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Ep 10 - Matt Lofton w/ Elite Worldwide - Coaching Call #2
277 Plays2 months ago
When it comes to shop management systems, in my opinion, you have only one smart choice. Tekmetric. So be smart. And use Tekmetric. You'll thank me later. Learn more HERE
Today, you'll get a glimpse into what a coaching call with Elite Worldwide can look like. That's because Mike and Matt sit down for a coaching call about one of Mike's shops. They go over how to mix personal goals and professional ambitions and strategies for increasing efficiency and revenue at the shop.
00:00 Aligning Goals with Action Plan
06:29 Aligning Personal and Business Goals
08:44 Aligning Team Goals with Personal Growth
12:58 Monetary Motivation in Work
16:11 Fixed Salary for Productivity
18:20 Calculating Effective Labor Costs
20:32 Understanding Technician Costs
24:15 Boosting Efficiency and Productivity
26:56 "Non-Conformity Why Statements"
32:56 Increasing Daily Revenue with Fewer Cars
36:15 TechMetric Performance Report Discussion
39:36 Improving Service Efficiency & Execution
42:15 "Understanding Business Purpose and Process"
45:45 Customer-Business-Employee Triangle Insight
49:09 Optimizing Advisor and Technician Goals
51:12 "Managing Ethics and Incentives"
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Transcript
Coaching and Personal Development
00:00:00
Speaker
What's up everybody. Uh, on today's episode, I sit down with Matt Loftin. We were actually at the elite ignite 2025 event in Dallas, which was a great event, but we sit down and talk about, um, my small shop, the one that I'm doing, uh, one-on-one coaching with, with Matt.
00:00:17
Speaker
And he kind of calls me to the floor on some things that I've not been doing, gives me some very clear tasks that I need to complete in the next 30 days. Honestly, it's my first experience with one-on-one coaching, and I can already tell it's going to be super valuable. I hope you enjoy it.
00:00:34
Speaker
The following program features a bunch of doofuses talking about the automotive aftermarket. The stuff we, or our guests may say, do not necessarily reflect the beliefs of our peers, our sponsors, or any other associations we may have. There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along. So without further ado, it's time for Confessions of a Shop Owner, with your host, Mike Allen.
The Value of In-Person Interaction
00:01:06
Speaker
All right, Matt. So a little bit of an atypical call that we're having here, uh, cause we're sitting across the table from each other. Typically these conversations happen over zoom or the phone. Um, what platform do y'all use? is Do y'all do zoom calls or? So it's, uh, most of what I use is teams. Okay. All right. I hate teams, but it works and it's popular. We have some of the coaches that are are not teams fans and they'll use Zoom. We're not ah picky on which platform they they choose to use there, but we do try to use the face-to-face platforms if possible. yeah Some of the clients prefer just a standard call and and that's fine as well, but nothing beats that face-to-face interaction if we can get it.
Ignite 2025 Elite Event Overview
00:01:46
Speaker
I agree. So we're here in Dallas at the Ignite 2025 Elite event. um I got here yesterday and we had the afternoon spent with
00:01:57
Speaker
the pro-service members and facilitators and Darren and and everybody else was great. This morning we've been talking um lean six Lean Six Sigma right with Javier has been our instructor and that's been some really strong content as well.
Dream Sheet and Goal Alignment
00:02:13
Speaker
But we're here today to talk about car fix. So this is effectively our second conversation And this is really kind of the first coaching call ah For those of you who have never had a one-on-one coach or work with elite after I signed up. ah They sent me a series of forms to fill out with ah Information about where the business is right now where my goals are what my dreams are um Kind of a getting to know you form things of that nature ah And this is the next conversation So I'm going to let you take it since you're the coach, and I don't know what to expect. So give it to me. Yeah, I know you did a great job of kind of running through the breakdown there. So where we're going to start is, like you said, we we send out those that annoyingly long list of jot forms that we ask you to send out, and a lot of it is repetitive. There is ah there is some method to the madness, and we're going to kind of go over some of the ah the method to it today. So we're going to start by going over the dream sheet that you filled out.
00:03:11
Speaker
And so the dream sheet just takes some of your personal goals, your professional goals. And what we're going to try to do is align those goals to an action plan and tie that to the store so the store can help you create some synergy between your personal and professional goals that you have. And then we can continue to work on those together. All right. So do I have the ability to see the forms that I turned in after I submit them? Yes. OK. I just didn't know if it doesn't matter. Keep going.
00:03:44
Speaker
So the the dream sheet, the first goal that we have on here, just just to kind of fill the listeners in, <unk>ll I'll read out the questions that's on the you know that's on the sheet as well, and then I'll give your answer for it, and then we'll kind of spend some time discussing it, and then we'll do that with each one of them. So it says, please name two things you would like to accomplish with your personal life that you feel are dependent on the success of your business. If they are clearly defined goals you have with deadlines, perfect. If they are just dreams and wishes at this time, that is okay as well.
00:04:12
Speaker
just check the appropriate box with each. So there's a box there that says dream or goal. Um, you did a great job filling these outs. I appreciate that. Made my job a lot easier. So you have this as a goal. Um, and you have a a timeline defined to it as 12 31 of 2028, and you would like to be 100% debt free to include your mortgage and your wife's student loans. Correct. So, okay.
00:04:37
Speaker
And so just for the listeners out there, um we kind of identify the difference between a goal and a dream. um a A goal is something that, again, that we can time base to it, and and that it's very specific and actionable, and a dream is something that might be slightly unattainable or maybe we don't have a clear vision or a clear understanding of what that timeline would be to be able to accomplish it but it's still something we would like to do. So that's that's how we define the difference between the two. So like I said you you made my job easy there on the first one that's ah that's a good actionable goal we got a time base to it. So I appreciate that.
00:05:13
Speaker
um So the the second one that you have here is that you wanted to raise three well-adjusted, self-sufficient, and productive members of society. And obviously, we don't have a a timeline on that. It could take you the next 40 years to try to do that in today's world. Hopefully, I get it pulled off in the next decade or so.
