Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sat Jan 19, 2008 9:55 am Post subject: Some Thoughts on Future Markets
Matt, had a great post in the advertising secrets forum. The art of selecting a focus for a business is one that may take a lifetime to master. As Matt’s post brings out, it is wise to do as much research as possible before committing to a specialty. A great Subaru repair specialist will not do well in a town with no Subaru vehicles.
Another point I feel is equally important is to realize markets evolve. They never stay the same and “falling in love” with a specialty can be devastating for a business. For instance in 1974 front wheel drive vehicles were just coming on the market. They were much lighter and less durable than previous vehicles. More to the point, they required far more accuracy in repair, because there were few if any adjustments on the suspension. Body shops were great at making them look good but alignment was something in the sublet column.
Alignment shops of the day were normally, “in the alignment business.” A wrecked vehicle that could not be aligned, did not fit their profile well, that was body work. Enter the frame and alignment specialist, not body shop and not alignment shop but a mix. In time vehicle designs got much better, collision shops became more prominent and direct repair by insurers changed the mix.
This is why a shop must keep an eye on the market, it will change. Today over 70 percent of our income comes from services we did not offer fifteen years ago. I predict this will continue to accelerate. The point is, what business are we in. A shop in the frame and alignment business may today see much of their market gone. If they are very stubborn they may see this as the economy, unemployment, high consumer debt or on and on. But is it really? They have failed to evolve with the market and excuses are just that.
So what business are we in?
Is it the auto repair business, or the personal transportation service business?
Posted: Sat Jan 19, 2008 6:06 pm Post subject: Re: Some Thoughts on Future Markets
louis wrote:
......This is why a shop must keep an eye on the market, it will change..... If they are very stubborn they may see this as the economy, unemployment, high consumer debt or on and on. But is it really? They have failed to evolve with the market and excuses are just that....
What are the implications?
Our dealership is dead slow, which is not unusual. 'Everybody' says 'It's normal this time of the year. All the other dealers are even slower, so are the independents.'
But I say all the other dealers and independents are making the same mistakes, and are losing their customers because of them.
Of course nobody wants to hear this, since it goes against what they believe is true about this industry.
So here are a few of the mistakes:
* Running cheap specials and then upselling to make up for it. Sure you make money, but never see the customer again. It doesn't sit well with them. The surveys never ask questions that tread on sacred ground; upsells.
* Treating small-ticket customers as an inconvenience, since pay is linked to sales. This rubs off on the customers, and we never see them again. Pricing and pay scales are just wrong. Besides, most warranty work is small-ticket.
* Promising work will be completed the same day they bring their car in, even before we even know what is wrong with the car. The rush to completion forces poor diagnoses, blanketing the problem with parts to insure it really is fixed, and skipping steps to finish by the end of day. The rush produces low quality, and high comebacks, and dissatidfied customers, who never return.
* Booking work that requires special tools on Satirdays, when often nobody with keys to the special tools locker is on site. This forces rigging fixes, poor quality, comebacks, and customers who never return.
* Who wants to add to this list? The typical tech knows what is hurting their shop more than the managers do:
1-
2-
3-
But Louis is booked over a week in advance, and apparently turns away good work every day. Beside that, Louis is in a poor State, Louisiana, that has been in recession conditions since the mid 1970s.
What are the implications? Many fellow techs are considering other occupations and telling the younger ones to not even enter this trade.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sat Jan 19, 2008 9:12 pm Post subject: Re: Some Thoughts on Future Markets
Bud wrote:
Our dealership is dead slow, which is not unusual. 'Everybody' says 'It's normal this time of the year. All the other dealers are even slower, so are the independents.'
But I say all the other dealers and independents are making the same mistakes, and are losing their customers because of them.
Of course nobody wants to hear this, since it goes against what they believe is true about this industry.
Ah, the infamous cycle. Every so often all of the vehicles in a given area quit breaking at the same time. That flies in the face of all logic, yet people seem to cling to that superstitious BS and have for years. I have heard that crap for 40 years, never believed in it and still don't.
So what accounts for these apparent down turns, and why are they getting worse? The heart of the problem is fear. People are scared to have their vehicles repaired and will go to almost any length to avoid it. Unfortunately for the trade, newer vehicles are far more dependable and the time between "having to face the challenge of repair" is growing ever longer. Shops have, by their practices effectively shrunken the market.
