about this scenario. When he left the trade and went off to law school, former colleagues—mechanics and shop owners—were having legal troubles of their own, so he decided to step in and help. Based in San Francisco and Los Angeles, he is now the lead attorney of Automotive Defense Specialists, representing only auto repair and auto body facilities—no accident cases involved—with 10 years of experience under his belt. To help alleviate any confusion, Ratchet+Wrench spoke with Ferreira on how auto repair shops can avoid being held liable in these types of situations. A S TO L D TO A B BY PAT T E R S O N
The biggest issue is if someone finds something and doesn’t tell them. I have
had customers that have tried to hold the shop liable. Generally speaking, the shop usually avoids liability. Most shops are vested in checking things out and finding something wrong to recommend another service to them. If they see something, they’ll say it, and if they don’t see it, it’s because it’s not in view. If it is unrelated to the repair, a shop cannot be held liable. Is it the duty to inform the consumer of an unsafe condition on vehicle? Yes, of course, but only if you see it. You could spend two weeks with a car to make sure that everything is working correctly.
GETTY
One thing that you worry about, especially in California, is the Bureau of Automotive Repair doesn’t want you scaring the customer into a repair. If you say it’s an
unsafe vehicle to operate, it better be unsafe to operate. You don’t want to say something that’s untrue. There are key things that could get a customer to recognize that this
is a dangerous piece of equipment and the things I am telling you are not because I’m trying to make a quick buck off of you, but because it is necessary to keep you and your vehicle safe. Let’s say you’re pulling off a wheel to do a brake job, and literally a rotor disintegrates in your hands. You can’t put it back together; nobody would put it back together and put it on the road. You tell the customer what happened and they accuse you of being a crook and they want to take their vehicle somewhere else. To avoid liability in these circumstances, I would say to the customer that you are not letting this vehicle leave unless it gets fixed or it leaves on a tow truck, and if somebody finds out you put the wheel back on the car and it kills someone, that’s the last thing you need on your conscience. An explanation of how the vehicle operates and taking a few minutes to explain to the customer why it’s important and how it’s important to the safety of the vehicle is the way to go.
Usually, that kind of gets their attention. Spending a couple extra minutes and even bringing them out to the car and physically showing exactly where the problem is, and using a visual aid to show what it’s supposed to look like gives them a visual representation and will help them understand more. It brings it from, “I don’t know anything about this; I’m afraid they are trying to sell me something I may not need,” to, “I understand, and I am comfortable with why the repair is necessary.” I would have a disclaimer on every single invoice related to recommended repairs.
Generally speaking, I would write on every invoice, “It may be unsafe to operate this vehicle on streets or highways in its current condition. We recommend XYZ repairs, and the shop makes no claim regarding the safe operation of the vehicle in its current condition due to the above issues.” And I would also say, “A driver/owner is responsible for any damages as a result of continuing to operate this vehicle in its current condition.” What that does is explicitly tells the customer there is something we found here that we feel is unsafe, we’ve told you about it, we don’t recommend you drive it, and if you do, you’re on your own. And at the bottom, have them sign it as proof. Have your paperwork in order. I don’t care if
it’s five, 10 years later—you’ll still have some customer or some lawyer saying you worked on their vehicle 10 years ago and probably failed to do something correctly, so let’s sue them as well. If you have your paperwork in order and have those documents that say you recommended the repair, those types of documents would deflect the blame or the liability to the customer that failed to do something that was recommended by a qualified mechanic. 01. 2 0 / R + W / 4 9
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A Winning First Impression Win the customer over immediately with a thoughtful check-in area BY TESS COLLINS
to the checkout counter, which has papers spread all over it. The customer patiently waits behind the desk, not sure which of the customers there are waiting and who have already been helped. The customer has no choice but to play on his or her phone until he or she is finally greeted. For check-in, the limited counter space means they have to fill out their information awkwardly in the air. Scenario No. 2: Upon entry, the customer is immediately greeted,
even though there is one person ahead of him or her. While waiting, the customer enjoys music and a TV playing informational videos behind the desk. Once it’s his or her turn, the check-in process is smooth and the customer has ample space to spread out any paper he or she may need. Which shop do you think the customer will come back to? It may seem like a small part of the entire repair process, but the aesthetics of a shop set up the customers’ expectations for the rest of the process, with one being pleasant and the other chaotic. Even if the staff is pleasant and the repair is perfect, the first impression of a shop can make or break it. Never underestimate the importance of your check-in area and the lasting impression it can have on customers. Two shop owners share why they’ve set up their check-in areas the way that they have and how it’s helped them win customers. 5 0 / R + W / 01. 2 0
1. Easy Access For the customer, the front desk is where it all happens. That’s why special attention needs to be paid to the setup. Randy Beeniga, owner of Foreign Accents in Greensboro, N.C., has a unique, round counter. The design of the desk allows those behind it to see customers and what’s going on in the shop. The layout lets the staff easily go back and forth between the front and the back of the shop. The desk progressively gets wider to a depth of 40 inches, giving customers plenty of room to set their personal items down on the counter and do any needed paperwork. Rick Hughlett, owner of Rick’s Automotive in Springfield, Mo.,also designed his front desk with the customer in mind. Hughlett was able to build his check-in counter from the ground-up and when he did, he took his past experience into consideration and designed a pull-out shelf for people in a wheelchair to use to do their paperwork after seeing many struggle with this in the past.
