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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.
Matt Lofton [00:00:00]:
Brian Tracy is a. He's an author speaker does sales and business presentations. They did studies where they took sales reps and they had them take a stopwatch and record how much time they were actually spending with their targets. And what they found was the average salesperson in America only spends 90 minutes a day actively selling to customers. Where I'm going with that is what he said was if you spend more time talking to customers, you will sell more. So if you think about the Advisor time, anytime I see a closing percentage issue, my very first fix for that is do anything you can do to make sure that the Advisor takes more time talking to customers.
Mike Allen [00:00:38]:
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.
Mike Allen [00:01:11]:
We're getting in the short rows for the expo, you know, and I'm kind of going in every which direction and it's a little bit nerve wracking and I can't even imagine what the staff is like right now because it's nerve wracking for me and I have way less going on than they do. But I'm leaving tomorrow to actually go to my elite pro service meeting in Michigan. So I'll fly into Detroit and rent a car and we're driving out to Jackson, Michigan for that meeting, which I'm excited about.
Matt Lofton [00:01:40]:
I'm a little jealous. Jealous on that one.
Mike Allen [00:01:43]:
Yeah, yeah, I think it's gonna be a good time. I mean, it's a good operation and it's always good to get together. You know, iron sharpens iron, right? With a bunch of other shop owners who have the, the same experience and, and the same struggles day to day. So that's been a great benefit for.
Matt Lofton [00:01:57]:
Me over the years.
Mike Allen [00:01:58]:
And kind of go get your batteries recharged and I'll get back Friday, like midnight.
Matt Lofton [00:02:04]:
Right.
Mike Allen [00:02:06]:
And we got the weekend to kind of recharge a little bit and then it's expo week. So back to back, you know, I got an elite meeting this week and expo next week. It's going to be pretty awesome.
Matt Lofton [00:02:17]:
So the question is, have you been getting your cardio in with the sumo suit?
Mike Allen [00:02:21]:
Oh my gosh. So, you know, I posted that reel or Braxton posted that reel. Me calling Lucas out that he was going to find an excuse to not actually do it. He has not responded. So, you know, we'll see. I'm hoping that'll find excuses. I really don't want to do it. Oh, God.
Mike Allen [00:02:41]:
I don't want to do it.
Matt Lofton [00:02:42]:
But.
Mike Allen [00:02:44]:
Yeah, I'm also not gonna be the one to out. So hopefully he out so that I can claim superiority. We'll see. But more direct answer.
Matt Lofton [00:02:55]:
No. No.
Mike Allen [00:02:56]:
I've been as unhealthy in my habits, exercise, diet, otherwise as possible. And, you know, my waistline. I've gained back everything I had before I started summer Olympics, you know. Cause I did the. I did the shot for a little while and it was working incredible. But then I started having poop mouth and so I stopped it and now I've gained it all back. So I'm back to square one. I'm a young man.
Mike Allen [00:03:22]:
Yeah, I'm a young. It's weird how if you just make healthy choices, then life is better. And when you make unhealthy choices, you become a lard ass. So.
Matt Lofton [00:03:33]:
And here we are.
Matt Lofton [00:03:34]:
We could always do the, you know, meal prep of boiled chicken and broccoli twice a day.
Mike Allen [00:03:41]:
I mean, boiled chicken and broccoli is not bad until you've had it 47 times in a month, you know, So I don't know, what's your health regimen like? Do you work out and cardio and all that stuff?
Matt Lofton [00:03:55]:
About the closest I get to working out would be I've got a dog that I hunt with and he requires a massive amount of exercise and so I walk him quite a bit. So we probably do about two miles a day walk in the neighborhood. And then during. During the hunting season, which is usually November through February, we probably do about 20 to 25 miles a week on the ground. Outside of that, I have not seen the inside of a gym since 2012.
Matt Lofton [00:04:28]:
And.
Mike Allen [00:04:32]:
Didn'T you just post your anniversary pictures? Was that when you got married? Was 2012?
Matt Lofton [00:04:36]:
I got 2013. Yeah.
Mike Allen [00:04:39]:
Just let it all go then, man.
Matt Lofton [00:04:41]:
Yep.
Mike Allen [00:04:42]:
So she does.
Matt Lofton [00:04:43]:
She does meal prep for the week. I mean, if it wasn't for her, I'd probably be £300, there's no question about it. But she, she does a good job of meal prep. And so I've got lunches set out in the, in the refrigerator and then she does meal prep for dinners. So I usually have a salad every night for dinner that she puts together and then I've got some form of chicken for lunch each day.
Mike Allen [00:05:11]:
Gotcha. All right, well, what is. I know Elite's bringing kind of the A team to the Expo. Tell me about what you guys are gonna be doing there.
Matt Lofton [00:05:22]:
Yeah, we're super excited about the Expo. So we have. Darren's gonna be there teaching a class. Tom Amaro, who is our director of operations, he's gonna be there teaching. Sabrina, who runs our service advisor training class, she's gonna be there teaching the class. And then some kind of way, they snuck me in on the roster as well, and I'll be there wasting a couple hours for some people.
Mike Allen [00:05:46]:
You know, I. I can't name names, right. But I got another call from somebody the other day who was talking about how they have jealousy issues when they listen to these calls compared to their typical coach calls. And it ain't my input that makes them jealous. So I keep telling this person that they need to just, you know, seek out. They'll be at the Expo. So. No, yeah, I'll tell you offline who it is, but I think you need to go.
Mike Allen [00:06:15]:
You need to go scoop them up.
Matt Lofton [00:06:17]:
Yeah, tell them. Tell them to give me a shout. Give my number.
Mike Allen [00:06:19]:
Be happy to talk to them. You know, I'm already. They're just living. Living in the shadows. But anyway, so let's talk about. Let's talk about car fix.