So why the cycle? Since people hate having to deal with repair shops, they wait, until their fear of being stranded or causing major damage overcomes their fear of repair. Eventually the vehicle breaks and the latter overcomes the former. They start coming into shops. The best shops were never slow in the first place so their backlog grows. The overflow goes to everyone else, starting with the least fearful down to the most.
The experience is even worse than the client remembered. Sort of like a bunch of up-selling pirana waiting for a feast. They leave vowing to buy another vehicle before facing it again, many do. Some are okay, and even return keeping the shops going. They are just too few and too far between to keep the places busy.
The reason for the cycle is simple. People are looking for excuses to not face the ordeal. Any excuse is good enough to put it off. Christmas bills, let's put off the dreaded repair. High heating oil cost, let's wait a bit longer. They may simply be able to find more excuses at certain times of the year. perhaps they wait, until the past memory fades, again reinforcing the span between highs and lows.
Spring comes and people want to start traveling. The fear of being stranded exceeds the dreaded repair, or their memories have begun to fade. Summer heat kills the car and they have no choice. Once “serviced” and with the experience fresh in their mind clients once again retreat. Not all of them the best shops stay full, there is just not enough overflow to keep everyone else busy.
Dave, it's not a mystery. It is all in the Deming forum on this site. It is like the first aid kit that never gets looked at until somebody starts bleeding.
Obviously all the vehicles in an area don't stop needing repairs or even routine service at Christmas, school start up in September, and at other set times we call 'the slow seasons.'
Honda says our customers are 76% likely to return. The bays empty for so long tell me their surveys are poorlly designed and yeild misleading data, like that 76% figure.
Try to imagine seeing this survey. It would get down to the real, gut-level reasons customers don't return, or who delay returning until their car is threatening to do something catastrophic.
1) Did they try to sell you something that you did not go in to buy?
What was it? Did you buy it?
2) Were you convinced that your car really needed that work?
3) If you weren't convinced, why did you buy it? Were you afraid of a breakdown? Of damaging your car? Was it fear, uncertainty, or what?
4) Do you feel you were taken advantage of, if you answered fear or uncertainty in question number 3?
5) If so, what are you going to do about it? Forget about it, complain to their management, don't go there again for service, or trade your car in the next time it needs major work?
As you can see, surveys never tread this sacred ground of upsells. Nobody wants their system threatened, even if it means the bays go empty. Just chalk it up to something out of their control.
Does that make any sense?
Last edited by Bud on Sat Jan 19, 2008 10:29 pm; edited 1 time in total
Posted: Sat Jan 19, 2008 10:24 pm Post subject: Re: Some Thoughts on Future Markets
louis wrote:
The heart of the problem is fear. People are scared to have their vehicles repaired and will go to almost any length to avoid it. Unfortunately for the trade, newer vehicles are far more dependable and the time between "having to face the challenge of repair" is growing ever longer. Shops have, by their practices effectively shrunken the market.
Allow me to be a little sarcastic here. Can't we 'educate' customers to spend more. Lets ply them with newsletters, which will get them to spend more, and move them up the scale. You know, get them to go from a 'C' customer to an 'B' or even an 'A.'
After all, advertising is not supposed to 'help' people. It has to have a gimmick, a trick, a come-on.
Ok, that's the end of sarcasm. I'm just adding to your point; saying that the whole problem of reluctant customers results from fundamental flaws in the way most shops operate. It can't be cured by a snappy advertising campaign.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sat Jan 19, 2008 10:33 pm Post subject: Re: Some Thoughts on Future Markets
louis wrote:
So what business are we in?
Is it the auto repair business, or the personal transportation service business?
What are the implications?
I believe we are in the transportation service business. Shops that are in the auto repair business just fix vehicles as they break. That may have worked in the 60’s when vehicles needed tune ups every 10,000 miles. They needed lots of repairs just to keep going.
Todays vehicles need a lot less repair, but they do need maintained. With proper maintenance a car can run for 250,000 miles or more. I believe it is our job to advise our clients how to get the most miles out of their vehicle and prevent breakdowns. It is our job to give our customers accurate information so they can make good choices.
People in the transportation business will evolve as the markets change. They are taking care of transportation needs no matter what the transportation is. The blacksmiths of yesteryear were put out of business by the horseless carriage, unless they learned to work on cars.
