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Confessions of a Shop Owner is hosted by Mike Allen, a third-generation shop owner, perpetual pot-stirrer, and brutally honest opinion sharer. In this weekly podcast, Mike shares his missteps so you don’t have to repeat them. Along the way, he chats with other industry personalities who’ve messed up, too, pulling back the curtain on the realities of running an independent auto repair shop. But this podcast isn’t just about Mike’s journey. It’s about confronting the divisive and questionable tactics many shop owners and managers use. Mike is here to stir the pot and address the painful truths while offering a way forward. Together, we’ll tackle the frustrations, shake things up, and help create a better future for the auto repair industry.
Uwe Kleinschmidt [00:00:00]:
The current definition, the job description of the ideal service advisor. Have you realized that person doesn't exist?
Mike Allen [00:00:06]:
How do you define the ideal service advisor?
Uwe Kleinschmidt [00:00:08]:
They have to be meticulous enough to build estimates and have to be outgoing and a people person. I mean, that's the opposite.
Mike Allen [00:00:17]:
Yeah, it's two different things. I think the outgoing people person is more important than the meticulous because I can sub meticulous out.
Mike Allen [00:00:26]:
The following program features a bunch of doofuses talking about the automotive aftermarket. The stuff we or our guests may say do not necessarily reflect the beliefs of our peers, our sponsors, or any other associations we may have. There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along. So, without further ado, it's time for Confessions of a Shop Owner with your host, Mike Allen.
Uwe Kleinschmidt [00:00:59]:
I grew up in a country where I would have been landing. I would have landed in jail if I had said what I wanted to. Right. I grew up in East Germany.
Mike Allen [00:01:09]:
So when did you leave East Germany?
Uwe Kleinschmidt [00:01:13]:
91.
Mike Allen [00:01:17]:
So after the wall fell.
Uwe Kleinschmidt [00:01:18]:
Wall fell in 87 and 89.
Mike Allen [00:01:20]:
89. Okay.
Uwe Kleinschmidt [00:01:21]:
I was in college and.
Uwe Kleinschmidt [00:01:25]:
I was part of the political movement helping to get the wall down.
Mike Allen [00:01:30]:
What was that like?
Uwe Kleinschmidt [00:01:32]:
That's a whole podcast by itself.
Mike Allen [00:01:34]:
Okay, okay.
Uwe Kleinschmidt [00:01:35]:
But yeah, it was give you just. So I was in college. It was a PhD student because I wanted to push out the time when I have to go to work every day.
Mike Allen [00:01:46]:
Okay. What were you studying?
Uwe Kleinschmidt [00:01:49]:
There is no equivalent in the US It's a mix of computer science and technical optics and measurement. So I focused on the ability to measure things in the industry, which had to be measured fast but accurately. I'll give you an example. We built a scale.
Uwe Kleinschmidt [00:02:11]:
Which measured coffee beans as they were poured in, as they're packaged by Jimmy Purdy.
Uwe Kleinschmidt [00:02:21]:
Down to an accuracy where the packager needed to put only two more coffee beans in to always pass the test by the customer. Because if the customer pulls a sample and it's not meeting the weight printed, the whole delivery goes back. Right.
Mike Allen [00:02:40]:
Okay.
Uwe Kleinschmidt [00:02:40]:
So they would put two more coffee beans in a. In a. With our scale, they only needed to put one more coffee bean in, and that amortized over millions of scale within three months. If you had charged a million dollars for it.
Mike Allen [00:02:58]:
Wow. And so that type of technology was being produced in East Germany.
Uwe Kleinschmidt [00:03:02]:
East Germany.
Mike Allen [00:03:03]:
Okay.
Uwe Kleinschmidt [00:03:04]:
So for some reason, our professor had. He played both sides brilliantly. So he was allowed to go to West German trade shows, and we would get phone calls the next day. Where can we buy it? And we said, we're just a university in East Germany. We have no production facility.
Uwe Kleinschmidt [00:03:24]:
And so that was super fun. Right? I mean, I. The stuff we did. And I had a professor from West Germany. So when you do your PhD, you do your thesis, and then you have to defend your thesis. And it's good for you if you have a diverse group of professors who.
Mike Allen [00:03:45]:
Critcher you on your panel. Yeah.
Uwe Kleinschmidt [00:03:47]:
And so I had built a software algorithm based on an idea I found in a magazine and asked the author of that article to come. I had no clue. He was the most renowned international expert on this. I had no freaking clue. And he came and he said, what you guys are doing here? How do you do that? We have no clue what you guys are capable of. Right.
Mike Allen [00:04:14]:
That's awesome. So what was it like? In answer to your question, if you've already covered this, No, I didn't listen to Lucas's podcast with you because I don't. I don't even listen to my own podcast. I don't. The funny thing is I used to listen to all the podcast, and then I started a podcast, and then I stopped listening to any of the podcasts, which is. I don't know. I don't know what that says about me or what.
Uwe Kleinschmidt [00:04:36]:
I mean, you're not listening to yourself to fine tune your.
Mike Allen [00:04:40]:
No, no, no. You'd think that I would be trying to have some iterative improvement, you know, to continue to hone my skills, but, no, not yet. So somebody. If somebody gets mad at me, I might go back and listen to what I said that made them. That's about it. So.
Uwe Kleinschmidt [00:04:56]:
And to answer the other portion of the question, right. Politically.
Uwe Kleinschmidt [00:05:02]:
Another episode. I was sitting with.
Uwe Kleinschmidt [00:05:07]:
Friends of mine, you could almost say from the same movement.
Uwe Kleinschmidt [00:05:13]:
And we had the list of the president of the university and all his underlings and put names next to it who are going to replace them. That was in.
Uwe Kleinschmidt [00:05:24]:
89.
Mike Allen [00:05:25]:
Okay, so was everyone in the administration? Were they all.
Uwe Kleinschmidt [00:05:29]:
Yeah, they had to be in the Communist party, otherwise they wouldn't have made it.
Uwe Kleinschmidt [00:05:35]:
And.
Uwe Kleinschmidt [00:05:38]:
We were lucky to a certain degree because we were such a small university.
Uwe Kleinschmidt [00:05:43]:
That nobody really cared.