Balancing Personal and Business Goals
00:05:31
Speaker
I just don't want to raise leeches. you know so you knowt You don't want to be sitting in your sitting in your living room and have a 30-year-old yell up there screaming, ma, more spaghetti. Exactly. yeah sir
00:05:44
Speaker
I think that's a great dream as well. I might share that one with you. um So the next step, it asks us to please name two things you would like to accomplish with your business that you feel are relative to the long term success of just the business itself. And again, if they're clearly defined, it's a goal. If it's not clearly defined, it's a dream.
00:06:04
Speaker
So you have a clearly defined goal here of $1.6 million dollars of revenue for this year. So in the end date of 12-31-2025. And then we have a another clearly defined goal of a net profit of $240,000 at the end of this year for that $1.6 million of gross sales. So again, thank you for setting clearly, clearly defined goals there.
00:06:29
Speaker
and And I think that your goals are kind of aligned with your personal goals, which again, kind of kind of makes it a little bit easier for us there. So we have a little bit less to discuss. So the purpose of this is to make sure.
00:06:42
Speaker
We all started a business for a reason, and the business is there to help us do things in our personal life, not just allow us to go to work every single day and plot away and store money like Scrooge McDuck.
Aligning Staff Goals with Business Objectives
00:06:54
Speaker
um That's nice, but if that's all we're doing, then kind of like we learned about yesterday in the Purge service meeting, we're kind of, we don't have balance in our life, right? So we want to make sure that we have some balance in our life.
00:07:05
Speaker
One of the first things that I like to do is a lot of times this is the first time a client has ever performed an exercise like this. They've thought about their business goals before, but they've never really sat down and thought about their their personal goals and how the business can help them attain those personal goals. And like I said, you did a great job of filling this out. I can tell it's not the first time you've done some goal planning before. So your goals are kind of, you do have some synergy there. Obviously your net profit goal is going to help you achieve your ah your debt free goal of your personal life there.
00:07:35
Speaker
So those are very well aligned. So really kind of the next step that I would go with you is since your goals and your dream sheet are very well aligned, we have we want to run this same process through with the staff. and So we have a dream sheet. You can pick and choose if you just want to do critical staff members um or you want to do everybody. It's up to you.
00:07:55
Speaker
but we have a separate sheets very similar to this one that we do for the for the staff as well. And because I know you because now we have this big goal of 1.6 million dollars of revenue that you have for you right for the business.
00:08:09
Speaker
but the staff is going to be the the team that's going to help you um produce the the output that's going to achieve that goal. So we need just like we want to, ah like like just the way we want to align your goals, your personal goals, your professional goals, we want to make sure that we align their professional goals to their professional goals as well. um And that's something I actually started about five years ago and I'm not a big kumbaya trust fall guy to guy, you know, I'm pretty, pretty pragmatic. So when I first I was like, man, this is going to be, it's going to be a waste of time. And, and I was wrong with it. So we do it every single year now. And it's made a huge difference again, and just aligning the team with
00:08:53
Speaker
why we're why they're coming in every single day and and slaving away for you know that 1.6 million dollar goal that we put out there and and instead of focusing on a goal that's important to us they're focusing on a goal that's important to them and then the other thing that we're doing is we're teaching them because if we have a business we have a a stewardship to our team as well to try to help them grow as people and a lot of times they never sit down and think about what's important to them. So like I said you can tell that you've done this before your your visions align but they've never sat down and thought about their personal goals before, right? So it's it's helpful for them um to be able to figure out how we can how they can take their output, use the pay plan, and align it to you know what their personal goals are and what they hope to achieve as a mission. And hopefully, we also teach them how to be slightly better at money management, more goal-oriented, more focused,
00:09:46
Speaker
um So, so we'll, so I'll send you that sheet and, and I would really recommend that you kind of sit down again. If you just want to do key team members, that's fine for now, for sure. Small shop. There's only 14 members. so still um Yep. So do them all. Um, it also really helps during reviews. We can pull that dream sheet back out.
00:10:04
Speaker
We can do it aligns us with our performance review. So when we do our performance reviews, we're going to sit down, we're going to pull the dream sheet out. We're going to have a you know a goal to actual way to track there that says, hey, we had a professional goal for you of this. That goal is going to allow you to achieve a personal goal of this. Let's see where we're at.
00:10:22
Speaker
and then we can find out where they're at on their personal alignment with that as well. So if they've met their professional goal but they've squandered it on the personal side, um again, we get to be that steward to try to help help keep them focused in their personal life as well and um hopefully you know help them develop as people and be better husbands, wives, family members, sons, whatever
Training and Growth in the Shop
00:10:43
Speaker
whatever that may be. so Any questions about that at the moment? I worry, like I've done something similar to that, not to that level of detail in the past.
00:10:55
Speaker
And yeah the whole point of it is to find out what their personal goals are and align their motivations at work such that when the company hits its goals, they are compensated either financially or with PTO or with other benefits in a manner to help them hit their goals so that it would be mutually beneficial, right? that That's my understanding. But I got guys who were like, oh, I just want to learn how to play a six ah a six string, you know, or I want to, you know, I give us, if it's a materialistic thing, I want to get a bass boat. Oh, great. That's sure. Yeah. That's, you need to earn money to do that. So I think, and that's, and that's a great point. So I, and I, I've run into that as well. Um, some people have different motivations in life. And, uh, so what I always try to tell people is I had, I had one employee that told me that her, that her goal for herself was to learn how to knit. And I said, that's not a goal. That's something we do on Saturday. We watch YouTube video. And that's great. I want you to learn how to knit too. That's very insensitive of you. is my Hey there. I'm going to tell you about something that has completely transformed how I run my shop, Tech Metric. As a 20 year shop owner, outdated systems used to slow us down. Everything was clunky from check-in to estimate building to customer updates. It all felt just
00:12:13
Speaker
super inefficient. Switching to Techmetric has changed everything. With Techmetric, you get a powerful shop management system that includes DVI, quick and easy estimate building, inventory management, real-time reporting, amazing customer communication, and it's really easy for your employees to learn how to use the software. I'm talking like a one-day learning curve.
00:12:33
Speaker
On top of that, TechMetric has tons of other tools to make you an even better operator. Stuff like integrated payments with buy now, pay later options. It's a huge asset. Ask me how I know. And recently they've added a CRM component with their partnership with ShopGenie, which I'm a happy ShopGenie customer already. So I'm super excited about that.
