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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]:
Really what I'm trying to do is at the end of the day, I'm trying to say, does, does the individual store manager and does it have a way of objectively looking at the day to say whether it was a good day or not? Because that keeps us from stringing to get. If I answer that question, no two or three, four times in a row, because I have it mapped out of what a good day is, you know, if we got three or four days in a row where we were way far off of being a perfect day, then I know we're going to have a not perfect week. I can't have a perfect week without having a few perfect days. The following program features a bunch of
Mike Allen [00:00:29]:
doofuses talking about the automotive aftermar.
Matt Lofton [00:00:32]:
The stuff we or our guests may say do not necessarily reflect the beliefs
Mike Allen [00:00:36]:
of our peers, our sponsors, or any
Matt Lofton [00:00:39]:
other associations we may have. There may be some spicy language in
Mike Allen [00:00:43]:
this show, so if you get your
Matt Lofton [00:00:44]:
feelings hurt easily, you should probably just move along. So without further ado, here's your host, Mike Allen with Confessions of a Shop Owner presented by techmetric, the best software ever invented for any purpose ever,
Mike Allen [00:01:04]:
Talking on Memorial Day, which is a little atypical for us to get together on a day off, but I wanted to make sure that we got the recording in time. I didn't know Braxton's on vacation at the beach. And he was like, hey, I'm gonna be at the beach all next week. And I was like, well, you're gonna be working from the beach, bro, because we haven't released our elite episode yet this month, so maybe he can edit in the sand. We'll see.
Matt Lofton [00:01:29]:
Well, you tell him I'll be working from the beach next week too, so
Mike Allen [00:01:32]:
I'll be working from the shop next week.
Matt Lofton [00:01:34]:
Lame.
Mike Allen [00:01:35]:
So if I took more of your advice, maybe I'd be able to work from the beach.
Matt Lofton [00:01:40]:
It's coming.
Mike Allen [00:01:46]:
So this is going to be released on May 29, effectively two weeks before the AI class. The Seth Thorsen is coming down to teach in Raleigh. You're sending one of your guys to that? Are you coming also?
Matt Lofton [00:02:01]:
I'm gonna definitely try to be there. Okay.
Mike Allen [00:02:04]:
I talked to Seth this week about it and he's, he's like, pumped up. He's like, this is a totally different class than what I did at Vision. You know, the technology is continuing to develop, but also instead of three hours, it's eight hours. And he's got like this big ass book that he's creating and printing. Everyone's going to get a copy that has the prompts that you need to create the tools that he's demoing in the class and has kind of the framework for you to be able to build your own tools. And an answer to the question of the people that are going to ask this. No, it's not going to be recorded. It's his intellectual property.
Mike Allen [00:02:43]:
No, it's not going to be live broadcast. It's his intellectual property. And no, I'm not going to share a copy of that book with you because then he'd never come back and teach another class at my, at my shop. So. But if you want to come, by all means you should, you should come. I think we've got eight seats left available before we hit max capacity and I think it's going to be pretty awesome. I'm excited about it.
Matt Lofton [00:03:05]:
For those of you that have never heard Seth teach before, Seth is probably one of the most detail oriented instructors that I have ever been in a class with. So I've not taken his AI class, but if he puts the same level of effort that he does into that, that he does into his Tesla class that he teaches at asta, it's, it's going to be a phenomenal event.
Mike Allen [00:03:29]:
Yeah.
Matt Lofton [00:03:30]:
So, yeah, no doubt super excited. And like you said, it's been, there's been so many changes, not just, you know, not just since Vision, but really in the last four to six weeks, you know, with AI and a lot of improvements.
Mike Allen [00:03:41]:
So the, well, that's the nature of the evolution of technology. Right. It's going to be an incredibly valuable class and the content in that book is going to be incredibly valuable. And probably a year from now it'll be, you know, it'll be, you know, surpassed by everything else that's new. But I think the benefit, the opportunity is here for the early adopters. That's going to be pretty remarkable. So I'm excited about it. And then we've got other exciting stuff to talk about coming down the line in the future.
Mike Allen [00:04:13]:
We'll save that for, for next month's recording, but I'm excited about some other projects that we're working on. ASTA is right around the corner now. We're all coming into summer season. Right. But you know, the fall shows are right around the corner and the course selection process for that happened last week and so all the instructors are being notified next week that their courses were selected because, man, we're so lucky yet again, we got far more courses submitted than what we actually have capacity for. So we had like an incredible group of individuals getting together last week and go through all the submissions and try to select out a well rounded set of courses for asta we're going to have. The idea is that in every learning session throughout the event, there's a course actively happening that's good for advisors, good for marketers, good for owners, good for managers, good for entry level techs, good for journeyman techs, good for master techs. So if you want to bring the entire shop, you can.
Mike Allen [00:05:15]:
And there's something for everyone at every session, so that's going to be awesome. And obviously Confessions is sponsoring the hospitality suite yet again. We're trying to make sure that we kick it up even another notch than what we had last year. And that's possible thanks to Elite and our other sponsors. That's what makes that possible. So thanks for that.
Matt Lofton [00:05:38]:
Yeah, absolutely.
Mike Allen [00:05:39]:
But should we talk about Carfix and how things are going there?
Matt Lofton [00:05:43]:
Let's do it. Yeah. How. How was April for you guys?