COURTESY OF FOREIGN ACCENTS, COURTESY OF RICK'S AUTOMOTIVE
Scenario No. 1: A customer walks into a dimly lit shop and goes
Front and Center The front desks at Foreign Accents (left) and Rick’s Automotive (right) are well thought out and serve as a way to enhance the overall customer experience.
2. Needed Distractions Checking in can often take time, so Hughlett makes sure to keep his customers occupied. How? “Something to occupy their taste buds and eyes while they’re waiting,” he says. The front counter at Rick’s Automotive always has a jar filled with branded suckers for kids. It turns out, it’s just as much a hit with the older generations. “Adults love suckers—it pacifies them for a little bit until they get to the counter,” Hughlett says. Behind the counter, Hughlett also installed a flat-screen TV that displays the different technicians at the location and how long they’ve been there, which helps create transparency with customers, along with a rolling news stream to keep customers informed and occupied while they’re waiting.
3. Information to Go Both Hughlett and Beeniga keep their technician’s business cards at the front counter.
“I’m big on promoting all my techs. Every tech has a business card with their picture on it,” Beeniga says. Hughlett also uses this technique and says that it’s effective for handing to customers as they leave, because they often forget the name of the person working on their vehicles so it’s nice to have that information on hand. Hughlett also puts his shop’s latest award up front, to let his customers know that the shop is highly reputable.
4. Personal Bubble With 1,400 cars per month, the desk at Rick’s Automotive often gets crowded, so Hughlett designed the counter with three POS systems and monitors and plenty of space in between so three customers can be checked out at the same time, if necessary. Personal space was one of the reasons behind the depth of Beeniga’s desk. “The depth I gave so customers can have more space on the counter,” Beeniga says of
the up-to-40-inch depth of his circular checkin station. “It can be a workspace in the front and you don’t impede each other—you’re not breathing down one another’s necks.”
5. A Clean Space Both of the shop owners agree that cleanliness is necessary when it comes to attracting customers. At 4 p.m. sharp on Friday, Beeniga shuts his shop down—no matter what—so the staff can clean. He has a checklist of items that need to be finished before the staff can leave for the weekend. “We don’t leave on Friday unless that list is checked. I won’t leave my shop with a mess,” Beeniga says. In addition to his Friday cleaning ritual, three entry-level employees are in charge of maintaining the cleanliness of the shop, which includes the front desk. Hughlett also has a dedicated employee that maintains the waiting area, including the desk. Above and beyond that, he utilizes a weekend cleaning service. 01. 2 0 / R + W / 51
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Columns
INDUSTRY INSIDER Rissy Sutherland
STAYING THE BEST OF THE BEST Outside visitors can highlight areas in your business that need work
FUE VANG
We often interview the “best of the best”
shops around, but this month, I wanted to talk about how one becomes the “best of the best,” and how they maintain that level of service moving forward. One of the key ways I have found to stay on top is to invite outside owners into your business for an evaluation. Having shops nationwide and working in the industry for many years, I get to visit different shops every month. It’s amazing what I see and learn from these experiences. I know that it only makes me better as a shop owner to make improvements, changes or to be motivated by what I see. But it also, I hope, helps the recipient to see things in a different light. I’ve always had an open-door policy to owners that I respect to visit our locations and provide valuable feedback and share what they see with a fresh pair of eyes. Another set of eyes will see things that you miss and point out areas to review that you may not have paid attention to in years. I recently had the ability to spend some time with Ashleigh Civitello, shop owner of Lucas Auto Care in Cypress, Texas, and consultant for ShopFix Academy. I enjoy my time with Ashleigh during every visit to get the female take on being an industry leader, a customer’s perspective, a respected automotive professional and an amazing shop owner. Ashleigh knows that to stay the best of the best, it’s important to invite others to your shop to gain a fresh perspective. Owners, Ashleigh explains, are so busy doing everything—from front counter sales to diagnosing cars—that they often forget to step back to see the bigger picture. With all of the hats that owners have to wear, it’s easy to overlook the old tires stacked up on the side of the building, or the member of the staff that’s stopped shaving. All of that, Ashleigh explains, starts to become the norm and is no longer acknowledged by the owner. That’s why it’s beneficial to bring in another shop owner,