Matt Lofton [00:06:31]:
Yeah. So we'll do a little recap on. On July. Just kind of bring everybody back up to speed. We kind of. We kind of started to turn in the wrong direction a little bit. We talked about, you know, maybe some of the things that we had, staffing issues that were going on as far as being a little bit understaffed at the front counter again. And then some technician issues we were having in the back.
Matt Lofton [00:06:57]:
And then really, the biggest problem that we had was just being able to sell. We seems like we kind of lost all ability to sell. Their closing percentage dropped off to about 21%. And so the big conversation that we had last month was putting together some sort of a trigger for management to be able to identify those negative trends faster, to be able to get them in motion to get there. And I know that the way you have your management set up, you have. Xander and Steven are both in kind of global management roles between the three stores. One of them is kind of focused on front of house. The other one's kind of focused on back of house.
Matt Lofton [00:07:39]:
We talked about putting some triggers in place for if we noticed that we had some underperforming issues. Audit and figure out is it front of house or back of house, and that we. We could Deploy the right manager on location.
Mike Allen [00:07:53]:
And that I think was super helpful and super useful. Continue. And then I'll tell you how, how that's gone so far.
Matt Lofton [00:07:59]:
Yeah. So with that being the recap there, kind of give us an update on, on August and how things went in August and we'll go from there.
Mike Allen [00:08:10]:
So this struggles continued through August and there are some issues front of house with getting our closing rate where we wanted to be. There's some issues back of house with getting the staffing where we wanted to be and some of our processes for the, the size of the DVIs that we're doing, the quality of the DVIs that we're Doing, and the average quote and our closing rate. And that is a factor of both front and back. Right towards the end of August, we kind of hammered that down a little bit. And now, you know, so we're going to be talking about August numbers today primarily. But now in September we've got the staff.
Matt Lofton [00:08:45]:
Right.
Mike Allen [00:08:46]:
At the end of August we got the staff where we needed to be. That's two techs, a GS and two advisors. And we're gaining speed rapidly as a result of that. And I expect that this month we're recording this in September will be maybe not quite like April was our best month ever, but a close second and we continue to gain momentum in that direction. And there are some things that both Xander and Steven, you know, front of house, back to house, need to continue to work on and you know, and therefore that I need to continue to work on. But overall, the direction that you've been giving me has helped me kind of pull it out of the ditch and get it back in the right direction. And I feel pretty good about it right now.
Matt Lofton [00:09:33]:
Okay, so we still have kind of this, the same closing percentage issue from what I can gather.
Matt Lofton [00:09:43]:
Yep.
Matt Lofton [00:09:43]:
Do you mind giving me a little bit of data on what the, what is your average tech quote at the moment?
Mike Allen [00:09:50]:
Well, for the month of August. Let me break out the calculator real quickly. Average repair order was $583.25. Closing rate was 20.81%. Super low. So that means my tech average quote was 2802. So I think what's happened when we had like back in April, when we had our record month, we were just putting, starting to put in place this, this concept that we've been talking about, the rack attack and multi stage selling and speed of service and all that kind of stuff. And part of the concept in that model is don't do the kitchen sink don't throw these enormous estimates where 75, 80% of the estimate is yellow stuff, and you kill the car because the customer's overwhelmed with, oh my God, I need to spend how many thousands of dollars I just came in for an oil change, right? And they need to know about all that yellow stuff.
Mike Allen [00:10:51]:
They need to be told about all that yellow stuff. But you don't necessarily have to make them feel like they need to do it all right now.
Matt Lofton [00:10:56]:
Right?
Mike Allen [00:10:56]:
You can just say, hey, so, you know, you got 120,000 miles on your struts. They're, you know, they're not performing the way they did when they were new. They're not leaking, they're not blown out. But you should be aware that that's on the horizon. We can take care of that for you today if you want us to, but otherwise just plan on that in the next, you know, few visits or whatever it might be.
Matt Lofton [00:11:15]:
Right. And.
Mike Allen [00:11:16]:
And not necessarily estimating those things unless the customer specifically ask us to estimate them, because you burn a lot of time estimating in that capacity.
Matt Lofton [00:11:26]:
Right.
Mike Allen [00:11:27]:
And so unintended consequence, when we made the switch to hubshop solutions, we no longer burn any time estimating things because they estimate everything for us super fast. It's easy. It's not a drain on the advisor's bandwidth.
Matt Lofton [00:11:41]:
Right.
Mike Allen [00:11:42]:
And so we had a dip in our tech average quote when we started integrating that. Our closing rate went through the roof and our average repair order went up significantly.
Matt Lofton [00:11:49]:
Right.
Mike Allen [00:11:51]:
And now our tech average quote has skyrocketed again because it's so easy to have these huge estimates on all these maintenance items and borderline yellow items on the dvi.
Matt Lofton [00:12:01]:
Right.
Mike Allen [00:12:03]:
We've started throwing the kitchen sink again, and I think we're killing some cars unnecessarily. And so I probably need to fine tune, I need to get with Ash and the team at hubshop and with the front of house team and the DVI team and make sure that we're all on the same page about what needs to be estimated and what just needs to be informed.
Matt Lofton [00:12:25]:
Right.
Matt Lofton [00:12:26]:
So my question is, if it's not, I understand it if your internal team is doing the estimating, because again, like you said, that's a time killer. But if it's not, if it's not hurting the bandwidth of the advisors, is this more of a service advisor sales process problem? More so than it is? Because the way that I see this is it's not a bad idea. It's not a bad thing to have those in the system as an estimate, as long as our sales process says, hey, we're only going to. I don't want to say forcibly sell, but forcibly sell the red items.
Matt Lofton [00:13:00]:
Right.
Matt Lofton [00:13:01]:
And then we're going to inform on. On the yellows that are still estimated in the system. We can go through and decline those, but there's still rollover items in the system for the next time the customer comes in.