00:12:53
Speaker
Obviously, there are a lot of factors at play here, but I want to give you some facts about my business since I made the change to TechMetric. In September of 2020, when I switched to TechMetric, my ARO was $293. In September of 2024, we were $916. That's over 300% growth.
00:13:09
Speaker
Now I'm not saying that TechMetric created all of that change, but I'm 100% saying that I couldn't have come this far without TechMetric. It's a key factor in our growth and success. If you're ready to level up your shop, TechMetric has everything you need. Productivity, revenue, customer experience.
00:13:25
Speaker
Measure up by every measure with TechMetric. Tap the link in the show notes to learn more. But we, you know, like you said, so we want to attach something everybody, you know, maybe, maybe we want a new car. Maybe we were looking to move out of our house, but they were renting and buying a home. We want to try to attach it to something that has some value.
00:13:45
Speaker
It's way easier from as a management tool if it is a something that is requires spending money. Sure, sure. And so, I mean, ah we do want to try to put something forward, you know, and and i try to I try to lead that conversation like that. So, and i even though they're not money motivated in the sense that they care more about money, that's they still have interest in their life or things in their life that are driven by money. It's a fact of life. So, if they live in a house, maybe they want to live in an Eisher house. Would you like to live in an Eisher house? I think we all would. Do you drive a car?
00:14:15
Speaker
Do you like to drive a nicer car? um All of those things, you know, in some way, shape or form are driven around money. And money is the reason that they come to work, along with the fact that they get some fulfillment out of the fact that they they do a good job at it. But at the end of the day, they, they wouldn't come to work. They wouldn't want to work if it wasn't, you know, if it was free. So, so we do want to tie that goal to something that's monetary. So I think you bring up a really good point there. And I just try to lead that conversation with that and say, Hey, listen, you you come to work because I pay you and I would like you to take the money that I pay you.
00:14:46
Speaker
And do something with it that, you know, has value to you. If there was something that I could help you do in your life right now that involves the money that I pay you that you could improve upon, that it could improve your life, what would that be?
00:14:59
Speaker
And so that's what we try to focus that on. If it's a dream vacation that they've never been on, if it's, ah like you said, a material thing that they wish they had, that they don't have, something along those lines, maybe it's paying down debt, maybe it's
Shop Structure and Management Strategies
00:15:11
Speaker
whatever it is. so But you're 100% right. We want to find something that's monetary that we can we can strive for.
00:15:20
Speaker
so
00:15:23
Speaker
The next question that I'll have for you is, or the next exercise that I'll give for you is, and we're not gonna spend a lot of time talking about this. This is just what I wanna cover with you so you have it. Make sure that you're putting together an action list. So you've you've got a goal of 12, 30, 31, 20, 28. That's a pretty long, that's a midterm goal there. ah Three years out of of that debt free um on your on your personal side of things. So I would create an action plan, step it out. Let's let's figure out how we're gonna get there.
00:15:52
Speaker
on the, we'll spend our time on what I can help you with, which is the business side of things yeah and trying to achieve that 1.6 million. So, and the 240 net profit that we have. So let's jump back into the store a little bit. And I know last time we talked, you kind of gave me an overview of of the team and the staff and the vision that you had for it and the vision that you have for this store. I know it's your your newest acquired store, correct? So it's three bays.
00:16:21
Speaker
Yeah, I got three lifts inside and one left outside. So the outside lift is really probably eight months a year getting utilized. Yep. And then three bays inside. Okay. Three lifts. And so right now you have three employees. Yeah, so I probably need to give some clarity. we I have I've transferred some people out and I'll let some people go and we've had 100% turnover at the end of the year, first of January. Okay. It was first of January. um And so I've got a service advisor who is new to the company, but he's an experienced advisor ah who started there. And then I've got two technicians. One technician um had been at one of the other locations and he transferred in.
00:17:02
Speaker
and He's a more mature guy. I think he's a mid-50s or something, but he's been doing his whole life. He's very reliable, very consistent. He can turn 50 hours a week pretty reliably. I'm very happy with that. And then a new hire who we've been in communication for years, just waiting for the right time to line up. um And he's kind of the the senior technician in the building. ah He was a shop foreman at his previous place for the last eight years.
00:17:31
Speaker
And we're seeing ah how he's going to work out, right? He's got a very high skill set, um but we've got to establish ah productivity levels. We've got to establish productivity. And one of the things that I did ah to get him, because I've been recruiting him hard, is I'm paying him straight salary. okay And there's no bump if he turns 60 hours versus if he turns 35.
00:17:57
Speaker
Now obviously there are some minimum levels of acceptable performance that have to be there to justify the salary. But I'm a performance motivated human being so it seems really weird to me that somebody doesn't want to be able to make more money when they do better.
00:18:13
Speaker
But that's just how he says he's wired. You see, you know. ah So that's the everyday on site. I have another store that's a mile and a half away. You know, it's in kind of downtown Raleigh, so that mile and a half is a different universe. um But I have one store manager over both Raleigh stores.
00:18:34
Speaker
And so he bounces back and forth between the two locations. And then I have a senior technician who is primarily at the other store and he's kind of the problem solver, diagnostic helper. um and And he sometimes will spend time over there helping him get out of a ditch or something if something goes sideways. But really it's three guys right now and then two that mostly spend time at the other railway location and come over and help when needed. Okay. So let's talk about the foreman just a little bit. Okay.
00:19:02
Speaker
So you say that you have a salary and employee and he may or may not be expected to be 100% productive based off of his role, correct? I need i need him to be 40 hours a week. Okay. Is that what you have said as his MLAP? I did not put it in writing. We just communicated that.
00:19:25
Speaker
Yeah. So that's a failure on my part is that it's not been put in, put in writing. So I would make sure that we go back and we double back to that ASAP. The other thing that I would suggest that you do, and you may have already done this, uh, any non flat rate technician that's going to be producing production in the shop, make sure that you calculate his flat rate pay in the system at whatever his MLAP is divided by his salary. Yeah.