as it introduces an outsider’s perspective to the business and provides valuable feedback that can be used to improve. Aaron Stokes and I visited Ashleigh’s shop before she started consulting. Ashleigh said the feedback helped her improve branding, the shop layout and find ways to improve flow and efficiency. However, for a shop visit to be beneficial, you must be open to constructive criticism, as Ashleigh was. Her shop had been in business for 10 years and was successful—it would have been easy for her to brush off our recommendations and think, “my way is better.” But, if she did this, how would she have grown? By taking a humble approach and listening to outsider perspectives, she increased revenue and currently has a second location in the works. Ashleigh herself now tours shops and has a checklist for what she looks at. For her, the journey starts online. Is it easy to get directions to the store? How does the website look? What do their reviews look like? All of this is evaluated before she even steps foot on the property. Then, as she heads to the physical store, she takes note of the neighboring streets and businesses, whether or not there is a view of the shop from the street, if the signage is clear and visible and if parking is easily accessible. Moving inside the shop, she takes note of everything—from the staff to the smell. Ashleigh plays the part of a customer and heads straight to the waiting area. Then, she evaluates how long it takes to be greeted, makes note of the interior signage and determines whether or not she feels comfortable. One huge, telltale sign of whether or not a customer will be pleased? The bathroom. You can tell a lot about a shop by the way they maintain their restroom, Ashleigh says. Next, she evaluates the staff to see how well they stick to the script and company policies. Ashleigh, who comes from a hospitality
Rissy Sutherland has opened more than 400 shops in her career as the executive for nearly a dozen automotive brands and now the president of SRS + Co. She is one of the industry's foremost experts in shop operations. sutherlandrissy@gmail.com ratchetandwrench.com/sutherland
background and is strong in that area, enters her shop through the back and takes the time to check in with technicians. Building relationships with the technicians can quickly help point out where the pitfalls are in the front. Allowing other shop owners to tour your shop allows you access to insight into layouts, equipment and efficiency and enables you to work out new ideas. After another shop owner tours your shop, it’s time to make an actionable plan. Since everything can’t be addressed at once, rate each item in order of priority and draw out a roadmap to get it done. To sum it all up, to be the “best of the best,” you have to have a thirst for improvement, curiosity on how to be better and stay humble. Having a “my way or the highway” view is not always the only or the right way. Finally, just ask. I don’t think in over 20 years I’ve ever had a shop owner say, “you can’t visit my store.” If you want outside feedback, just call up one of your mentors—respected brothers/sisters in the industry—and ask. You will be blown away by what you will learn. 01. 2 0 / R + W / 5 3
T O O L B OX / C A S E S T U DY
OPERATION
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GOODWILL How this shop owner overcame an adverse situation and made an impact in the community
BY A B BY PAT T E R S O N
PHOTOGRAPHY BY SARAH WARE
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T O O L B OX / C A S E S T U DY
une 9, 2019, seemed to be a typical Sunday morning in the city of Dallas. Jordon Baker, owner of Lake Highlands Automotive, was getting ready to take his son to church camp and to attend his daughter’s dance recital later that day. All of a sudden, clouds started to form, the daylight suddenly turned into night, and wind power picked up to high speeds. What was supposed to be a relaxing Sunday turned into a nightmare for most. The Washington Post described the storm as a “massive rain bomb” over Dallas, and the pictures don’t lie. The storm only lasted an hour and a half, but did more damage than the city expected—Baker says “thousands and thousands and thousands” of trees were down throughout the city. “It looked like a war zone,” Baker says. “One hundred–year-old trees were down and a lot of people couldn’t get out of their house.” According to The Dallas Morning News, close to 220,000 homes were without power in Dallas County alone. And by noon the next day, 205,000 were still without power, along with 13,000 more in surrounding counties. Baker’s shop was one of the places affected by the power outage; no power meant no work for the shop for two whole days. But, by thinking of the bigger picture, Baker was able to use those two days to his advantage and grow his customer base. Baker details how his shop decided to turn a terrible event into a positive impact for the community and his shop. 5 6 / R + W / 01. 2 0
Like Father, Like Son Jordon Baker (left) has continued his father, Rag Baker’s (right) community involvement by donating to various organizations in the area.