Mike Allen [00:13:13]:
So you think it's not uncheck them. You don't uncheck them. You leave them there. You just. Are you declining them and saying, hey, Ms. Jones, I left some notes on here about a few other things that are really kind of, you know, maintenance on the horizon, or how do you recommend going about that?
Matt Lofton [00:13:28]:
So here's, here's a way to do this. It's not necessarily the way, but it is, it is a way and maybe inspire some inspiration. So we had an. We had an average tech quote problem as well, and that's a problem. But I mean, you can get to the point where your average tech quote's high enough that it impacts closing percentage, right?
Mike Allen [00:13:48]:
Yeah.
Matt Lofton [00:13:49]:
So we came up with a repair plan. So the repair plan splits the estimate into three visits. So we're going to take anything that's a safe. A major safety or reliability issue. And that's our today quote. So we're going to quote that today. And then anything that is a preventative maintenance or like you said, like, so rear shocks that are leaking.
Matt Lofton [00:14:20]:
Right.
Matt Lofton [00:14:21]:
That's a problem. But it's not a. The car. It's not a major reliability problem. It's not a major safety issue.
Matt Lofton [00:14:32]:
Right.
Matt Lofton [00:14:33]:
So that would be. That would be something that we could plan and prepare for. So we would put that in a second visit column. So we have today's visit is going to cost X amount of dollars. We got. Your next visit is going to cost X amount of dollars. So now you're three. The goal is to try to split that $3,000 average tech quote into three different estimates.
Matt Lofton [00:14:55]:
Three different visits.
Matt Lofton [00:14:56]:
Right.
Mike Allen [00:15:00]:
Got it.
Matt Lofton [00:15:02]:
And so that way when we present. So you're kind of following.
Mike Allen [00:15:08]:
So it's almost like red is today. Yellow repair items is the next visit. Yellow maintenance items is the third visit.
Matt Lofton [00:15:15]:
Yep. So the, the phone call would sound like this. It would say, hey, Mike, today we got you in. We have, you know, we did find some safety and reliability issues. For us to take care of those for you today, you'd be looking at $1,000 for X, Y, and Z. You know, would you like us to get that done for you? Yes.
Matt Lofton [00:15:33]:
Great.
Matt Lofton [00:15:34]:
Awesome. Hey, we also found some other issues that were bam, bam, bam. These are things we can address at a later date if there's interest in it. You know, in that conversation we can quote those things and then we get into preventative maintenance. Hey, we also have some preventative maintenance items that you're going to have coming up, you know, coming up that should probably need some attention. Here's what they are. If they have interest in that, then we can, then we can quote the kitchen sink. Does that make sense?
Mike Allen [00:16:01]:
Well, I think that makes a lot more sense than trying to reshape what Hub Shop is doing. Because if it's not taking any time off of our plate, we might as well have it all estimated so that we have it in the, in the computer system so that we can just pull it up next visit.
Matt Lofton [00:16:13]:
I was going to say, and it makes your follow up visit more beneficial because then what you can do there is you can preload the, your scheduled appointment. So if your scheduled appointment is coming in from the last visit today, I can pre build the estimate. I can put all the deferred items on there that we recommended in the repair plan for the next visit and I can go ahead and preload those and I can try to sell that on the front end of the, of the conversation at intake versus waiting for the, you know, waiting for the tech fines and the inspection to come back.
Mike Allen [00:16:51]:
So let's talk about how that model would affect the KPI that we're talking about. Tech average quote's not going to change. Closing rate might not change, but you're thinking the ARO will go, I guess closing rate will go up because you're killing fewer cars.
Matt Lofton [00:17:07]:
Yeah. So the closing ratio is going to go up because again, like you said, instead of doing oil change, you're going to have less oil change only or less testing only tickets.
Matt Lofton [00:17:18]:
Right.
Matt Lofton [00:17:19]:
So you're, the goal is to try.
Mike Allen [00:17:21]:
To.
Matt Lofton [00:17:24]:
I mean the, the goal is to sell the, the primary need right now and then schedule out the other stuff so it'll have a, it won't have a massive impact on the closing percentage. You're not going to go from 21% to 50% because we're not going to reduce the average tech quote that much. And then over six months you'll start seeing, you know, on the second visits is when you'll start seeing the closing percentage really creep up again because you'll have less tech fines the second visit than you did the first visit. At least you should. So you're part of what you're dealing with is, is getting good inspections for the first time off that customer.
Matt Lofton [00:18:01]:
Right.
Matt Lofton [00:18:02]:
In other words, first time that customer comes in, you're going to have a bloated estimate because you haven't seen the vehicle before and you have all these things that are getting estimated at one time or they have come in before. But before HubSpot, you weren't estimating everything.
Mike Allen [00:18:17]:
So Hub Shop, HubShop Solutions.
Matt Lofton [00:18:19]:
Hub Shop.
Mike Allen [00:18:19]:
I'm sorry, Hub Shop, not HubSpot.
Matt Lofton [00:18:22]:
Hub Shop. But so before HubShop you would have, you know, you would have been missing some of the, you know, some of the items that were found in the tech quote because the service advisor didn't have enough time to put it all on there.
Matt Lofton [00:18:36]:
Right.
Matt Lofton [00:18:38]:
So now, now all of those things are getting on there and you're, you're up about $800 on your average tech quote from what you were previously. But again, that should dwindle back down over the next six months.
Mike Allen [00:18:53]:
So, I mean, the example that comes to mind immediately was two weeks ago, a client came in for normal service. Their struts were blown out. Both of them were right. So they approved $2,000 in strut repairs and they had a minor leak from the power steering rack, but it's like a 14 hour job to do the power steering rack and they had some minor tearing and some control arm bushings. Both of these are yellow items.
Matt Lofton [00:19:17]:
Right.
