We’ve hit more than a million downloads!
So a few months ago, I was speaking at an automotive accounting event in Vegas. No, it wasn’t NADA (I already said I stopped going to those), but it’s similar. The only real difference was that this event was for brokers instead of dealers.
And just like NADA, the hosts at this event were also telling me not to talk about Tesla because it’s an “uncomfortable” subject!
Well, these brokers were talking about how Volkswagen doesn’t have a clue, because they’re transitioning to electric cars and, in their own words, “Americans don’t want electric cars.”
Bull. Absolute bull. I’ve said it before, and I’ll say it again: This isn’t about us, it’s about China.
China has been selling 30 million new cars a year – twice as much as the US. They’re not only dominating the world car market, they’re also phasing out combustion engines.
By 2026, every new car in China has to be electric. It’s a game changer. That’s why Tesla opened a factory there. It’s part of the reason why the CEO of BMW stepped down…
…But, according to these brokers, Volkswagen doesn’t have a clue? From what I can tell, by going electric in anticipation of this change, Volkswagen is miles ahead of the competition!
Look, I get it. The internal combustion engine built our market, and our industry was modeled after what Henry Ford did with the Model T…. But it’s not just about selling cars or servicing cars anymore. Transportation is changing. By getting rid of the internal combustion engine, we’re being forced to swap out the very backbone of our industry!
In the last three years alone, countries like Norway, Denmark, Israel, Iceland, the Netherlands, Sweden, the UK, Ireland, and most importantly China have all publicly announced plans to phase out combustion vehicles by 2030. Now, aside from China, these aren’t very big markets compared to the U.S. But I bet you that every other major market is going to follow eventually.
Regardless of your personal beliefs in things like climate change, there’s a clear and overwhelming trend starting, and the industry has to adapt if it’s going to survive.
Speaking of transportation changing….
There’s an all-female shop in Philly called the Girls Auto Clinic. It was founded in 2013 by Patrice Banks to empower women to have equal roles in the auto industry by educating and employing women in a full-service auto repair shop.
Now I know what you’re probably thinking: isn’t that some sort of… reverse discrimination?
Yeah, that’s a fair point.
Why couldn’t a guy apply to work in that shop? Then again, he could always open his own all-male shop, right? But wait– A lot of shops are all-male shops without even trying to be! It’s a male-dominated industry, and there’s nothing fresh or unique about an all-male shop! Who knows? Maybe consumers have a tendency to trust a shop more if it’s all-female.
The shop has been around for 7 years, after all. They must be doing something right!
Now, we’re not here to talk about the difference between a male or female service advisor, but I’ve always tried to get female advisors in any male-dominated drive because it balances out the shenanigans that are bound to happen in a testosterone-fueled environment.
But the funny thing is, a lot of female customers don’t trust female advisors. Most of the time, they ask for a dude! Now, I’m not saying that’s how it is in every shop across the board, but it’s definitely something I’ve noticed, and that’s just crazy to me.
That being said, people do relate and open up a bit more when it’s men talking to men or women talking to women. That’s just human behavior. Either way, an all-girl shop is a cute marketing idea and if we can get more women into the industry, I’m all for it!
Some of the top managers we’ve had in our coaching group have been female. You don’t want to scare talent away and cause them to go to other industries just because of their gender.
Now it’s time for Terms You Should Know:
Efficiency vs. Proficiency.
Efficiency is how many hours the technicians flag vs. how many hours are available so, if they’re working an 8 hour day and they flagged 8 hours, that’s 100%. If they work an eight hour day and they flagged 16 hours, that’s 200%. 24 hours, 300%. 30 hours, 375%.
Proficiency is a formula of how long they’re clocked on a repair order which means nothing. If you flag 200%, I couldn’t care less about proficiency. If you bonus on proficiency but your efficiency is low, you’re losing money so the thing I would like you to do is just focus on efficiency and forget about proficiency.
It’s something consultants love to talk about to confuse you and make you feel like you need them, but it’s not a measurement that I’ve ever seen improve the bottom line.