Uwe Kleinschmidt [00:05:47]:
And so.
Uwe Kleinschmidt [00:05:53]:
But on the other hand, we had. I mean, there was a professor, as an example, who wrote books about basics of, you know.
Uwe Kleinschmidt [00:06:05]:
How computer hardware works. His books were published internationally.
Uwe Kleinschmidt [00:06:12]:
After the Wall came down, they did a study and found out that our college had the most modern patent library in the whole Germany.
Mike Allen [00:06:26]:
I mean, I'm coming from a place of great ignorance about these things, Right. But in my mind.
Mike Allen [00:06:33]:
Before the wall came down, it was like a third world country on the other side of the wall.
Uwe Kleinschmidt [00:06:38]:
Yeah.
Mike Allen [00:06:38]:
Shortage and people lived in fear and corruption and everything. And then now there is corruption to be had over here too.
Uwe Kleinschmidt [00:06:47]:
Right, Right.
Mike Allen [00:06:48]:
It's just more subversive. I don't know.
Uwe Kleinschmidt [00:06:51]:
Yes and no. So here's the interesting thing, right. The fact there was a West and an East Germany, for example, allowed.
Uwe Kleinschmidt [00:07:03]:
90% of the East Germans to watch West German TV and receive West German radio. There was only close to the Polish border. There was something we called the. The Valley of the Clueless.
Mike Allen [00:07:21]:
And folks that didn't have radio wave access. Yeah.
Uwe Kleinschmidt [00:07:25]:
And I don't know whether you heard the town named Dresden. Dresden was bombed.
Mike Allen [00:07:29]:
Dresden, yeah.
Uwe Kleinschmidt [00:07:30]:
Dresden.
Mike Allen [00:07:31]:
Yeah.
Uwe Kleinschmidt [00:07:31]:
Firebombing was that. And that was the center of the Valley of the Clueless. And the interesting stats were that the people who wanted to leave East Germany and move to West Germany and.
Uwe Kleinschmidt [00:07:47]:
Basically turned in applications were per capita the highest in the Valley of the Clueless.
Mike Allen [00:07:54]:
Wow. So all they had though was the propaganda about.
Uwe Kleinschmidt [00:07:58]:
So they overcompensated. Right.
Mike Allen [00:08:00]:
Okay.
Uwe Kleinschmidt [00:08:01]:
The moment you know how it's really in real life, then you see, oh, it's not all golden. What looks like golden. Right. And so. But my dad, for example, he visited his, I don't know, cousin or whatever when the wall was still up and he came back and was completely bitter and destroyed. He said, but I worked 40 years of my life as well.
Uwe Kleinschmidt [00:08:34]:
Right. So he realized firsthand the difference to your point. Right. In East Germany you learn to improvise because there was a shortage of a lot of things. Money was not an issue. The issue was to get it. I drove a.
Uwe Kleinschmidt [00:08:51]:
A Trabant. I don't know whether you ever seen those East German made from there were only a few pounds heavy because the body was not metal, it was plastic. So you could play a prank on your teacher by two people, lift the car and put it on bricks. And when they want to drive home.
Mike Allen [00:09:11]:
They good wheels to spin. Yeah.
Mike Allen [00:09:15]:
Although I am driving around in a Miata a lot now. So I feel like there are plenty of dudes who can pick my car up and move it right now.
Uwe Kleinschmidt [00:09:20]:
Right. So. So a buddy of mine and I change the clutch in a parking lot New Year's Eve in college. Right. It was so simple, but 24 horsepower, two stroke engine.
Mike Allen [00:09:37]:
Anyway, was the Nepner motorcycle, is that East German or was that Russian?
Uwe Kleinschmidt [00:09:41]:
Which one?
Mike Allen [00:09:42]:
D N E P N E R. I think it was Napro.
Uwe Kleinschmidt [00:09:46]:
Is that's. That's a river in Russia.
Mike Allen [00:09:50]:
Okay, so it's a.
Mike Allen [00:09:56]:
The BMW R series motorcycles from the set from the 60s were copied. Right. By a Russian company. And then. Okay, yes, it's a copy of a copy of a copy, probably.
Uwe Kleinschmidt [00:10:06]:
But.
Mike Allen [00:10:09]:
Is the motorcycle version of the altel from 1960? No.
Uwe Kleinschmidt [00:10:13]:
I don't know. I'm not so motorcycle savvy.
Mike Allen [00:10:19]:
Well, cool. So, uwe Kleinschmitt, AutoTech IQ.
Uwe Kleinschmidt [00:10:24]:
Thank you.
Mike Allen [00:10:25]:
Formerly of East Germany, now of California, now of California. Where you are. Where are you in California?
Uwe Kleinschmidt [00:10:30]:
Currently in Pasadena.
Mike Allen [00:10:33]:
So, man, I keep getting sucked back into this. How does it feel being in California where there's a large segment of the population that feels like maybe we just need to give communism another chance? We just haven't done it right yet.
Uwe Kleinschmidt [00:10:47]:
So I started writing a substack channel, if you know. A substack. Yeah. Comparing East Germany with California.
Uwe Kleinschmidt [00:10:55]:
I can see the symptoms and I can predict where it's going to land. And the reason why we are still there is my wife's kids. And so originally we wanted to move to Florida or South Carolina.
Mike Allen [00:11:13]:
And, well, a lot of folks were leaving and going to Idaho and Texas and Colorado and Tennessee.
Uwe Kleinschmidt [00:11:19]:
Yeah.
Mike Allen [00:11:20]:
So.
Uwe Kleinschmidt [00:11:20]:
But, you know, in East Germany, we. We had a saying.
Uwe Kleinschmidt [00:11:27]:
It cannot be that the lost one switches the light off. What that means is, you know, leaving is never a solution. You have to do something about.
Mike Allen [00:11:37]:
Somebody has to fix it. Yeah.
Mike Allen [00:11:40]:
Well, we shall see if somebody decides to fix it or not.
Uwe Kleinschmidt [00:11:43]:
See, I got now the invitation from the government to do the interview to become naturalized. Nice.
Mike Allen [00:11:53]:
How long has that taken you?