THE BACKSTORY
Lake Highlands Automotive has been in operation since Reg Baker, Jordon’s father, purchased the shop’s former facility in 1989, moving to its current location in 2003. Baker has always been very active in the community. He puts on multiple events throughout the year that directly benefit the shop. For instance, Baker donates $7,000 to $10,000 each year to the local YMCA, including the local organization’s golf tournament, benefiting underprivileged kids. To bring the community together, he hosts and sponsors events, such as the shop’s first cornhole tournament this year, and he recently helped out a high school student ask someone to homecoming—changing the shop’s sign to say, “Jenna, it would be so clutch if you would go to HoCo with me. —Garrett” (spoiler alert: She said yes). Baker says nothing he puts on for the community costs money, just time. People in the community willingly help out with the events and donate their goods when needed; all he has to do is make a couple calls. “When I get my community involved in something, I can gain people’s trust,” Baker says. “I’m not just a mechanic, but a neighbor and a friend.”
THE PROBLEM
The June storm had a major impact on the community. Thankfully, the storm didn’t
directly hit the shop, but it did affect the shop’s ability to work. For two days, the shop was without power, which meant Baker’s crew couldn’t get anything done, or earn any money. And, the shop didn’t have a plan in place simply because something like this never happens in the area. Baker had one of two choices: He could either shut down his shop until the power came back on, cutting payroll to try and save money, or he could keep staff on payroll and rally up his crew to create a positive impact, which could lead to business growth down the line.
THE SOLUTION
Instead of him and his crew sitting around waiting for the power to come back on, he decided to be proactive and make the most out of the shop’s current situation. Baker sent out a Facebook post on the shop’s business page saying the shop would be on duty with trucks and chainsaws as a “goodwill service to the neighborhood.” All of a sudden, comments and messages started pouring in left and right. Baker says, overall, the post was shared 92 times, reached a total of about 14,000 people, and engaged 1,700 people. A quick look at the comments from those shares reveals a slew of positive sentiments about the shop: “I’ve always loved that place; they are the best.” “They are amazing with car service.” “Gotta love these guys!”
PREPARING FOR THE WORST Even if you think a storm or disaster is unlikely to affect your shop as Baker did, you may want to adjust your mindset and plan ahead for the possibility. Cate Steane, founder of Make It Happen Preparedness Services, shares her tips on preparing for this situation ahead of time.
LAKE HIGHLANDS AUTOMOTIVE Owners: Jordon and Reg Baker Location: Dallas, Texas Shop Size: 5,000 square feet Staff Size: 16 Average Monthly Car Count: 720
Tip No. 1: Take
Annual Revenue: $3 million
“This is the car business I was telling you about.” Even the District 10 City Council Representative, Adam McGough, reached out to the shop to help out in other surrounding neighborhoods. For some extra hands on deck, Baker reached out to one of his high school friends who owns a local roofing company, Brown Roofing Solutions Inc., to see if his crew would help out with their initiative. With three trucks and an extensive amount of chainsaws, both staff (totaling more than a dozen) headed out in uniform to lend a helping hand. The entire crew worked long, 12-hour days, helping cut down and move trees for people who were trapped or couldn’t access their home. And, with so many people needing help, Baker worked two extra days on top of that to help out those he couldn’t get to while the power was out. One household, for example, was quoted $4,500 just to move a tree out of the way. Instead, Baker and Brown took care of the job for free—it took six hours with the help of another crew member. The effort from the entire crew helped roughly 40 to 50 people with Baker and Brown helping an additional 10 residents.
THE AFTERMATH
After two workdays with no power, the lights finally switched back on around 3 p.m. that Tuesday with the shop back in
business the next day. To this day, Baker estimates he acquired 30 to 40 new customers just from the shop’s efforts the day of the storm. So far, the shop’s revenue has increased by $350,000 since 2018, largely thanks to that bump in June. “It’s not always all for profit. Sometimes there are bigger things that you could be doing,” Baker says. The community heard what Baker did and, because of it, when the time came to get their cars repaired, his shop was at the top of mind.