Mike Allen [00:05:47]:
It was the best month of the year so far. Revenue and net profit wise, not that it was on benchmark, but you know, getting top line revenue where it needs to be or closer to where it needs to be is always a good thing. And we continue to kind of zero in on getting our expenses back in line with where they need to be. And we've taken some more steps in that direction or some steps have been taken in that direction that we're not going to, we're not going to regain those expenses. I had one of my service advisors left in May and I don't think we're going to replace them. The, the technology that we have available now to make the estimating process and the DBI process more efficient and effective, I think I'm gonna run a little bit leaner and see how that works. I think it's gonna work really well. If the last couple of weeks is any indication, it's gonna be way better.
Mike Allen [00:06:50]:
So we shall see. But let's see. We had last month, from a pure number standpoint, while our revenue was better and our profit was better, none of the numbers were like, let me brag about this numbers. 232 cars, 35% close ratio for a $461 ARO. So ARO was really low Tech average quote was really low. If you think about that, that means the tech average quote was only 1200.
Matt Lofton [00:07:24]:
1300. Yeah, yeah, yeah.
Mike Allen [00:07:27]:
Gross profit was lower than it needs to be, was at 53 and a half points. Some of that was a couple of warranty jobs that we had, but a lot of that was falling off of margin. I think there was some emotional discounting happening. So one of the things that we uncovered with a little bit more accurate RO auditing was that. So the way we had TechMetric set up is we had TechMetric set up to automatically attach a DVI to every repair order when it was opened. Right. And so when I pulled the reports, every repair order gets a dvi. And I wasn't doing deep dive audits.
Mike Allen [00:08:10]:
And what we found is we're nowhere near every repair order getting a dvi. We were finding reasons not to do D. Oh, they were just in last week, right? Oh, they're here for work that was declined last time. We're just doing the stuff that we recommended when they were here two months ago. Yeah, but it's been two months, you know, and look, I. I don't think that we're going to have DVIs done on 100% of cars because. Or 100% of tickets, because not every ticket is a car. Right.
Mike Allen [00:08:39]:
Sometimes, you know, Ms. Jones brings in her spare tire or her flat tire without the car.
Matt Lofton [00:08:45]:
Right.
Mike Allen [00:08:47]:
But 95 to 98 to 99. Yeah, I think that should be a reasonable target. And so we're watching that much more closely and expecting to see a move in the right direction. And so ultimately, that's what I kept focusing on. Tech average quote being too low as we're not inspecting the vehicles effectively. And in reality, the vehicles that are getting inspected are being inspected well. And the ones that get a DVI have a really good tech average quote. It's all the ones where we were finding an excuse not to do a DVI that was dragging down that tech average quote because it was just a state inspection.
Matt Lofton [00:09:24]:
So what is your inspection sent to? Customer percentage.
Mike Allen [00:09:31]:
Embarrassing, but let's pull it up. So if you're a techmetric user, you're going to go into reports, employee reports, and then the last report on the bottom is inspections. And then you can select your date range and pull that report by technician, by service provider, or by inspection name. So for us, I go to inspection name. And our preventative maintenance inspection is our primary DVI. Right. Sent to customer was 70%. And this store was better than any of the other stores in that capacity.
Mike Allen [00:10:06]:
Viewed by customer was 45%, meaning they were not actually using our process, which is, you know. Hey, Ms. Jones, is now a good time to talk? This is Mike from Carfax, yada, yada yada. I sent over a link. Have you had a Chance to look at that yet? Okay, let's look at it together. I'm going to walk you through it. Go ahead and open that up. Let me know when you get it open.
Matt Lofton [00:10:26]:
Right.
Mike Allen [00:10:26]:
And less, less than half of the ones that got sent were viewed and only 70% got sent. So less than half of 70%, that means 32, 33%. Roughly 1/3 of the cars were getting the customer was viewing the dvi, which, so ARO is going to come up and if every vehicle gets a dvi, tech average quote is going to come up. I mean, it's just failure to follow process. So for sure that's something that we've begun focusing on in the last couple of weeks. And it's a little bit embarrassing to say that I allowed it to get to that level without catching it, but this is a broken record. I wasn't paying attention.
Matt Lofton [00:11:13]:
So, so what is the. I know we've talked about this in the past. Where do you have. Because right now it's just you and Steven on the management side of things overall for the company. What is, you know, what are the triggers that we have in place to take a look at that preempt an audit and then preempt some sort of action after the audit.
Mike Allen [00:11:40]:
So I don't have set triggers. It's like, hey man, if ARO gets this low or tech average quote gets this low, or if inspections viewed by customer gets this low, then we have to do xyz. We've talked about that. I don't know, probably six, eight months ago we talked about setting trigger points, but I never formalized those trigger points and put them in, codified them. So what do you suggest?
Matt Lofton [00:12:06]:
So what I would suggest is, I would suggest putting together, we call it a perfect day plan, which is if everything goes like it's supposed to go, these are the, you know, this is what the number should look like. And then, you know, so that's your, that's your dream day, right? And I mean all the way down to what we're going to have on the schedule. You know, how many pre schedules we should have, how many rollovers we should have, how many waiting appointments we should have, how many drop offs, what the ARO should be, what the GP per hour should be, how many build hours should we sell, so on and so forth. And then I want to try to build some contingency plans inside of there of what to do if one of those, you know, what do we do if a technician calls out sick?