Uwe Kleinschmidt [00:11:55]:
Actually, not long. I was super surprised. I actually, I wanted to do it for a long time, but Germany has a huge problem with dual citizenship. They put so many hurdles in the way that I thought, you have to prove to Germany that you still have ties to them, otherwise they just release you. So if you want to achieve dual citizenship, which was my goal, you had to jump through hoops. And I said, okay, whatever, don't have the time for this. And last year, the Germans decided it's not that important and dropped all requirements. And so I just filed the application and got my interview for Halloween.
Mike Allen [00:12:37]:
Are you going to go in costume?
Uwe Kleinschmidt [00:12:39]:
Actually, so if you read the requirements, they say if you have been in the US for more than 20 years, you don't need to prove that you can read, write and speak English. So we were joking. I should just wear a letter hose.
Mike Allen [00:12:57]:
Just go fully to Hoshin, come with.
Uwe Kleinschmidt [00:12:59]:
A stein and start talking German and see whatever happens.
Mike Allen [00:13:05]:
If it weren't such a serious thing that you don't want to up and start over again. That would be pretty epic.
Uwe Kleinschmidt [00:13:11]:
Yeah, my daughter just did it.
Mike Allen [00:13:13]:
So you do the exam and it's an interview. Okay. And how long until you get.
Uwe Kleinschmidt [00:13:21]:
Two more weeks if you pass. Two more weeks.
Mike Allen [00:13:23]:
All right. Are there basic, like, what types of things do you need to prove? I know that. I've been told that people who are taking their naturalization interview, exam, whatever, typically know more about American civics and history than the average.
Uwe Kleinschmidt [00:13:37]:
My wife read the question. So there's a question catalog. Right. And they pick and choose so you can prepare really well, I'm told. And, and she said, I don't know any of this.
Mike Allen [00:13:52]:
Who's the third president in the United States, for example?
Uwe Kleinschmidt [00:13:55]:
Yes.
Mike Allen [00:13:57]:
I don't know. Was it Adams? I don't know. Jefferson? I don't know.
Uwe Kleinschmidt [00:14:02]:
Yeah, it has to be one of the early ones.
Mike Allen [00:14:04]:
Yeah, yeah, whatever.
Uwe Kleinschmidt [00:14:06]:
Nobody's.
Uwe Kleinschmidt [00:14:09]:
You know, I'm, I'm, I feel a little safe. Maybe I shouldn't generally study. I came to this country and created over a hundred jobs, so isn't that worth something?
Mike Allen [00:14:20]:
That's worth something, right? We still gotta study, man. My, my 15 year old is due for his driver's exam to get his permit. I'm like, bro, in North Carolina.
Mike Allen [00:14:33]:
You have to get an appointment 90 days out or you have to get in line at 4:30 in the morning.
Uwe Kleinschmidt [00:14:37]:
Wow.
Mike Allen [00:14:39]:
And I said, if I get in line at 4:30 in the morning or if you wait 90 days and you haven't studied for this test and you fail the, the written portion of this test, I will maybe just murder you rather than get back in line again.
Uwe Kleinschmidt [00:14:53]:
So no, in Germany it's much worse. You Pay A, to €1500, which is what, $1700 to get your driver's license. And when you fail, you start completely over and pay again.
Mike Allen [00:15:07]:
Well, and you have probably fewer stupid automotive accidents from poor drivers, you know, Probably. And the other end of the spectrum, you know, go to some, some places in Southeast Asia where it's like free for all, you know, absolute madness.
Uwe Kleinschmidt [00:15:22]:
Yeah, but mobility is a value, you know, and see, completely different topic. But.
Uwe Kleinschmidt [00:15:29]:
You heard about safety first, right? That kind of rule, safety third. I'm with that. Right. So Mike Rowe did in one of his podcasts, he said there's a study about an intersection where they had more.
Uwe Kleinschmidt [00:15:46]:
Accidents after they installed the traffic lights. Why? People feel safe, they don't need to care about it anymore. They just follow the light. Whereas before everybody Paid attention. So I like that everybody paid attention better, I have to say.
Mike Allen [00:16:04]:
The problem is getting everyone to actually pay attention.
Uwe Kleinschmidt [00:16:06]:
That's true.
Mike Allen [00:16:08]:
I know that I am 100% guilty of that. Being a distraction while driving.
Uwe Kleinschmidt [00:16:15]:
Yeah. But the deeper problem is.
Uwe Kleinschmidt [00:16:20]:
You rely on the system and when stuff doesn't work, you blame the system.
Mike Allen [00:16:24]:
You know, I don't remember who I was talking with. I think it was Jim Kokonis and Brian Pollack and I were discussing the other day.
Mike Allen [00:16:35]:
A trend of. There's a term given to it, but a reduction in competency in professional individuals who were relying too much upon AI to do their job for them. And so they were dumbing down. Right. Their competency. And I know that AI is, you know, it's coming for your job, but I think people who know how to use AI appropriately are coming for your job and they're going to be able to do the job of two people.
Uwe Kleinschmidt [00:17:05]:
And.
Uwe Kleinschmidt [00:17:07]:
Yes, if you have a job which is day in, day out, the same mundane, repetitive thing, you should be worried.
Mike Allen [00:17:16]:
Well, like if. If you're a radiologist.
Mike Allen [00:17:19]:
You had a really good career and, and you had good income, but don't let your kid be a radiologist. Right, right. No, but.
Uwe Kleinschmidt [00:17:28]:
But it's really interesting. AI. So we use AI heavily. We have several million repair orders and inspections in our database. Right. And so when we realized that service advisors spend quite a bit of time on the phone explaining pictures to their customers, we thought that's not a good use of their time and it's kind of sales pressure. Right. You cannot avoid that.
Uwe Kleinschmidt [00:17:58]:
It's perceived as talking down on me as a customer. Right. It's unavoidable. And so we started building a tool which basically interprets the pictures and puts the arrow on it and caption. So when the customer gets the inspection result, they actually get educated. They don't need a third party to explain to them what's on the picture. The AI does that. And it was so amazing to see how to deal with AI.
Uwe Kleinschmidt [00:18:28]:
So, number one, if you let it flow, you will be super surprised.