THE TAKEAWAY
The most important takeaway Baker wants shops to know is that it’s all about your mindset. Many may feel like they don’t have time to give back, but if they look down the road at the impact it will have on their business, it’s well worth it. “I could have cut my payroll that day, but instead, I gave all of my guys an opportunity to earn and do something good for this community, knowing that it was going to have a positive impact on my shop,” Baker says. Most shops, Baker says, are profitdriven; they’re more willing to spend money on marketing and mailers than spend time giving back. He says if shops take the focus off of money and put it on their communities, it’ll work in their favor. He lost sales for those two days, but it paid off in the long run.
advantage of insurance. Make sure your policy is up to date and the coverage is there. Utilizing insurance to the best of its ability will help you recover faster. Steane says most insurance companies will come out for free to make sure things are safe at your shop, and you won’t be penalized for it. Tip No. 2: Protect
your investment. Steps to protect your investment should be included in your plan when it comes to insurance, cash reserves, line of credit and predocumenting claims. Steane says to have cash reserves or a line of credit to keep employees on the payroll. Tip No. 3: Make a plan.
Putting the perfect plan in place will ensure your business will be able to stand up on its own two feet following a disaster. Your plan should include evacuation procedures, how to operate during a utility interruption, and a plan for how to reopen within five days. 01. 2 0 / R + W / 57
T O O L B OX / S A L E S + M A R K E T I N G
Stop Offering ‘Emotional’ Discounts How to stay firm in your pricing—no matter the situation BY A B BY PAT T E R S O N
Specials run for a limited time and are meant to promote a service in the shop, usually throwing in a freebie or taking a couple of dollars off the original price. And while it’s fairly common knowledge this is bad practice, it’s still 5 8 / R + W / 01. 2 0
a persistent issue. Some shop owners think offering a discount will help their business, especially when it comes to emotional discounts— when staff members, managers, and business owners give a discount to make an emotional customer satisfied with a service (either out of sympathy or fear of losing business). “In today’s world, we feel a customer is going to bad-mouth us and post a review,” Nate Bean, owner of Integrity Automotive in Issaquah, Wash., says. “We have to look at it from a business perspective.” Like Bean, EuroTech Car Care owner, Kenny Ware, doesn’t believe in emotional discounting. The owner of the Killeen, Texas, shop constantly looks at the facts, figures, and numbers to keep the business on track. “We all have to give some type of discount, but discounts as a whole devalue your product,” Ware says. “You need to be firm on your prices.” Bean and Ware provide tips for avoiding emotional discounting altogether.
Set the tone. All in all, it’s all about showcasing your shop’s value and not emphasizing on price. “Shops think discounting services upfront is the way to attract customers, but in the long term, the growth and margins will not add up to that and you will attract the wrong customers,” Ware says. “If you give a customer good quality and a good warranty, you are giving them a good customer experience and they usually won’t ask for a discount.” Ware says if a customer asks for a discount, it’s simply because of the lack of the customer’s perceived value. “It’s a lot of things a shop does before it gets to the point of continuously discounting service,” Ware says. “I think it starts with your advertising, your branding—not branding yourself as a cheap place. We simply don’t use the word ‘free’ or ‘cheap’, and we don’t advertise tons of deals and discounts.” Clearly communicate with employees. If your employees don’t see the value in your business, neither will the customer. Ware says employees need to understand
GETTY IMAGES
Like most businesses, many shop owners provide their own specials.
repairs, but those are only in cases when they come from an organization that reaches out and asks for the shop’s help. If someone is unable to afford the repairs, Bean’s shop advises them of the option to apply for financing through the companies with which they partner. These companies check credit and determine how much the customer can safely qualify to borrow. And if the customer will not qualify for external financing, then Bean suggest contacting a friend or family member for assistance.
where the money goes, what it pays for, and what it took to produce that product. “At the end of the day, they’ll end up saying, ‘There is no way we can cut the price,’” Ware says. “They have to see the value. If they don’t see the value in what you’re doing, they will cut the price.”
“THE PEOPLE THAT TEND TO ASK FOR DISCOUNTS ARE THE TYPE OF PEOPLE THAT ARE ALWAYS ASKING FOR DISCOUNTS; THOSE ARE NOT MY IDEAL CUSTOMERS.” NATE BEAN OWNER INTEGRITY AUTOMOTIVE
Hear the customer out. There are customers that come in and can’t pay due to financial hardship, or are outraged by a price.