00:19:53
Speaker
So and just to clarify that for the listeners we want to we want to calculate the effective labor cost and we're going to take the effective labor cost so if the MLAP for him is 30 hours you said it's 40 so we're going to take whatever his salary is for the week and we're going to divide it by 40 and that's going to be his hourly rate that we put into the shop into the into the shop management system.
00:20:15
Speaker
If for whatever reason he was doing more managerial foreman style duties and his MLAP was 20 hours, just to give some easy math, this is not going to be his pay. I understand that, but let's say he's a 40 hour, you know, his 40 hour work week but supplies him with 40 hours per hour, $40 per hour.
00:20:34
Speaker
You would have to put them in your shop management system if your MLAP was 20 hours, you'd have to put them in at $80 an hour. So, um I understand what you're saying. One of the things that I've done is I've averaged my cost of labor production across the company. Yep. And we have every technician or growth of skill level and tech metric at that same cost. so that i If I could make that a hidden number, then it wouldn't be a problem. But technicians, if ah if I have their actual cost in there, then technicians see what each other's wage yeah level is. Yep. And so I just I did the math on this individual. The number that is in tech metric right now is within 15 percent of that. OK, but he's high on that. So, you know, I mean, I need to readjust his M lap up to bring it in line or
00:21:27
Speaker
That's a conversation that the two of you need to have when you go back and discuss is in lab. yeah um and I think it's a really good idea to break down that effective labor cost to him and and share that concept with him. ah So, full disclosure, so when we work with clients that have salary technicians or hourly technicians, I have a ah ah base plus hybrid style pay system. And you are the one that told me a couple a couple months ago, it doesn't matter what your pay plan is, you're choosing to manage something, whether it's you know effort or ethics yeah is what you're choosing there. And I thought that was probably one of the best, simplest ways of breaking
00:22:03
Speaker
breaking pay plan concepts down. So, where I'm going with that is that when I when i talk to my team and when I talk to clients, ah you know, to ask them to talk with their team, the technician themselves thinks about their pay in terms of what they make, right? And they don't understand that if I make $40 an hour,
00:22:27
Speaker
How are you telling me that I cost you $80 an hour, right? they need We need to share that math with them because they need to understand that the cost to us is tied directly to the production value that they have for us. So if we're going to have an individual that's going to be less than 100% productive, either A, we have to raise our our labor rate to absorb the the lack of productivity to still be profitable off the labor.
Achieving Revenue Goals with Current Resources
00:22:53
Speaker
when the customer is therefore paying for the, you know, for the gap there or and I want them to know that that may not be fair because they may not agree with that, right? or I want them to understand that they have to perform other duties that add value back to the shop. So again, if you have a foreman that's a working foreman and he's doing 20 hours a week, but he's doing all the dispatching, he's doing estimating, he's doing all the rechecks that come back in, does that add production value? Yeah. I mean, it's- Because other people aren't doing those things and they're- That's exactly right. So he's turning them around. While it's not his production,
00:23:25
Speaker
Um, it's adding production to the rest of the team. Now I can raise the MLAP of the other team members to absorb that, right? So it doesn't matter how we get there, but I want them to understand that. So if you're, if you have to understand, you know, they need to understand that ratio and what the value that they provide. And I want all of my don't, it's easy to do a service advisors, right? I need you to to sell X, right? Um,
00:23:46
Speaker
But technicians, especially when we get into technicians that might not have an expectation of 100% productivity, it it becomes a little bit murkier. yeah So, but I would sit down, I would have that conversation with him and you might, you know, based off the math there, you might decide that him his MLAP needs to be 45 hours of production. um At that point in time, you said he's going to be doing the majority of the Diag as well.
00:24:08
Speaker
Yeah. was leaning in it Well, not the, he, it'll probably be a 60 40 split because the other guys competent also. So neither of them are you know low Bs. They're both pretty strong professionals. Yeah. okay So just, um, you know, go through with him and and go through your diet strategies as far as what your, uh, what your standard basis are for, um,
00:24:30
Speaker
for production hour pay for Dyke, make sure that he's in line with that so we don't run into that because Dyke techs are always, you know, that's not fair for me to get one hour for this and so on and so forth. Make sure that you guys are in alignment on that, but i i would I would have that conversation as quickly as possible to make sure you're not investing a lot into a guy that's going to be unhappy six weeks from now or you're going to be unhappy six weeks from now.
00:24:56
Speaker
um um I'm going to have to add personnel. I don't think that 1.6 million with two texts is realistic. It's not. ah So with three days, there's only so many people that you can add, right? Yeah. So do you think that two high performing technicians and a quality GS can get there or do you think it's got to be three texts?
00:25:23
Speaker
I think that depends on the ability and the mix of work for the two quality technicians that you have. So the challenge there is this, it diagnostic work is always going to be the least overall profitability that you're going to do. And I know you have a specific strategy around diagnostic work as well that also impacts that. yeah um So what I would say is you're going to have to they're going to have to be highly efficient and highly productive. So 45 plus hours a week, you're going to have to almost two to one them on the efficiency side for those guys, and they're going to have to be doing the the mix of work that allows them to be able to do that. And we're going to have to and the
00:26:12
Speaker
The only thing on the GS side was would be, while he may not be a strong R and&R or a strong diagnostic tech, he is very strong on the discovery side and we're not losing discovery out of the GS. yeah I think it's possible. That's one of the biggest problems that I had with GS's back in the day when I had them is the tech average quote was so low because I just didn't know what to look for or what they were looking at.
00:26:33
Speaker
or you get the the pencil with the same every single vehicle needs a power steering flush, even though that's kind of electronic power steering or needs rear shocks and a belt, yeah you know, drive belt or power steering flush, like you said. So, yeah ah you know, those, I think that's training.
00:26:48
Speaker
um if you If you don't have a training system set up for your um for your DVI or for your inspection process, ah we consider that part of our internal communication. So there's internal and external communication. Internal communication is gonna be all the lingo that we use, diag, spill and fills, whatever you want it to be, right? um And so we make sure that we we spend a lot of time in the onboarding process of going over that um that internal communication.
00:27:18
Speaker
And then we actually have a flow chart for red, yellow, greens that they're going to input into tech metrics.
Process Standardization Across Locations
00:27:24
Speaker
So we go over, Hey, this is a belt. This is our definition of red. This is our definition of yellow. This is our definition of green. We have gotten to that point. We do have our standardization down in the expectation.
