Making Your Cars Count - Achieve a Better Than Average Repair Order
I recently spoke to an owner about his shop hitting an income plateau. He wanted to increase his car count to solve the problem. As we began to peel back the onion, I discovered his Average Repair Order, ARO, was hovering at $149. He was surprised to learn that the national average repair order was about $250-$300, and that well run shops were able to maintain an ARO of $400-$500. In less than one month, we were able to more than double his ARO and significantly improve his profit. The solution was not more car count, but making the cars count. His shop was like many shops, it was very busy but not very productive.
Your Average Repair Order, ARO, is one of the most important key performance indicators. It is easy to track by simply dividing your total gross sales by the number of repair orders. Once you have established what your current ARO is, begin the process of improving it. Set a target ARO and a time line goal. Then look at the things that must be improved upon to achieve your goal. Remember that what is measured is managed, so monitor your ARO daily.
THE INSPECTION PROCESS
Digital inspections have been around for a while. It does not matter if you prefer paper or digital inspections. What does matter is performing a thorough inspection every time. Do not assume your technicians are doing thorough inspections. If you have lost focus on good inspections, you will probably see a 15-25% increase in sales when you begin to focus on it again. Begin with taking a close look at the inspection form itself. Meet with your staff and design a new form that works for your technicians and your service advisers. Give them plenty of input to insure that it works well for them. This gives them a feeling of “buy in” and gets them onboard with this project and the changes that may need to be made in your current procedures. Demonstrate how you want to perform the inspection with your technicians. Bring in a vehicle and do an inspection using your new form. Show them how to grade the fluid conditions and properly record the information on the form. Demonstrate how to measure tread depth, brake pad thickness, and belt conditions. This will make the inspection results consistent and keep it from being subjective. Go over every line of this form so everyone uses the same consistent standards every time. Consider paying your techs for each properly performed inspection. This will put them in the mindset that this is not just important, but it is part of their job. It is money well spent to get a properly performed inspection.
Your customer will benefit from it and so will your shop. Review every inspection form. See if the recommendations seem to fit with the age and mileage of the vehicle. Look for patterns, like one tech who may be recommending a certain fluid service on every car. If something seems wrong, address it right away.
THE SALES PROCESS
Having good customer relations is very important to a successful shop. Everyone wants a trusted adviser to give them the best possible advice. As owners, we use consultants, accountants, and lawyers to give us the advice we need. Your customers depend on their vehicles and they want us to give them advice on keeping those vehicles running well. Your service adviser is instrumental in developing and maintaining the trust your customers have in your shop. People want a shop to call home. When you demonstrate that you care and are looking out for them, they will call your shop home.
A great way to demonstrate your concern for your client is to spend time with them during the initial write-up. We all know how chaotic that first volley of customers can be when you have just opened the doors for the day. There are a couple of strategies you can use to avoid rushing the initial write-up. Set your morning appointments 5 or 10 minutes apart. This will avoid the pressure of being 3 or 4 people deep at the counter. Another way to go is to start the repair order when the customer sets that appointment. Get your problem statement and other details at that time so the drop off is quick and easy. During the initial write-up, try to pace your customer’s energy level and mood. Always be positive and upbeat. Sometimes your customer is upset about their car, so slow your roll, be empathetic, and assure them they are in good hands. Customers like someone they can relate to. Customers buy from people they like. Remember, we are in the people business and we just happen to fix cars.
Obtaining a great problem statement can save hours of wasted time in the shop. The best way to get a great problem statement is to ask open-ended questions. For example, “What was the last repair done before you noticed the problem?” Another question could be, “Under what condition does the symptom present itself?” This questioning method is very effective for getting the most accurate and complete problem statement. Paraphrase what your customer said back to them to insure you have correctly understood them. Once you have completed the repair order, find out how they would like to be contacted. Record their preferred method of email, text message, or phone call, and if there is a time during the day they would prefer.
Once the evaluation and inspection are complete, it’s time to build the estimates. Begin with the customer’s primary concern. For example, if their primary concern was brake noise, build a recommendation package for the best possible repair. Not just calipers, pads, and rotors. Also include a brake flush and clean and adjust the rear brakes if needed. This will give them the best dependable repair possible. Use the same method for each recommendation. Tell your customer that it’s your job to tell them everything you found with their car so they can make the best decision. Always begin your presentation with positive observations about their vehicle. Comment on what low mileage the car has or that all the maintenance seems to be up to date. Build the case that this car is worth the investment you are about to ask them to make. Present your recommendations in the following order:
· Primary Customer Concern
· Needed Repair
· Reliability Concerns
· Preventative Maintenance
Always check your customer’s repair history in your operating system as well as any previously unsold recommendations. Also check for any Technical Service Bulletins or recalls that could be relevant to their vehicle. All declined recommendations should be noted on their invoice.
When it’s time to give your customer their car back, it’s important to recap everything with them. Go over the invoice. Cover what they bought and why it was a good idea. Go over the items they declined and mention the time frame you recommend to address any of these items. Tell them about your warranty. Let them know they can call you with any questions or concerns they may have at any time. The last thing is to set their next appointment. For example, “You should be due for your next oil service and tire rotation in about 4 months, what day is best for you?”
ARO improvement is great for your customer because they enjoy predictable, comprehensive, professional service every time. This builds their trust and will turn a customer into a client and clients into advocates for your shop. This will improve your ARO and your professionalism. It’s not always about car count, but rather making the customers and their cars count!