Mike Allen [00:19:17]:
They're not immediate. Safety concerns are not going to cause, you know, reliability issues in North Carolina though it is going to be an issue for state inspection to have a power steering leak. And so that was like another $5,000 on top of the $2,000. And so when we let them know about those items, they're like, well, I'm just going to get rid of the car. If it needs $7,000 worth of work, it's not worth having it anymore. And this is a perfectly good vehicle, right?
Matt Lofton [00:19:44]:
Yeah.
Mike Allen [00:19:45]:
And we killed the car with that. And so there's some messaging.
Matt Lofton [00:19:49]:
Right.
Mike Allen [00:19:50]:
And some communication methodology there that, that can maybe pull that out. But it definitely was kind of a thorn in the side of, you know, we've got to figure out what we're doing here and how we're communicating to keep from killing these perfectly good cars.
Matt Lofton [00:20:07]:
So are your advisors texting the estimate as soon as they get it put together from hubshop? How does we get.
Mike Allen [00:20:15]:
We text the dvi.
Matt Lofton [00:20:17]:
Yep.
Mike Allen [00:20:18]:
And then we call them to review the estimate. We don't actually text the estimate.
Matt Lofton [00:20:22]:
Okay.
Mike Allen [00:20:23]:
So.
Matt Lofton [00:20:24]:
All right. So my, my thought Process is, is this is a pre, pre sales call process issue and they need to have their, they need to have their sales plan put together before they make the call. And the easiest way to do it is to go through and uncheck the stuff and physically write it down, if that makes sense.
Matt Lofton [00:20:51]:
Yeah.
Matt Lofton [00:20:53]:
And say, okay, this is estimate one. If we do the. The need to's right now, estimate 2 is next visit stuff, you know, next highest priority. Like you said, like your yellow control arms would be something that we would probably want to get at, you know, at the next visit. The rack and pinion is something we would want to keep an eye on and maybe get done before the next state inspection.
Matt Lofton [00:21:17]:
Right.
Matt Lofton [00:21:19]:
So that way it splits, it splits those things up into three different visits and it's a little bit more palatable. Yeah, but that way when they call, they have an idea about what we're trying to sell today. We're trying to sell $2,782.55.
Matt Lofton [00:21:37]:
Right.
Matt Lofton [00:21:41]:
And then what do you feel like the, what is the sales process there after? So are we, are we giving the whole bite at one time right now? In other words, are they going through the entire deal or what is the.
Mike Allen [00:22:04]:
So it's a two stage sales process right now. It's the. And you know, the Adams methodology is a three stage sales process.
Matt Lofton [00:22:14]:
Right, but.
Mike Allen [00:22:17]:
And we're just at two. But it's the one like compelling item, safety related item emergence item, whatever it is it may be, get that approval, get them in a loaner car, get them home, whatever it needs to be so that they've changed their mindset to I'm investing in my car and I'm going to be without my car for a little bit. And then we're. Before we start work on the thing that they have approved, we call them back to let them know everything else that we see. You know, like that customer, we had not touched the struts on their car yet when we called them and told them everything else because they need the. They should know everything that we see on the car before we do anything on the car, Right? Absolutely. Because they have the right to back out once they know the whole picture like that customer did. So it's a two stage call and it's typically the most red of the red items.
Mike Allen [00:23:09]:
And then the second call is everything else. And that's when we're killing it because the. Everything else is being presented as. I don't know that the rank and file guys on the team that are making these calls are breaking it up into stages of severity. I think they're saying you need to do all this.
Matt Lofton [00:23:23]:
Right.
Mike Allen [00:23:25]:
And I've got some, you know, and we spot check calls and we listen to calls or Xander listens to calls. You know, she tries to do five per advisor per week with varying levels of success. But we're signing up with a new tool that I can tell you more about next episode that is going to be, you know, we put in our, the checkpoints that we want to check in it. It grades every single call in real time and lets us know if we've had a bad miss or a bad drop ball or an angry customer or whatever in real time. And, you know, hopefully that'll be a tool that will help us reinforce the right processes and give real time feedback a little bit more effectively. We'll see. I mean, those tools are everywhere right now. Like everybody's racing to market to see who can get the best one of those tools in place.
Matt Lofton [00:24:18]:
Yeah, yeah, I think that's, I mean, it's a big hole in the industry and whoever does win that race is going to be doing the industry a huge service because it's a, it's one of the biggest challenges as a shop owners. How do we, you know, how do we review those calls enough to be, you know, know, consistently enough to have meaning without clogging up the works with everything else we have going on?
Mike Allen [00:24:41]:
Yep, for sure.
Matt Lofton [00:24:42]:
For sure. So what are some of the other. How many, how many waiters do you guys have? You guys have a lot of waiters in that area?
Mike Allen [00:24:57]:
It's a mountain because it's right on campus there. So, you know, and we have a fair amount of just walk in. So if I pull up the appointment schedule. Let's just look at. For today. I think I have four waiters on the schedule today, which is, I would say less than normal. 1, 2, 3, 4, 5, 5, 6, 7, 8, 9, 10, 11, 12. Four of the 12 appointments are waiters.
Matt Lofton [00:25:32]:
Okay.
Mike Allen [00:25:33]:
If I go back and look at last week, you know, on Friday, 1, 2, 3, 4, 5, 6 waiters out of 15 appointments. Okay.
Matt Lofton [00:25:47]:
And you guys are running the, the rack attack there now with those waiters as far as taking them to the vehicle and doing the. At vehicle presentation.
Matt Lofton [00:25:56]:
Yeah.
Matt Lofton [00:25:57]:
And so you feel like most of where you're losing them, you feel like you're getting enough off the first initial conversation and it's the second call that winds up killing the, the sales.
Mike Allen [00:26:11]:
That is. Yeah, that's, that's my feeling at this point is that we're we're going backwards or not converting any of the second call stuff. Any is an extreme term.
Matt Lofton [00:26:22]:
Sure.
Mike Allen [00:26:23]:
A large volume of the second call stuff is, is not getting sold.