Mike Allen [00:13:01]:
Right?
Matt Lofton [00:13:02]:
So there's a, there's A There's already a plan in place of how to adjust for the day. What do we do if we're taking a look at our day and we have too many waiters coming in? What do we do if the mix of work or the mix of cars coming in is probably not going to yield the discovery that we're expecting?
Mike Allen [00:13:22]:
Right.
Matt Lofton [00:13:22]:
So in other words, we're looking at it. We have three state inspections on 20, 24, 2025 vehicles. Right. We're going to have good car count, but we're going to have real low discovery off of that because there's not going to be a lot of opportunity. So that's going to impact the opportunity to sell, which is going to impact the overall numbers of the store either today or in the future. So then I'm trying to figure out what the, you know, what is the minimum level, you know, that we can accept for those numbers?
Mike Allen [00:13:59]:
Okay, I'm making as fast as I can.
Matt Lofton [00:14:04]:
Yeah, you're good. And then, so for the perfect day, really what I'm trying to do is at the end of the day, I'm trying to say, does, does the individual store manager and does do my regional. Do they have a way of objectively looking at the day to say whether it was a good day or not? Because that keeps us from stringing to get. If, if I answer that question. No. Two or three, four times in a row because I have it mapped out of what a good day is. If we didn't have three, you know, if we got three or four days in a row where we were way far off of being a perfect day, then I know we're going to have a not perfect week. I can't have a perfect week without having a few perfect days.
Matt Lofton [00:14:45]:
Right?
Mike Allen [00:14:46]:
Yeah.
Matt Lofton [00:14:47]:
And so that allows us to act a little bit faster and you can set up a during the day scorecard to see if we're on track. So like you can set up a 10 o' clock check, a 2 o' clock check to see are we on pace today or not. And if we're not, that I'm just trying to shorten the decision making process, the timeline for decisions. Right.
Mike Allen [00:15:15]:
So there's three weeks to say, oh, things are bad.
Matt Lofton [00:15:18]:
Yeah. And because that's. That, that's the problem. Right. I mean, that's, that's when things get real crazy is, you know, we're not. We're looking at the, we're looking at the estimate or the RO that we have in front of us and we're not looking a day 2, 3, 4, 5, 6 out.
Mike Allen [00:15:34]:
You know, it's got date, location, self assessment. How did the team do today? How did you do personally today? That you being Steven, my office manager. How did the technical team at this location do today and how did the front office team do at that location? List any big wins, list any big problems or issues that need improvement, any major carryover jobs I should be aware of, anything that needs my immediate attention. So those are kind of the generalized scores. And then we've got total approved gross profit for the day. We just track gross profit. We don't track top end sales for that purposes. So approved gross profit for the day.
Mike Allen [00:16:19]:
We know what the break even gross profit per day is and we know what the, what the high, what the high target is. So did gross profit exceed break even? Did it exceed the high target? Yes or no on each of those. How many appointments do we have tomorrow? How many new five star reviews do we get today? Were there any sub 5 star reviews today? How many labor hours did we bill out and what was the gross margin on the build out work for the day? And then he's got the last three questions are did we make money today? Have we made money so far this week? Have we made money so far this year or this month? So that's what's sent every day.
Matt Lofton [00:17:01]:
But so I like that and I don't have any issues with it. The, you got the top, the top half of that's very subjective. You know what, and it's kind of how you feel.
Mike Allen [00:17:15]:
Right.
Matt Lofton [00:17:16]:
How did the technicians do today? How did the service advisors do today? You know, I'm shifting away from as many subjective questions as I can in that regard. I'll have a spot down at the bottom of mine that says, you know, give me your thoughts and feelings for the day kind of deal. You know, but how many negative reports do you get at the top half of that?
Mike Allen [00:17:42]:
The most negative numbers are him judging himself negatively.
Matt Lofton [00:17:46]:
Sure.
Mike Allen [00:17:48]:
But
Matt Lofton [00:17:50]:
I mean, and, and I don't, and I don't mean that right now
Mike Allen [00:17:53]:
is we had a technician that left halfway through the day because it wasn't feeling well and that was the, the negative for the day.
Matt Lofton [00:17:59]:
Right? Yeah. So the issue there that I have is, and I'm not saying that we're searching for negatives, what I'm saying is, is that you're going to get, you know, when I first stepped away from the day to day operations, I would call into the store, I would send a text to my manager and I would say, how's Everything going today, every single message that I ever got back was, it's going great. Having a really good day. There were never any problems. And I'd look at the end of the day and it's like, well, we had twelve hundred dollars of approvals and, you know, two cars that came in. I mean, how's this even possible? That we had a great day and this is what we got out of a great day. So we, we had to go back through. And so they don't mean anything by it.
Matt Lofton [00:18:40]:
They just don't want to a. They don't want to download the team. Right. In their mind, they're supposed to uplift the team. And they are. And then number two, they should uplift
Mike Allen [00:18:51]:
the team to the team, to us. They need to tell us what's going on. Yes. You know.
