Greg Bednar, owner of Greg’s Champion Auto (GCA) in Mankato, Minn., will never forget the day, in 2011, when he received sobering professional news.
Champion Auto
Location: Mankato, Minn.
Size: 10,000 square feet
Staff: 10 (1 owner, 2 service advisors, 4 techs, 2 part-time shuttle drivers, 1 part-time bookkeeper)
Lifts: 9
Average Monthly Car Count: 340
Annual Revenue: $1.15 million
“My bookkeeper came to me, shut my door, and she said, ‘We don’t have enough to make payroll. And we don’t have enough to make accounts payable,’” Bednar says. “And I sat there and stared at her.”
A loan provided temporary salve. But GCA was developing a gaping wound with regard to its finances. Annual revenue was around $300,000. And Bednar―who had taken over the struggling Champion Auto facility in Feb. 2010―was scrambling to acquire new customers. Simply put, sales needed to improve, soon.
The shop’s small staff could sense Bednar was in over his head initially. When he took over the facility in southern Minnesota, Bednar was greeted with two technicians and a massive amount of doubt.
“There was a lot of skepticism that I was going to be able to pull this thing off,” Bednar recalls.
The shop owner knew it was time for a crash course in how to run an auto shop.
THE BACKSTORY
Back in 2010, Bednar could certainly relate to the old adage “You don’t know what you don’t know.”
Though he was a former Air Force mechanic, Bednar’s professional background mainly consisted of stints in software development, telecommunications, and fundraising. He had been talked into taking over the 37-year-old Champion Auto facility by a fundraising colleague.
“I knew business, and I had a real sense for that. And also for marketing,” Bednar notes. “What I was short on was the specifics of … how do you make that phone ring? How do you manage car count?”
Bednar was coming to grips with the fact he needed a thorough tutorial on his new industry. He just wasn’t sure which school he needed to matriculate at.
And the clock was ticking.
EXPERT ADVICE
TRAINING SERVICE ADVISORS
Carlo Sabucco, President, Sil's Complete Auto Care Centre
One element of an "ideal shop," like Greg Bednar aimed to create at his shop, is having well-rounded service advisors. And Carlo Sabucco, who has been on the board of director of the Automotive Aftermarket Retailers of Ontario and owns Sil’s Complete Auto Care Centre in suburban Toronto, is an authority on that subject.
Service advisors are front-end of the business. They are the make-it-or-break-it. How they answer the phone, how they talk with the customer, their body language, how they handle our systems, are all front end. When the owner’s not there, do they maintain the system?
And all training here is done like a McDonald’s effect. It’s a systematic process. I have a different philosophy when it comes to my peers in the industry. I personally believe an owner or a manager of a multi-location needs to work side-by-side with a service advisor for a minimum of three months. I don’t want to know six months in that I’ve picked a lemon; I want to know three months in. And, I want them to feel the pressure of me being beside them. But I also want them to see the value of how important they are to my company, because I’m giving them my personal time to train them. The problem is, most owners won’t commit that type of time, because they’ve got other stuff on their plate. So they pass it off to a manager, or they hope a senior advisor will teach them; It doesn’t work, in my opinion. I’ll spend at least half a day with them (each day), at least until they pick it up and run with it.
THE PROBLEM
GCA’s vital signs were weak upon Bednar’s arrival. Average repair order (ARO) was a dismal $173. Customer attrition was an issue. The shop’s staff wasn’t even measuring effective labor rate. But the annual revenue—around $300,000—made the owner especially uneasy.
Bednar knew he needed to increase the flow of customers into his shop, but he couldn’t zero in on the ideal way to do so. The owner was using a patchwork approach to advertising that was doing little to improve his threadbare finances.
While uncertainty shrouded Bednar’s business, the owner remained relatively confident that his willingness to work would eventually bare fruit.
“I don’t give up,” Bednar notes. “If I can’t figure out how to get to my goal, I figure out how to go around the obstacle, or under the obstacle, or over the obstacle.”
THE SOLUTION
Finally, while flipping through the pages of an industry periodical, Bednar had an epiphany of sorts. He noticed an article that mentioned the top auto shops in America, and one was located just 90 minutes away, in the Twin Cities suburbs. Bednar had reached a conclusion: If he couldn’t create his ideal shop from scratch, he’d try to mirror the best around.
“I gave the owner a call and said, ‘I’m a great copycat,’” Bednar says light-heartedly. “So he let me come shadow him for a day.”
The tutelage of owner Rich Fearing at Village Auto Works and Transmission in Roseville, Minn., was immensely helpful. But it also reinforced to Bednar that he needed truly extensive, immersive shop instruction. RLO Training, and its Bottom-Line Impact Group (BLIG) process, seemed to have solid word of mouth.
RLO—which consults shop owners on how to be more efficient and manage their finances—and coach John Wafler didn’t hold any punches with Bednar, providing the unfiltered truth in 2013.
“For three days,” Bednar says, “you open your books and you bare your soul.”
Bednar knew he was stuck in a hole. But the BLIG program, which offers owners a support network, provided optimism. The humbled owner absorbed every tip he could, paying particular attention to suggestions that he upgrade his advertising approach, utilizing a Mudlick Mail direct mail campaign.
The advertising initiative isn’t cheap, costing GCA $2,800 for 4,000 pieces sent per month. And, though the program has just a 1 percent response rate, it generates a solid return on investment; as Bednar notes, if he mails out 4,000 pieces, that translates to 40 new customers. That can easily generate around a 500 percent return on investment.
Bednar also implemented a thorough, complimentary inspection process that focused on finding legitimate deferred maintenance on vehicles, which upped ARO.
Ultimately, the direct mail campaign provided the main key that unlocked success for GCA.
“Once that started to generate some traffic, things really took off,” Bednar notes of the Mudlick program.
"I don't go to work anymore. My passion, my hobby, is now my work—and it's so rewarding."
- Greg Bednar, Owner, Greg's Champion Auto
THE AFTERMATH
Bednar’s initial BLIG meeting was in Feb. 2013. By June of that year, sales numbers started to make a steep incline. The Minnesota shop owner says gross sales climbed to $500,000 quickly, and “then growth came in 20 percent to 30 percent increments each year.”
Bednar credits his altered marketing approach for much of his recent prosperity.
“You have to have some kind of marketing means that is going to get your word out there,” the owner notes. “And I had been doing a shotgun approach to this—radio and print—and nothing was seeming to get any traction. I went with the Mudlick program and went all in.”
The result: GCA’s annual revenue improved from $360,000 a few short years ago to the point where Bednar expected it to be around $1.15 million when final numbers are tallied for 2016. The shop’s average monthly car count rose from 165 in 2011 to 340 by 2016.
Nowadays, the Minnesotan is knowledgeable enough to provide his own auto shop tutorials. And, he happily notes, “I don’t go to work anymore. My passion, my hobby, is now my work—and it’s so rewarding.”
THE TAKEAWAY
One main lesson Bednar learned from his RLO studies: the importance of having a focused advertising approach.
“The improvement was dramatic once my direct mail program started to bring in customers,” notes Bednar, whose shop garners a 4.9-star average rating on surecritic.com.
“We had meteoric growth,” he adds. “The growth was breathtaking, really–hard to keep my arms around.”