Matt Lofton [00:26:26]:
Yeah. And so just to go back to when we were, when we were killing it in the, in the good month that we had, just kind of remind, remind yourself and, and the viewers or listeners, you guys were at that 800-850aro.
Matt Lofton [00:26:45]:
Yeah.
Matt Lofton [00:26:45]:
And we were actually getting pretty daggone close to a, a thousand dollar ARO there.
Mike Allen [00:26:50]:
I think in that month. It was real close. Yeah, I'm going back there right now, all over it.
Matt Lofton [00:26:55]:
And so regardless of what the closing percentage is, the, the average tech quote just should just affect. The closing percentage is really all it should affect. Obviously there could, you know, there should be some net effect on the ARO based off of that. But if you're, if you were at 21% and the only thing that happened was your average tech quote went up but your ARO was still the same, you would, there would be no impact, you know, really to the business as long as car count didn't change.
Mike Allen [00:27:22]:
Well, it was an 800 ARO and a 35% closing rate. So the tech average quote was 2300. So tech average quote has gone up by 500 and ARO has gone down by, you know, 150.
Matt Lofton [00:27:35]:
Yeah. So I think we have a presentation problem, Right? I mean, I think there's no doubt about that because I mean, I'm okay with the, I'm okay with the closing percentage coming down because we're putting more yellows and preventative maintenance and other stuff on there. I don't think that's a bad thing. I think that the presentation strategy or, you know, how we're presenting that information is, is impacting the performance there. The only other question that I have.
Matt Lofton [00:28:05]:
Is.
Matt Lofton [00:28:09]:
The two stage, you know, the second stage deal where we're, where we're calling back. Is that something that you feel like could be done? Can you do both stages at the same time?
Mike Allen [00:28:24]:
Well, I mean, of course you can.
Matt Lofton [00:28:25]:
Right?
Mike Allen [00:28:26]:
Because there, there are shops all over the country forever that have been doing it that way.
Matt Lofton [00:28:30]:
Right.
Mike Allen [00:28:31]:
And I think the methodology that you described of, you know, hey, Mr. Jones, one of the things that we do is that, you know, we're going to build out a complete repair plan for you and we'll let you know everything we see on the vehicle and then we'll break it down into levels of importance and urgency and make a plan for you to, you know, keep this thing Road worthy for as long as possible for you. I think that's how a lot of people have done it for many, many years to, you know, varying levels of success. I was bought in and am bought into what the Adams team is doing. And you know, Hayes methodology and it works when it's done right, but so does the repair plan methodology. Everything works when it's done right. Nothing works when you screw it up. So it's just we got to figure out which version what, what is the thing that we want, right? How do we want to execute? And I'm frankly not, not ready to give up on the Hays methodology because I, having seen it work to a high level, I believe that it can be a very good methodology, but I've not yet executed on it on a high level.
Matt Lofton [00:29:45]:
What is the timeline from on the second call then? In other words, by the time they've.
Mike Allen [00:29:51]:
Exited in a perfect world, it should be an hour or two, no more.
Matt Lofton [00:30:00]:
What do you think it is right now? In reality?
Mike Allen [00:30:03]:
I don't have an answer for that. I don't know. I'm too disconnected and that's probably something I should address.
Matt Lofton [00:30:10]:
Okay. And then I know in that scenario that there's supposed to be the conversation of, hey, this is what we found really quickly in the first 10 or 15 minutes we were looking at your vehicle. Our technician's going to go over, you know, the whole thing and we'll call you back if we find anything else. Are we, in other words, there's supposed to be some sort of a seed planted that says that we could be calling you with some other stuff?
Mike Allen [00:30:36]:
Yes, you, absolutely. That's part of the conversation is like, you know, for this methodology to work properly, the, the first call needs to be super fast, very quickly after the clients drop their keys or if they're a waiter, obviously it's, hey, there's, you know, just wanted to bring something to your attention that we saw while we've got it in, you know, here's this, this is important need to get it taken care of for you, you know, and you close that item and then it's. While we're waiting for that part to arrive, we're going to go ahead and complete our inspection on your vehicle and is this a good number to reach you at to go over the findings on our pmi? So you're telling them that we're continuing to inspect the vehicle and that we're going to call you back with an update.
Matt Lofton [00:31:18]:
So the other thing that I have found that impacts closing ratio is, is that that conversation doesn't happen. I'm not saying that it's not happening with you. I'm just saying that would be another thing that I would look into because that's the surprise factor of the kitchen sink.
Matt Lofton [00:31:36]:
Right? Yeah.
Matt Lofton [00:31:38]:
Wait a second. You guys just told me I needed $800 worth of work. Now you're calling me back and telling me I need twenty five hundred dollars worth of work. What the hell is going on?
Matt Lofton [00:31:44]:
Right.
Mike Allen [00:31:50]:
Yep. And so I know that it's part of our process, but is our process being followed?
Matt Lofton [00:31:55]:
Are we doing it? Yeah, yeah, yeah. And so that's, and what happens there is the advisors is so repetitious for them that they assume that the customer knows that that's how it's supposed to happen. Not understanding that that customer only comes in one or two times a year at max. And especially with repeat customers, they also assume that those customers know exactly what's going to happen every single time they come in. So they don't go back through the, hey, this is what's getting ready to happen. We're going to look at, you know, so that can, if you don't set the table correctly for the presentation, it kind of kills the presentation.
Matt Lofton [00:32:33]:
Right.
Mike Allen [00:32:36]:
We need to educate the customer on every visit on what to expect and how it's going to happen.
Matt Lofton [00:32:42]:
And especially if you're going to do the two step deal. Because again, your assumption is right now is that the second step is killing the first step. You know, we're doing a good job. I mean it's, I would have a hard time believing that your guys forgot how to sell emergency items. You know what I mean?
Mike Allen [00:33:02]:
So, I mean items kind of sell themselves usually. So.