Uwe Kleinschmidt [00:18:35]:
How good it is. Give you an example. It looks at a picture and says, here's an oil leak and there's a loose connector. But the inspection topic was oil leak. So you have to throttle it and say, don't tell us about the loose connector. That's a different inspection topic.
Mike Allen [00:18:52]:
So we have started experimenting with.
Mike Allen [00:18:56]:
Just. We know what we see. Take a picture or a video of what we see and then tell me what you see. And it is pretty accurate. On what it's seeing, especially you give it information about what type of vehicle it is that you're under.
Uwe Kleinschmidt [00:19:08]:
Yes.
Mike Allen [00:19:10]:
And so that's. I can see how that would be a useful and valuable tool. I was in another conversation recently about if you can build a really high level DVI with really good explainer videos and really good easy to understand regular vernacular write ups.
Mike Allen [00:19:29]:
There are some people who believe that you can send that to them and let the customer follow through that process and it will be as effective as an average service advisor. Without an average service advisor being there.
Uwe Kleinschmidt [00:19:40]:
The question is whether that's a good goal.
Mike Allen [00:19:43]:
I don't know that average is a good goal.
Uwe Kleinschmidt [00:19:45]:
Right.
Mike Allen [00:19:46]:
But my question is.
Mike Allen [00:19:49]:
Can you trust the customer to go through that entire process without being led through it?
Uwe Kleinschmidt [00:19:56]:
You measure that. That's easy.
Mike Allen [00:19:59]:
Let's back up. Yes, tell me what all of tech IQ is and what it does. Because we know each other, but not everybody listening does.
Uwe Kleinschmidt [00:20:06]:
So Ototech IQ. So I sold Autovitals, was supposed to retire, but I'm kind of obsessed with what the DVI is capable of because I think even today we have only scratched the surface and we'll see whether we can touch on all those things in this podcast. And so the first idea was we knew that pre educated customers approve more. It was really simple. Right. The more they are educated, the more they approve. That seems counterintuitive. And some service advisors have a lot of pride in explaining what's wrong with the call to the customer.
Uwe Kleinschmidt [00:20:49]:
Right. But the numbers are. There's nothing to discuss really. Right. So we, for example, measured how long a customer would study the inspection result unattended.
Uwe Kleinschmidt [00:21:06]:
And so there were two things. The more you edited the pictures and made them self explanatory, the longer the research time and the longer the research time, the higher the approval rate. It was completely clear. Right. So I thought, okay, let's build Ototech IQ.com and put so much education on that website that people who look for a problem solution about their car on Google will find it and then we will explain how much it's going to cost and how to do it yourself. No, that's not what we're going to do.
Mike Allen [00:21:46]:
I was just going to end the recording right there and thank you for coming.
Uwe Kleinschmidt [00:21:53]:
No, we are. Because most customers have. They're intimidated by the technical complexity of the car. Right. And so if they're completely non prepared in the discussion with a service advisor, they're timid. Right. And they decline because they don't know what it means. Or they approve because they're in fear that something is happening.
Uwe Kleinschmidt [00:22:15]:
Neither one is good. Right.
Mike Allen [00:22:17]:
Okay.
Uwe Kleinschmidt [00:22:18]:
And so we build. What is it? 125,000 web pages explaining common causes for a symptom like a noise, a smell, a warning light. Right. And then when they find it.
Mike Allen [00:22:32]:
Hey, it's me, Mike's kid. Want to tell us your wild shop stories? Or maybe you just think my dad's totally wrong. Call us at 704 confess and leave a message. You can tell us we're awesome or you can tell us we're idiots. We're cool either way. That's 704 Confess. Just don't make it too weird.
Uwe Kleinschmidt [00:22:50]:
They can read it. And then they answer questions about how do you experience your problem? And then hook them up with shops in their area. We have certified. Right. And certification means we ask you to fill out a survey about your DVI process. We give you some feedback on too low hanging fruit changes you can make in your business to improve it. And that's it. Product number one.
Mike Allen [00:23:18]:
Okay.
Uwe Kleinschmidt [00:23:20]:
Then we were looking for a software. How can we show shops that you have a good DVI process? Right. How do we measure it? Instead of just talking and teaching and preaching. Right. And. And so we build a tool which measures recommendation rates and decline rates by job.
Uwe Kleinschmidt [00:23:43]:
Guess what the highest decline job is in numbers. So how many jobs?
Mike Allen [00:23:49]:
Not percentage, but just.
Mike Allen [00:23:52]:
Either a light bulb or an air filter filter. Okay.
Uwe Kleinschmidt [00:23:56]:
By far, either one. Cabin or engine air filter.
Mike Allen [00:24:00]:
I would believe that completely by far. And because that's the thing that people think they can do themselves.
Uwe Kleinschmidt [00:24:06]:
I don't believe that.
Mike Allen [00:24:07]:
You don't think so?
Uwe Kleinschmidt [00:24:08]:
I think that's an excuse to, to, to. To just get the conversation somewhere else.
Mike Allen [00:24:15]:
Okay.
Uwe Kleinschmidt [00:24:15]:
You know how you can test it?
Mike Allen [00:24:16]:
Sure.
Uwe Kleinschmidt [00:24:17]:
Pick up, pick up the phone. A week later, call that customer and say we want to. We want to complete our documentation. Have you replaced the air filter?
Mike Allen [00:24:26]:
And they'll say no.
Uwe Kleinschmidt [00:24:27]:
Nobody will say.
Mike Allen [00:24:28]:
Do you think that's. That they don't think they can do it or that they just don't think about it and that it's not important to them? I think because we haven't educated them as to why it's important.
Uwe Kleinschmidt [00:24:39]:
I think the latter is true. So for example, what we recommend to our customers is buy a bunch of clean filters, put them in a Ziploc bag, put them near the techs who do the inspection, and when they pull out the vehicle filter, hold in the same picture the clean one next to the vehicle filter. And then, you know, it's dirty. It's always dirty. There's no discussion about anymore is it dirty or not. And since most people rarely change their H vac filter at home, this is the exact same thing, right? Yeah. So you have to educate in a very short period of time. So what do you think that amount.
Mike Allen [00:25:21]:
Of available time is for that educational process?
Uwe Kleinschmidt [00:25:26]:
It's two phases. The first one is make sure you give customers time to research the inspection. Because there's nothing better than educating yourself.