We need to change and evolve in order to survive.
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sat Jan 19, 2008 11:41 pm Post subject:
Bud wrote:
Dave, it's not a mystery. It is all in the Deming forum on this site. It is like the first aid kit that never gets looked at until somebody starts bleeding.
Bud,
My mistake, I should have been clearer. I did not mean that what Louis wrote, or is going to write, was a mystery. I was refering to the way he wrote it. The last line he wrote did remind me of the last line in the chapter of a good book. It left me wanting to know more, wanting to read the next chapter.
Bud wrote:
Obviously all the vehicles in an area don't stop needing repairs or even routine service at Christmas, school start up in September, and at other set times we call 'the slow seasons.'
I agree. I also think that there are less people purchacing car work during these slow times. They only have so much money and Christmas spending takes priority over an oil change. What I am starting to learn is that a good shop will attract a larger portion of the smaller group that is buying. If the portion the shop attracts is large enough, they will stay busy.
Bud wrote:
Honda says our customers are 76% likely to return. The bays empty for so long tell me their surveys are poorlly designed and yeild misleading data, like that 76% figure.
The surveys were designed to get a high number, not an accurate number. Two very different things.
Bud wrote:
Try to imagine seeing this survey. It would get down to the real, gut-level reasons customers don't return, or who delay returning until their car is threatening to do something catastrophic.
1) Did they try to sell you something that you did not go in to buy?
What was it? Did you buy it?
2) Were you convinced that your car really needed that work?
3) If you weren't convinced, why did you buy it? Were you afraid of a breakdown? Of damaging your car? Was it fear, uncertainty, or what?
4) Do you feel you were taken advantage of, if you answered fear or uncertainty in question number 3?
5) If so, what are you going to do about it? Forget about it, complain to their management, don't go there again for service, or trade your car in the next time it needs major work?
As you can see, surveys never tread this sacred ground of upsells. Nobody wants their system threatened, even if it means the bays go empty. Just chalk it up to something out of their control.
Does that make any sense?
It would be very interesting to see the results of a survey like that. I can almost guess some of the answers.
It boils down to trust. Are we really giving the customer the information they need to make good decisions. Do they trust us to do so. I believe it is our job to advise our clients how to get the most miles out of their vehicle and prevent breakdowns. It is our job to give our customers accurate information so they can make good choices. If we take care of our customers they will take care of us.
At my shop we tell our new customers (the existing ones expect it) “we will probably tell you more about your vehicle than anyone”. We do a quick inspection of the vehicles that come into the shop. Stuff like fluid levels and condition, look at the belts, hoses and radiator, any fluid dripping on the floor, air up the tires including the spare. Based on that inspection we prioritize the recommendations we are making. By telling the customer up front, before doing the inspection, it seems to ease their mind when we do give them the results. When we tell the results, we tell them what is good about their vehicle as well as what is in need of work.
It may be symantics, but I believe we are doing the client a service by letting them know the general condition of their vehicle. We have talked ourselves out of some jobs because it was better for the client to replace the vehicle than to repair it.
Thanks,
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sun Jan 20, 2008 3:34 pm Post subject: Re: Some Thoughts on Future Markets
Quality, Value, Ethics
Bud wrote:
louis wrote:
The heart of the problem is fear. People are scared to have their vehicles repaired and will go to almost any length to avoid it. Unfortunately for the trade, newer vehicles are far more dependable and the time between "having to face the challenge of repair" is growing ever longer. Shops have, by their practices effectively shrunken the market.
Allow me to be a little sarcastic here. Can't we 'educate' customers to spend more. Lets ply them with newsletters, which will get them to spend more, and move them up the scale. You know, get them to go from a 'C' customer to an 'B' or even an 'A.'
After all, advertising is not supposed to 'help' people. It has to have a gimmick, a trick, a come-on.
Ok, that's the end of sarcasm. I'm just adding to your point; saying that the whole problem of reluctant customers results from fundamental flaws in the way most shops operate. It can't be cured by a snappy advertising campaign.
Hi Bud,
An excellent point!! Advertising is an important tool in the arsenal of a good shop. It can get people in to see how good the service is. It cannot make up for a poor or disjointed business philosophy.
"Nothing kills a bad business quicker than good advertising." It is well that most advertising is so poorly done. Think of the results if it were truly effective.
