When Ratchet+Wrench posed the question, “What are the biggest diagnostic challenges facing shops these days?” on Facebook, over 60 comments came flooding in. Pointing to the conclusion that diagnostics, unsurprisingly, come with a lot of challenges—and these battles are ever-evolving.
Diagnostic challenges have always been a hot industry topic, but as technology advances and more ADAS features are being integrated into everyday vehicles—the subject becomes more and more pressing.
From buying the equipment, to training the staff, to educating the customers and selling the services, challenges within diagnostics are abundant. How a shop faces these challenges, can make the difference between profitability, and money loss.
Ratchet+Wrench breaks down the above issues, and takes an in-depth look at how shops can overcome each challenge—and ultimately, find diagnostic success.
The Challenge of Buying
John Bridgwater has plenty of diagnostic scan tools at the shop he manages, Wright’s Automotive Service in San Leandro, Calif.
But even still, “it’s not enough,” he says.
And, it may definitely feel like that for a majority of owners.
The amount and variety of scan tools constantly being marketed can become overwhelming—and deciding which tools to invest in is a large, costly decision. If a tool investment is ill-researched, the expense of the scan tool could be wasted, leaving lost money and no added profit.
Currently, Bridgwater says he has roughly 12–14 diagnostic scan tools in his shop, a mixture of both factory and aftermarket. The accumulation of tools has been a steady and carefully decided collection.
Which begs the question: Which scan tools should a shop have, and when should an extra investment on a specialized factory tool be made?
According to Bridgwater, it all depends.
Start with the basics.
The first scan tool Robert (Dutch) Silverstein, owner of A & M Auto Service in Pineville, N.C., bought for himself and his shop was an aftermarket tool—it was what fit in his budget. He said the tool allowed for him to simply have a large variety of cars to work on and with which to make money.
“When you first start out, you have to get an all-in-one tool, unless you’re going to start out specialized,” Silverstein says.
Independent shops should focus on getting a tool that will do as much as possible, he says. It’s not going to be perfect, Silverstein explains, or even near it—it will only be able to do roughly 80–85 percent of all the operations a factory scan tool can perform. But an all-in-one tool will achieve your best return on investment.
Although, Bridgwater suggests that most shops will need a variety of aftermarket tools, because no one tool is going to do everything you need, he says.
Soon after, Silverstein started looking at which vehicles he saw more of come into his shop. After noticing that a large amount of Fords came in, he bought his first factory diagnostic scan tool.
Consider the investment.
Similarly to Silverstein, Bridgwater expands his scan tool collection by surveying what vehicles come into his shop. Specifically, he keeps an eye on what work he isn’t able to do because of his lack of tooling for it, and he then bases his decision on that.
“If I see that I am turning down the work because I am not properly tooled for it, I take that into consideration,” Bridgwater says.
Once he sees that he has a need for a specific factory tool, he has no problem making the investment.
“You have to have the factory tools if you’re going to have 100 percent coverage for the product lines you’re working on,” Bridgwater says. “If you want to be able to program and handle all of the complex stuff that only a factory tool gives you, you have to invest in the factory tool.”
Before investing in any new scan tool, Bridgwater looks at what the capabilities are of his current scan tools, and compares them to the added capabilities of the possible new tool.
“Look at what you can you do with the tools (you’re considering purchasing), but more importantly [look at] what you can’t do with the tools you're looking at buying,” he says.
Know your market.
Diagnostic scan tools are expensive, and as previously stated, a large purchasing decision. But with a carefully researched collection, the array of tools can greatly expand the array of work a shop can accomplish.
Silverstein’s scan tools have allowed him to be able to count on one hand the amount of times his shop has had to send a car back to the dealer (excluding recalls and warranty work).
In regard to purchasing costly and necessary tools, Silverstein has the motto, “You have to sacrifice today for the blessings of tomorrow.”
However, it is important to take note that a mantra of, “The more tools, the more jobs,” isn’t entirely true. While some large tooling investments need to be made, not every tool is needed in every shop.
For example, Bridgwater has a collection of GM, Ford, Honda, Toyota and few other factory tools, but a Chrysler scan tool will not be found in his shop. Why? He simply doesn’t work on enough of them to make the investment, he says.
“I have no problem buying a factory tool if I worked on them (Chryslers). I just don’t see enough in my shop for it to be worth the money,” he explains.
The Challenge of Training
Buying diagnostic scan tools is one undertaking, but ensuring that a shop’s staff is properly trained to correctly use them, is another. Limited training could result in a tool investment going to waste, leaving a shop with a pricey tool and no knowledge on how to utilize its function.
Both Bridgwater and Silverstein put strong emphasis on training, and have set up systems in their shops that provide themselves, their staff, and their customers the benefits of the extended effort of constant equipment education.
Find what you need.
Bridgwater explains that most factory scan tools come with a lot more information and explanation than aftermarket tools. For example, the BMW factory tool comes programmed with the entire test plan information all within the tool itself.
Although maybe not as thorough, most tools—both factory and aftermarket—will have a decent amount of information online. Bridgwater says that this set of information is good for technicians that may not have a lot of experience with scan tools, but ultimately, won’t sharpen the technicians’ skills—which is why training is such a large priority for him and his shop.
“I think ongoing training is incredibly important,” Bridgwater says.
The changing complexity of vehicles in one of the largest driving forces for Bridgwater to invest in training for his technicians.
“You need a scanner for some basic brake functions these days,” he explains.