00:27:34
Speaker
yeah Trying to get a consistent dvi result and estimate regardless of which technician does the inspection regardless of which location does the inspection. Yeah, and so I think that's very important. So that's that's one of the things that have years talking about and we're actually we're going to talk about tomorrow's standardization and optimization of process. um And you're kind of at that phase right now having multiple locations where standardization and optimization is a necessity so.
00:27:57
Speaker
You know, whatever you guys have standardized at one location and it and it's working and you've optimized it, you you know, we need to try to transition that in um as as best as possible to the rest of them. And then anybody that' that has a nonconformity to the standard, the the penalty is retraining.
00:28:15
Speaker
Right? We have to put them back through the training process. um I like why training. So I want them to know the why, why it's important to the business, why it's important to them and why it's important ah to the customer. to the customer yeah And so my personal process for that, it's not necessarily an elite taught training method there, but when i When I go through non-conformities on standard or process, um I'm going to ask my employee to write me the why statements for whatever the non-conformity process was. So we didn't we didn't do a follow-up call with the customer. It's part of our exit strategy. It's part of our vehicle delivery process. um They're going to get a
00:29:00
Speaker
They're going to get contact from us. If I go through and see that we don't have an outbound call for that client within a certain amount of time, I'm going to reach out to the employee and say, Hey, I need you to give me a Y statement on this. And we're going to talk about why it's important to them. So how does it help them achieve their goals as an employee? Why is it important for the company? How does it help us achieve our goals? And then why is it important for the client? Because that's what those three things are, what we focus on and what we're there for.
00:29:28
Speaker
Why is it important to the employee, the company and the customer? Yep. Okay. I like that. So when we, when we actually thinking about changing a process or improving a process or creating one, um, that's the, we have to it has to fill to two of those points. So if it's not making it better for the customer, it's not making it better for the company, it's only making it better for the employee. Well, you said earlier, you got to train on what is effort or ethics, one or the other. Yeah. So, yeah. Yeah. So, you know, that's, and then and then again, it's only making it better for the customer and it's not making it better for the employee and it's not making it better for the business, then why do we want to do that?
00:30:18
Speaker
And if it's not making it better for the business, and it's only making it better for you know for the employee, we don't want it so on and so forth. if We go all the way around the surface. We want to hit at least two of those touch points if we're improving it and and go through. I like it.
00:30:36
Speaker
The, I know you guys are implementing the speed of service model at this location. And I know you said you had not really, you hadn't really started implementing that at the time. Is that correct? Correct. The um the desire is to begin implementing it by end of March. Okay.
00:30:54
Speaker
and that's you know Also, one service advisor is not enough for 1.6 million. so The goal is to add a hybrid GS position who's going to be helping with estimating and DVI and phones and that kind of thing, kind of kind of float back and forth. um Not really heavy production, but doing a lot of DVI's and estimating and then helping with phones and and and that kind of thing.
Marketing and Performance Metrics
00:31:20
Speaker
um first, and that will be a big part of speed of services because that individual can get the vehicles in and get them inspected and get the estimate out in a timely fashion. um And then very shortly thereafter, we'll be adding another technician. Okay. So what I want you to do is, if you make a note here to below your 1.6 million revenue goal,
00:31:45
Speaker
those are two critical actions that need to happen before we have the ability to achieve that goal, right? We have to we have to identify that GS floater position, and then we're gonna have to identify the um the technician to add on. Because like you said, we're gonna have to have three production technicians, and we're gonna have to add support staff to be able to support that goal of 1.6 and run the speed of service model. Okay. So,
00:32:14
Speaker
I know so kind of staying in line with what our revenue goals are there and some action items that we need to kind of cover. What is your what is your current marketing strategy? Do we have a strategy and plan in place for ramping up to because you're right at 1 million right now. So we're looking 1.6 is a fairly aggressive increase. So what is our strategy on the marketing side to drive new customers there?
00:32:40
Speaker
So the location is on a main thoroughfare kind of between NC State University and Meredith College. So it's heavy traffic, low speed with very easy ingress and ingress and good visibility. So it's a good location. I wish I had 10 days there. Right. um get a fair amount of just roll up and walk in, drop the keys, and and walk back to town because it's a very densely populated area. I don't have a shuttle driver. I don't have the learner cars at that location. I just don't need them. If we need to give somebody a round, we just use Uber. yeah um so Right now, car count is
00:33:18
Speaker
kind of where we need it for the staff that we have. So you have enough interest. Yeah. um I'm not doing any direct mail in that location. I'm doing you know AdWords, SEO, and that's the majority of what I do. Now I have some ah mass media print mail that has it goes out and coupon books and that kind of thing that has all locations on it. Right. ah So it benefits from that.
00:33:44
Speaker
And then we have internal retention and re-acquisition stuff that we do. You know, lost customer, re-acquisitions stuff, and you know service reminders, that kind of thing. OK. And I've just signed up with Turnkey Auto Marketing. So I'm going to be meeting with Carrie Lynn this weekend about implementing that process there. And I'm also entertaining the idea of doing some ah TV ads, ah not on broadcast TV, but some specific two specific neighborhoods through streaming services and cable and that kind of stuff. OK.
00:34:19
Speaker
All right so you're comfortable with where our car count is at the moment for the level of staff that you have and you're fairly confident that you have a strategy that you would be able to ramp up for the two new employees that we're going to be adding. Yeah I'm going to need ah probably eight cars a day to get to that goal and right now we're at like six so when I add these personnel um I think that I'm not going to have to add 50% more cars because I believe my tech average quote is going to go up when I have a higher level of DVI being executed on. And I think that our closing rate will go up if we can execute on speed of service. yeah So I won't need as many cars. I'll need a few more, but not as many.
00:35:01
Speaker
um But I mean, that goal is $6,000 a day, essentially in revenue. yeahp um So I think we can get there. So let's take a look at where you're currently at on a standard with things like AWRO and ARO and C, see where we have to push. Because if car count is, if we're looking at car count kind of being flat and not increasing car count,
00:35:22
Speaker
then obviously we know that we have to be more efficient with the cars that we currently have to be able to hit that 1.6, which is what you're discussing there between the speed of service and the discovery getting better. So last year, I'm going to do a little math here.