Uwe Kleinschmidt [00:25:42]:
I always use this example and probably everybody has heard it by now. Imagine you go to Amazon, look for a product, find the page, you cannot decipher the picture. And as you stare at the picture, not that it's blurry or anything, you just don't know what it shows. You get a phone call from an Amazon salesperson who is explaining to you what's on the picture and is asking for the buy. You would never use Amazon ever again. Why? The autonomy to make decisions and educating yourself has been violated. Service advisors do that every day. And so my claim is, since everybody has now in the last 10 years gotten to a purchasing behavior where the empowerment of educating yourself.
Uwe Kleinschmidt [00:26:33]:
Is available.
Uwe Kleinschmidt [00:26:37]:
Just pick that up and do the same thing with your inspection result and make your inspection results self explainable.
Mike Allen [00:26:44]:
Who is your star client? The star user of your technology?
Uwe Kleinschmidt [00:26:50]:
Oh, we have several.
Uwe Kleinschmidt [00:26:53]:
So let me just go through to the last product, Tech8IQ, because that's basically the culmination of everything we went through because we started teaching. Based on what I just said, our shops, you have to edit your pictures before you send them to the customer. You have to edit your pictures. Arrow circles text on the picture, white text on the picture and not in the findings. Here's why. Customer gets a text message, taps the link, sees some tiny thumbnails, if you're lucky, they tap on it. What happens next? It takes the full space of the screen of the screen and whatever is in the findings is gone.
Mike Allen [00:27:37]:
Yeah, right.
Uwe Kleinschmidt [00:27:38]:
That's why if you want to have a good user experience, the picture itself has to be self explanatory. Right.
Mike Allen [00:27:45]:
Do you want like a bright yellow text or.
Uwe Kleinschmidt [00:27:48]:
I mean the arrow needs to be in the, in the. And big enough. So.
Uwe Kleinschmidt [00:27:55]:
It has to be big enough that the thumbnail is interesting because that's their first experience. Right. And if they got to click text on it, they cannot read it, but there is text on it and they see the arrow in the right color, they will tap on it. One of our customers called that the cocaine for my customer. He said I had Stubborn customers who really rarely approved what I proposed on the inspection result. And now they approve it. $4,000 $7,000 estimates. Right.
Uwe Kleinschmidt [00:28:30]:
Okay. At one point I said to my team, look, I'm a little tired of preaching and teaching this editing and some of the DVI softwares out there to this day don't have even the ability to edit it. Right?
Uwe Kleinschmidt [00:28:47]:
Let's just do it for them. Let's AI do it. And that's how tech aid IQ was born where we basically trained the AI with the millions of pictures. We had to know what's on the picture and put the error exactly at the problem area and put the caption on it. Right? So now the users of Tech ADA iq.
Uwe Kleinschmidt [00:29:14]:
The tech does still it's red, yellow, green. Because one of our ground rules is the tech is always right. Although we know it's not true. But we wanna, we wanna, we don't wanna overburden.
Mike Allen [00:29:26]:
Well, the tech still needs to own the inspection.
Uwe Kleinschmidt [00:29:28]:
Actually the service advisor needs to in my opinion.
Mike Allen [00:29:31]:
But the service advisor needs to own the estimate before they pick up the phone and call.
Uwe Kleinschmidt [00:29:35]:
Yeah, but also the quality of the. That's the second ground rule. So the tool could in theory take the text information, enhance the images.
Uwe Kleinschmidt [00:29:46]:
Puts the text on it and then just puts it in techmetric for example, we integrate with Tektmetric two way and then you just hit the send button.
Uwe Kleinschmidt [00:29:58]:
And so we said no, let's have the Service Advisor review everything first before they hit the send button. And but we have now when we look at the Service Advisor activities, a lot of shops scroll through the page super quickly and hit the transfer button to techmetric or autovirus. And that shows me they have a high trust in our tool. Right. And results poster child.
Uwe Kleinschmidt [00:30:29]:
I give you three examples. Right. My Nikki shop started. They're not famous for sophisticated DVI processes. Right. Started the tool, $50 increase in a week.
Uwe Kleinschmidt [00:30:45]:
Five location owner one of his locations started using it. 350 car count a month. Pretty busy shop. 23% increase build hours in the first 10 days.
Mike Allen [00:31:01]:
Did they maintain that increase? Okay.
Uwe Kleinschmidt [00:31:06]:
And something else happened for that particular shop they had already a split between Service advisor only responsible for the inspection, Production manager responsible for the estimate and dispatching of tax. And before they would end up at the same time editing pictures in the inspection and building the estimate ended about at the same time. So the service Advisor could send it with TechEd IQ. The Service Advisor's twiddling thumbs now he's done way before.
Mike Allen [00:31:38]:
Well, that increases their capacity to say yes and have More relationships.
Uwe Kleinschmidt [00:31:42]:
Yeah. Which to me, by the way, not to.
Uwe Kleinschmidt [00:31:48]:
Change topics too much, but.
Uwe Kleinschmidt [00:31:51]:
If you look at the current definition, the job description of the ideal service advisor, have you realized that person doesn't exist?
Mike Allen [00:32:01]:
Because how do you define the ideal service advisor?
Uwe Kleinschmidt [00:32:04]:
They have to be meticulous enough to build estimates and have to be outgoing and. And people. A people person. I mean that's the opposite.
Mike Allen [00:32:16]:
Two different things. I think the outgoing people person is more important than the meticulous because I can submetype meticulous out. That's what I'm doing.
Uwe Kleinschmidt [00:32:24]:
But, but you have to admit that's only possible from a, from a cost structure. When you have reached a certain. It adds volume and revenue to afford the specialization.
Mike Allen [00:32:37]:
For sure. For sure. Yeah. You know, just like there are, I hate the term unicorn technicians out there.
Uwe Kleinschmidt [00:32:43]:
Right.
Mike Allen [00:32:43]:
There are some unicorn advisors out there. But on the whole. Yeah, but it's not super high performing sales advisor typically is a train wreck on their paperwork and their documentation and their process following because they're just out. They're just out there want to put their arm around you and love on your customers and just build relationships. And then they're like, that's why you.
