Subscribe
Share
Share
Embed
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.
Matt Lofton [00:00:00]:
I describe value as what the customer sees is worth paying for. Nothing else really has value. In our industry, we say things like our DVI process adds a lot of value. I think a DVI is good, and I'm not saying don't do a dvi, but if you polled your customers and asked them whether they thought it was worth paying $150 for a DVI, you would find out that they do not in most cases. So it has no value to them. So value is what you can charge for.
Mike Allen [00:00:28]:
The following program features a bunch of DU talking about 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.
Mike Allen [00:01:01]:
Did you want to buy all your clothes for you?
Matt Lofton [00:01:04]:
I don't know that I've really bought anything for myself clothing wise and I take that back. I went to Asta, I went to the mall and bought the wrong size jeans that I still haven't taken back yet.
Mike Allen [00:01:20]:
So I'm a big Red Bull racing fan in Formula one. So that's the hoodie that I'm wearing right now. But I would never buy one of these because they're stupid expensive. But I was at Apex and SEMA and Lucas and Jeff Compton and I went to dinner with some techs that were at the show on scholarship. It was a really good dinner but we were over at Caesar's palace and I somehow managed to dump to like I was I reached forward to the table and then pulled my hand back with my whiskey glass and hit the water goblet and and like pulled a full water goblet of cold ice water onto me and I was freezing my ass off and best possible chance of getting back to the room was like half hour with you know everywhere it takes forever to get to in Vegas. Yeah and so I just swerved right into the first store and in the casino and bought a Red Bull hoodie and changed in the changing the fitting room. And then Amanda gave me a hard time about having 180 hoodie because it's ridiculous that I own 180 hoodie. That's stupid.
Matt Lofton [00:02:37]:
So anyway so one of my biggest my first mistake as a married man I had just I just bought the shop and or I was getting ready to buy the shop so I told my wife I was like, look, we're gonna have to need to be budget friendly right now on the personal side of things. We got to cut down and cut, cut a few personal expenses. We were in Raleigh for a friend of hers wedding. She went to NC State. And so we're, we're killing some time at the mall. She's getting her. She's get. They're all getting their makeup done at one of the places there in the mall is what we were there for.
Matt Lofton [00:03:12]:
So I'm walking around with a buddy of mine. We go into one of the, like, sporting goods type stores. And I'm a big Florida State fan. And this was the last year that Florida State won the national championship, so it would have been 2013. So they had a, A patent leather gold Florida State hat with the big, you know, with the big spear on the side of it. And I bought it and I came walking out and I had that hat on and I mean, she lost her mind on me. She was like, you're telling me that I need to watch my spending? And you just went and bought the ugliest 80 hat in the history of the world.
Mike Allen [00:03:53]:
Do you still have it?
Matt Lofton [00:03:55]:
I do. And every now. And I'll send you a picture of it here in just a little bit. Every now and again I. I'll put it on and get myself in more trouble.
Mike Allen [00:04:07]:
Sometimes you got to poke the bear, so.
Matt Lofton [00:04:10]:
Well, actually, I might wear it this this Friday because I'll be in Raleigh for the Florida State NC State game.
Mike Allen [00:04:18]:
Nice. Go Seminoles.
Matt Lofton [00:04:21]:
Yeah.
Mike Allen [00:04:21]:
Boo.
Matt Lofton [00:04:22]:
Wolf pack, you're a UNC fan, right?
Mike Allen [00:04:25]:
I am. I am a Tar Heel through and through. So it's basketball season.
Matt Lofton [00:04:29]:
Yeah, there you go.
Mike Allen [00:04:30]:
I don't care about football anyway. We are playing that school in Durham this weekend. By the time this is released, it will be in the past and we'll be able to revel in the glorious victory of the mighty Tar Heels. You know, unc, the abbreviation for University of North Carolina is actually an abbreviation for the University of National champions. They are the best.
Matt Lofton [00:04:57]:
So I am a UNC basketball fan just because if you're going to be in North Carolina and you're going to be, you have to be a college basketball fan of some kind. And if you're going to be one, might as well be one that Michael Jordan played at. So that was, that was my determination of picking UNC over the rest of them.
Mike Allen [00:05:16]:
I will tell you that for the most part, our listeners don't give two shits about sports or college sports. So we probably shouldn't bore them with that.
Matt Lofton [00:05:23]:
Yeah.
Mike Allen [00:05:23]:
So.
Matt Lofton [00:05:24]:
Yeah.
Mike Allen [00:05:25]:
Well, how was. We're halfway through November at this point. How was October for you?
Matt Lofton [00:05:31]:
Yeah, October was great. We had a record month at the shop and.
Mike Allen [00:05:36]:
Nice.
Matt Lofton [00:05:36]:
It was busy. It's good. I wish, I wish more of it would have carried into November, but.
Mike Allen [00:05:42]:
Yeah, you're telling me about some of that.
Matt Lofton [00:05:43]:
We seem to, seem to run out of luck there as soon as this clock struck midnight on the 31st. But we're using our time wisely to plan for 2026 right now.
Mike Allen [00:05:55]:
Well, we also had a record October. I feel like we've twisted on the knobs appropriately and things at the Hillsborough street store are really running smoothly. We got the staffing levels where we want them. I think we got right people, right seat kind of deal. The, the culture over there is amazing. They're having fun and they're just killing it. So super excited about that after what was kind of a up and down summer to be coming into the fall and, and setting a record is nice. So.
Matt Lofton [00:06:32]:
Yeah. Well, congratulations. I know you guys have been kind of fighting that battle for the last four or five months now. Yeah. And trying to get the, trying to get the chemistry over there. Right. So before we get into everything, let's kind of run through some of the numbers. I know we were talking a little bit offline and top line number looked pretty good there.
Matt Lofton [00:06:54]:
Just really quick just to kind of recap staffing wise, because I know we've been here, there and every way here, there and everywhere on the staff. And you said you finally got your chemistry and everything right. We're senior advisor.
Mike Allen [00:07:06]:
Yeah, we have a senior advisor, we have a support advisor who's kind of splitting this time between the front of house and back of house, helping with estimates and funds and parts and things. We have a GS and we have two technicians. So again, it's a three bay shop. We've got one lift outside. So I call it three and a half. It's small, it's cramped, it's dirty, it's an old building, but it's a great location. Okay.
Matt Lofton [00:07:34]:
And so top line numbers for last.
Mike Allen [00:07:37]:
Month were 1, 175.
Matt Lofton [00:07:41]:
175.