First things first, hear them out. “Listen to everything they have to say and stay quiet,” Bean says. Bean says to find out where they are coming from, let them voice their feelings and tell them what they are thinking or feeling. And if they bring up a discount, he usually follows up with asking the customer, “what is fair to you?” Simply put, a discount might not be what makes the customer happy. “I think people tend to offer a discount because they think that’s what is going to satisfy the customer that is upset, but it doesn’t resolve the situation,” Bean says. “Offering a discount is just going to put a bandaid on the situation.” Have empathy, but hold strong. Bean says if someone can’t afford it, you have to be empathetic, but not sympathetic. “You have to understand their situation, be patient, and allow them to express their emotions without interrupting them or acting irritated,” Bean says. “Empathy for their situation is important, but taking responsibility for it is not.” The shop sometimes does pro-bono
Reward loyalty. Instead of discounting based on emotions, like encountering an angry customer or one that’s having a difficult time making ends meet, Bean rewards his existing customers. He gives them a rebate after the service has been done and they can redeem that for services in the future. Bean says a new customer hasn’t earned this luxury yet, whereas an existing customer that comes back time and time again, has. He says once you give a new customer that you have never seen before a discount, they will ask for it next time and the time after that. It’s not fair to the other customers who are willing to pay full price. “The people that tend to ask for discounts are the type of people that are always asking for discounts; those are not my ideal customers,” Bean says. “Once we do this, we are devaluing our business and our industry and the services we offer. I think as an industry we need to think about that.” Bean says paying for the set price benefits everyone that is quoted, and if his shop could offer a discount to everyone that asks for one, it simply means the shop’s pricing is too high. “I want to make sure I am providing for the health of my business, the income of my staff, and for the customers as well,” Bean says. “As soon as I discount a repair, I am compromising the value of the work we do and the value of our business, our company, and the industry.” 01. 2 0 / R + W / 5 9
I N T E R V I E W
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Columns
THE BOTTOM LINE Mitch Schneider
KEEP YOUR EYES OPEN Wandering around can teach you a lot about your business
MICHAEL HOEWELER
Balance and flexibility are essential
elements of a normal and productive life and I haven’t found anything that works any better. I was thinking about that as I moved through my Qi Gong exercises, which are exercises reserved to help warm-up before beginning a Tai Chi Form. Thinking about how both flexibility and balance are as essential to success in business as they are to your physical well-being brought me back to a recent video blog I posted on “management by wandering around” (MBWA), an idea Tom Peters proposed in In Search of Excellence. The principle is clear. Whether at your own place of business or another’s, you can learn far more by keeping your eyes open and asking questions than you ever could through meetings or more formal investigation. I’ve been an ardent supporter of MBWA ever since I was first exposed to the concept. You see, curiosity is perhaps one of the most critical assets you can develop while striving to become a successful troubleshooter or diagnostician. Success is measured by how well you are able to discern proper operation and performance from whatever anomalies you are confronted with. From the unexpected to the extraordinary to the out of place. It’s no different when you make the decision to manage by wandering around. If you’re in a 20 group and involved in shop visits, stopped by a colleague’s shop to grab them for a quick lunch or found yourself stuck on the road and thought about what was going on around you, you’ve been exposed to this principle— whether you realize it or not. If you’ve come back from an errand, parked at the bottom of your own lot, walked up the hill to the office and
witnessed your technicians as they went about their business—went on about your business—and wondered what they were doing or why they were doing it the way they were, you know exactly what MBWA is all about. This is where flexibility and balance play a critical role. Most of the time, we move through life focused on what’s directly in front of us. Priority is afforded that narrow band at the center of our field of vision. However, that isn’t all we see. We are able to see and sense images and movement at the edges of our vision—our peripheral vision. If we move our head from one side to the other, we’re able to process more. But, that movement is limited by how well or how much we are able to move. The tighter we are—the more limited and constrained—the less we are able to take in without exaggerating our own movement. When we take the time and make the effort to relax and stretch, we’re able to move more easily, increasing our range of motion and field of vision. The ability to remain relaxed and supple may have started out as a survival skill, but it is no less critical today than when we left the mouth of the cave to begin the hunt. If you develop those skills and train yourself to see everything that is going on around you, you are far more likely to spot a problem or potential crisis before it metastasizes throughout your business. You might catch the subtle slouch of an unhappy team member as they walk to their next job out of the corner of your eye—something you may have otherwise missed. You might catch something in the tone of your service advisor’s conversation with a client at the counter or a slight change in their body language that resulted in a lost sale.