Uwe Kleinschmidt [00:33:02]:
Have business with Excel and that's why you have salespeople.
Mike Allen [00:33:05]:
Yeah.
Uwe Kleinschmidt [00:33:05]:
And in this industry you want to combine them into one job.
Mike Allen [00:33:09]:
And the funny thing is you always hear the salespeople promise everything and then the implementation team has to pick up the pieces and deal with the disaster that sales. And the sales guy's already got his commission and he's moved on to the next. On the next lead, you know.
Uwe Kleinschmidt [00:33:22]:
Yeah, I know. I know exactly what in the software.
Mike Allen [00:33:24]:
World, I'm sure you do.
Mike Allen [00:33:27]:
They seem to be the worst offenders of that.
Uwe Kleinschmidt [00:33:30]:
But there are ways of managing that. On the one hand, you don't want to stop them. On the other hand, you don't want to get it completely out of hand. Right.
Mike Allen [00:33:38]:
Yeah, for sure, for sure.
Uwe Kleinschmidt [00:33:39]:
So yeah, that's so. So the AI is super powerful. We just need to channel it. Right, Right. And.
Uwe Kleinschmidt [00:33:51]:
The sky is the limit. But I'm still the feel that we replace people or the AI is. I cannot share this.
Mike Allen [00:34:01]:
I think it's going to replace low performers.
Uwe Kleinschmidt [00:34:03]:
Yes.
Mike Allen [00:34:03]:
And it's going to make high performers even more effective.
Uwe Kleinschmidt [00:34:07]:
Totally agree.
Mike Allen [00:34:08]:
So. And that's okay. There's been technological evolution throughout the history of mankind and we have more people now and more employment now.
Uwe Kleinschmidt [00:34:16]:
Right.
Mike Allen [00:34:17]:
You know, the steam engine was going to put everybody out, in, out of business. It did not do that. You know, yeah, we're okay. So I'm not worried about there not being any good jobs to be had. I'm. I'm more worried about not getting left behind by the evolution and getting caught out.
Uwe Kleinschmidt [00:34:34]:
Yeah, Actually I see another trend and that's also a reason why I started Autotech iq, I believe.
Uwe Kleinschmidt [00:34:44]:
Just like I used the Amazon example, we as consumers get more and more and more empowered to make decisions. So, for example.
Uwe Kleinschmidt [00:34:57]:
Service advisors are being told to tell their customers, I cannot give you an estimate on the phone. I have to see your car first. I don't know how long we're going to be able to do that. I think customers will be so impatient and the effort and the inconvenience is so high that you, that we have to find different ways to.
Mike Allen [00:35:20]:
Well, that's part of the systems that I'm implementing right now is trying to get over that hurdle without guessing over the phone. Right. And that's one of the things that some of the best rage bait that I create is talking about the process that we go through for that. And that's, I don't, I do not charge for diagnostics. And most, you know, interesting. My, my, two of my managers are here and one was in Becky Witt's class and one was in Cecil Bullard's class at the same time. So at lunch I was like, how was classing? I was, it was great. Except Becky and Cecil both agree that we are the problem.
Mike Allen [00:35:54]:
With what? With this industry.
Mike Allen [00:35:58]:
But you know, what we did is.
Mike Allen [00:36:01]:
And I've said this many times, but I'll go through the real quick version for you is when a new customer comes in that doesn't have a relationship with us or calls in because they call before they show up. And how much is X? Or I have this symptom. What do you think that is? Their guard is up. They've just moved to town and they don't know anybody and they don't want to get taken advantage of. Or the guy that they thought they could know like, and trust. They feel like it's taking advantage of them until their guard is up. Or the guy that they know can't get them in for three weeks.
Uwe Kleinschmidt [00:36:31]:
Right.
Mike Allen [00:36:31]:
And they've got a time sensitive need. Right. So their guard is always up when they call you for the first time. And.
Mike Allen [00:36:41]:
They'Ve called three places and they got bad phone skills and bad etiquette. Or hold, please. Or maybe they got a really good service advisor who said, Absolutely, Ms. Jones, we can help you with that. And I've Got ASC certified master technicians who are able to inspect the problem for you, give you a complete written estimate. We always get permission to start off at $196 for all testing and inspections. Any simple fixes I'll include for you in there. But anything above and beyond that, I'm going to stop and talk to you first.
Mike Allen [00:37:07]:
I never spend your money without your permission. Right. Well, that's pretty good. It's $200 though, just to look at it.
Uwe Kleinschmidt [00:37:13]:
Right.
Mike Allen [00:37:13]:
They don't know. Right. It's just what we're doing is the same thing that AutoZone does for free. Right. And so what I did was.
Mike Allen [00:37:23]:
In 2023, we did just over $200,000 of diagnostic labor and we had about 12,500 total billable hours in the year. Divide those numbers together, it came out to 15, 16, $17, something like that. I raised my labor rate by $19. And then I still pay my technician for their time to do the diagnostic. And now when Ms. Jones calls, I say, Absolutely, Ms. Jones, we can help you with that. Anytime you're experiencing a problem like that, it's important to have a master technician inspect that issue for you.
Mike Allen [00:37:54]:
I'm going to give you a complete written estimate at absolutely no charge. Is right now a good time to bring it in and I don't have to fight for that $200 and tell them now someone like Lucas is going to tell you that I'm just rolling the price in and screwing. Everybody pays for the. I think he told me that it was communist or socialist. Everybody pays for your diag, even if you don't pay for your diag.
Mike Allen [00:38:18]:
But.
Mike Allen [00:38:22]:
We'Re getting way less pushback and car count is up and that works. But maybe that's a temporary band aid for what you're talking about because the impatience level is going to get so high.
Mike Allen [00:38:35]:
And there's going to be someone who's going to give them what they want. And if there's someone who gives them what they want with the right level of accuracy and the right level of disclaimer for situational variance, then they might start getting a bigger and bigger piece of the pie eventually. So you have to be able to evolve to maintain relevancy. So do you think that real time accurate estimates over the phone with caveats or education about variance is the direction?
Uwe Kleinschmidt [00:39:04]:
Yes. You can always put the disclaimer in.
Mike Allen [00:39:07]:
Yeah.