Mike Allen [00:07:42]:
That was 229 tickets at $763 a piece with a 59.9% GP. I think that was a record month. It was definitely a record month on GP.
Matt Lofton [00:07:58]:
Yeah. Yeah. That's 100 a record. Yeah. So there's, there's some strong numbers. Let's talk about outside of the chemistry side of it. How is, you know, what's changed on the process side that's. That's allowed that to happen because that's a.
Matt Lofton [00:08:14]:
That's a drastic diff.
Mike Allen [00:08:15]:
What's.
Matt Lofton [00:08:16]:
Are we seeing that trending into the rest of this year and into next year?
Mike Allen [00:08:21]:
I think if we keep the team in place, yes. One of the things that we have been doing, frankly, all year that probably was a limiting factor is we kept shuffling people around between locations trying to find the right mix and the right, you know, grouping of individuals for the best possible outcome and unintended consequence in doing that was nobody ever got their feet settled under them. Um, and, you know, I did employee interviews with everybody in the company a month and a half ago, and one of the things that was pretty universally stated was you got to stop moving us around so much because we can't get into a. Into a rhythm. Right. If you don't know how long you're going to be there, because there are people that went to all three stores this year.
Matt Lofton [00:09:11]:
Right?
Mike Allen [00:09:12]:
Yeah. So. And I think that contributed to some employee turnover that we had as well, along with some other things. But, yeah, I think stability and predictability is important for all people, and I kind of taken my eye off that ball, so. Okay.
Matt Lofton [00:09:29]:
I think that's a. It's a good observation to have there. All right, so we got a plan to keep this. This team in place for the foreseeable future. So I want you to write this down and when you talk to your team about this, because I think it'll be important for them to hear it. I want your number one goal when you go to the Hillsborough store to say, our number one goal is retention.
Mike Allen [00:10:02]:
Okay. I think that's employees and customers.
Matt Lofton [00:10:06]:
Yep. And so on the. On the employee side, and I know that you know this, but we'll just cover it just for the sake of covering it. And I think, as. I think you felt a little bit of this this year, which is anytime, you know, your turnover wasn't always people leaving. It was just people moving from store to store. But sometimes, you know, some of it was people leaving as well. But anytime we have turnover in our employees, the process goes all the way back to square one.
Matt Lofton [00:10:36]:
And we got to train all the way from the beginning. Doesn't matter how good of an individual we hire, we still got to bring that person up. We're, you know, a bare minimum of six months behind the eight ball of where we would have been had we hired the right person, trained the right person, and kept the right person the first Time. So I think that if you've identified that these five people are the right five people, let's make that the number one goal and try to make sure that we hold on to that retention. Where do you see? So I know, I mean, October is historically a good month in our state. I know a lot of other states, I know a lot of other shops have good, good months in October. Where do you see the growth we know we're capable of doing 175. So if we had the ability to do, what would allow us to do 175amonth, every month? What are kind of the core things that we need to focus on within that group that allowed that month to happen?
Mike Allen [00:11:40]:
Well, I mean, 175amonth is just in the math. 29 build hours a day. Right. So two texts and a GS that's pretty close to redline, I think, because, you know, my GS, he's not doing brakes and fluid services. He's doing oil services, tires and state inspections, and not even a bunch of tires.
Matt Lofton [00:12:07]:
Yep.
Mike Allen [00:12:09]:
So I think my advisor certainly has. My advisor team certainly have the ability to estimate and sell 30 hours a day. And they probably need to estimate 60 to sell 30. You know, I think that's part of it. One of the things that we're working on actively is like with that 700 and whatever ARO was $763 ARO that was with a 27 closing rate.
Matt Lofton [00:12:47]:
Okay.
Mike Allen [00:12:48]:
So our tech average quote was way too high. We talked about that a few times over the course of the year. And I think we've been killing a lot of cars. This is a $2800 tech average quote. I think we've been killing a lot of cars with huge estimates that were mostly maintenance or upcoming services. And so we've really been focusing on. Let's draw that back a little bit and let's focus on the red items and let's educate and inform on the yellow items on the, I think green, yellow, red on the dbi. Right.
Mike Allen [00:13:29]:
And if the client has a road trip on, on the horizon or ask for us to do those items and obviously we're going to do that. And there's a degree of autonomy allowed, I think, for the advisor to understand the type of service that that customer wants and adjust that, you know, it's not written in stone, but we really need to have a 60, 70% closing rate on the red stuff. If it's red, if it's really bad. And we're documenting appropriately and showing evidence of that and Providing solutions for timing or finance or whatever else it might be. I mean, and we're reasonably priced. That's something else we need to talk about. And we're reasonably priced, then we should be able to get 60, 70 of those red items. And then the yellow stuff is the stuff that's going to drag you down to a target of 50, you know, 40, 50.
Matt Lofton [00:14:22]:
Yeah.
Mike Allen [00:14:23]:
But, you know, this month.
Matt Lofton [00:14:27]:
Bless you.
Mike Allen [00:14:29]:
Excuse me. This month we're at 30% closing rate month to date. Okay. But the arrow is the same. So that shows the tech average quotes come down a little bit, but we haven't really increase the aro. So I don't know, we're spending less time on estimating.
Matt Lofton [00:14:47]:
So I think it's important just to run through this really quick. I think it's important to tell them the goal is not to bring the AWRO down. I don't think that's really your problem. I think the AWRO is what it is. In other words, the inspection yields what the inspection yields. And if the cars that you have have that, you know, yield that amount, then they yield that amount. I think what needs to change is the sales process and the presentation process to make sure that we're prioritizing and we're not presenting kitchen sink estimates. Meaning that just because we wrote up a $3,000 estimate doesn't mean we need to present all $3,000 of it as something that needs to get done today.
Matt Lofton [00:15:31]:
You know, we can segment that out into here's today's bundle. This is the things that are of immediate concern, and we give a price for that and then we list out the other things.
Mike Allen [00:15:42]:
Well, and we had been outsourcing, estimating for most of the year.
Matt Lofton [00:15:50]:
Right.
Mike Allen [00:15:51]:
And we brought that back in house. And that's another conversation for another day on the why. But one of the things that plays into that is, is it worth the time to price a set of quick struts on every car that's got 110, 000 miles on it, that has the OEM struts on it if they're not leaking?
Matt Lofton [00:16:14]:
No.
Mike Allen [00:16:17]:
Because that, you know, that's time and a super low closing rate.