Mitch Schneider is a fourthgeneration auto repair professional and the former owner of Schneider’s Auto Repair in Simi Valley, Calif. He is an industry educator, seminar facilitator, blogger, and author of the acclaimed novel Misfire. Contact him at: mitch@misfirebook.com. mitch@mitchschneidersworld.com ratchetandwrench.com/schneider
Flexibility and balance will allow you a greater range of response. More options. More opportunities to learn, grow, act and react. The alternative—the absence of flexibility and the lack of balance—is often described by words like immutable, intransigent, rigid and unyielding. Think about all the successful businesses you know of. Think about all the shop owners who serve as role models for the kind of future you seek for yourself, your family and everyone in your organization. How would you characterize the way they move through the world? The way they approach the challenges they face in business and in life? I’ll bet the connection between balance, flexibility, and success is self-apparent. So, relax. Close your eyes. Take a deep breath and move. Slowly. Quietly. Deliberately. Forward. Back. From one side to the other. Slowly expand your range of motion and your field of vision. Now, open your eyes. You may be surprised at what you are able to see now that escaped you just a moment ago. 01. 2 0 / R + W / 61
“IF I GO A DAY WITHOUT LEA SOMETHING, I’VE MISSED A Repair Life
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S T E V E M C AT E E
PHOTOGRAPHY BY DON CORNETT
AY ARNING THEN A DAY.�
Push For Excellence Steve McAtee has won the NAPA/ASE Tech of the Year award six times, and, at 60 years old, continues to seek learning opportunities.
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R E PA I R L I F E / S T E V E M C AT E E
Steve McAtee was working as a line mechanic at a Madison, Ind., Firestone location in the 1980s when the shop decided to close and head over to a nearby town. McAtee figured it was as good a time as any to make a big move himself. “I don’t want to get caught without a job," he thought to himself. "So maybe it’s time for me to open up my own garage.” The product of that go-getter attitude is Madison Auto Service, which McAtee has owned and operated for almost 35 years now. McAtee has spent decades in the repair industry, putting in time and effort that has allowed him to reach the title of a World Class ASE-certified technician, as well as garner a plethora of other awards and certifications along the way. Even with the vast amount of experience that he has, he constantly strives to learn more about his profession. He treats every day at the shop as a chance to expand his own knowledge, educate his staff and even pause to help out other mechanics in the Madison area. “If I go a day without learning something,” he says. “Then I’ve missed a day.”
AS TOLD TO HANNAH BUBSER 6 4 / R + W / 01. 2 0
I usually get in between 7:30 and 7:45 a.m. Waking up is my favorite part of
the day because I’m ready to get things started. The shop opens at 8, but I’ve always had an “open door policy.” I base my entire day off when customers begin arriving. I figure, if someone is there a couple of minutes early, what does it hurt? If I’m in at 7:30 and a customer is ready to walk through the door, they can. When I’m not there to let them in, then they are waiting at the door for when I get there. Basically, my day starts before it even starts. Next, I check the schedule. Usually we book out a week ahead of time for appointments, but there’s always someone who has an emergency. My day can
end up going bumfuzzle right off the bat. Madison is a town of only around
MADISON AUTO SERVICE
Location: Madison, Ind. Shop Size: 4,000 square feet Staff Size: 5 employees (owner, office employee and 3 technicians) Average Monthly Car Count: 140-160 Annual Revenue: $700,000
technician and I’ve won the Napa/ASE Technician of the Year award six times. This is all to say that I am motivated to do quality work and continue learning where I find the opportunity to do so. Lunch hour is from noon to 1 p.m. De-
pending on the size of my staff that day, I have to make sure both the shop and the office are covered. I only have one office employee and she’s my daughter, Alisa. I want to make sure she gets a break so that she’s not running on empty. I will drop all of my tools and cover the office for her. When she first started, people would call the shop and ask to talk to a mechanic instead of her. But she has been with the shop for awhile now and even has her own ASE certification. It’s really awesome because she can explain all the pricing and talk about cars directly with customers. She covers it just as well as a learned mechanic. Now, when I’m answering the phones I’ll get people who want to talk directly to her. So, the tables have turned a little bit, but I’m happy about it. I’m proud of the work she does and what she has been able to learn here. That’s huge.
A Helping Hand Steve McAtee fills in wherever he’s needed in the shop, including filling in for his daughter, Alisa (above) in the main office so she can take a break.
12,000, but we’re always trying to squeeze people in and shuffle our schedules around. It can get hectic, but we like to help as many people as we can because I don’t just work on just Chevrolets or Fords, I work on motor vehicles. I used to always associate Ford with Ford, Honda with Honda, and Toyota with Toyota. But then, one day, I realized that these vehicles are all the same. They all work the same way. So, I stopped looking at them as totally different animals. I like to help every car that comes to my shop, and when I classify them all as “motor vehicles,” it makes it easier to approach every oddball vehicle that may arrive. We touch all kinds of brands here, but cars are cars. If you get past the nameplate, there’s an opportunity to really dig in and learn more about vehicles in general.