Uwe Kleinschmidt [00:39:08]:
And don't make it fine print, make it clear.
Mike Allen [00:39:11]:
Yeah.
Uwe Kleinschmidt [00:39:12]:
But it shows that you care and not put a hurdle up.
Mike Allen [00:39:16]:
And do you have anybody who's Practicing that yet to success? No.
Uwe Kleinschmidt [00:39:21]:
Okay.
Mike Allen [00:39:21]:
I can see how that would be on the horizon. I don't want to be first. My dad used to say that it's exciting to be a pioneer, but pioneers also ended up face down on the prairie with a bunch of arrows in their back.
Mike Allen [00:39:35]:
So let me be like.
Uwe Kleinschmidt [00:39:38]:
So here is my prediction.
Uwe Kleinschmidt [00:39:46]:
It will start with your web presence or whatever way they found you. So for example, imagine.
Uwe Kleinschmidt [00:39:56]:
Your website or autotech IQ.com.
Uwe Kleinschmidt [00:40:02]:
Says, so what vehicle do you drive? What's the vehicle type?
Mike Allen [00:40:06]:
So 2019 Silverado.
Uwe Kleinschmidt [00:40:09]:
And then we, we tell the customer. So we say that today already in order on autotech iq.com if somebody says, I drive a BMW and I live in wherever. We show how many BMWs the shops have worked on and the one with the highest. And. And the certified shop is at the top. Right. They have the highest experience.
Uwe Kleinschmidt [00:40:33]:
Done Right. From a customer.
Mike Allen [00:40:34]:
Of the ones that you have their data.
Uwe Kleinschmidt [00:40:37]:
Of the ones we have the data. Okay. And the next step is the user of my website.
Uwe Kleinschmidt [00:40:47]:
There were 50 people driving the same car as you in the same mileage range. Their reviews were this.
Uwe Kleinschmidt [00:40:56]:
And they had the following work done on their call. Do you want the same work done?
Mike Allen [00:41:02]:
So do your users have to give you permission to publish that information?
Uwe Kleinschmidt [00:41:05]:
Yes. Okay.
Mike Allen [00:41:07]:
Because I would think that there are going to be some people who are hesitant to give up that information.
Uwe Kleinschmidt [00:41:10]:
That's fine.
Mike Allen [00:41:10]:
Yeah.
Uwe Kleinschmidt [00:41:11]:
So currently.
Uwe Kleinschmidt [00:41:13]:
We are not even tapping into customer information because we are not a CRM system yet.
Uwe Kleinschmidt [00:41:22]:
Which is another topic I would love to talk about.
Uwe Kleinschmidt [00:41:27]:
But I see that in the future. And the pattern is motorists like me are the next best reference I can get. And if it's not just a customer, but a customer who drives the same car in the same mileage range as me.
Uwe Kleinschmidt [00:41:48]:
Pretty close. Yeah.
Mike Allen [00:41:50]:
And this shop has seen one customer with that car and this shop has seen 40 customers of that car and they got five star reviews then. Okay. Yeah. So makes sense.
Uwe Kleinschmidt [00:42:01]:
So the more you can empower, it's again, empowering the motorist. And because we just know with numbers that the more you empower your customers, the higher the approval rate. There isn't. I want to. I debate anybody who tells me the opposite any day. And that's a new finding in a lot of belief systems shops have. Right. And just like the dvi.
Mike Allen [00:42:29]:
So is there a place for.
Mike Allen [00:42:34]:
In this dystopian future that you draw, is there a place for a selling service advisor on the phone or is it all going to be initially, there's.
Uwe Kleinschmidt [00:42:43]:
Always A human involved. I don't. I mean, yes, I love technology, but if you make a purchase of a certain amount.
Uwe Kleinschmidt [00:42:55]:
You want to talk to somebody. Yeah, but that's not necessarily the expert behind the counter who offers that service.
Uwe Kleinschmidt [00:43:04]:
Right. The worst example for me is a dealership. Right. When I want to buy a car, I know more about the car I want to buy than the salesman who wants to sell.
Mike Allen [00:43:15]:
You've been researching it for two months.
Uwe Kleinschmidt [00:43:16]:
And I talk to people who, you.
Mike Allen [00:43:18]:
Know the same car. You know all the sub models and the features. Yeah, yeah.
Uwe Kleinschmidt [00:43:21]:
And I talk to people who drive the same car. So. So there's talking. Right. And what was your. And, and sometimes that might not be face to face. That might be in a Facebook group or. Yeah, whatever.
Uwe Kleinschmidt [00:43:35]:
Right. So that the medium in which the service advisor is talking to the customer might not be always the phone. We have a customer who doesn't talk to a shop who doesn't talk to their customers on the phone. Pure text. And so he uses our JobView IQ product where I say, Scott, your recommendation rate is awesome, but your decline rate could be lower. Right. Let's target 40%. He said, Can I have some phone recordings from you? He said, no, we don't call customers.
Uwe Kleinschmidt [00:44:17]:
I said, what do you do? We send text messages. Okay, then send me the text messages over. And we started fine tuning the text messages together so they become shorter and more impactful and the decline rate followed.
Uwe Kleinschmidt [00:44:32]:
It doesn't mean it's a stellar decline rate because there are other shops who have way better decline rates for the same job.
Mike Allen [00:44:40]:
But does he even have service advisors then?
Uwe Kleinschmidt [00:44:42]:
Yes. Okay.
Mike Allen [00:44:45]:
Wow. That's an easy service advisor job. If you've got all the tools that you're talking about functioning and they don't have to call people, all they got to do is take keys and check people out. I don't know.
Uwe Kleinschmidt [00:44:55]:
The service advisor came from the main. They have two servers. Advisor that came from a four tire Specialized.
Mike Allen [00:45:03]:
Okay.
Uwe Kleinschmidt [00:45:03]:
So high.
Uwe Kleinschmidt [00:45:06]:
Car count. So they were looking for ways of keeping the car count and lowering the effort. I think that's where that came from. But.
Uwe Kleinschmidt [00:45:16]:
Look, nowadays you should try everything. And since we can measure everything, just measure and decide what works. Right. So I'm, I have no, like a.
Mike Allen [00:45:28]:
Mad scientist in a lab, just positive theory and divine your test and try it out.