Matt Lofton [00:33:06]:
Yeah. And so I mean you have history, you know, you have sales history in there that says that we, we were doing a pretty good job of doing that. Now we're in a spot where the average, where the second step is calling out and we're, we have more stuff that we've found in the, in the tech finds that we've estimated. Your tech funds probably haven't changed really. It's just all of it made it to the estimate now along with all the preventative maintenance stuff because of the service that you're using. So that's what's raised it. The other question is have you thought about doing some sort of a preventative maintenance plan where you take the preventative maintenance out of the, the general estimate? Not out of the general estimate, but it's out of the tech fines side of things.
Mike Allen [00:33:57]:
Elaborate on that. What do you? What do you mean?
Matt Lofton [00:34:00]:
So you can do like a maintenance club where you have annual maintenance on the vehicle and that way you're breaking up preventative maintenance. Instead of it being 100% factory maintenance schedule, you have your own maintenance schedule. And we're splitting those things up to where we're trying to get those done with an oil change service versus adding it to the, you know, the tech quote side of the estimate, if that makes sense.
Mike Allen [00:34:32]:
Well, I know that like another one of the services we're using is Detect Auto, right. And we're using a couple of its features. One is to help, you know, service advisors build, build better tickets for the technicians, you know, from a diagnostic questionnaire perspective. But they have a maintenance recommendation tool that searches your local history and CARFAX service history and it compares it, what they find there to what you set up on the back end as your maintenance schedule. What you're, you know, we need, you know, this service every 50,000 miles or whatever it might be.
Matt Lofton [00:35:05]:
Right.
Mike Allen [00:35:06]:
And I know that's not perfect because there's some pretty widely variable maintenance schedules based on fluid specs and brands and that kind of stuff, but generalized intervals. So I think we could probably adjust that to a plan of that nature because a lot of our tech average quote right now is deferred maintenance that hasn't been found locally or on Carfax service history from Detect Auto. So maybe, you know, it's, you know, transmission fluid serv service hasn't been noted and the fluid doesn't look bad.
Matt Lofton [00:35:48]:
But.
Mike Allen [00:35:49]:
It is a serviceable fluid system. And it's. So it's marked yellow because it doesn't look bad, but we don't have a service history.
Matt Lofton [00:35:55]:
Right.
Mike Allen [00:35:56]:
So.
Matt Lofton [00:35:59]:
So one of the things that, that we did was we put that at the first stage of our sales process. So that's talked about at intake.
Mike Allen [00:36:06]:
Okay.
Matt Lofton [00:36:07]:
So we would take all that stuff pre build that estimate, you know, exact same process you're talking about there with Detect Auto and looking at our previous service history, Carfax previous service history, identifying that, hey, we have a fluid service that hasn't been done. We put it on the ticket the day before when the customer comes in for intake. We're having that conversation right then and there. And so it's not adding to the, the repair quote, if that makes sense.
Mike Allen [00:36:41]:
How long is your intake process.
Matt Lofton [00:36:47]:
In reality or how long should it, how long is it supposed to be?
Mike Allen [00:36:51]:
Yes.
Matt Lofton [00:36:54]:
So I'm a, I'm a big, I think the most important part of our process is the Intake Because I think if we do the intake really well, that the sales process takes care of itself. So the intake process to be done correctly should be about 15 to 20 minutes. And that is from the time the customer gets there to the time that we have started introducing them to the sales process. That makes sense. So the, the general idea of how we're trying to run that is if it's a waiter customer for there for an oil change, we're trying to do everything we can do to greet them in the parking lot, get the keys as quickly as possible so we can move the vehicle. So we'll usually have a support person, like a porter, greet them, move the vehicle and stage it in the technician bay. The service advisor is then going through the if they're a first time customer, are you new to the area? If not, what has you looking for a new repair partner today? And then we're going to sit that opens the door for the conversation of what makes us different. So we're going to go through our value proposition, we're going to go through our service declarations as far as we do everything from tires, oil changes, engines, transmissions, the whole deal.
Matt Lofton [00:38:17]:
Then we're going to get into, hey, this is what's going to happen at today's visit, right? Anthony, your technician is starting your oil change service right now. Every time you bring your vehicle in, we're going to do a basic safety inspection, take a look at these, you know, these areas on the vehicle and then he's going to come grab you, take you to the vehicle and show you what he found. Our number one goal is that you believe 100% of you know of what our recommendations are and that if you have any questions, you have an opportunity to get those out in the open right now.
Matt Lofton [00:38:47]:
Right.
Matt Lofton [00:38:49]:
So hopefully by the time that conversation is done, the technician, we do the inspection process first. So they're going to do a visual inspection first. They're going to find because you know this, the technician can do the visual inspection in 15 minutes or less. It's the documentation in the DVI that takes the time, that takes the 30 to 40 minutes. So hopefully by this time the technician is done staging the vehicle, lifting it, doing the undercar underhood inspection. He's going to walk in, introduce himself, take the customer to the vehicle, show them what his findings are.
Mike Allen [00:39:24]:
So you have the tech doing that, not the advisor.
Matt Lofton [00:39:26]:
I had the tech doing that. But the invite, the advisor kind of tags along because inevitably what's going to happen is. So the advisor is sitting there getting the list while he's going over it so he can go in and do the estimate. Inevitably, when you do the show and tell presentation, the customer asks, well, how much is that?
Matt Lofton [00:39:46]:
Yeah.
Matt Lofton [00:39:47]:
And then our deal is, hey, that's a great question. That's a question here for your service advisor. And then what we're trying to do at that point is set the stage for the next hour, for the next 40 minutes, which is, hey, I'm going to, I'm going to write all this down, I'm going to share this with your advisor. They're going to come up there, they'll give you a quote with repair plans and some options there. I'm going to document all of this in our system for you and complete the service. And that should take about another 40 minutes. So now they know that it's, you know, going to be another 40 minutes of waiting, but they know what they're waiting for. And then from there the advisor is going to complete the estimate, have the conversation with them, try to exit through a learner car or shuttle service, and then take care of.