00:35:40
Speaker
Average repair order last year would badly underperformed was 466, and the closing rate was 33.5%. So that means the average written app repair order was 1300 and change.
00:35:52
Speaker
okay um This year to date, and we're recording this on January 24th, average pair of orders bringing up some, 573, so still not where it needs to be, but tech average quote has suffered with these new techs. They're not following our standards effectively yet. Let's see, 573, and we're at 38.5%.
00:36:20
Speaker
um So 1,400 and change. So tech average quote actually is up to, our target tech average quote across the company is 2,000. Okay. um So that's I think that's a good number. We we should you know try to tell clients to shoot for 1,500 to 2,000. Obviously, that could change depending on the business model. If you're a Euro shopper, a diesel shop, that number could be higher. um But we want to be somewhere between that $700 and $900 ARO.
00:36:46
Speaker
um In most cases for general repair. So where you're at that's gonna put you what your current current target is So if we're under the target right now, we obviously underperformed last year there We know we have a new staff there now So we're training my question to you is what would be your audit process that you're running through? To make sure that we trained them through that without just coming in at the end of the month and saying hey guys, we We miss it again ultimately I have tasked my senior technician that primarily is at the other store because he is bonus on both stores total tech production um with training ah DVI process and what we look at and what our standards are to the new guys and it's a slow process.
00:37:34
Speaker
one is embracing it better than the other. So that, you know, 1488 was with that ah month to date, average written. Do you prefer average written repair order or tech average quote? does Do you care? So Elite actually describes it as average discovered services. Okay. And we're going to cover that as well. um And in our next conversation, we'll go over the performance report and I'll share that with you and then we'll spend some time going over that.
00:37:57
Speaker
Since we're both tech metric users, we're um werere a little bit more familiar with it as average written repair order as because that's the way they reported inside of tech metric. yeah So we'll refer to it and you know on in our conversations and I'll try to default back to the client and what their understanding of the terminology is because I don't try to get hung up on semantics. AWRO is perfectly fine with me.
00:38:16
Speaker
um I think I've got one who's floating around 1,000 and one who's floating around 2,700. That's what's dragging it. and The dude who's floating around 1,000 needs to be retrained. okay so As far as auditing, I don't really audit, I just pulled the report and see what the tech coverage quote was and it was what it was. so So the the only reason that, and that's that's a fine place to start, um what I would say there is, because when you go pull that technician in, he's going to give you the line of, well, I had two, you know, 20, 24 vehicles that came in, or what
Evaluating Performance and Ethical Practices
00:38:54
Speaker
do you want me to do? Just find stuff on vehicles? There's nothing wrong. You know, that's what you're going to get, right? So I like to try to be prepared for that conversation. If I'm going to be you know discussing performance, I want to be able to show them what the performance actually is. So I want to know what the mix of vehicles that they've been working on, because that is a variable.
00:39:09
Speaker
um So I'll try to go through. Your process right now of review is great, but if you're reviewing the standard and the standard is below standard, what I would suggest is is is that should trigger an audit of some kind. And so what I would do in that scenario is let's say tech tech A is 2,700. He's above our standard. And we get to tech B. Tech B is at 1,000. That's below the standard. Anything below a certain deviant is going to trigger an audit.
00:39:40
Speaker
And I'm going to go through and audit his ah repair orders for that week and and review his inspections. I may not review every inspection. What I'm looking for in the repair orders is is vehicles that fit our avatar because you know if a vehicle fits our avatar,
00:39:56
Speaker
then we should have good discovery. That's how we're basing that $2,000 worth of discovery. The AWRO is off of a certain type of vehicle coming in, right? We want a vehicle that's between five and 10 years old, has between 50 and 100,000 miles on it, so on and so forth, right? so Because historically, we know if we drive that vehicle in, we're going to get the output of a $2,000 inspection if we have a qualified technician go through a thorough inspection process, right?
00:40:22
Speaker
So I want to see how many vehicles that he worked on that actually fit inside of that client avatar. If he if he did not get those, then I... you know, I don't beat him up that week, right? Because there's no point in me beating, if he had, if he had five cars that he worked on and and four of them were outside of the k client avatar and he didn't actually have opportunity, the other thing is, is there's a chance that maybe he pulled in a car that was inside of a client avatar and we just fixed everything the last oil change, right? And there is no discovery. We just did tires, brakes, all the flushes, all the good stuff, right? um
00:40:58
Speaker
So that's not a discovery issue, right? I can't really blame him for that. He did his due diligence. Yeah. It's just like when you're auditing a technician for low production and it turns out the service advisors hadn't sold shit all week. That's exactly right. It's not his fault. So that's the second thing that I'm looking at. So if I look at his inspection report, because the other part of that equation is, is the service advisor has to actually estimate it before it shows up as a, you know, as a declined service or part of his AWRO. So if I'm looking at it, I'm like, okay, well,
00:41:24
Speaker
You know, Tech B, he's got five cars that fits fit inside the client avatar. He's done good write-ups. Let me go pull up the estimates. Did all of the things that that he found in his tech write-ups, did they make it to the estimate? And if the answers no, then I'm going to the front of the house and I'm pulling the service advisor in and we're having a conversation about that. So, um especially while you're introducing you know, you identified, hey, we don't need more cars, right? We need, we need to be more efficient and we need better execution. We need better execution on the cars that you have in that process and that in that phase. You're going to have to get there through audits or else you're going to be too late. Also, one of the things that I've seen also is some advisors getting hyper fixated on closing rate as like an ego number. And so they will leave items unchecked that don't get sold.
00:42:13
Speaker
to inflate, to falsely inflate their to their closing rate, but also it falsely deflates the text, average written or repair order, and it doesn't feed those declined items into the funnel for future recommendations because it's been unchecked. So it's like, guys, you have to mark them declined. yeah So what you just described right there, and that's exactly right. So, I mean, there's a lot of a lot of training that you're going to get that tells you to shoot for this particular closing percentage numbers and you hear it online.
00:42:44
Speaker
I don't get and don't get excited about one way or the other about closing percentage. I want to know what my standard is, so I have an internal target for myself. I very rarely ever discuss it with the team.