Matt Lofton [00:18:55]:
Yeah. But they also, they also feel like if they tell you that there's a lot of problems, then that's an indictment on them as the manager and the leader of the person that's there. Right. So if I'm supposed to be managing the location while you're not there and I text you and I tell you all of these terrible things that are happening at the location, then I'm telling on myself as being somebody who can't handle, you know, the people and the staff at the location. So I've just found that I get a very. Or. Or. They're not even trying to hide anything.
Matt Lofton [00:19:33]:
They're just very subjective in how they're viewing the day. Right. It was a good day because no technicians came up and cussed out a service advisor today. Right. It was a good day because no customers came in and yelled and screamed at us. It was a good day. It felt easy. Right.
Matt Lofton [00:19:49]:
So we had customers that came in that we liked. You know, our favorite customers came in. Not necessarily the ones that buy everything, but the ones that are the most fun to talk to. So I tried to take away as much of that subjectivity as possible. So if there was something that I wanted to know, I want to attach a number to it and get them to report the number. Or it's a binary yes or no. Right.
Mike Allen [00:20:15]:
Just because I don't want operations on that reporting.
Matt Lofton [00:20:21]:
Yeah, yeah. I just, I don't want them to spend a lot of time filling out something that's going to yield zero intellectual data. Right. In other words, I can't make a decision making off of something that you're subconsciously going to give me. Not 100% and not that they're lying to you, but they're just, they're, again, it's subjective. So I have to take you at face value that it was what it was. Right? So what you really want to know is things like. And what you're going to get reported on is, did we have a technician leave early? Right, so just what was my available technician hour for the day? Right.
Matt Lofton [00:20:58]:
How many texts do we have? We have three. How many did we have work today? Two. Instead of having 24 hours, we had 16 hours. You know, that's really what I need to know because that's going to make a difference in how I view the data, because I can't hold them to the same expectation for 16 available hours as I can for 24 available hours. Right?
Mike Allen [00:21:17]:
Yeah, absolutely. So that's the thing, is my daily manager report is shitty.
Matt Lofton [00:21:25]:
It's not shitty, it's too much.
Mike Allen [00:21:29]:
Okay?
Matt Lofton [00:21:30]:
It's too much because again, if I'm filling out all that, if I'm the manager, I'm going to breeze through the top half of it and just give you the fluff and the rainbows. And then the stuff down at the bottom has to be accurate, right? Because it's. The things you have down there are binary. It's. Did we make money today, yes or no? Did we cover GP today, yes or no? What was our GP total? What was this? What was this? What was this? So, I mean, those are. Those are things that they can't hide from. They have to get it directly from, you know, from the results of the day. So I like that a lot better.
Matt Lofton [00:22:01]:
The step that I would take next is, is what happens if we're below on that, right? So just think about the subjective stuff at the top. Think about the number that you really want to attach to that subjective thing to make it objective, you know? You know, because there's, there's two or three questions you could ask on the technician side of things. Did everybody show up? Did we have all our available hours? Did we have any comebacks, you know, today? I mean, that's what you're really looking for, right, is that type of stuff. And then service advisor, you could ask a few questions to figure out how the service advisors are doing too. And then, you know, then what we can do is we can start attaching a what to do in case of situation. So we go, we go down that list one by one and we say, all right, Steven, what should we do if we have less technician available hours today than expected? What should we do if we look at today and we have less than expected on Our, in other words, let's say we have four appointments this morning, three of them cancel, what do we do? And I know we have generic slow day plans in place, but I find that they don't realize that it's a slow day until 2:00'. Clock.
Mike Allen [00:23:32]:
Yeah, yeah.
Matt Lofton [00:23:33]:
So, and, and then what I would probably do there is put some pace checks in the day. So like instead of him waiting till the end of the day to report these things, are they on track for the numbers that you have set up in there at 10 o' clock and at 2 o'? Clock?
Mike Allen [00:23:52]:
Do you think that's too much reporting during the day?
Matt Lofton [00:23:54]:
Well, I don't think he necessarily needs to send that to you, but he needs, somebody needs to be looking at it. Because my thing is is again, if it's, if it's 10 o' clock and I identify that, and I identify that we have less available hours because we have a technician out and we have two canceled appointments today or our schedule is filled up with a bunch of non opportunity things, I can do something about it at 10 o'. Clock. By the time we get to 4 o', clock, when I'm starting to do my report, today is already over.
Mike Allen [00:24:25]:
Yeah.
Matt Lofton [00:24:26]:
Right. And so, and I'm not saying that I can turn at 10 o', clock, I'm not saying I can turn that day into a perfect day, but I'm trying to. There's more money in raising the floor than there is raising the ceiling sometimes. In other words, the consistency of it.
Mike Allen [00:24:46]:
So let's say it's 10 o' clock and at the beginning of the day we had 14 appointments, but we've got four no shows. And of the 10 that we do have, you know, three of them are not historical buyers. So we know that we're set up for a shitty day. What are the types of things that you would expect that manager, what's the conversation he's having at 10:15 when he does his check? He's like, oh boy, we got a scramble. Yeah.
Matt Lofton [00:25:21]:
So what we're doing there is we're going through and taking a look at our deferred services from our VIP customers that have come in recently. We're going to, we're going to go ahead and look at pre scheduled appointments in the future and see if I can rob some of those coming forward. In other words, I'm going to look into next week. I'm going to steal from next week for this week. You know, a bird in hand is worth two in the bush. Right. I'd rather have a good today than I would the promise of a good tomorrow. And so I'm going to start pulling in my pre scheduled appointments.