But what does go a long way, is having a shift meeting.
Take 10 minutes out of every day with your advisors, your technician, and refocus them. Get them pumped. We encourage you to play music before every meeting, so let me tell you my current top five shift meeting songs:
- Rage Against the Machine – Killing in the Name
- Run the Jewels – Talk to Me
- Greta Van Fleet – When the Curtain Falls
- Tim McGraw – Live Like You Were Dying
- Pearl Jam – Clairvoyants
Get everybody focused on what they should be doing today – not thinking about their bills or problems – and get them focused on delivering a five-star customer experience!
Now to wrap it up with our audience questions…
“Our dealer has a $12.95 oil change semi-synthetic or false synthetic. We have customers that only come in for the low cost oil changes. When I offer any other services, they decline. Some are converted, but not as many as I would prefer. Sometimes I ask them why they won’t allow us to earn their business. They say, ‘Oh, I have a mechanic.’ Then I respond, ‘But your mechanic doesn’t offer oil changes for $12.95.’ I feel like this is the wrong response or attitude, but I feel like a cheap whore and we’re being used. Any tactics for a higher conversion rate? Thanks.”
Wow. Sorry you feel like a cheap whore. Don’t think I’ve heard that one before.
Still, a great question. There’s a couple things going on here… and the first one that you have to understand is that selling is like a batting average. A lot of times, you feel like you’re not selling, but most of the time you actually are making good numbers. It’s the same thing that happens to techs in the shop. They feel like, “Oh, I fill out the inspection sheet but we never sell the work,” but if you go back and look, you actually are probably selling work!
If you’re going to run some sort of campaign that was going to drive traffic, that would be a good one; $12.95 is driving traffic. It’s working! You want to concentrate on being consistent and not letting the ones that don’t buy get into your head, right?
You don’t have control of the marketing at the dealership but know that you’re lucky to be getting traffic because some shops don’t get any at all – it’s better to have something than nothing!
You also gotta frame it as investing marketing dollars back into the customer. The sale isn’t made on the back end when you present the inspection, it’s made at the write-up. When you pet the dog and have a great conversation up front, you might just wow them and make them want to switch from their mechanic to you. Make it a process and keep doing it and you’ll convert plenty.
I would also say that you’re probably projecting; you’re projecting that you’re a $12.95 loser and it’s almost like you’re asking a question with the intention of a negative outcome. What I would say in those situations is something to the effect of, “Hey, I’m glad you’re here for the oil change and that you keep coming back, but I want to earn ALL your business. What can I do to earn that?” and then shut up.
At the risk of shamelessly plugging our training, our coaches are skilled in handling objections like that. If you had a coach, you could work with your coach and better your skill set!
“I started a job as a service advisor a month ago with no experience. I picked it up quick, and now I’m doing pretty much everything including warranty work with a little bit of help every now and then. How do I get more hours per R.O. and how do I make it work for me to increase my gross profits?!? Because my co-worker told me that the less you pay the technician, the bigger your gross profit numbers get. On the other hand, everybody keeps talking about increasing the hours per R.O. so I’m a little confused. Any advice? Thanks much.”
The first thing I would say is that it’s the most moronic thing ever to pay an advisor on gross, and you want an advisor to worry about paying the tech less?! You’re not training them. They don’t even understand what gross is!
We’re in an industry where we need technicians, by the way. We’re losing two technicians for every new one coming in, and we’re going to create a situation where advisors are trying not to pay technicians?! That’s crazy!
The gist of it is: don’t pay the techs less. What you want to do is hold your effective labor rate. The effective labor rate has nothing to do with hours per R.O. but hours per R.O. will help you sell more gross collectively. On every hour of labor you sell, the higher the effective labor rate, the higher your gross.
You want to increase your effective labor rate, focus on helping the customer first! If they like and trust us, they’re not going to be as focused on price.
Once again, we appreciate everybody for tuning in and downloading a million times!! I’m still blown away by this milestone. Thanks again to all of you, and we’ll see you again next week!