Masters of the Trade

Master Technician Group is a three-location Toronto automotive diagnostics and repair shop, with a particular competence in electrical work thanks to the background and expertise of its founder, Joe Dacosta, who established the company in 1994. Master Technician also does rebuilding of starter and alternator assemblies, and is a Drive Clean accredited test and repair facility.

The main nine-bay location is on Dundas St. West in the Junction area of Toronto. In the last few years Master Technician has opened two satellite shops, one in the city’s west end on Brown’s Line, and one in the east end on Gerrard Street in Toronto’s Upper Beaches neighbourhood. Each satellite has three service bays.

General Manager Tony Virgilio was brought on board three years ago to steer the company through an image and culture remake, as well as to launch the new sites. “The first job was to get the main location operating less in ‘mom and pop shop’ mode and more as a full-fledged, professional independent,” says Virgilio, who brought to the job nearly three decades of front-office and shop floor experience. “We wanted to be above the neighbourhood shop level – a place where people can have their vehicle checked properly and deal with someone who’s knowledgeable and informative.”

Virgilio didn’t waste time with the transformation, and soon afterwards he moved on to set up the Browns Line location. The Gerrard St. satellite followed a year later.

“We’re very well known for our electrical and diagnostic work,” Virgilio says. “We have a reputation for being able to find problems others can’t.” He attributes that competence to the background of Joe Dacosta, an electrical technician with years of experience. “Joe spends a lot time training our guys in good diagnostics habits,” Virgilio says. As a result, the company now has three highly skilled automotive electricians, “but ultimately our skill in diagnostics comes from Joe – he has a real knack for finding problems other people can’t find.”

Master Technician doesn’t do conventional marketing beyond some print and TV ads targeted at Dacosta’s Portuguese-Canadian ethnic base, where loyalty is high. The company website is fully functional, but Virgilio prefers a face-to-face ‘marketing’ strategy. “Customer service is king, and the best way to build the business is to get out there and shake hands with people.” That approach has earned Master Technician a 75 per cent repeat business rate.

Virgilio relies on the Mitchell 1 automotive information services system, which he says he finds the most user-friendly of the packages he’s looked at. It’s especially useful in stocking parts, issuing labour hours quotes for service work orders and in maintaining the client information database.

“We don’t stock a lot of inventory,” Virgilio says. “Of course we keep the fastest moving parts on hand, but for the most part we rely on our jobbers, so we don’t really need a huge, intricate system to manage inventory. There’s enough jobbers out there, and they’re fighting strong enough for the business, especially in the last three to five years, that the price levels have been very good – and the deliveries are faster than you’d get a pizza.”

The industry as a whole is still in the doldrums, Virgilio says, and so far 2012 is shaping up to be a repeat of 2011 for Master Technician. “We’ve been very aggressive with our pricing for the last two years,” he says. “We haven’t had any choice about that.” But the company is on a good footing thanks to the solid customer base and the high repeat-business rate. Location also has a lot to do with it. All three Master Technician shops are on busy streets in high-traffic parts of the city, not hidden away in industrial or rural locales, so visibility is good and new business comes in at a steady rate.

“Frankly, one reason that we do so well is that we follow up on educating the customer by offering them value options on the work we’re doing,” Virgilio says. “If a car needs brake work, we’ll offer a choice: a top-line OEM quality brake, a mid-range option and a lowest-price option.” Master Technician does advise customers on the drawbacks that come with the price-bender approach, but in the end the choice is up to the customer. “We understand dollars and cents are very important to people. It helps that we don’t just say ‘this is the job, this is the part we’re going to use and here’s the price.’”

Like others in the business, Virgilio finds that customers are becoming more knowledgeable. “I truly enjoy dealing with the more educated customer. It makes my job easier. I believe in providing the customer with as much information as possible to make an educated decision, and most of them already know what I’m talking about now.”

Customers who know what needs to be done and why tend to be more accepting of an argument in favour of higher-quality replacement parts, Virgilio says, but the learning curve cuts both ways. Some customers accept the need to invest to get the assurance of quality, but you also get those who pound the virtual pavement until they find a website with the absolute rock-bottom price for a part, and then insist they won’t pay a penny more. “That’s fine,” Virgilio says, “as long as I’ve disclosed all the options and given them my reasons for opting for quality.”

Recruiting is a challenge. “We have a great core of guys,” Virgilio says. “Eleven of our fifteen mechanics have been with us for seven years or more. They’re very devoted, intelligent and great at what they do. But it’s typical for this industry that for some people the grass is always greener somewhere else. Turnover is a fact of life, and it’s always a challenge to find good people.”

Many contenders are what Virgilio calls “book smart” – they’ve cracked the classroom and textbook work but they’re short on hands-on experience. Another challenge is the fact that Master Technician’s top brass, i.e. Joe Dacosta himself, is very hands-on. A talented mechanic with decades of experience under his belt, he knows the business inside out and believes in educating his staff personally. Unfortunately, human nature is such that some people who’ve earned their spurs don’t take this level of input well.

Another challenge is the need to keep equipment current as automotive technology becomes more and more sophisticated at an ever-faster pace. This relentless advance puts increasing pressure on profit margins.

“The profit margins are definitely getting leaner,” Virgilio says. “Not from the point of view of customer of course! Your door rate may go up the same percentage as payroll or rent, but people will say you’re still making more money. They don’t see the new computer we need to diagnose vehicle ECMs, or the updated A/C machine because the laws have gotten more stringent about recovery.”

Still, the business is viable, and Master Technician is where Virgilio wants to be. “I was a franchise guy in the early days,” he says. “I worked with some of the big names. But I really like the independent work better.”