Matt Lofton [00:16:20]:
Yes. And I would agree with that. So, I mean, mechanical components by mileage, I'm not a ginormous fan of. And as somebody, I mean, my store name is Strut Daddies, and my experience in the industry is heavily strut related. I have probably dynoed a couple hundred thousand struts in my life. So I can tell you there is validity in making that recommendation as far as at 100,000 miles, that the gas inside of that strut has degraded to the point that the rebounding compression characteristics of that strut are no longer performing at its peak rate. But to your point, the vehicle is still largely, still safe and it is still 100% reliable. So what I look for there is, in, in that scenario, I'm either looking for a leak or I'm looking for signs of degradation of other components.
Matt Lofton [00:17:20]:
So in other words, if we have tires, you know, you know, that type of stuff, then it's. Then we're saying, okay, you need, not only do you need them by mileage, but I have evidence that shows that they have failed and it's costing you other money. You're going to buy these struts, whether you buy the struts themselves or you keep replacing tires. Right. But if I don't have any evidence that it's causing a safety problem or it's causing a, you know, an issue with other components and other systems, then that's a really difficult conversation to have. Oh, you should replace that strut. Just because.
Mike Allen [00:17:58]:
Yeah, because I really, I would really like to have that $3,000 of revenue. You should replace the struts.
Matt Lofton [00:18:03]:
Yeah.
Mike Allen [00:18:04]:
Yeah.
Matt Lofton [00:18:05]:
So I think that comes down to you guys sitting down and having a really good conversation about what your, what your red, yellow, green standards are, what that, you know, what that internal communication needs to be. As far as what things do we recommend by mileage? What things don't we recommend by mileage? Who makes the mileage recommendations? In other words, does the service advisor make the mileage recommendations? Does the tech do the mileage recommendations? I think. And now that you got a good team in place, I think that's a good place to start with them, is just, you know, try to make sure that you get. The other thing is, you know, I mean, but it's not just Texas techs and service advisors. Everybody kind of has their own opinion on all of that stuff. And I think trying to cram the one size fits all, you know, down the group is there's some things that you're. You probably are going to concede on to what their opinions are going to be because. And when it gets into real life practice, they're going to do it subconsciously that way anyways.
Matt Lofton [00:19:07]:
Right. So as long as it's not a deal breaker for you, then some things, you might as well just go ahead and let them have their, their way on.
Mike Allen [00:19:19]:
Well, we, we have started having team meetings where we have front of House individuals and back of house individuals and office individuals from every store come together once a month and go over process and procedure and rewrite and get in input. And actually last Tuesday was the meeting for November and that's what we talked about was updating our DVI standards. And you know, what qualifies as yellow? What is red? When do we need to call in a second opinion if it's a GS doing the dvi, you know, when do we need to call a technician over to give a judgment call? And we were having conversations about control arm bushings, cracked, what, what's a yellow level of crack, what's a red level of crack, you know, and who's qualified to make that judgment call, how to properly measure ball, joint play, things like that. So we actually established that and we up did some pretty significant updates to our previous standard sheet that we had. And because of the turnover that we've had in the last year, because of reasons a lot of the folks had never even seen that sheet because I had printed and laminated and handed them out to everybody.
Matt Lofton [00:20:35]:
Yep.
Mike Allen [00:20:35]:
And now like half the people had that and half of the people didn't. And so it was like, well, I'm.
Matt Lofton [00:20:40]:
Going to do the update, I'm going.
Mike Allen [00:20:41]:
To print it out and hand it out to everybody.
Matt Lofton [00:20:43]:
So.
Mike Allen [00:20:45]:
Yeah, there's been a lot of time for self reflection here in the last several weeks.
Matt Lofton [00:20:50]:
So I think another thing that you probably ought to think about there in that scenario is shooting a quick video on those just so you can add to your, you know, your training when you do onboard somebody. Because it's one thing to write it down. Technicians are not paper readers. I mean, the least visited section of Identifix is description and operation. Right. Yeah. So I would think about, you know, maybe taking a picture or a video and that way you can have, hey, this is, we consider this yellow, we consider this green, we consider this red. Right.
Matt Lofton [00:21:34]:
You don't have to. And that you can just accumulate that over time. And that way you've got some sort of a visual there as well that you can add to your standard sheet. You know, tires, good tires need needed in the next six months, tires needed today, those types of things. And that way, that way it just kind of keeps everybody on the same standard and have a better understanding of what that is.
Mike Allen [00:21:59]:
Okay.
Matt Lofton [00:22:01]:
All right, so I want to circle back to another comment that you made on the pricing side of things and you felt like maybe we're talking about the closing percentage, we were talking about the estimates being large, being One part of it there as far as having maybe too many things on the estimate that we were presenting at one time. And then you said something about your pricing structure and your pricing strategy maybe having some effect on that closing percentage as well. You mind kind of going into a little bit more detail on that?
Mike Allen [00:22:33]:
Yeah. So another thing that I learned kind of internally when I interviewed the entire staff was I'm okay with being the expensive guy in town, but we've got to, we've got to provide value to justify the expense, right? And you know, we've got the best warranty in town and we've got free loaner cars and you know, all of those kind of things that we train into the advisors to talk about.
Matt Lofton [00:23:05]:
But.
Mike Allen [00:23:07]:
The perception had become within the company that we were one, too expensive and two, we weren't bringing the value the way that we used to. Right. But there's always the risk of people selling out of their own pocket and considering what they can afford versus what our customers can afford, Right. So you have to take that with a grain of salt. But then if you go and you look at, if you look at our Google reviews, right, our 1 star reviews almost all have to do with pricing or failure of communication ultimately. And so, well, you got a thousand reviews, you got 31 star reviews. And if 20 of them are talking about pricing, well, that's 20 people out of a thousand. How many customers do you actually have in that time? Should you listen to that? Well, so take it with a grain of salt, but so that's two pieces of smoke, right? And then you start talking around the community and you start digging around the community and the reputation is they're really expensive.
Mike Allen [00:24:12]:
They're really expensive. They're really expensive. So Ruth's Chris is really expensive. But if you ask people about Ruth Chris, typically they're really expensive is not the first thing people say they talk about the food, the service and the price is part of the conversation for some folks, right. So I just felt like there was enough smoke that I needed to dig for some fire. Right. And one of the things that has happened in the last year is our labor rate's gone up $57 in the last 17 months or so. And we are far and away the most expensive independent in the market.
Mike Allen [00:24:51]:
And we're more expensive than a lot of the dealerships in the market. Right. And that's, that's okay if you're bringing that value, but I'm not sure that we've been bringing the value to that level.