00:42:56
Speaker
So it's a goal that I work on as a manager and a leader to try to improve that number. And that's what I would that's what i try to tell my clients is is do not discuss that number with the team because it's a manipulative it's it's a manipulatable number. What you just described is exactly what's going to happen. If you make that a goal you know for for the service advisor in two days, they're going to hit it. i And the numbers are going to be the same. And the problem that I had is I've never like compensated off of closing rate.
00:43:22
Speaker
But it was something that ah you know we were doing like score keeping like we had the whiteboard and we would put up performance numbers and ah in a non-customer facing part of the shop. And you have these people who are hyper competitive and they just want to be the leader in every category, right?
00:43:38
Speaker
and It's like, you're getting paid on gross profit dollars, bro. It doesn't matter what your closing rate is. It just matters how many dollars you generate, but they don't care. It's ego. So I think that's really important to come back to those why statements, right? Why is it important for you to follow this process? Why is it important to the company for you to follow this process? And why is it important for the customer? So when we look at discovery and elite is the only real curriculum that Elite is 100% across the board on with every single client. and I think this is a universal fact of the automotive industry and it was the biggest thing that I learned from coaching. So a lot of shop owners get hung up on the fact that they think that we're in the fixing cars business. So the the best analogy that I have for clients is this, if you go to a high-end restaurant, they're not in the feeding people business.
00:44:29
Speaker
That's an expectation. It's experiential. yes If I go to a high-end restaurant, the bare minimum of the expectation is I'm going to leave there not hungry. like I'm not happy about it if I leave there not hungry. I better leave there not hungry, saying that was the best meal that I've ever had. and The conditions were the best conditions for me to have a great experience. The music needs to be loud enough where I can't hear the conversation at the table beside me, but not loud enough where I have to yell across the table to the person that I'm talking to. The lighting has to be light enough where I can see everybody.
00:44:59
Speaker
but not light enough to where they can see how ugly I am. And so i mean all that we're buying the experience, right? And so I try to make sure that we understand what business we're in. And so we're in the discovery business. So we're in the experience business and we're in the discovery business. So for the dollars and cents side of things, all every single car that comes in, we're buying opportunity for discovery.
00:45:19
Speaker
And so I make sure that the staff knows that because if if we bring in a car and we do a flat repair, right? So these are the things that as a personal shop owner, these are things that trip my trigger, right? You're going to get a quick service car pulls in, it's dragging the tire flat, you know.
00:45:34
Speaker
Some guy goes out there and jacks it up in the parking lot, pulls the tire off, does you know does the patch repair on it, puts the tire back on, fills it up with air. We charge him $40, the car leaves. What a waste, right? What a waste of an opportunity. That's, you know, we lost the $2,000 of AWRO on that and the $40 meant
Enhancing Customer Experience
00:45:55
Speaker
nothing to us. so i want to I mean, I want to help everybody, but I have it, so the elite's version of that is this. We have an ethical obligation to the business, to the staff, and to the customer for full disclosure of everything that's going on with the vehicle. Well, we are the professional, right? We're the professional. The customer doesn't know what's going on with their car.
00:46:12
Speaker
So from a customer facing standpoint, I want to make sure that the team knows it's not just for dollars and cents, right? It does have a selfish benefit of adding dollars and cents to the, you know, to the output of the shop. But like you said, we're a professional. Number one, they don't know what they're looking at. And B, we have professional equipment that allows us to see things that they can't see. They don't have a lift at home, so they're not crawling underneath their car. And even if they did crawl underneath their car, they don't know what they're looking at.
00:46:39
Speaker
I want to take a ah very quick tangent. There's a shop owner in this building right now at this event who sent me a picture last week. They were doing a plug on a Bentley tire in the parking lot. Yeah, you know who you are, center.
00:47:02
Speaker
Sorry. Okay. We can get back on the phone because I apologize. That's probably a $5,000 tire in all fairness. It is a $10,000 oil change. He said it's a customer who spends about 60 grand a year. I think I was like, I don't care if I wreck the damn thing. Just plug it. I got to get on the road. Oof, man. yeah there's That's a big conversation. but yeah so You know, so I mean, if we take a look at that, we talked about the triangle there, you know, of the customer, the, you know, the customer, the business and the employee, you know, discovered services is one of those universal truths, I think, across every single shop out there, regardless of your business model. That's what business we're in. It fits all three of those. We have to believe that. And the team has to believe that and has to understand that. And I, you know, I want to make sure that everybody on the team understands that. A lot of times, the other issue that I see with technicians is,
00:47:47
Speaker
technicians, like just like service advisors sell from their own wallet, technicians discover from their own, the last person you want to ever buy a car from is a mechanic, yeah right? I mean, I love them all. I love you guys out there, but um typically speaking,
00:48:03
Speaker
We're going to drive it till it's broken and then we're going to fix it because it's easy for us to fix it and we know we can do it. So um I've seen that to where they're acceptable tolerance on things is, is considerable. And then depending on the area you're in and the and the talent that you're hiring, it may just be how they were trained. Yeah. Right. So I mean, we, we bring in technicians all the time. They've never even done a DVI before.
00:48:23
Speaker
one One of the things that we talk about in our team meetings on a regular basis is how bad our industry is in general. And if you think that, I mean, yes, it's frustrating because you want perfection at your business. And you know sometimes just stupid shit happens and it ruins your mood. But call around to other shops and just ask for an appointment, ask for service, from and just experience what it's like on the phone.
00:48:49
Speaker
go to other shops, experience what it's like there, the level of service they're getting. We're really bad at taking care of people as an industry, so that means it's not really hard to be better than average, and it's very doable to be exceptional comparatively to your marketplace.
00:49:07
Speaker
No, you're 100% right. And that goes back to what we were just talking about, about a lot of shop owners get hung up on the fact that they think that our job is to fix cars. That's an expectation. That's the bare minimum of the every customer that brings their car to your shop expects that when their vehicle leaves, it's going to be repaired yeah or the service is going to be completed professionally, right? That's an expectation.
00:49:27
Speaker
So if that's an expectation, that's not our job. That's the bare minimum.