Matt Lofton [00:25:52]:
We're going to contact fleet accounts, see if we can steal one, you know, one or two extra cars from a fleet customer. So those are the, that's the action plan of 10 o' clock and we're behind. And so what we're doing there is we're taking a look at what we have on the schedule and multiplying out what the opportunity is. Right. So if I know that, if I know that $2,000 is our, our discovery target and our average, then I can say we have 10 cars on the schedule, that's $20,000 of discovery. I can take that and determine what our average closing percentage is and we can pretty closely predict out what the day is going to be, you know, for approvals. And at 7:30 in the morning when she's running through her, you know, beginning day, you know, checklist there, if our approval number is going to be below what the target is just based off the way the schedule is laid out, then we're starting that process at 8 o' clock in the morning to try to, you know, sometimes you need to add more cars. You know, sometimes you have enough cars but again those cars aren't going to yield any opportunity.
Matt Lofton [00:27:01]:
And then it's really, how do I speed up the throughput of the cars that aren't going to yield any opportunity so I can spend more time with that way they have a focus of again, the customer that comes in for a state inspection that never spends any money. I'm not saying treat them poorly. I'm just saying if I have a new customer that's coming in with an F150, that's a good opportunity vehicle. Why do I want to go spend. Even though Mike's been in 27 times, if he's got $150 RO, I'm not going to be rude to Mike, but I'm going to spend time with, you know, Jim over here that's walking in for the first time, that's got a good opportunity vehicle. And I'm going to try to make sure that I put my attention where, you know, where our intention is supposed to be.
Mike Allen [00:27:43]:
Copy that. Makes perfect sense. So, and we are running into that a fair amount, you know, 20, 25 Tesla coming in for a state inspection, safety only. You know, it's the amount of discovery opportunity that's there for us is not a ton. So.
Matt Lofton [00:27:59]:
No, no, it's, it's Little to nothing. And, you know, the way the North Carolina, you know, procedure is set up, you can't, you can't do a PMI on it unless you sell something else
Mike Allen [00:28:11]:
or unless they tell you that you
Matt Lofton [00:28:12]:
can, or unless you ask and they give you authorization. But, you know, from a technician standpoint, if you know you're getting a $13.60 state inspection, that you're getting 0.14 or whatever it is and you're going to do a free PMI on top of it. Yeah, you know. Yeah, it just. They wind up breezing through it.
Mike Allen [00:28:35]:
So how do you feel about all these shop owners out there that report their numbers but exclude state inspections from the numbers?
Matt Lofton [00:28:46]:
So I have clients that I asked. So I did that for a while. My coach asked me to do that for a while just to see what the. What the real numbers of repair were. And when I say numbers are repair, I'm not talking about the quantity, but to see what the quality was off of the. If you took out state inspection tickets, what is your aro? What is your hours per hour off actual general repair work?
Mike Allen [00:29:08]:
Look, when I first opened my shop, I thought my old systems would keep up. The software that I had would continue to evolve. But as we grew the slow estimates, scattered workflow flow, increasing downtime, it really just, it was becoming a real problem. That's why I switched to techmetric. It's not just software. It's a complete shop management system that makes my life easier. Smart jobs, instant estimates, integrated payments, integrated financing options. I mean, it allows me to focus on the work that actually makes me money and not get bogged down in the other details.
Mike Allen [00:29:40]:
My shop's repair orders have jumped over 300% since switching to TechMetric. And when I need help, their support team responds in real time. I actually was online with them asking questions just this week, and I got answers in minutes rather than having to wait for callbacks and emails days later. If your system is holding you back, it's time for a change. Tap the link in the show notes and see how techmetric can help you move your shop forward.
Matt Lofton [00:30:03]:
You know, because what we found was he's. I think I told you this in one of the early episodes. He used to ask me this question all the times. What business are you in? What business are you in? And it used to annoy the crap out of me, you know, because it's like, well, it's obvious I'm in the automotive repair business. What he was trying to get me to realize was I was in the State inspection at Luba business, Because we didn't do a lot of repair early on. We were doing a lot of state inspection and lube. And so finally he said, look, Matt, because I. I tell this story, you know, when we teach Eagles.
Matt Lofton [00:30:36]:
When I first joined Elite, by the end of 2017, which was our first year in business, we were doing about 115 cars a week. And that sounds really good, but the first time I went to fly with the Eagles, I was talking to. You would know who I'm talking about. Borst Automotive in Arizona. They had sent their general manager to Eagles at the time. And nice guy. I can't remember his name, but we spent a lot of time talking and eating at lunch. And so we're asking the shop owner questions, right? You know, how many bays do you have? How many techs do you have? How many service advisors? And then it got to how many cars? And so, you know, I told him how many cars we did, and he's like, my God.
Matt Lofton [00:31:16]:
He goes, what are you guys doing, like, two, three million dollars a year? And I'm like, no. I was like, we did 700,000. And he goes, oh, oh, are you guys like an express loop or something? And it wasn't. We were an express loop. You know, we just. We weren't intending to be. We just didn't have the processes in place to, you know, capitalize off what we were doing. But so at that point in time, I, you know, he did ask me to pull out state inspections and oil change only tickets just so we could track, you know, how are we actually doing on repair tickets? And I'll do that from time to time with customers that I know that have a lot of.