Matt Lofton [00:25:01]:
So I'm Going to ask you a question really quick because I think that vocabulary matters when we talk. And I want the listeners to. Because value is a buzzword, it gets thrown out there a lot. When you say value, describe value to me as it pertains to your shop and your product.
Mike Allen [00:25:22]:
I want customers to feel good about their experience with us. I want them to feel like they know, like and trust us. They're getting a high level technician with a high quality part. We fix it. Right. The first time, you know, they have a relationship with their car guy or their car girl. Right. Those are all parts of that, you know, the other value adds, you know, they're going to be, you know, well, it's a, it's a local family owned business.
Mike Allen [00:25:52]:
It's, you know, free loaner vehicles, free Ubers. It's the five year warranty. It's, you know, those are all other kind of. They're value ads, but they're also marketing points. Right? Sure. I think it's quality and how you make me feel.
Matt Lofton [00:26:07]:
Okay.
Mike Allen [00:26:09]:
So because Ruth Chris makes me feel good and it's good food, I'm gonna.
Matt Lofton [00:26:14]:
Simplify it for us and the listeners really quick and then we're gonna deepen the conversation about it.
Mike Allen [00:26:19]:
Okay.
Matt Lofton [00:26:20]:
So I describe value as what the customer sees is worth paying for. Okay. Nothing else really has value. All right. In our industry, we say things like, our DVI process adds a lot of value. I think a DVI is good. And I'm not saying don't do a dvi, but if you polled your customers and asked them whether they thought it was worth paying $150 for a DVI, you would find out that they do not in most cases. So it has no value to them.
Matt Lofton [00:26:57]:
Right. So value is what you can charge for that a customer is happy to pay for. Right. So Ruth Chris has value because the customer is willing to come in there and buy the steak because the steak tastes good and all the reasons this good service is good and all that. I think what you described there is you have a level of an experience that you feel like your customers will value. Okay, Right.
Mike Allen [00:27:22]:
That's accurate.
Matt Lofton [00:27:24]:
And if we can give them enough of what they actually value, then price becomes not a. Not an important thing anymore.
Mike Allen [00:27:35]:
Less important.
Matt Lofton [00:27:36]:
Less important, for sure.
Mike Allen [00:27:37]:
Yeah.
Matt Lofton [00:27:39]:
So with that, there is a. Every market is different. Right. And we've heard, you know, I've heard your podcast with Brian, and I've heard Brian talk about his market and his customers, and he has a really good pulse on what his area is. And you know, what they're able to do and what they're not able to do and so on and so forth. And it's different. And he's right about that because the values of different areas are different and what they value is going to be different. So my question is, what do you feel like your, if you think about your customers in your area, what do they really value from a willing to pay for it standpoint?
Mike Allen [00:28:22]:
I think they value the customer experience, how we make them feel.
Matt Lofton [00:28:27]:
Okay.
Mike Allen [00:28:28]:
I think they want it fixed right the first time right now, or maybe not even right now. They want it fixed right the first time when they want it fixed.
Matt Lofton [00:28:37]:
Okay.
Mike Allen [00:28:38]:
More often than not, it's right now. Sometimes some people are planners and they plan ahead and that kind of thing. But most people, you know, 2:30 in the afternoon on a Friday, I'm going on a road trip tomorrow morning, my check engine lights on. Right.
Matt Lofton [00:28:55]:
Okay.
Mike Allen [00:28:56]:
So I think timing, doing it right, making them feel good, those are the things I think that are valued.
Matt Lofton [00:29:06]:
All right. So then if you feel that then we need to design the customer experience around those things, which I think you've done in some, in some aspects of it, which is timing. A portion of that is speed of service and making sure that we make them a priority. And I would agree with a lot of what you're saying there. It just third party observation says the closer we get to large population bases, time becomes more of a concern to those people than almost anything else. Right. How? Because convenience of their lives are busier. They're professional.
Matt Lofton [00:29:40]:
We usually have two working, you know, two working members of the household or running around all day long doing, you know, working, and then we get home and running around doing the kids stuff. So there's very little free time. They depend on the car. They got high expectations. They're usually professional manager people of some, some kind probably, which means they have a higher expectation of people in general and experience, you know, service and experience in general, which leads to the speed of service model in those areas. Right.
Mike Allen [00:30:11]:
Yeah.
Matt Lofton [00:30:13]:
So.
Mike Allen [00:30:15]:
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.
Matt Lofton [00:30:34]:
What do we need to change about the conversation on the front end? Are we having a. Are we having a good conversation on the front end of what? And I know we've talked about this a little bit in the past, but are we, are we having a conversation on the front end that sets the table for what they value?
Mike Allen [00:30:52]:
You're talking about the intake conversation. Yeah, write up. Not effectively.
Matt Lofton [00:30:57]:
Okay.
Mike Allen [00:31:00]:
Like, like at the Hillsborough street store, the primary selling advisor there and the support advisor are both just really likable dudes who put you at ease and are really good at just kind of. They're trustworthy dudes and people trust them. Naturally. That's not systematized. That's just them being the types of guys that put people at ease. Right. And that it's not about. Sure.
Mike Allen [00:31:36]:
They are saying, you know, here's what you should expect. Here's what I'm going to call you. Here's, you know, I'll send you a link that's going to have pictures and videos of anything that we might need to discuss. But that's not systematized. They're just doing that because they know that makes their life easier to do it. I don't have a policy saying that. Here's what we need to cover in that conversation.
Matt Lofton [00:31:55]:
Okay. I would think about. And I would talk to the service advisors as well, just to kind of think about. So closing percentage is largely affected by objections, right? Objections in our industry are very consistently predictable as far as what they are. And a lot of them, in most cases, once we get to the root cause of it, are going to get down to price. A majority, you know, majority of the time. But I don't think it's focused on the. I don't think it's really the price that's the problem.
Matt Lofton [00:32:34]:
I think it's the, the way that we presented the value, like you said. So they, they didn't understand. We just told them they needed struts. And struts are going to be fifteen hundred dollars. And they got sticker shock from fifteen hundred dollars worth of struts because they've never put struts on their vehicle before and they think it's too expensive. They go get a second opinion. Somewhere some other guy tells them either A, they don't need struts and you were just trying to rip them off, or B, they do the struts, but they do the struts for $900 instead of $1500 and now you were too expensive.
Mike Allen [00:33:06]:
Right.
Matt Lofton [00:33:09]:
And that's, that's where I think you are getting that reputation in the industry. I don't think, you know, we're in the area and I'VE I have, I've sailed that same same ship and we fight those same seas there. But my opinion is I don't think that comes down to as much of what your price is. I know you talked about your labor guide, not the labor guide markup, but the labor matrix.