Communication and Alignment of Shop Goals
00:49:31
Speaker
And our job is to make sure that they have a great experience to create an environment that brings those walls down, that allows them to feel comfortable going through the process that we're getting ready to push them through. And then for the output of the business, our job is to perform professional discovery. yeah That's it, those those things. so um I would make sure I would go, I would sit down and make sure I had a really good, clear conversation with everybody. But I know you probably have, obviously. But I would try to come up with those why statements about why it's important for them. Maybe it's a pay plan thing. um Maybe it's just you have some, people I mean, i've I got employees that are just really staunch on their ethics, right? And so maybe it's important to them to understand why it's important from an ethical standpoint to do proper discovery.
00:50:15
Speaker
um So just try to go back through and and rehash those conversations, make sure that they have some some goals on the discovery side. Do they know that they're supposed to get $2,000 per AWR? Probably not. Well, i I've communicated it to... my store manager and my senior technician and I expected them to trickle it down but I probably need to be part of those conversations. Yeah, so what I like to do on the advisor side is make sure that they have a target when they get when the when they get through estimating the ticket that they understand that we're looking for an AWRO of $2,000.
00:50:53
Speaker
And then on the technician side, since they don't really think dollars and cents, they think in hours, that I like to make sure it's easy for us to come up with what that, if we have if we have a hours per RO goal of two hours, and we have a general closing percentage of 50%, then we know they need to discover four hours per vehicle. So I have a discovery goal for them. Now, I make it very, very, very, very clear that we're not looking for unethical discovery just to meet a goal.
00:51:21
Speaker
Just don't miss the stuff that we shouldn't miss. It's an average. There's going to be cars that don't need anything. There's going to be cars that need 25 hours. That's exactly right. And so I make sure that I have a really clear conversation with them so they understand that we're not looking to recommend things that aren't supposed to be recommended. However, we can't miss the things that are there, right? They're bringing it to us for a reason. Fixing the car is not really the core reason that they're bringing it there for professional discovery and experiences and discovery is
Actionable Improvement Plans
00:51:50
Speaker
a part of that experience. so They need to understand that that's โ the four hours of discovery is the goal. the the The benefit of that goal is going to be the production that they get out of it, right? If you if you want to make 40 hours a week, you have to find me 80, right? So something to think about. I have โ
00:52:08
Speaker
um I have seen some clients actually put a spiff out there for discovery. um and Do you think that that pushes, well, then you got to manage ethics, right? You have to manage ethics. So as a flat rate, you know we've had this conversation and this argument kind of on the personal side of things. ah As a flat rate shop, you're choosing to manage ethics already.
00:52:29
Speaker
yeah um And I think that it can be done. I don't think there's anything unethical about flat rate, and but it does change what you but you have to look at, right? We don't have to manage effort that much because if they're not producing, they're sharing in the lack of production yeah you know on on their end as well in the pay scale. so It can be done ethically, but you're going to have to be the one that manages the ethics because we are putting $100 bill on the table and if we turn our back, we're incentivizing them to maybe take $100.
00:52:59
Speaker
so um Yes, you would have to you would have to review that and what you would have to look at there is making sure that we're not recommending things that don't need to be recommended and then make sure, put a very strong, have a very strong conversation on the front end that there's a disciplinary action that's just not going to be tolerated, right? if If you do cross that line or an ethics first company and anything that's going to break our ethics is a a deal breaker.
00:53:26
Speaker
absolute integrity. It's non-negotiable. Non-negotiable. So, and that's, that's a conversation that we have with every single, every employee when we hire them in the hiring process. And it's one of the things that we talk about at Elite, even with our coaches all the time and in our, in our onboarding sessions with our coaches is that integrity is at the core of everything that we do. And if there's at any point in time, we're doing something that's unethical, it's, it's a non-negotiable. It's a done deal. Copy. All right.
00:53:56
Speaker
Do we have time to go over anything else? I think we're at a pretty good stopping point there for the day. You've got some pretty strong action items. Just for accountability, I want to read back the action items. 100%. I need to go through the dream sheet exercise with each of my team members, and you're going to send me that team leader employee version. I'll send you the employee version. I need to double back to my salary technician and make sure that he understands in writing what his MLAP is.
00:54:23
Speaker
and what the goal is versus the MLAP.
Podcast Conclusion and Final Thoughts
00:54:27
Speaker
um I need to, or I like the idea of why based processes and procedures and so when somebody fails to follow a process and that means they get retraining and they need to know the whys for the company, for themselves, and for the employee, or for the customer. I've got By the end of February, I need to have that GS floater, ah GS advisor hybrid ah in place, and I wanna have a technician by end of March. I just don't have the bandwidth to onboard and train multiple people at the same time in that store.
00:55:08
Speaker
And lastly, I've got communicate with the full team what our average written repair order goal is and why. 100%. So that's, yeah, that's a team meeting. That's buying everybody. Yeah. One topping pizza for lunch. Get a pizza party.
00:55:26
Speaker
Super. So, uh, you know, you're going to hold me accountable to that next time we talk. Yeah. So how this process is going to work is we're going to have these discussions. We're going to identify the the areas of opportunity that we're looking to improve upon. We're going to set the 30 day action plan together of how we're going to achieve those things. And I'm going to share that action plan with you for the accountability side of things. okay And as you get done with them, you're just going to check them off.
00:55:47
Speaker
um And so if you at any point in time, if you um feel like you need to add another step in there, if there's something else that you need to do to be able to achieve that action item, add it in, check it off, and we'll continue to try to work through things that a way. Super. Looking forward to it, man. Awesome. Thanks.
00:56:03
Speaker
Thanks for listening to Confessions of a Shop Owner, where we lay it all out, the good, and the bad, and sometimes the super messed up. I'm your host, Mike Allen, here to remind you that even the pros screw it up sometimes, so why not laugh a little bit, learn a little bit, and maybe have another drink. You got a confession of your own, or a topic you'd like me to cover, or do you just want to let me know what an idiot I am? Email mike at confessionsofashopowner.com, or call and leave a message. The number is 704-Confess. That's 704-266.
00:56:32
Speaker
three three seven seven If you enjoyed this episode, be sure to like, subscribe or follow. Join us on this crazy journey that is shop ownership. I'll see you on the next episode.