Auto Service World
Feature   February 1, 2003   by Bob Greenwood

Greenwood on Management

Resolution for 2003: "Educate Our Clients" - Part 2 of 2


In part one, I mentioned some basic criteria that we can start to share with the customer/client. It is important to build money into your business budgets to develop material that educates the consumer on the real costs of running this business in order to allow you to serve them effectively and professionally.

Consider developing an “menu style” board for posting in the client area, with effective lighting, that breaks down how $1 on the clients invoice is spent, in order to serve them professionally:

Consider this concept. The numbers I have used represent the breakdown of a profitable shop today, however, the goal is to achieve a net income of 8% to 10% before corporate taxes are paid That can only be achieved with the right labour rate and the shop operating with a productive process format. It is imperative that you sit down with your own accountant and work out your shop numbers. Take your year-end numbers and summarise them into this format. It is something the customer/client can understand.

Do not be afraid to admit that you make a profit. Profit is not a dirty word, and profit is required “if” you are interested in serving your clientele properly in the future. The client becomes a big winner when the shop is profitable because then you will have the monies required to invest in new “Hi-Tech” equipment that will be needed to serve their future automotive needs, and be able to afford the best staff to ensure the clients work is done right.

Also, it is imperative that we educate the client regarding your policy on the Quality of business you want to deliver to them. Consider making up another wall board with the following:

The Management

Looking at these two educational tools coupled with January’s article on this issue, you are now beginning the process of up front education of your clientele. This is only the beginning. There are so many topics to discuss such as the technology in a car today compared to 5 or 10 years ago, the life expectancy of today’s vehicles, the life expectancy of today’s equipment, the type of equipment, the diagnostic skill level required and not just a mechanical level, and so much more. The message you clearly want to achieve is that your shop today is in the “knowledge” business, not just the “parts” business, and your educational material must clearly define this.

Shops that continually run their business on “price” are doomed, and if they don’t want to change, there is not much a lot of us can do about it, other than wait for them to go out of business. You are in business for the “long run” — the journey — a career, not an overnight trip that so many are determined to be.

Education of your clientele will determine the level of relationship you end up with. Set an objective of producing one new educational material per month for your shop. When your client walks in, let them see how fully informed you want them to be. Consider direct mail pieces to your clientele, as a “Information Feature” on our industry, on your shop.

It is only with education that one can see rightly, see what is essential is actually invisible to the eye. Your educational message, in essence, should be screaming to the marketplace “We are the Independent sector, and I, as a competent shop owner, want you, my client, to clearly understand that there are only two ways to run our type of business, namely… PRICE / SERVICE / QUALITY… PICK TWO! We, as a competent shop have chosen our two… we are in the Service/Quality business.

Where Does Your Average Dollar Go To Maintain Your Vehicle?
To replace total parts installed 35
(Oil, Tires, Batteries, Parts)
To replace all shop wages 33
(Technician, Administrative, Mgt.)
To replace legislated payroll taxes 3
(CPP, EI, Statutory Holidays, Workers Compensation)
To replace shop operating expenses 23
(Insurance, Shop & Office Supplies, Utilities, Business & Property Taxes, Maintenance & Repair, Rent, etc.)
Shop Profit before corporate income taxes 6

“Quality”

Much as we would like to, we cannot provide both quality parts and professional workmanship, and low prices. Our regular clients know that our prices may be perceived to be in the higher bracket of the industry but they come back again and again, because we do the work right and guarantee both parts and workmanship.

Further than this, we will run real “values” from time to time, but will not run loss leaders just to draw people in and use high-pressure tactics to “sell” work or parts.

We will counsel you about real deficiencies in your automobile, give you an honest quotation concerning repair and maintenance costs, and leave the decision concerning whether you want us to do it to your discretion.

Please note that our maintenance and Technical Service rates must include the wages of our highly skilled and trained technicians plus other overhead costs such as rent, equipment costs, insurance, utilities, business and payroll taxes, etc.. Oh yes, one further addition, our prices include a profit allowance for us so that we can continue to provide Quality service to our many valued friends and clients.

Please do not hesitate to ask for a quotation on any work or service. We are not ashamed to quote our rates and take the time to share with you what extras you get for the sometimes perceived higher costs than those provided by some competitors.


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