Mike Allen [00:33:35]:
Yeah, the labor matrix. I think, I think my labor matrix and my labor rate were both a little bit aggressive. And so I've rolled both of those back. They're still on the high end of the marketplace, or at least the rate is. I've gone far less aggressive on the matrix. You know, we've had some jobs where we were just were, you know, way more than the dealership. And it wasn't a commodity item job, you know, and it was because of the combination of our labor guide markup, our labor matrix and our labor rate all created enormous labor prices. And I gotta have margin, right, because there's always upward wage pressure on, on the skilled labor side of it.
Mike Allen [00:34:26]:
And you know, it's that time of year to be shopping for health insurance again and Lord knows that ain't getting any cheaper and everything else. But you know, that falls back to the question of do you want something at a slightly lower margin and just do volume and outrun your overhead, or do you want incredible margin but no cars? I don't know. And so is that a scarcity, fierce, fear based mindset that I'm in right now because I'm scarred or.
Matt Lofton [00:34:56]:
I think, I mean, I think there's an element of that. I really do. I mean, I think that you've, I think that you guys had a lot of challenges in a kind of a short amount of time. And honestly, I think that that feedback that you get is never good, it's never fun feedback to hear. And I, I think that it shows regardless of what you try to put out there on the evil shop owner side of things that you, you know, that you do care and you do care about what your customers think and what your employees think. So I mean, hey, I give you a tremendous amount of credit for going through and having those employee conversations because that's not an easy thing to sit down and do, especially the size company that you have with the number of team members that you have and to digest the feedback that you had there because it sounds like not all of it was, was great feedback, which is another really good indication of their trust and faith in you as the owner.
Mike Allen [00:35:52]:
I was happy that they were willing to, to shoot straight with me. I also ended up calling a few of the high Level individuals that have left the organization in the last year or two and talking to them about their experience and obviously they were much more comfortable. No filter at all. Right. And I'm, I'm thankful that none of them were like, mean to me. You know, none of them, you know, punch me in the nose. But they also had no motivation to sugarcoat anything. So, yeah, it's good information.
Matt Lofton [00:36:22]:
Yeah. But I mean, that's, you know, that, like I said, that's a testament to, you know, to the relationships that you built with your, with your team and that they're willing to share that information with you and, and give you some bad news every now and again because not. It doesn't happen everywhere. So that's, that's a good thing there. On the price dropping thing. I mean, anytime that we do a price adjustment, I like to go back through and do a math check. There should be. We didn't drop the price to make less money.
Matt Lofton [00:36:50]:
Right. We dropped the price to hopefully price ourselves into the market to be able to make more money. So that's a, you know, that's an interesting strategy sometimes, obviously, meaning that we need to go back through and check the math to make sure. We obviously feel like that should have an impact on the closing percentage. Right. So we set our closing percentage at the Hillsborough store. Were we at this pricing in October or have we made that pricing change since?
Mike Allen [00:37:18]:
That pricing change was made 48 hours ago Monday morning.
Matt Lofton [00:37:21]:
All right, so our, our record month was with our aggressive pricing that was pricing us out of the market and we had a 27 closing percentage. Is that what you said? Yeah.
Mike Allen [00:37:33]:
Okay, 27.1. All right.
Matt Lofton [00:37:39]:
So have you gone back through and done the math and said if we did the exact same volume that we did now with the same closing percentage, where does that take our sales to? And then where is our break even of closing percentage to where we would have to get back to the 175.
Mike Allen [00:38:00]:
The challenge with that is that it was not just a pure labor rate change. It was labor rate and labor matrix change. So doing that math on those numbers will be hard. But what I can do is say, what do I have to do.
Mike Allen [00:38:15]:
To.
Mike Allen [00:38:16]:
Get to 175 with our current.
Matt Lofton [00:38:21]:
Rate.
Mike Allen [00:38:21]:
And matrix, but our partial labor ratio is not quite one to one. Give me just a second here. So the net effect, I believe, is going to be about a 15% cut in labor prices.
Matt Lofton [00:38:34]:
So let's just, let's just make it easy and let's just do a 15% cut on the effective labor Rate.
Mike Allen [00:38:40]:
Okay.
Matt Lofton [00:38:41]:
I know that's probably not going to be one to one, but.
Mike Allen [00:38:44]:
Yeah.
Matt Lofton [00:38:45]:
Yeah. What was our ELR in October?
Mike Allen [00:38:51]:
147. 47 times 0.85 is 125, which is way too low. That won't allow for.
Matt Lofton [00:39:01]:
So let's make it a seven. Let's cut it in half and call it a seven and a half percent cut.
Mike Allen [00:39:06]:
Why?
Matt Lofton [00:39:07]:
Why? Yeah, because I don't think you're. I mean, you're. I've. I haven't ever raised my labor rate and had a direct. I haven't raised my labor rate. 10. Bump in my effective labor rate.
Mike Allen [00:39:17]:
Yes. That's fair.
Matt Lofton [00:39:18]:
I don't think that you're going to have a. A direct 15 drop in your effective labor rate either.
Mike Allen [00:39:24]:
So that puts you at 135. Well, seven and a half percent.
Matt Lofton [00:39:28]:
So let's just. Let's just cut it in half there and say if your effective labor rate. I mean, it's reasonable to assume that your new estimating pricing strategy is going to drop your effective labor rate some.
Mike Allen [00:39:40]:
Yes.
Matt Lofton [00:39:41]:
Okay. So let's take a look at our build hours and in October and let's assume what our labor sales would have been at.135.
Mike Allen [00:39:56]:
So 575 hours sold in October. So.
Matt Lofton [00:40:01]:
So 575 times 135.
Mike Allen [00:40:03]:
That's 77 6.
Matt Lofton [00:40:08]:
Yep.
Mike Allen [00:40:10]:
And we had 84. 844 in October was our actual sales. So a difference of $6,800 in labor revenue. Divided by 135 means I need to sell 50 more hours to get to the same number.
Matt Lofton [00:40:33]:
Yep. And so we've kind of already talked about the fact that in October we were at Redline as far as a production capacity standpoint with two technicians. We were doing about 29 build hours a day between the two technicians and the GS, which is.
Mike Allen [00:40:55]:
And it would need to be 31.2.
Matt Lofton [00:40:58]:
Yeah. And that's.
Mike Allen [00:41:00]:
Which I'm not sure we can do.
Matt Lofton [00:41:02]:
Yeah, that's. That's already killing it. With two good technicians and a GS out there, it might not be. If you had three A level technicians, you might be able to get something like that.