Matt Lofton [00:32:01]:
Have a lot of state inspections. But by and large, no, because I wanted it, like you said, it excuse all the numbers, right? And it hides the pain. You know, if you're doing 30 state inspections a week, Joe Marconi says something, and it's. It's accurate. He says, everything that you do should either be for a profit or lead to a profit. And if you're doing 30 state inspection tickets a week and they're not leading to a profit, then you got to do something about it, right?
Mike Allen [00:32:38]:
Funny we say that. I. I've always scoffed at the people who pulled those numbers out, and I'm like, it's a car. It counts. You know? But we did 70 state inspections out of the 200. And however many cars last month, 232 cars, we did 70 state inspections. So, I mean, that would probably make the Numbers look prettier, but it doesn't change the top line revenue or the net.
Matt Lofton [00:33:04]:
No, for you, I wouldn't take it out. And the only reason that we'll take it out for others is just to show them really. Like if we, if we limited this and we replaced those 70 cars with more repair work. Yeah. You know, the other thing is, is that the other thing that I'll get clients to do is track of those 70 cars, how many of them return. Right. So one of the things I have found that state inspection customers, first time state inspection customers have one of the lowest return rates of any other. They're calling you because their normal guy told them he can't get them in.
Matt Lofton [00:33:38]:
Right. Now they waited till they got the thing in the mail, then they waited another two weeks after they got the thing in the mail. Now they've looked at their sticker on the back of the license plate and they've realized we got one week until we're into the next month and they're getting ready to get pulled over. Yeah. And this is their one day off that they have time to come and do it. And so they're calling around, they've called their two or three normal people that they would call and then they're. The only reason they came to you is you said yes.
Mike Allen [00:34:07]:
Yeah.
Matt Lofton [00:34:07]:
And so, and so if we take a look at that. So we did, we did some client studies this year and what we found was, so if you take, if you take a look at retention rates across, you know, customer visits, right. So one visit to two visits, two visits to three visits, three visits to four visits, the first time customer has about a 30 to 40% chance of coming back for a second visit. All right. And these, these are good shops. This isn't like shops that have four star reviews and have retention issues. So if, if at really good shops, you know, we're seeing 30 to 40%, you know, from first visit to second visit, it goes to about 50 to 65%. From, from second visit to third visit, from third visit to fourth visit, we're seeing above 70%.
Matt Lofton [00:35:03]:
Yeah. And then fourth visit on it's like 80 to 90%.
Mike Allen [00:35:07]:
So getting them back that second time is crucial.
Matt Lofton [00:35:10]:
And so if I'm going to take in. So the conversation that I have with my advisors with the state inspection is the state inspection yields nothing for us. Right. It's going to be a big zilch in most cases. Maybe we sell a set of wiper blades, maybe we really piss them off and tell them that they need something else and we fail them and they, you know, but by and large it's going to be, it's not, it's not something that we can expect to yield a bunch of discovery and opportunity for. So what is the real opportunity? That a real opportunity is to gain a second visit. Right. So that's where we're pushing really hard to identify is this, is the vehicle something that we want to get back in and is the customer something that we want to get back in? And if it is, that's our focus on, on estate inspections.
Matt Lofton [00:35:54]:
How do I get that next visit sold?
Mike Allen [00:36:01]:
Yeah, I think it's for those. Let's just make it a fast, efficient, pain free, pleasant experience and leave them thinking that was easy and those guys were nice.
Matt Lofton [00:36:13]:
Now if you do that, they're never coming back. Really well, because, because there is no experience in estate inspection. All you've done is met their expectations. So you became fast food service. Right. So you met the bottom line expectation and they'll come back to you the next. All they're ever going to come back for is the state inspection in that scenario. Even if they're going to remember it was really fast, quick and easy and painless to get the state inspection there and they're going to come back for that.
Mike Allen [00:36:39]:
Even if part of the conversation with the customer is telling them about how we're full service and we do everything and we have loaner cars and we have shuttle service and.
Matt Lofton [00:36:47]:
And then I have to, then I have to ask the harder questions of, you know, so I'm going to ask, you know, are you new to the area or you're just new to me. Yeah, right. And then I'm going to find out, you know, why are you coming in today for the first time, you know, and then before we leave, I'm gonna give you a, I'm gonna give you a reason to come back. So I'm gonna sell you an offer that says, you know, and it pretty much guarantees me three visits out of you. Yeah, right. So that's, that's gonna be my plan with that is I'm gonna identify while you're there again, is the vehicle, you know, something that we, that we covet, you know, does, does this vehicle have a lot of opportunity for us? And if it does, I can't judge the customer until they come in two or three times. Right. Because I don't know anything about their buying habits.
Matt Lofton [00:37:36]:
We haven't developed a relationship yet. I don't know anything about their driving habits. I don't know Any. I don't know where they work. And I'm not going to figure all that out in the first visit. Right. I'm going to get a piece of it, but I'm not going to get all of it. And, you know, how many times have you seen a customer come in? And the first two or three times they buy nothing.
Matt Lofton [00:37:53]:
And the service advisor goes, oh, that guy's. He's a dud. He's not our customer. And then the fourth or fifth visit, he comes in and he gets everything done. And everybody's all surprised, like, oh, Mike's come in fourth. He's never gotten anything done. Look, you just approved everything. Well, yeah, it's because he came in the first time with his arms way up here.
