By Coach Chris Cotton, Auto-Fix Auto Shop Coaching
Understanding the Current Economic Landscape
The economy right now is a mixed bag, with fluctuations impacting various industries differently. However, as my good friend Brian Walker states, we have to create our own economy. I’m seeing some bad habits in the industry, and we need to get on top of this right now! While challenges are present, they also bring opportunities to fine-tune operations and provide exceptional service to stand out in a competitive market. Finally, we don’t need to create our own issues within our auto repair shops on top of everything else that is going on.
Service Advisors: Selling With Their Own Wallet
One critical aspect of running a successful auto repair shop is ensuring that your service advisors are not selling with their wallets. This means they should refrain from projecting their financial limitations onto customers. Service advisors must understand that each customer has different financial situations and priorities. Our responsibility is to share their vehicle’s needs with them so they can make informed decisions.
Encourage your advisors to present all necessary repairs and services honestly and transparently. This will allow customers to make informed decisions based on their needs and budget. This approach builds trust and ensures that the vehicle receives the necessary care to remain safe and reliable.
Comprehensive Estimations: No Skipping on Recommendations
Your technicians are skilled at identifying issues, but it’s up to the service advisors to ensure that everything they write up is estimated. This includes wrap-around services and mileage-based maintenance recommendations. When advisors neglect to estimate all identified issues, it can lead to missed revenue opportunities and potential customer dissatisfaction when problems persist.
A thorough estimation process should include:
- Technician Write-ups: Every issue the technician identifies should be included in the estimate, including pictures and videos. You better be using DVIs. We don’t have time to get into that, but it is essential.
- Wrap-around Services: Additional services that enhance the primary repair, such as alignment after suspension work or cooling system service with a water pump and thermostat replacement.
- Mileage-Based Maintenance: Recommendations based on the vehicle’s mileage, such as oil changes, filter replacements, fluid services and other scheduled maintenance.
The Importance of Average Estimate and Its Impact on Average Repair Order
Let’s talk numbers. The average estimate is crucial in determining the average repair order (ARO). Your ARO is a key performance indicator that reflects the health of your business. If your average estimate goal is set correctly, it can positively impact your ARO.
Here’s why:
- Accurate Estimation: Setting a realistic and comprehensive average estimate goal ensures that all necessary repairs and services are accounted for, leading to higher average estimates.
- Customer Trust: Providing thorough and accurate estimates builds trust with your customers. When they see the value in your services, they’re more likely to approve the recommended work.
- Revenue Growth: Higher average estimates naturally lead to higher AROs, boosting revenue and profitability.
To improve your average estimate and, subsequently, your ARO, focus on:
- Training service advisors to provide complete and detailed estimates.
- Regularly review and adjust your average estimate goals to reflect the current market conditions and shop capabilities.
- Monitoring performance metrics to identify areas for improvement and celebrate successes.
Establishing a Written Process for the Perfect Estimate
Creating the perfect estimate is an art that requires consistency and precision. To achieve this, it’s essential to have a written process that outlines every step your service advisors need to follow. This process should be clear, detailed, and regularly reviewed to ensure it remains effective.
Critical Components of the Perfect Estimate Process:
- Initial Customer Interaction:
- Greet the customer warmly and gather basic vehicle information.
- Listen to the customer’s concerns and document them accurately. Use symptom sheets as necessary to get the technicians the information they need to diagnose the issue accurately and in a timely manner!
- Digital Vehicle Inspection:
- Perform a thorough inspection based on the customer’s input and routine checks.
- Document all findings, including visual inspections and diagnostic results.
- Include pictures and videos
- Estimate Preparation:
- Compile all the identified issues and recommended services.
- Include technician write-ups, wrap-around services, and mileage-based maintenance.
- Ensure all parts and labor costs are accurately calculated.
- Re-word technician spelling and descriptions as necessary.
- Customer Presentation:
- Present the estimate to the customer clearly and understandably.
- Explain the necessity of each service and answer any questions.
- Provide options and prioritize repairs if necessary.
- Follow-up:
- Document customer decisions and update the estimate accordingly.
- Schedule approved repairs and set clear expectations for completion time.
Utilizing Training and Multimedia
Consider creating a training video demonstrating how to write the perfect estimate to reinforce the written process. This video can be a valuable resource for new hires and a refresher for experienced service advisors.
Conclusion
In these challenging economic times, running a successful auto repair shop requires a keen understanding of the market and a commitment to excellence in service. By ensuring that your service advisors are not selling with their wallets, estimating all recommended services, setting accurate average estimate goals, and establishing a transparent process for creating estimates, you can significantly enhance your shop’s performance and profitability.
Stay proactive, keep learning, and adapt to the ever-changing economic landscape. Your dedication to quality service and customer satisfaction will ensure your shop’s survival and ability to thrive.
Feel free to ask any questions or for further insights on optimizing your auto repair shop’s operations. Let’s drive success together!
Coach Chris Cotton
