Repair shops come in many shapes and sizes. Customer demographics, market opportunities, facilities, employees—no two shops have the exact same circumstances.
There is, however, one thing all successful shops have in common, says Jim Murphy, and that’s efficient workflow.
And Murphy would know; his Pro Service network of shops through Elite Worldwide is one of the most exclusive 20 Groups around, made up of some top-tier shop operators. Murphy sees the importance of shop efficiency every day in his coaching.
“And there are keys that any shop can take and replicate in their own environment,” he says.
As three different shop owners explained to Ratchet+Wrench, efficiency is all about simplifying the complex—using specific systems, processes and overall operational philosophies of operation. They shared their five keys that have helped them succeed.
Nate Bean, owner
Integrity Automotive Maintenance and Repair
Issaquah, Wash.
Size:
8,000 square feet (10 bays)
Staff:
9 (6 technicians, 3 service advisors)
Average Monthly Car Count:
300
Annual Revenue:
$1.75 million
Gary Pontious Jr., owner
Toledo Auto Care
Toledo, Ohio
Size:
8,000 square feet (10 bays)
Staff:
9 (6 technicians, 3 service advisors)
Average Monthly Car Count:
300
Annual Revenue:
$1.75 million
Steve Grimes, owner
Honest-1 Auto Care
Six locations near Portland, Ore.
Size:
8,000 square feet (10 bays)
Staff:
9 (6 technicians, 3 service advisors)
Average Monthly Car Count:
300
Annual Revenue:
$1.75 million
#1. Inventory of Labor: Scheduling for Capacity
In a little more than 15 years of operation, Nate Bean’s business, Integrity Automotive Maintenance and Repair in Issaquah, Wash., has grown from two employees (just Bean and his wife, Susan) to 12 and has operated in three different buildings.
“A lot changes when you’re growing your business and really trying to get things in place,” he says.
For Bean, it wasn’t until three years ago that his shop hit its stride in its 8,000-square-foot facility. That’s when he began a systematic scheduling process that was built on the concept of “inventory of labor,” as in the amount of labor hours a shop has available to it each day—a shop’s true capacity.
The simple calculation: Take the maximum billable hours each of your technicians are capable of producing in a given day, add them together, and you have your shop’s inventory of labor.
For Bean, he has an apprentice tech capable of six hours, two higher-level techs at nine hours each, and three master techs at up to 14 hours apiece. That’s 66 total billable hours his shop can churn out—at a maximum—in a given day.
“If you don’t know what your shop is capable of, it’s pretty much impossible to schedule work accurately,” Bean adds.
To do this, Bean pushes appointments with his customers. He prefers cars to be dropped off in the morning, diagnostics complete by 11 a.m., and the customer called before lunch with an estimate. Integrity Automotive has eight loaner cars, a shuttle service, and will do pick-up and drop-off when needed.
“We don’t discourage waiting,” he says. “We just give good options and reasons for them not to. If you don’t have people sitting there waiting on the vehicle, you control that car’s flow through your shop.”
Since Bean went to this philosophy, his business has reached new levels. Over a three-year period, he was able to increase car count from 240 to up to 350 in 2014. Sales hit $1.75 million last year, a 25 percent increase from 2012, and he increased his average repair order (ARO) from the low $400 range to above $450 during that time.
Getting the most out of each vehicle in 2014, the shop is on pace to top $2 million for the first time, with an ARO of $519.
#2. Personality on the Front Counter
Gary Pontious Jr.’s business philosophy originated from an unlikely place: hockey legend Wayne Gretzky.
“He was asked one time what makes him such a great goal scorer,” explains Pontious, co-owner of Toledo Auto Care in Toledo, Ohio, “and he said that it’s because everyone around him skates to where the puck is, and he skates to where the puck is going to be.
“It’s just a lesson of thinking ahead and looking at the next thing that will make your business stand out. In today’s industry, that’s the customer experience. Anyone can fix a car; not everyone can give an exceptional experience. That needs to be your differentiator today.”
Jim Murphy
Industry Consultant
Murphy’s Law No. 1
Benchmark Efficiency
Five additional key performance indicators Jim Murphy says to use for evaluating your workflow:
1. Productivity (90 percent benchmark)
2. Efficiency (130 percent benchmark)
3. Total Billed Hours Sold (varies depending on shop size, scale, staff, etc.)
4. Number of Repair Orders (varies)
5. Break-Even Point (varies)
Murphy’s Law No. 2
Test Your System
Murphy likes to do a simple drill with his customers: Take a single morning, and instruct your staff that the service advisors and technicians can not speak to each other at any point. Your process should work without any verbal cues, he says, and this exercise will help you quickly identify where lapses are in the system.
Murphy’s Law No. 3
Watch Comeback Ratios
Comebacks should never exceed 0.5 percent of overall gross sales, Murphy says. If your comeback ratio leads to a higher number that likely means mistakes are being made at some point in the workflow process.
And how does that play into shop efficiency?
“You have to find a way to balance exceptional customer service with not having an overworked front counter,” he says. “If your front counter staff is overworked, either customer service or their service writing or their workflow management is going to suffer.”
In 2013, Pontious made the decision to create a new customer service representative (CSR) position at what was a five-employee shop. Previously, all front-counter duties were handled by the shop’s lone service advisor and Pontious when he was available. The CSR is now responsible for answering the phone, greeting customers and writing the initial service order based off the initial discussions with the customer. That frees up the service advisor to focus on his most important roles—sales, writing estimates and managing the shop workflow.