Matt Lofton [00:38:10]:
Then he came in the second time like this. Then he came in the third time like this. And by the fourth time he comes in, he's, you know, his hands are down and he's, you know, there's. There's a relationship and an element of trust there. Right. So, you know, it's. How do I get them to that third or fourth visit as quickly as possible is what I'm looking for.
Mike Allen [00:38:29]:
That's great, man. You're way better at this than me. You want to just come run my shops for me?
Matt Lofton [00:38:35]:
Sure.
Mike Allen [00:38:37]:
I don't want to pay you as much as you want, though.
Matt Lofton [00:38:39]:
You do not. But there's a number, Mike.
Mike Allen [00:38:46]:
Probably the number is you own my business. I would be a terrible service advisor. You would fire me immediately.
Matt Lofton [00:38:56]:
I'm a terrible service advisor, too. I tell. You know, my team will tell you, like, if you need one thing sold in the shop, like, if that's. If you had to talk to one customer and you needed to sell it, I'm probably your guy. But if you needed somebody to stand there for eight hours a day, 40 hours a week, I get shiny squirrel syndrome. Way too bad. And I hate being stuck behind the desk. It's just.
Mike Allen [00:39:18]:
I get antsy, for sure. I will tell you that I went to Matt Curry's Level up event last week and toured a few of his shops and spent some time with him and the folks that were there. And I can talk a lot about that whole experience. It was overall a very good experience. And I didn't really know what to expect coming into it, but I came away with a. A really good opinion of Matt and his operation. But one of the things they were doing during the second day is they were just kind of. They're doing an example of their role plays.
Mike Allen [00:39:55]:
So they put A big, like a scenario and an estimate up on the screen and they'd pass the microphone around, you'd role play and then they break down what you did well and what you could have improved upon and kind of their word tracks and their touch points that they use and they train. So it's kind of like a sales training meeting for, for them.
Matt Lofton [00:40:12]:
Right.
Mike Allen [00:40:14]:
Fucking microphone came to me and oof, it was bad, bro. It was bad, bad. But I was not the worst in the room. But it was kind of taking lambs of the slaughter, a room full of owners who don't really write service anymore, asking them to do that gig. But it did make me feel a little bit convicted that if I'm going to be running the, the sales conversations and the training conversations within my company, I need to be able to execute on what. What I'm asking them to execute on.
Matt Lofton [00:40:48]:
So, yeah, I mean, it's so I would. And I just told you, like, I would be the worst service advisor in my store. There's no question about it. So my people are better than I am at doing it 40 hours a week. But I do tell every owner, you should be as good as them once, you know, if not better. Because like you said on that, you know, on the role play training side of things, if I can't role play it at a high level, how can I expect them to? Hey, how do I train them and how do I hold them to a standard? But I mean, it's. I would say, I mean, you have scripts and processes and everything for your sales. What we did was I have so my, my highest producing advisor, she does a great job of leveraging AI.
Matt Lofton [00:41:39]:
All right, so what we did for her was we uploaded all of the sales scripts into chat into a project, and then she'll upload the RO into that same project and then turn on the voice Deal. And tell it, hey, that, you know, we're gonna, we're gonna role play this ro. You're gonna be the customer, you know, and I'm gonna be the service advisor. And then they role play it back and forth and it, you know, the prompt tells them to review the scripts that we have and then give her feedback on how she could, you know, follow the script better. So it knows what our, you know, sales scripts and customer prompts and stuff like that are.
Mike Allen [00:42:22]:
And we've gotten script there and you can make chat the service advisor and you can be the customer and see how it follows the script and how it overcomes objections too, which is pretty slick.
Matt Lofton [00:42:32]:
Yep. And so Our. Our process, and this doesn't make it right, but I want to try to get everything down to a price objection. Right. Because in. The only objection that I really want my service advisors to really know how to handle is the price object. I'm gonna rephrase that. If we do our job correctly on the front end, the only thing that we should have left at the end of it is a price objection.
Matt Lofton [00:42:55]:
Right.
Mike Allen [00:42:57]:
Trust. And everything else as a possible. Yeah.
Matt Lofton [00:43:00]:
If. If they. If they believe that it needs to get done and they believe in the urgency that it needs to get done now, then the only thing that could be. The only reason that they wouldn't get it done is they didn't see the value in the price that we presented to get it done. Right. And that value could be, I don't have the money today, which is a future issue. Right. We just got to figure out how do we get the money today that they would have tomorrow.
Matt Lofton [00:43:24]:
It could be they don't have the money at all, and they have no way of getting the money. Like, they would love to get it done with us. There's just no way.
Mike Allen [00:43:30]:
Yeah.
Matt Lofton [00:43:31]:
Or it could mean that they think we're full of crap. That breaks for 680 is way too much money. And, you know, they're used to paying 400 for breaks. So I'm trying to condense it down to that as quickly as possible and just get them really good at overcoming that, because. And then if we. If we identify later in their audit that it was something other than a price objection, then we screwed up somewhere before that. Right?
Mike Allen [00:44:00]:
Copy. Quick shift of gears. I know we're running out of time. When is your next Eagles program?