Mike Allen [00:41:17]:
Okay, let's step back. Something that we didn't discuss. We've talked about it earlier in the year. My two Raleigh stores are relatively close together.
Matt Lofton [00:41:25]:
Yep.
Mike Allen [00:41:25]:
Hillsborough street store, the one that we always talk about, has high volume and traffic and visibility. Northwest street is on a feeder road and doesn't have good visibility, but it has more base space. And so this Store fills up and then overflows down to that store. So Northwest street supplies capacity and Hillsborough street supplies car count. And they kind of have this symbiosis. Right. So some of that labor that was done by. That was built by Hillsborough street happened at Northwest street because they back and forth.
Mike Allen [00:41:58]:
So I still have more capacity at west street. And I'm sorry I didn't think about that earlier. Okay, so another two hours is totally doable.
Matt Lofton [00:42:07]:
Yeah. All right, so you're running, you're running that more like a satellite location.
Mike Allen [00:42:14]:
Yeah. And that's a really important factor in all this. I'm sorry I didn't bring that up earlier. I wouldn't think about it.
Matt Lofton [00:42:20]:
No, that does. That makes a big difference. So, okay, so you have hours.
Mike Allen [00:42:28]:
Last month I said, Remember I said that there was 500 and some hours. The primary technician there did 260. Secondary technician had some time off, but he did 161. The GS did 50, so that's 460 of the five. So that means 110, 112 hours happened at Northwest Street. Okay, so.
Matt Lofton [00:43:03]:
All right. And I'm assuming they have capacity to take on much more than that. Yeah.
Mike Allen [00:43:08]:
Yeah. West Street's not working at capacity.
Matt Lofton [00:43:13]:
All right, so. So you have the ability to sell more. We're just going to transition that over to. Over to the other store, which is fine. That, that makes a. That's a big difference there. Have we had this conversation with the front counter as far as.
Mike Allen [00:43:39]:
So I had it with the front counter. And you know, part of their compensation is off of gross profit. They get a percentage of shop wide gross profit. And so there were some concerns about cutting gross profit, but there was some understanding because they do feel like it. They get blown out of the water with some competitive price shopping occasionally. So it was, you know, mixed reaction, but they understood the effort. And one of the things I said is like, as we're not Firestone, we're not a dealership group, if we make this change in it and it works great, and if it doesn't work, we can change it back in a couple of weeks, you know.
Matt Lofton [00:44:15]:
Yeah.
Mike Allen [00:44:16]:
And I think they understand that. I had the conversation with the guys in the shop and they were all universally happy about it. They're like, yeah, but they always are.
Matt Lofton [00:44:26]:
They think that unfortunately this is. It's a weird conversation because as much as technicians want the, the labor, their labor.
Mike Allen [00:44:34]:
Million dollars a year and have all the benefits, but they think we should be $75 an hour.
Matt Lofton [00:44:38]:
Yeah. Everyone I've Ever talked to. And so. With all that being said, my question is, you said they felt, your service advisors felt like they were getting shopped a lot and they were happy about that when you guys. So obviously the closing percentage has to go up. That's the number that we're looking to improve. Right? We're looking for the closing closing percentage in ARO increase. All right, so if the closing percentage increases, then we know that we've, we've had a successful.
Matt Lofton [00:45:13]:
What is your, what is your dry run on this? In other words, how long are you willing to run this?
Mike Allen [00:45:22]:
I'm willing to run it for a month, I think, to get, to get some of the peaks and valleys out. Because like, for example, we're talking about this store specifically, they don't have a lot of problem vehicles in the building. But like at our big store right now, this morning in our team meeting, we were celebrating that a car that's been with us for six months was finally finished. I've taken a much heavier role in day to day operations at that store in the last few weeks. And when I first sat down to do it, I pulled up our loaner car. She and I was like, hey, guys, we need to check this vehicle in. Clearly we've not been following the process because it says that this customer's had a car for 156 days. And they were like, well, about that, I was like, one.
Mike Allen [00:46:13]:
I mean, I should have known that this customer had a car for 156 days. But that immediately became priority number one is to get that client's vehicle finished and done. And we finally finished it yesterday just in time because they showed up with my loaner car 14,000 miles overdue for oil change, with steel belt hanging out of one of the tires, complaining about a vibration.
Matt Lofton [00:46:41]:
Oh, so problems. We get problems, don't they?
Mike Allen [00:46:46]:
They do, they do.
Matt Lofton [00:46:49]:
So closing percentages, you know, is kind of, kind of the thing that we need to focus on there. We need to try to keep all things else the same. Tech average quote needs to try to stay the same. Because if tech average quote comes down, then closing percentage goes up, but ARO stays the same. So I would try to focus on, you know, making sure that they understand, hey, we need, we need to try to make this a sanitary test environment here, you know, just, just so we can see what we're at.
Mike Allen [00:47:18]:
Okay.
Matt Lofton [00:47:20]:
Because if you're, if you're taking too.
Mike Allen [00:47:23]:
Many knobs at once, you can't tell which one made the change.
Matt Lofton [00:47:25]:
Yeah, yeah. And, and if your closing percentage goes up to 40%. But your tech average quote drops $700. You're going to think in their mind that dropping the price is what made the closing percentage go up. But the closing percentage didn't really go up on the stuff that they were actually going to have a chance to sell. It just stayed the same. Right. The other thing that I think is a, is a good practice to do again.
Matt Lofton [00:47:50]:
I, I, I still believe going back there and doing a, you know, doing a value audit of, you know, making sure that we do that description with the, the team and the service advisor of what is value. I think a lot of times, I think a lot of the sales training that we have in our industry focuses on features and benefits that are easy for everybody to say the same, you know, if we pick up the phone and we call 10 good shops, 10 good shops are going to talk to us about their warranty and the fact they have ASE certified technicians and all of those other things. And probably 25 to 50% of the bad shops are going to say the same stuff too. Right. Because Technet doesn't fit quality of shop or quality of employees. It takes $119 a month to have a 24 month, 24,000 mile warranty. And so, so that's not really a differentiator, I don't think. Let me rephrase that.
Mike Allen [00:48:49]:
Five year, 50,000 mile warranty nationwide. Just saying you have to have it.
Matt Lofton [00:48:54]:
I'm not saying it's not a differentiator. I'm saying if we're all leading with the same thing. Right. It's not difficult for me to say five year, 50,000 miles the same way as it is for you to say. And how, when are they going to find out that they, if that's actually bogus or not? Yeah, it, you know, the car actually has to break four years from now for us to find out. So they gotta say yes to. So I don't really find that to be a huge differentiator in a lot of places. I would sit down with the team there and figure out, hey, what do you feel like the differentiators really are? I think a portion.
