It’s the end of the month and you’re checking your numbers and there it is, glaring back at you: your shop’s efficiency percentage. A number that has always been consistent and high has dipped and you’re unsure as to why and beyond that—how to get it back to where it was.
Even the most well-run shops have been in this situation. It happens. The true test is whether or not you get yourself back to where you need to be. Patrick Murray, owner of Redline Speed Worx in Green Brook, N.J., has been in business for 14 years and runs an operation just shy of $3 million per year, is no stranger to this situation. He’s learned how to identify the cause and get back on track. He and Chris Kanna, a former shop owner and a business coach with his company, Camel Theory, share what to do if your efficiency dips.
Identify the Problem:
According to Murray, if your efficiency dips it’s probably due to one of three reasons. Either it’s an issue with a technician, you’re not bringing in as many cars as you should be or not enough work is being identified and sold on each vehicle.
“If we see something we’re not liking, what’s the root cause?,” Murray says. “What’s the roadblock?”
Before you can get yourself back on track, you need to find out where you went wrong. If you’ve done a good job of tracking your numbers, it should be easy enough to find.
Scenario 1: Low Producing Tech
If you break down each technician’s average and find one is bringing down the total average then you have a technician issue.
Get Back on Track
If Murray finds that a technician has been slower than normal, he sits him or her down for a conversation.
“Me, as the owner and leader, I want to do all that I can to help these employees,” Murray says. “I want them to be successful. Is there a solvable issue? Do we have a skill problem? What can we do or make available to increase skills and abilities?”
If the tech needs more formal training, for example, he sends him or her to that training and puts the technician on a 30, 60, 90 day plan to increase skills and abilities and then gives that person reasonable targets based on his or her abilities. If that person doesn’t get there after that time period, it may not be a good fit.
Kanna agrees that if it’s a technician issue, it falls on the owner of the shop and that the culture of the shop or the relationship between the technician and the shop may be the cause. For example, if your technician isn’t performing because he or she is going through something in his or her personal life, it shouldn’t come out of the blue that the efficiency goes down.
“As an owner, you have to go out there and demand communication, because, let’s be honest, techs don’t talk to people,” Kanna says. “You as the owner need to be good enough to fix things and build relationships.”
Build a rapport so your staff knows that they can come to you with issues and you can help.
Another tip Kanna has for keeping out of this situation is to make sure your
technicians are aware of their efficiency numbers every day. This can be done through a management system so they know if they’re not performing up to the standard that has been set.
“If your staff doesn’t know what it is and what it means what it dips and when it’s high, you’re not going to get anywhere,” Kanna says.
Scenario 2: Low Car Count
If you see that your car count has dipped or isn’t as high as it could be, then your technicians aren’t being given the opportunity to turn the hours they are capable of and it comes down to a lack of customers.
Get Back on Track
If this is the issue, it falls on you as the owner, Murray says.
“We as the owner did not deliver the cars to the shop,” he says. “We didn’t hold up our end of the deal to market and get cars in.”
Whether it’s new or returning customers, the owner needs to do whatever he or she can to make sure those customers come in and once they’ve come in, stay customers for life.
“Historically, a good shop should run 70 percent return customers. If that ratio is out of whack, that tells you something,” Murray says. “If you’re servicing 10 percent return customers, why are they not coming back? Do we need to attract more customers or invest in the team and give them training on how to take care of customers?”
Kanna says the type of customer that you’re marketing to could also be an issue. If, for example, your direct mailers are touting the “lowest prices in town,” you’re probably going to attract price shoppers that may only come to the shop that one time.
“Your marketing has to line up with your business model,” Kanna says.
Another issue you may need to consider if you find yourself in this scenario is not converting leads, Kanna says. Every time a customer calls in, that’s a lead. Often, whether it’s because of a lack of people skills or time, that conversation will cause that potential customer not to come in. To increase lead conversions, Kanna suggests recording lead calls and then listening back to them with your team and discussing what was done well or what could have been done to get that customer to come in.
Scenario 3: Low ARO
If the car count is there and there’s not one or two techs to blame but the shop as a whole, then efficiency may be low because higher hour jobs are not being sold.
Get Back on Track
Murray is very focused on how much opportunity is found with each car at his shop.
“Is that opportunity being discussed with the customer?” Murray asks. “When efficiency is low, most of the time, techs are doing a poor job of inspecting cars.”
In most cases, Murray explains, techs don’t understand that there’s a target dollar amount to be identified on each vehicle which will vary from shop to shop. If that’s the case, the owner needs to make that known. Murray wants his techs to find $1,000 of work per car. In order to do this, he has four checkpoints that he has his techs go through when inspecting the vehicle to go over with the customer. The first is solving the issue that the customer came in for. The second is any safety issues that are an immediate concern, third is anything that may become a problem soon and fourth is any maintenance needs.
“If they do these things, you’ll get a few hours of work,” Murray says.
Kanna agrees that a proper vehicle inspection is key to maintaining a high efficiency. In many cases, service advisors are afraid to sell, he explains. If you set up the customer for what to expect in the beginning and “plant the seed,” selling that extra work at the end is easier.