Uwe Kleinschmidt [00:45:33]:
And, and if it doesn't work, try something else. Yeah, but fail fast, as they say. Right. Don't make it, make it a big story. Just ABC testing, see what works and do more of it. And Anyway, CRM I want to talk about if that's okay.
Mike Allen [00:45:53]:
Okay.
Uwe Kleinschmidt [00:45:57]:
My claim is that.
Uwe Kleinschmidt [00:46:03]:
Customers who make an appointment through the service reminder.
Uwe Kleinschmidt [00:46:09]:
Only do that because they trust you. They don't even read the service reminder.
Mike Allen [00:46:15]:
They don't even read the service.
Uwe Kleinschmidt [00:46:16]:
What reminder? Okay.
Mike Allen [00:46:17]:
Yeah.
Uwe Kleinschmidt [00:46:18]:
Why? 80% of those jobs they don't understand.
Uwe Kleinschmidt [00:46:24]:
And you could have sent an invite to breakfast email, they would have made that appointment. But here's the thing. Back in autovitals I calculated a special retention rate which was not the usual retention rate, which is most people say does the customer come back in the next two years. Right. I calculated does the customer come back at the proposed time window and does the majority approves the majority of the recommended work?
Uwe Kleinschmidt [00:47:01]:
Guess what the best retention rate was of the top high best shops in the nation?
Mike Allen [00:47:08]:
40%.
Uwe Kleinschmidt [00:47:09]:
34.
Mike Allen [00:47:11]:
Yeah.
Uwe Kleinschmidt [00:47:12]:
And that tells me the CIM system needs to be disrupted.
Uwe Kleinschmidt [00:47:20]:
It's okay, but there are better ways of doing it. And so my idea is basically.
Uwe Kleinschmidt [00:47:28]:
So what happens when you get a service reminder? Yes, you trust them but you know you will pay money, you just don't know what for exactly. And what it does. Because the service reminder doesn't explain the why, it just lists the jobs. Right. Normally.
Uwe Kleinschmidt [00:47:46]:
The DVI is completely different. The DVI does exactly the opposite. It spends a lot of time on documenting the conditions.
Uwe Kleinschmidt [00:47:55]:
And then the good DVIs say why you should approve it. So we for example in techediq offer three world snippets, why now? What's the safety impact if you don't do it and what are the cost savings? Not delaying the approval. Yeah, right.
Mike Allen [00:48:15]:
How much more will it cost?
Uwe Kleinschmidt [00:48:17]:
How much more? And it's less that we use numbers. We just say if you delay it, here's the next part which is going to be impacted. And, and, and in a previous version we even gave the worst case scenario, but Chop said that's too pushy feel. Yeah. Fear mongering. And so we took that out.
Uwe Kleinschmidt [00:48:39]:
So the why is so important. Right. And, and so in my opinion a much better CRM system is.
Uwe Kleinschmidt [00:48:48]:
And you can try it today.
Uwe Kleinschmidt [00:48:52]:
Have your service advisors, after the work is approved.
Uwe Kleinschmidt [00:48:58]:
Turn all the red or yellow items which got approved into green and at pickup present the inspection again and say this is what you came in for, this is what we have done. Congratulations. Here's the number.
Uwe Kleinschmidt [00:49:18]:
Not all the screen because they have declined.
Mike Allen [00:49:21]:
Well, the things they did are green now and here are the things that are still red.
Uwe Kleinschmidt [00:49:24]:
And that's the last thing you say. See the yellow stuff up Here. So in our definition of red, yellow, green. Red is today, yellow is in the future. Green is good, right? Simple. And you just point out, see the yellow green up here, the yellow stuff up here. We would like to make the next appointment to reinstall inspect your vehicle commitment to pay zero. Yeah, and they just had that great experience where they got an inspection result and they could decide what to approve and what not.
Uwe Kleinschmidt [00:50:01]:
That empowers them completely. Do it again. Right. So instead of having a service in the wall driven.
Uwe Kleinschmidt [00:50:12]:
Reminder, have an inspection in the wall driven reminder. It just offer to reinspect the vehicle. You will see that goes up in the retention rate.
Mike Allen [00:50:24]:
Well, I'm interested to have my team come to your booth tomorrow. They won't be out here tonight to learn about the TechView IQ and I want to learn about your estimate building.
Mike Allen [00:50:35]:
Software also. So.
Uwe Kleinschmidt [00:50:37]:
Okay.
Mike Allen [00:50:37]:
Pretty cool, man.
Uwe Kleinschmidt [00:50:38]:
We, we, we can do that.
Mike Allen [00:50:42]:
Uber. Thank you for coming on, man.
Uwe Kleinschmidt [00:50:43]:
Thank you. It was a pleasure.
Mike Allen [00:50:44]:
We just went through an hour. Can you believe that? Yes, it went quick. It didn't feel like an hour.
Uwe Kleinschmidt [00:50:48]:
But you know, I love to talk about this.
Mike Allen [00:50:50]:
I mean, I can tell you're passionate about it, man.
Uwe Kleinschmidt [00:50:53]:
There's so much to to do and I love this industry and the people.
Mike Allen [00:50:57]:
Well, time to get out of the booth. All the owners are about to come down. Owners only. Tonight we'll have dinner down on the showroom floor. You're going to be slinging your software everywhere, handing out beers, so. Thank you. Thanks. Thanks for listening to Confessions of a Shop Owner where we lay it all out.
Mike Allen [00:51:13]:
The good, the bad, and sometimes the super messed up. I'm your host, Mike Allen, here to remind you that even the pros screw it up sometimes. So why not laugh a little bit, learn a little bit, and maybe have another drink? You got a confession of your own or a topic you'd like me to cover? Or do you just want to let me know what an idiot I am? Email mikeonfessionsofashopowner.com or or call and leave a message. The number 704-confess. That's 704-266-3377. If you enjoyed this episode, be sure to, like, subscribe or follow. Join us on this crazy journey that is shop ownership. I'll see you on the next episode.
Uwe Kleinschmidt [00:52:00]:
Huh?
Mike Allen [00:52:06]:
You know I said jess.
Mike Allen [00:52:17]:
You know I said jess.