Matt Lofton [00:49:29]:
I think another thing would be good to do is when they get a no, like when a customer declines for, you know, wholesale or especially a red item. Right. You're focused right now on trying to sell more core needs like today needs. And I, I agree with that. We should almost never lose brakes. We should almost Never lose tires below 2,32 of an inch. We should almost never lose, you know, things that are Immediate safety or reliability concerns. Right.
Matt Lofton [00:50:00]:
And I agree with your thinking there. My question is, every single time that that happens is did we, did we actually find out why? And so, Bob Cooper, there's a great audio file and you have access to this on the Elite website through your client portal. I would get your service advisors to listen to it. I listen to it at least once a year. For those of you that are out there that have never heard Bob Cooper.
Mike Allen [00:50:25]:
Speak.
Matt Lofton [00:50:28]:
I thought I was a good salesperson until I listened to this audio file and I realized how inadequate I really was.
Mike Allen [00:50:35]:
This is cooper from like 2005 or something of class.
Matt Lofton [00:50:39]:
It might be from like 30 years ago, I don't know. But it, it's, it's listeners.
Mike Allen [00:50:43]:
Cooper was the founder of Elite.
Matt Lofton [00:50:45]:
Yeah, Bob Cooper was the founder of Elite Worldwide. And, and he was just a, he was a phenomenal communicator. Just, just a. He's a zig ziglar type individual that just really had a way of, of communicating with people. And, and he was a value based individual. So he tells a story in this audio file about a customer that came in with a vehicle that had a noise. And they identified, they did their evaluation and they identified in the evaluation that the u joints had play in the U joints and that's what was causing the noise. All right? And they disassembled the U joints to find the play and all that.
Matt Lofton [00:51:27]:
They, and they charged him for the testing. The customer declined the services, thanked him for his time, paid the diag fee and left. And he tells the story about how bad he felt. He's like, because I know this guy needed u joints and he left not getting his car fixed. So he had the same problem that he showed up with. And he paid whatever the diag fee was. He said, I felt so bad about it that I actually called the guy back a couple days later and I, and I kind of begged him to figure out where I failed in communicating with him to that he left not getting his car fixed. And he says, well, Bob, I just want you to know that I didn't get my car fixed because you lied to me.
Matt Lofton [00:52:05]:
And he says, well, what do you mean I lied to you? And he says, well, my brother in law is a mechanic and what I didn't tell you was is that my brother in law looked at the vehicle before I brought it here and he looked at the U joints and he told me that the u joints were good, all right? And you tried to sell me u joints and I don't need you joints and therefore you lied to me. Right. And so in that conversation, what he realized was, is that he didn't do a good enough job of explaining, you know, what was necessary there and why, you know, what our recommendation was, and that he didn't get the, the information from the individual at the time when he could have fixed the problem about why he said no, because if we, if we get that, then we can have a chance to handle that before it leaves. From a service advisor standpoint, what we do most of the time is most customers are non confrontational. And so they smile at us and they say they give us some sort of a sidestep objection. Okay, well, I tell you what, I'll look into that. I appreciate it. I'll think about it, or I'll give you a call when I want to get that done.
Matt Lofton [00:53:14]:
I'll talk to my spouse, whatever the sidestep objection is. Right. They smile.
Mike Allen [00:53:19]:
You call it a sidestep. I call it. They lie to you.
Matt Lofton [00:53:22]:
Yeah. And it, and it is a lie. Yeah, but I mean, but it's, it's a side step, but it's a, it's a subconscious lie. All right? They don't know that they're doing it when they're doing it. It's built into their, it's built into their psyche and we all do it. Let me ask you a question. If you go to a department store and you're shopping for clothes and the rep, the rep comes up to you, what question do they always ask?
Mike Allen [00:53:46]:
Is there anything that I can help you with? No, I'm just looking.
Matt Lofton [00:53:50]:
Every single person I've ever asked that question to, and everybody that's ever asked me that question has said the exact same thing. So one of my friends from high school, she's the director of denim for Nordstrom. All right? And so they made one change in their, in their sales process there with their reps, where they stopped asking that question. And what they started asking was, hey, I see you're looking at jeans today. What size are you? And from there you're going to say, I'm a 36, 32. And they're going to say, awesome. Well, hey, while you're looking over here, I'm going to go pick out some, you know, some in your size for you to try on. That I think will be a really good fit for you.
Matt Lofton [00:54:36]:
And then they go grab a few. So now they're, now they've got themselves engaged in that, you know, in that process with you.
Mike Allen [00:54:43]:
Whereas do you know how I know you don't listen to my podcast.
Matt Lofton [00:54:47]:
Why is that? Because you're not a 36.
Mike Allen [00:54:49]:
Talked about how I'm a size 36 on the episode with Mimby and Tanika because I blew my pants out trying to wear pants that were too small for me many years ago. But I digress. Sorry. My specific gene size came up in an episode recently. Can't believe you don't listen.
Matt Lofton [00:55:12]:
I do listen. I listened to the Darren episode as a great episode.
Mike Allen [00:55:16]:
It was. It was. No, I think that's awesome. I think, and it's true, we do tell little white lies to avoid having the conversation that we want to have all the time or the conversation that we don't want to have.
Matt Lofton [00:55:32]:
Yeah. And so what Bob Cooper said, you know, that I found really profound with that. And I think it's important for advisors to hear the same, the same messages. He said when the customer says no and they walk out the door, your reputation walked out with them. Unless you know why they said no.
Mike Allen [00:55:51]:
That's powerful. If a customer says no and you don't find out why they said no, when they walk out the door, they walk out the door with your reputation.
Matt Lofton [00:56:00]:
If you think about all the one star reviews that you sat down and described to me about the customer said we were too expensive. Almost all of them came in and got no work done. Right. I got some level, base level service, whether that was testing or an oil change. You guys provided an estimate. They said no. And I would almost guarantee you if you asked your service advisors, none of them stood in front of that front desk and told them how expensive you were and how terrible of a place you were and all of this stuff. Right.
Matt Lofton [00:56:32]:
They never complained about it. We were talking offline before we started and I told you that I just got a bad customer review on, on Facebook and our. Our shop showroom is recorded with cameras. So I went back and watched the interaction happen live. And that guy thanked my staff before he left and told them how much he enjoys a portion of the staff that was there and then left and 15 days later wrote a horrible, scathing review about nothing that happened afterwards. So it's not like he came, picked up his vehicle. We didn't fix it. He was just there for a free tire rotation and he wrote his review about the terrible experience he had.