“[The CSR’s] main goal is to connect with the customer and establish trust,” Pontious says. “You have to start your workflow process by getting customers in the door, getting all the right information and getting that on to our service advisor.”
Toledo Auto Care has two women sharing the full-time CSR position, both hired on personality, Pontious says. In the first 12 months of having that position, car count increased by nearly 40 percent, the shop topped $1.1 million and is now on pace for a 15 percent increase in 2014.
#3. Marketing for the Right Work Mix
With his maintenance-focused business model, Steve Grimes says his main job as the owner of six Honest-1 Auto Care locations in the Portland, Ore., area is to make sure customers come through the door.
The idea is to “make it work” for the customer, saying “yes,” and finding a way to work them into your workflow. That requires careful scheduling, but, more than anything, it requires accurate marketing.
“To be efficient, we have to keep the bays full, the phone ringing, and we have to bring in the right type of work that’s going to allow the team to do profitable work,” Grimes says. “That all comes from marketing.”
Grimes has a specific approach that he tweaks slightly for each location, and he spends at least a portion of one day each week at each facility pouring over its individual marketing strategies and results.
He tracks it religiously, through specified phone lines, coupon and deal turn-in rates, and by his service staff asking every customer what lead them to the shop.
Grimes spends roughly 5 percent of each shop’s gross sales on marketing, splitting that between direct mail (40 percent), customer retention methods through CustomerLink (30 percent), and pay-per-click Internet advertising (30 percent), which Grimes says nets his shops the biggest return on investment.
“We spend $435 per month per shop, and it directly leads to more than $10,000 in sales per shop each month,” he says. “That’s a big return, and it’s something to really focus on today. Search, and paid search, is the modern-day Yellow Pages. You can’t afford to not be involved with it.”
And by understanding what works and what doesn’t, Grimes can target the optimum customer demographics in each area, ensuring that those walk-in customers are the customers that will make his shops money.
“When you get the right type of work coming in the door, it jump starts the workflow process and gives your team a chance to be efficient,” he says.
#4. Inspections as a Baseline
Shop efficiency is all about billed hours, and getting the most out of each vehicle is critical. That’s why all three shop owners—Grimes, Pontious and Bean—put a large amount of emphasis on their respective inspection processes.
Grimes’ teams at Honest-1 do a 21-point inspection on every car. Integrity Automotive does two separate types of inspections, Bean says, a comprehensive one and a safety check.
At Toledo Auto Care, Pontious’ techs do four different types of inspections, all of which are free to the customer.
“We try to partner with our customers to keep their vehicles running as long as possible,” he explains. “So, we developed our maintenance plan around that.”
Every first-time customer gets the shop’s “multi-point inspection,” or MPI, which includes more than 70 items, and gives the shop and the customer a “baseline” for the vehicle’s needs to help set up the maintenance plan. Return customers also get an MPI once each year.
Then the shop has a separate, scaled-down version of the MPI that comes with every service performed on the vehicle. There’s an additional safety and maintenance inspection that comes with each oil change (the shop recommends it every 5,000–8,000 miles), and a “pit stop” safety inspection the shop will do three times a year for customers on appointment.
“The average car we see is 11 years old and between 100,000 and 160,000 miles, and with the way cars are made today, if you keep up on regular maintenance, you can make it to 300,000 (miles),” Pontious says. “And, it’s giving us an opportunity for more work on every vehicle.”
#5. Workflow’s Linchpin: Nonverbal Communication
Regular and open communication is important for every business. That’s how decisions and improvements are made.
For workflow, though, Bean says an efficient shop should rely on nonverbal cues, developed through a systemized process of dispatching work from the front counter to the technicians in back.
“If you have well-written work orders, well-written inspections and a process for dispatch, the only time there’s verbal communication is when a mistake is made,” he says.
Both he and Pontious follow this philosophy in their respective shops. Pontious’ process is detailed and precise, yet simple and repeatable:
Step 1: Service Writing. Toledo Auto Care’s CSRs take detailed notes at drop-off time and enter it into the work order in the shop’s management system.
Step 2: Transition to Service Advisor. The CSR then prints the work order and puts it in a file rack on the wall of the service advisor’s office, hanging the vehicle’s keys on a corresponding hook next to it. The advisor simply needs to see the work order in the rack to know there’s a job waiting.
Step 3: Schedule the Job. The service advisor double-checks the work, and then assigns it to a technician based on the shop’s schedule and the technician’s skill level and experience.
Step 4: Dispatch to Technician. Each technician has a job board at his bay that consists of a dry-erase board with a file rack attached to it. The job board is broken into three sections: The top is for vehicles to be inspected, the middle is for approved work for that day, and the bottom is for work approved for the next day. The dry-erase board next to it allows for any notes that need to be filled in. The jobs are also color-coded based on priority (red being critical, then yellow, green and blue).
Step 5: Job Returned to the Service Advisor. When the technician completes the work, he brings the file back to the service advisor’s office rack. If it was an inspection, the advisor then calls the customer to sell the work and will return the folder back to the technician’s rack. If service is complete, the advisor will then bring the folder to the CSR, who then schedules delivery.