Matt Lofton [00:44:10]:
So we have fly with the Eagles coming up. We just had our last one in Charlotte this past. Not last week, but week before last, and that was an awesome event. It really was cool. We had Dutch Silverstein there. I know. We talked about that. And so Dutch was our special guest.
Mike Allen [00:44:25]:
If you get the grumpy old man to come to the room and sit in the back to audit the class, and he says that he can unreservedly recommend it, that's pretty high praise from that old dude. Yeah, he said it was really good, so that's awesome.
Matt Lofton [00:44:39]:
Yeah, it was. It was great to have him there. And he added a lot to the class as well and was gracious. He did. He. He was gracious enough to buy lunch for everybody the first day and. And brought a. You know, brought a guest with him that got a lot out of the class.
Matt Lofton [00:44:52]:
It was fun having him there. And, and then so our next one coming up is going to be in Providence, Rhode island in October. We should have the date sealed for next week, but it will be in October in Providence, Rhode Island. So Providence is between New York City and Boston, which is, it'll be gorgeous
Mike Allen [00:45:16]:
up there that time of year too.
Matt Lofton [00:45:18]:
It's. Yeah, fall time up there is going to be really pretty. So those of you that are looking for a fall vacation, this is when you bring the wife to and then afterwards you guys go sneak off to Boston for a day or two or go sneak off to New York City for a day or two and enjoy yourselves again. It's, it's three days between management owner training. We spend a lot of time, we spend a lot of time on employee development. We spend a lot of time on how to, not just the fact that you need processes and procedures, but structurally, how do you actually build and implement a process and procedure. And then we spend an entire day on, on the numbers and we actually do some breakout groups. So we ask you to bring your information with you and we actually help you develop what your break even should be, what your labor rate should be and then how to, how to identify what your KPI target should be based off of those things.
Matt Lofton [00:46:18]:
So you're going to leave with some very actionable things that you can take back and implement. And it's not just a bunch of theory, you know, theory of operation and it's not a generic playbook that says this is the way everybody should do it. You can tailor, tailor it to your facility as well, but we'll teach you the steps that it's going to take to be able to do that. So really excited about, you know, the direction of that program and where it's been going. The feedback that we've gotten off of it over the last 18 months has been, been really awesome.
Mike Allen [00:46:48]:
Well, I know that it was great back in the day when I went and I know that it's been completely rewritten and it's all new content and everything I hear is great about it. So Masters, when is the next Masters program start?
Matt Lofton [00:47:01]:
Masters, our next one is in June. They have, I think they have one or two seats available for that. So anybody interested in Service Advisor training? That's a six month Service Advisor course. Three days in person and then six month group coaching after that. Sabrina does a fantastic job with that program. Darren, our CEO actually co hosts that on the in person side of things. So that's his passion project is teaching the advisor. So they do a great job with that program.
Matt Lofton [00:47:30]:
Again, that's going to be filling up pretty quick here. So if you're interested in that. And I think the next one is probably around that same October time, I'd have to take a look at that. But there is. There is one. Following that up. Notes in September. Okay, so the next master's being September.
Mike Allen [00:47:47]:
I did find out this weekend that for the first time ever, I'm going to be hosting a class at ASTA Expo.
Matt Lofton [00:47:55]:
Nice.
Mike Allen [00:47:56]:
It's. It's going to be Lucas Underwood, Tanika Haynes and I. It's owners only. So no managers, no advisors, no techs, no vendors. Owners only in the room.
Matt Lofton [00:48:09]:
Are you doing the. Are you doing the Brian Pollock thing where it's like you should know but don't.
Mike Allen [00:48:14]:
Well, I mean that you just watch our recording episodes we've done. It's full of. It's 17 hours of. Mike doesn't know that I should know. You can just cut. You can use AI to cut Mike's part out and just listen to what Matt says. And there's your class. No, but it's going to be very open engagement.
Mike Allen [00:48:37]:
I'll come with Hot Topics to discuss. We'll have the two of them or the three of us kind of give our feedback and our input and our answers and see where we agree and where we disagree. And then we'll pull the attendees into the conversation as well. And there'll be some opportunity for them to kind of lob topics up there too. Very interactive course. I think it'll be a lot of fun. ASTA Expo is going to be pretty awesome this year. Just hearing some of the stuff that they're talking about, some of the.
Mike Allen [00:49:10]:
The content that there's going to be there. It's going to be awesome. So I'm looking forward to that too. So a lot of fun stuff on the horizon. It's going to be fun.
Matt Lofton [00:49:17]:
Yeah, man. Always look forward to asta. It's. You guys do a great job of putting that event on. And every year it just gets better and better and super. It's always the only circle on the calendar and look forward to getting to.
Mike Allen [00:49:30]:
I hope I get to see you in a. In a couple weeks. I hope you come down on Saturday for sess class, even if you can't make it for the whole day and hang out or come down Friday night. We're doing. We're hanging out Friday night doing shenanigans also. So.
Matt Lofton [00:49:41]:
Okay.
Mike Allen [00:49:41]:
One or the other. So yeah, man, Love peace and hair grease dog. See you.
Matt Lofton [00:49:47]:
Happy Memorial Day.
Mike Allen [00:49:48]:
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 704-26633. If you enjoyed this episode, be sure to, like, subscribe or follow. Join us on this crazy journey that is shop ownership.
Mike Allen [00:50:25]:
I'll see you on the next episode.