Matt Lofton [00:57:15]:
And to be fair to him, he did have a terrible experience and we had to address it. It was our fault. However, my point is, is he didn't address it in the moment in front of us. He was nice, he smiled, he left he was still pissed.
Mike Allen [00:57:28]:
Yeah, most people are non confrontational for sure.
Matt Lofton [00:57:30]:
Most people are non confrontational. You will almost never get the direct truth out of them. All right, so we talked about the intake conversation. One of the things that I would recommend doing is, is I would ask a question of all of your new customers in the intake conversation of. Hey, Mike, one thing that I want to make sure that we set clear today is if you ever have questions, concerns about what we recommend and why we recommend it, or if the experience that you have here in the store ever doesn't line up with what your expectations are, I need you to do me a favor. Can you please tell me before you walk out the door? Because I can't fix what I don't know about.
Mike Allen [00:58:14]:
How often do your advisors have that conversation at write up with a new customer?
Matt Lofton [00:58:21]:
I am, I am getting very. We had a goal in October, at the end of September, we set a deadline to say, hey, we're going to be at 100% of that conversation with every new customer. And we did an in store test where we actually did a role play test. And every service advisor had to pass the role play test for that conversation. And so we were able to accomplish that in September. And I do not believe that our October. I believe that a lot of our October success was due to that because what it allowed us to do. Because the flip side of that is when I get you to agree that you're going to tell me when you don't believe me.
Matt Lofton [00:59:06]:
Right now, let's go to the presentation and I taken you to the back and I've shown you your brakes are at 2 millimeters and you say, no, now I, now I get to have the conversation. Hey, Mike, you remember when we sat down earlier and I told you that, you know, if there was ever anything that I did that, you know, you, you didn't trust or provided an experience that you didn't enjoy that you would let me know about. Right? Well, I'm concerned that I failed you in one of those two areas. Really quick. Do you mind elaborating on me? We went out to the back, we took a look. Did you have any questions about Jim's recommendations on the brakes? Right? And they go, well, no. I say, okay, so you believe that 2 millimeters the brakes need to be replaced, right? You believe that? And he's like, well, yeah, I mean, I believe they could be replaced. Okay.
Matt Lofton [00:59:54]:
And you believe that in Jim's recommendation that they need to be replaced right now, like asap? He's like, well, yeah, I guess I could see them needing to be replaced right now. He's like, okay, so is it fair to say that you're. That your problem is that you don't see the value and what we've presented as a solution to replace them, like it might be the price? He's like, well, yeah, I just don't think $650 replace brakes is a good deal right now. We've gotten to the problem and that's, in my opinion, we make that job more like a sales pitch if we don't have that agreement on the front end. Yeah. And they've sealed.
Mike Allen [01:00:35]:
The methodology that we've been using is not nearly as well developed. You know, it's. We. We talk about regularly the fact that most of the no's that we get aren't the real reason they're saying no. It's the reason to get us to go away. Right. And that we have to get comfortable being uncomfortable and asking for the real reason. And it's, you know, well, what, what's your plan moving forward for this? You know, you understand that this is really important and we need to get this taken care of.
Mike Allen [01:01:04]:
You know, is there a reason you're not comfortable, you know, having us address this concern for you today? But all that feels kind of salesy, ultimately. But if you've prefaced the conversation at write up before there's ever been any findings or any estimating, I think that makes a lot of sense. Yeah.
Matt Lofton [01:01:21]:
It only feels salesy when it comes out of the blue. Right. And it feels salesy most of the time because the service advisor feels like they're being pushy, they feel uncomfortable, and they transfer their discomfort over to the customer. Right. And so it's easier. It puts them in an area of more comfort to have that difficult conversation when they've already agreed on the front end that they would provide that feedback if you ask for it.
Mike Allen [01:01:48]:
That's awesome. Thank you, Matt. Anything else you want to go over today? No, we're bumping up over an hour, so.
Matt Lofton [01:01:59]:
Yeah, I would sit down. I would, you know, I would figure out what your break even for this experiment to work as far as dropping that pricing down. Because anytime we go up on pricing, we need to make sure that the closing percentage doesn't drop to a point that we don't hit our break even anytime we go down on pricing, you know, we should see a lift in closing percentage or a lift in car count volume, one of the two. And, you know, make sure you've done your math. There Again, I would go back through, you know, do the value audit with the team. They're the ones talking to the customers all day, every day. Think about what. And say, listen, don't.
Matt Lofton [01:02:34]:
Don't give me industry jargon bull crap. I mean, like the guy standing across the counter, what do they really want? And then how do we give them more of what they really want? And value does not always mean value doesn't always have to cost you money. Right? We're looking for how do we add value? How do we add perceived value? Right? And then. Then I would sit there and talk about that intake conversation and start there. How do we add one sentence? How do we change one sentence in the intake conversation? What would that look like? That would have. That would set us up better for the presentation side of things.
Mike Allen [01:03:14]:
I love it. I'm. I'm going to the shop today, and we're. I'm going actually to the Hillsborough street shop, and we're grilling smash burgers and hanging out for lunch and eating. And that's what this is. My thinly veiled excuse to buy a Blackstone. But no, I'm gonna have that conversation today at lunch.
Matt Lofton [01:03:39]:
Awesome. Well, tell them I said congratulations on the awesome October. I probably won't see you guys before then, so happy Thanksgiving. Hope you guys have a good time, brother. Hope you have a good turkey day.
Mike Allen [01:03:50]:
You know, our next episode, we're gonna have to wear, like, Santa hats or something, because I think it's due to be released on the 23rd. Our next episode, the Merry Christmas episode.
Matt Lofton [01:04:00]:
I've got. I've got one for you, Mike.
Mike Allen [01:04:03]:
All right, I'm looking forward to it.
Matt Lofton [01:04:04]:
I'll come properly attired.
Mike Allen [01:04:08]:
See you, man.
Matt Lofton [01:04:08]:
All right, have a good one.
Mike Allen [01:04:09]:
Thanks for listening to Confessions of a Shop Owner, where we lay it all out, 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, 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 call. 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.
Mike Allen [01:04:46]:
I'll see you on the next episode.
Matt Lofton [01:04:58]:
Ah.
Mike Allen [01:05:05]:
You know I said just.
Matt Lofton [01:05:16]:
You know, I said just.