There must be two components, the package and the product. They must complement each other and I don’t believe one can exist, for long, without the other. One must deliver on what the other promises. Ever notice how a busy streak in many shops inevitably results in an even worse slow streak. During the busy streak, even more bad-will was created than usual. This kills off [as potential clients] a lot of the folks that may have eventually found their way in. The ill will they spread does the rest, until the experience fades from memory.
Contrast this with a truly Deming oriented business. They are always busy and adding additional personnel increases sales, but does not decrease the backlog. It's simple, each new client generates more sales and more to the point, more sales leads. Continual growth is the natural result. A healthy business produces clients just as a healthy body produces blood.
Good advertising is very effective for the healthy business, because they truly have something to offer. There is no instant pudding, it can’t work the other way around.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sun Jan 20, 2008 3:45 pm Post subject:
Bud wrote:
Dave, it's not a mystery. It is all in the Deming forum on this site. It is like the first aid kit that never gets looked at until somebody starts bleeding.
Obviously all the vehicles in an area don't stop needing repairs or even routine service at Christmas, school start up in September, and at other set times we call 'the slow seasons.'
Honda says our customers are 76% likely to return. The bays empty for so long tell me their surveys are poorlly designed and yeild misleading data, like that 76% figure.
Try to imagine seeing this survey. It would get down to the real, gut-level reasons customers don't return, or who delay returning until their car is threatening to do something catastrophic.
1) Did they try to sell you something that you did not go in to buy?
What was it? Did you buy it?
2) Were you convinced that your car really needed that work?
3) If you weren't convinced, why did you buy it? Were you afraid of a breakdown? Of damaging your car? Was it fear, uncertainty, or what?
4) Do you feel you were taken advantage of, if you answered fear or uncertainty in question number 3?
5) If so, what are you going to do about it? Forget about it, complain to their management, don't go there again for service, or trade your car in the next time it needs major work?
As you can see, surveys never tread this sacred ground of upsells. Nobody wants their system threatened, even if it means the bays go empty. Just chalk it up to something out of their control.
Does that make any sense?
I think such a survey would tell what should already be obvious. Success is not very difficult to measure. Ethical practices, a lot of money in the bank and a lot of clients at the door. If any are missing . . .
"A successful business Ethically and Profitably produces services that don't come back for people that do."
Dave wrote:....The surveys were designed to get a high number, not an accurate number. Two very different things.....
I can only agree with that view partially, maybe 50%. True, surveys are partially bogus. But they also try to measure changes implemented as a result of previous market research and surveys.
It is easy to see what prior research said customers wanted by the way things are run today. Here there is great pressure to: 1) Finish the car the same day it is dropped off (or frequently, sooner) and to, conversely, 2) Fix it right the first time, which earns a tiny bonus.
Imagine the conflict to achieve conflicting goals in a large unweildy system with dozens of steps, built in wasted time and poor communication, from start to finish.
Of course the prior reasearch was faulty. One popular method to probe consumers' minds is called conjoint anaylsis. People are given long lists of pairs of choices, and patterns are distilled, mathematically, from their answers.
In our case, the choices 'finished by noon, 3:00 pm or 5:00 pm' were chosen more often over their paired choices like'price, hours of operation or location of dealership.' Sounds reasonable, right?
It was faulty research, because these choices were obviously left out of the test questions: Do you prefer your car finished within six hours of drop off, or do you want: 1) the mechanic to be thourough, 2) not guess at the cause of your problems, 3) not replace too many parts, 4) be able to road test it regardless of time constraints, 5) to have to bring your car back because steps were omitted in the rush? Everything a good tech needs to do professional, accurate, economical repairs was obviously left off the surveys.
They can't include those 'real' choices in their surveys because they would be admiting those things happen in their dealerships.
Now, many independents try to copy what dealerships do. Many independents are suffering because of this mistake. Rather, they could profit by countering the dealerships' mistakes, which are obvious.
Now, many independents try to copy what dealerships do. Many independents are suffering because of this mistake. Rather, they could profit by countering the dealerships' mistakes, which are obvious.
That wasn't very clear. Many independents over-promise and under-deliver on completion times, and many offer bonuses for low comeback rates.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
FAQ
Search
Memberlist
Usergroups
Profile
Log in to check your private messages
Log in