Silverstein believes in the investment of training so much so that at his shop, that he shoots for each of his techs to have 40 hours of it each year.
Pay their way.
In order to cement extended education as a shop priority, owners can invest and pay for the training of their employees. Silverstein pays his techs a special training wage—a reduced number from their regular hourly wages. He also foots the bill for the classes themselves, the transportation to the training, the hotel and the meals purchased during the trip.
At Bridgwater’s shop, he pays for various annual training packages from different vendors/parts suppliers each year. He also encourages his team members to find training on their own and present the opportunities to him.
“I’ll say, ‘You find whatever training you want, bring it to me, and I’ll pay for it,’” Bridgwater says.
He recently brought two of his staff members to VISION, an auto repair shop training conference hosted by the Midwest Auto Care Alliance, and paid for their way. He says the investment was beyond worth it.
Bridgwater says he once saw a quote on Facebook that speaks to how he views training at his shop. The gist of the quote is as follows: “What happens if we pay for all this training and the people leave us? Well, what happens if we don’t pay for it, and they stay?”
The Challenge of Customer Education
Not only can technicians benefit from diagnostic education, but customers can as well. When a customer understands the what, when, where, and why of diagnostics, he or she is more likely to have a full understanding of the process and the necessity to charge for the service.
A moment of explanation and education can stop customers from “price shopping” and help them understand the value of the work being done on their vehicles.
Talk them through it.
Silverstein is big on customer education, and one look inside his shop will prove that dedication. He has wall hangings throughout his waiting room of educational graphs and guides, as well as further information on the front desk that customers can look at or be walked through.
When explaining diagnostic tests to his customers—or guests, as Silverstein prefers to call his loyal patrons—he will slow down, go through each step of the process, and end his explanation with a question that can only be answered with a “yes.”
An example of how Silverstein explains the process of diagnostic testing could look like the following:
“We’re going to go in and we’re going to evaluate your vehicle, and then we’re going to run a series of tests. Based on those tests, we're going to tailor the repair so it actually fixes what’s broken in your car—does that make sense?”
The final question allows the customer to begin agreeing, and provides them with a degree of certainty.
“I’m going to give them every opportunity so that they can learn and not feel as if they are being taken advantage of,” Silverstein says.
Use their language.
Fully explaining exactly what diagnostics are to someone who may know anything about their vehicle, is a challenge. To combat the jargon barrier, Bridgwater explains to customers why they are paying for diagnostic testing in a language they will understand.
First, Bridgwater will figure out what the customer does for a living—are they in food service, construction, do they work for the government, etc. He then tries to use examples from their professions to explain how what they do has value, just like what he does has value.
“I try to equate what I do with what they do, and if I’m successful, they understand it and they are happy to pay my fees,” Bridgwater says.
He might also explain to them using an example of something we all have experience with—going to the doctor.
“If you go to the doctor, they are going to run a set of tests, and charge you for the tests, regardless of the outcome. The doctor is going to do basic height, weight, and blood pressure tests. Based off those tests, he or she will do more tests, and will charge you for those tests,” Bridgwater says.
It’s all about explaining that answers have value, he says.
The Challenge of Selling
When Silverstein first started his business, he didn’t charge for diagnostics—it was just him and he had monthly debt he had to pay. Silverstein didn't want to turn work away and was afraid that if he charged for diagnostics, people would take their business elsewhere.
“I wasn't presenting from a position of strength but from a position of weakness,” he says.
He hadn't had enough time yet to develop clientele, but soon learned that not charging for the tests, was not the way to make money.
“Every minute of the day, the clock ticks, and you have to earn that money whether it be with brakes or diagnostics,” Silverstein says.
Understand your value.
“A lot of people don’t understand the value of the expertise that they bring to the table,” Silverstein says. “They don't value it themselves, so why should other people value it?”
Bridgwater explains valuation like this: Every day, it costs $2,500 just to open the door before a wrench is even lifted. So, why would a shop give away their services if it costs that much to even open their doors?
“I’m using my most skilled and most talented technician, who knows how to use my most expensive equipment; why am I going to give that away?” Bridgwater says.
Revenue is time-based, Silverstein explains, any specialized testing has to make up for the lost revenue of parts.
Instead of charging the typical hourly rate and losing money, Silverstein suggests looking at a multiplier or a recovery factor.
“If someone is doing brake jobs all day, they're going to make more money than when doing diagnostics—but that’s backward. Diagnostics require the most specialized equipment and the highest-paying techs. Why should they get paid any less?” Silverstein says.
Charge what you're worth.
“The reality is, most shops out there either discount their diagnostics, roll it back into the repair, or devalue that service,” Bridgwater says. “Diagnostics aren’t the least valuable portion [of the service]; that’s the most valuable portion of the service”
Right now, Bridgwater charges a fixed rate when someone brings a car in. If a vehicle has, let’s say, an air conditioning problem, their check engine light is on, their ABS light is also on, and there’s a strange noise—that would be a four-step analysis. Each analysis step has a testing and inspection rate. If a certain analysis only ends up taking under five minutes, he won’t charge the customer, but if not, each of those steps needs to be charged for, he explains.
Silverstein has a guarantee on his website letting his customers know that if they have a problem with their cars, and they let him go through the entire series of testing he needs to run, and he still can’t fix the problem—they don’t pay him.
That’s a pretty strong statement, but regardless, it shows customers that they have to be willing to pay for the testing necessary to isolate their vehicle’s problem.
“Realize your value and charge for that value,” Bridgwater says.