Matt Lofton [00:40:30]:
So that's kind of the, it feels.
Mike Allen [00:40:33]:
Very similar to what we're trying to do now. It's just with a few slight variances. I think a lot of so much just, you know, debate and discussion about all the different concepts of execution. I think they're all very, very similar and they are with little differences here and there. So. But yeah, I mean, that slow conversation I could see like a customer comes in and you know, we greet them at the counter and the desire is to just get all the information, grab the keys, get the mileage and get them gone. But walk them over and sit down at one of the seating areas in the lobby and just, hey, let me just run through everything with you and, and jot down some notes and talk about the process and it's, you can see how that would be a much better experience. If you think about, if you've ever been to a spa, like, if you've ever been to like, is it foot, hand and foot, hand and stone, whatever the, the chain, the, the chain of massage spas.
Matt Lofton [00:41:35]:
Yep.
Mike Allen [00:41:36]:
I'll go for a couple's massage with my wife occasionally and you know, the therapist will come out and sit down with you and they'll talk to you about what to expect and you have any pain points and you know, and it sets the expectation for the visit. And I can see how setting the expectation for the visit in a non rushed, comfortable setting would be valuable.
Matt Lofton [00:41:58]:
So, you know, who Brian Tracy Is no. So Brian Tracy is a business. He's. He's an author, speaker, does sales and business presentations. He did a presentation. It's on YouTube somewhere. I can't remember how I ran across it, but anyways though his. He found they did studies where they took sales reps and they had them take a stopwatch and record how much time they were actually spending with their intended targets.
Matt Lofton [00:42:34]:
Right.
Matt Lofton [00:42:35]:
What they found was the average salesperson in America only spends 90 minutes a day actively selling to customers. Now, our industry is slightly different, but that's all. Still, that was a pretty good average. Where I'm going with that is what he said was if you spend more time talking to customers, you will sell more is essentially where that goes. So if you think about the Advisor time and you've done a great job of providing them with tools that eliminate their time away from the customer, right? So they get caught into parts acquisition, they get caught into estimating, they get caught into talking with the technicians. They get caught into doing all of these admin projects that don't have anything to do with talking to customers. Anytime I see a closing percentage issue, my very first fix for that is do anything you can do to make sure that the Advisor takes more time talking to customers.
Mike Allen [00:43:37]:
What do you think is an appropriate in your model? Because your model is different. What do you think is an appropriate number of customers per day per Advisor?
Matt Lofton [00:43:46]:
As far as customers per day per advisor, I don't know that I have a. I don't know that I have a true. I think that there's a. There's so much that that depends on because it depends on how much free time they have. What is the actual process for the Advisor? What is on their plate? If they're doing the estimating, if they're handling parts, then that obviously takes away part of their time and reduces it. If you, if you have something like what you have with Hub Shop Solutions or you have a parts person that's handling that stuff, that buys them more time. I think that again, if you're having a closing percentage problem and the first step is, okay, what is on their plate?
Matt Lofton [00:44:35]:
Right.
Matt Lofton [00:44:35]:
What are they doing besides talking to customers? Can I eliminate some of the stuff that they're doing that's not talking to customers? If we've eliminated some of that stuff, inevitably what happens is, I don't mean that they get lazy as in they don't want to work. It just becomes not top of mind.
Matt Lofton [00:44:51]:
Right.
Matt Lofton [00:44:52]:
Because it's so much easier just to rush through the intake process. Just to rush straight to the transactional side of things. Hey, your car is broke, you need to do this to fix it. What do you want to do that's so much easier than it is to go sit down and have a conversation with a customer and learn who they are, where they've been, why they're coming to you, you know, what their driving habits are, how many people drive the vehicle. All the things that you would really want to know in a good intake conversation, right?
Mike Allen [00:45:21]:
Yeah, for sure.
Matt Lofton [00:45:22]:
But what I can tell you is if you do spend more time with the customer, all of that stuff winds up getting better. Every time we focus on getting the service advisor from behind the counter spending more time with the customer at intake, there's less. So I tell, I tell a story of a couple years ago, my wife and I, we had, we hit the, the holiday season and we were like super stressed out. My wife is like really big on Christmas. She gets like, it's like a three month holiday for her and by the end of it she's wiped out. And I'm twice as wiped out from having to pick up from her being wiped out. So I'm a Hilton honors member from where we used to travel so much with racing. And I got a, I got a phone call at the right time, this guy calls me and he says, hey, we would like you to do a timeshare.
Matt Lofton [00:46:16]:
We would like to do a timeshare presentation. We'd like to fly you to, you and your wife to Vegas. We'll put you up in Trump Plaza for three days and we'll give you $500 worth of meal vouchers, you know, for the trip. I was like sold.
Matt Lofton [00:46:33]:
All right?
Matt Lofton [00:46:33]:
And I'm not a timeshare guy. I know what we're getting ready to get into. But it was Christmas time, funds were low right off of Christmas. We wouldn't have normally done a five thousand dollar Vegas trip. Right, right at that time. But we needed to get away, so we did it. We get there and the present, the timeshare presentation is the next morning and it's one hour, right? So we get in the cab, we're riding to the place where the presentation is at. We tell the cab driver what we're doing and he says, he says, listen here guys, you look out the window, he said, you see all these big ass hotels.
Matt Lofton [00:47:08]:
He said, they didn't build them off a nose. He said, so we're going to practice this entire time saying no. We got 15 minute ride there. We're going to say no. For 15 minutes, alright? So we practice that entire time. We get there, we sign in, they sit us down in this little cubicle area. The salesperson walks up, he sticks his hand out and he goes, hi, my name is Jeff. Which one of you guys practice standing in front of the mirror saying no all night long.
Matt Lofton [00:47:39]:
Right?