The day goes by so fast, I don’t realize it’s closing time until it’s closing time.
I look at each day as an opportunity to learn something new. For the past 10
years, we’ve been an ASE Blue Seal garage. I’m big into certifications because they are a great way to improve my work and provide an outlet to learn more as a mechanic. Over the last couple of years, I have thought about everything I’ve learned over the course of my career and how I could motivate my employees to want the same experiences. I’m 60 years old, but I still want to learn how to do better. I want to go for the gold. I encourage my employees to take training courses and get certifications. This is for their personal benefit, as well as the reputation of the garage. I’m an ASE certified master auto technician, and, after having that title for 25 years, I went on to become a World Class ASE certified
We could stay until 7 or 8 because of how packed our days are, but I don’t want to push my employees. We close at 5 and I try not to stay later than 30 minutes after we lock the door. Giving myself a cut-off allows me to breathe and get away from all the telephone calls. We get repair calls all night with people calling at 1, 2 and 3 in the morning. People don’t seem to know what time of day it is when they call. But we will always get back to them, because the most fulfilling part of my day is reflecting on the people that we’ve helped. We never turn anyone away, and we’re proud of what we do. I’m not here to do fast and easy work. We are here to repair cars. We can look around town and know that we are doing top dog work because other garages are asking us for help. This is another thing I look at as a learning and teaching opportunity. Pride is a big thing, but we will never refuse help to another garage because I think that’s just plain mean. At the end of the day, it’s all about feeling good, helping others feel good and knowing that you took care of business in the best way possible. 01. 2 0 / R + W / 6 5
Columns
THE FIXER Aaron Stokes
THE ROAD TO SUCCESS Goals are mile markers on the road to your overall aspiration
make when it comes to goals is that they don’t know what a goal is versus what it isn’t. Because of this, people are confused about what a goal should be and how to set it up. A common mistake is to take last year’s numbers and try to beat it by 10 percent and to do that every single year. That doesn’t always work. In fact, it almost never does. Instead of doing that, I want to lay out a different way for you to go about setting goals in the new year. First, you need to understand what a goal truly is. A goal is the overall theme for all of our actions over a period of time. It’s not the ideal. The ideal is like a sunset 1,000 miles in front of you. No matter how fast you drive, you’ll never catch it. It’s beautiful, you like staring at it, but you will never get there. Goals are mile markers on the road to an overall theme. If a goal you have is to hit 200 cars per month, it’s because you have an overall theme to grow the shop. Inside of that theme, there are goals; profit goals, car count goals, gross profit goals, employee count goals, etc. These goals are signs along the road that let you know that you’re getting to your destination. I have a vision board in my closet, 6 6 / R + W / 01. 2 0
behind all of my hanging dress shirts. Nobody can see it but me. Every day, when I push my clothes aside, I can see the vision board that’s full of pictures that speak to my subconscious brain. I can speak to myself through these pictures. If we can employ our subconscious brain on our behalf to hit those goals, it’s a game changer. First, we have to set our goals up correctly. What I’d love for you to do is to take last year’s profit and loss statement—or where you think this year is going to land—and use that as a springboard, nothing more. Do not use it as a budget, or a rule, but instead look at it as the past. That way, we can measure progress and know exactly where we’re going on the frontside and know whether or not we’re going to hit what we’re setting out for. You can’t create a budget from the past because you might have more office supplies in your P&L last year because all kinds of things broke in your office or you may have moved locations; your electric bill might be more expensive because you have A/C in the shop now. You never know what caused last year’s situation, but you have to believe that your wisdom in the moment was the best decision and you have to trust it. Because we grow off building blocks
aaron@shopfixacademy.com ratchetandwrench.com/stokes
like car count and technicians, we can’t always grow by these predetermined percentages and so, because of that, we have to make adjustments in order to get to the next level. We have to say to ourselves, “OK, if I add one more technician, I’ll grow, but will I grow so much that I have to add more office staff? And, if I do, how will that impact my P&L?” We have to make sure that we’re always using our business summary, which is, in any industry, the specific report that applies to the industry and states the progress, which for us, is hour and car count, that we have in a certain period of time. Once we have that, we can move forward with our P&L and make business decisions. You need to focus on how far you’ve come, not how far you have to go. If you stay focused on how far you’ve come, you will encourage yourself but if you focus on how far you have to go, you will always be discouraged.
FUE VANG, GETTY
I feel that the biggest mistake people
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.
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