Matt Lofton [00:47:40]:
So what he did was in the first three seconds of his presentation was he got the elephant right out of the room and he deflated the balloon, right? There was a lot of tension and pressure. We were worried about sitting there saying no for the next 15 minutes. And then he went into, hey, you guys are already Hilton honors members. I'll make you a promise right now. There's nothing that we're going to do today that's going to, that's going to jeopardize that. So I left there and we went back and rewrote our entire intake process. Because what I thought about was if you think about your wife, your kid and think about your customers right now, because a lot of your customers are students, right? Well, they've been told. So they're on the phone talking to dad the night before.
Matt Lofton [00:48:20]:
Hey, how's everything going? Oh, good. I'm taking my car to car fix, getting oil change tomorrow. And he goes, what does he tell the daughter?
Mike Allen [00:48:29]:
Don't buy anything, they're gonna try to rip you out.
Matt Lofton [00:48:30]:
Don't buy anything without calling me back. Get an estimate and don't say yes to anything without talking to me.
Matt Lofton [00:48:39]:
Right?
Matt Lofton [00:48:40]:
Same thing happens with the wife. Every new customer, they have fear when they come to us because our industry has the same type of reputation that timeshare industry does, right? We're going to sit you down for this presentation and we're going to sell you a bunch of stuff that you don't need. That's a fear. So what we did was in our word tracks was we wanted to try to do exactly what that guy did, which was take, just get that out in the open, right, right away and try to de escalate that situation. And part of, part of that is done by speed, putting some urgency into the front part of the process. Because as soon as you get there, if the car is moved immediately, then that de escalates things a little bit, right? They're like, man, okay, these guys are serious about me being here. By having a one on one personal conversation and admitting the fact that, hey, this might be a little weird, you know, because you're coming to us for the first time. I'm sure this isn't the first time you've had your vehicle worked on and Wake county before.
Matt Lofton [00:49:37]:
What has you looking for a new repair partner today? Hey, let me explain to you why we might be a little bit different. Let me explain to you what our process is so you don't have any surprises.
Matt Lofton [00:49:46]:
Right.
Matt Lofton [00:49:47]:
And our only goal today is to make you a lifelong customer.
Matt Lofton [00:49:51]:
Right.
Matt Lofton [00:49:52]:
And then hopefully by the end of that conversation, we're getting into that, you know, the inspection side of things is done. And now they're saying that. Oh, exactly what they told me was going to happen is happening because they told me that Mike, my technician, is going to come grab me in 15 or 20 minutes. And here we are. Mike comes to grab. So the goal would be to interrupt that conversation with the technician, if that makes sense.
Matt Lofton [00:50:15]:
Nice.
Mike Allen [00:50:16]:
That's really good stuff, man. I appreciate that. I know what I'm talking about with Xander and Steven at our next meeting.
Matt Lofton [00:50:23]:
So thank you for that.
Mike Allen [00:50:25]:
Absolutely.
Matt Lofton [00:50:27]:
Cool.
Mike Allen [00:50:27]:
Well, I'm tomorrow morning heading to Michigan and then back in and again back at Expo. So you're not going to be able to make it to the meeting in Michigan. I know that you're bummed out about that, but I'll see a lot of the other members of the elite team up there and I'll see you the week after. What are you coming down?
Matt Lofton [00:50:50]:
Coming to asda?
Matt Lofton [00:50:51]:
Yeah.
Mike Allen [00:50:52]:
Coming Thursday?
Matt Lofton [00:50:54]:
Yeah. So we shut down for those two days. So Thursday and Friday we'll shut down. So the whole team will be there Thursday, Friday, Saturday, I'll be there Thursday. I don't think my class is. I'm not presenting until Saturday morning, so I think I'll probably stay the night Friday just so I don't have to fight the traffic to get there. But I'll be there. I'll be there Thursday morning and then I might be there as early as Wednesday because I think they're shipping all of the stuff to me and then I drive it up there.
Mike Allen [00:51:22]:
Well, I was going to tell you Wednesday night. I've rented out Rush hour carding in Garner and I've invited have a lot of my crew. I know you won't do it. Come socialize though. We got ax throwing. And I know that you won't come out there and put us all to shame because you'll have to go 100% and you can't not. But if you are around Wednesday night before the expo, reach out to me and maybe come, you know, share a soda and some wings or something. All flats.
Mike Allen [00:51:51]:
I've learned you got to go all flats all the time.
Matt Lofton [00:51:55]:
Wait no, no.
Mike Allen [00:51:56]:
You were one of my supporters on the drumstick wagon.
Matt Lofton [00:51:58]:
I'm a drumstick guy. Yeah. I'm a lazy eater. I don't like to rip it apart and have to peel off.
Mike Allen [00:52:04]:
I eat them all. But anyone who wants all flats, I think is. It's problematic, man. I mean, I will eat any. Kitchen hates that. The kitchen hates that because they got to sort them before they fry them. It's a pain in the ass.
Matt Lofton [00:52:15]:
Anyway, I'll put it this way.
Matt Lofton [00:52:16]:
If.
Matt Lofton [00:52:16]:
If there's a buffet there and there's. There's drumsticks and flats mixed together, I'm picking all drumsticks on.
Mike Allen [00:52:24]:
On fried chicken. Do you want all legs?
Matt Lofton [00:52:26]:
No, I'm a white meat fried chicken.
Mike Allen [00:52:28]:
Okay, Okay, I got you.
Matt Lofton [00:52:31]:
All right, dude.
Mike Allen [00:52:32]:
Well, I'll see you in a couple weeks.
Matt Lofton [00:52:34]:
All right, sounds good. See you, Mike.
Mike Allen [00:52:36]:
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, 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 Mike Confessions of a shop owner.com 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.
Mike Allen [00:53:13]:
See you on the next episode.
Matt Lofton [00:53:39]:
It you know I said jessica.