Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Mon Sep 17, 2007 7:14 pm Post subject: Three Questions Help Turn Me Around
Many years ago my business would suffer slow spells. Sometimes it seemed the phone would not ring for days. During these times I would always try to find reasons. For instance if it were September, I would reason it must be kids going back to school. If it were January I would figure people must have over-spent for Christmas. April was always tax time and on and on. I pretty much had a reason for every season.
Of course I also had strategies for dealing with the slow times. This always seemed to revolve around pricing and discounts. This increased sales, but at the expense of profit. After many years I solved this problem, in my case. I have had no less than a three-day backlog over the last ten years. During the same period the company has consistently grown ten-percent or more, each year.
For me, there were three questions I knew I had to answer. I had to be brutally honest about the answers. I also had to commit to work on the problems, indicated by the answers:
I have too few clients at my current price. Their numbers can be increased by discounting. Does this mean there are not enough clients out there or that clients think my service is not worth the price charged?
Why would a client pick me to service their vehicle instead of one of the other 100 or more shops in town?
Joined: 15 May 2007 Posts: 146 Location: Garden City, KS
Posted: Mon Sep 17, 2007 9:03 pm Post subject:
I feel these three questions led you to your three answers: 1) Fixed Right the First Time, 2) Done When Promised, 3) Priced Within Quote. Now....how you arrived at these is very interesting to me. I think Fixed Right the First Time has been beaten into our heads. I remember interning at a Ford Dealer and their training videos repeated that saying over and over. Really, we all know we don't want to keep going back ANYWHERE for the same problem over and over. Done When Promised I feel had to have been a little more difficult to figure out, but perhaps hearing client complain about past experiences may have helped lead to it. Now, as for Priced Within Quote...I think that may have been the most difficult to discover. It seems to me that our industry is very adept and comfortable with the price changing. It seems to me that it is even built into our estimating systems. We give preliminary estimates that are contingent on us getting to a "safe" spot into the repair process, if not until we actually finish. I can see this occuring from time to time, but the client should be educated as to why and its implementation minimized. I know of shops that feel no remorse in quoting an impossible price, and then calling the customer with "bad news" on their findings and a revised estimate. I guess this is a little better than the ones that wait for the customer to show up to pick up the vehicle and then drop the bomb. "Well, Mr. Jones, we didn't break it, build it, or buy it."
Please tell us the story of how you came to these brilliant conclusions...or atleast the philosophy used to attain them. Thanks! Later, Matt.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Tue Sep 18, 2007 8:01 pm Post subject:
MattFMN wrote:
I feel these three questions led you to your three answers: 1) Fixed Right the First Time, 2) Done When Promised, 3) Priced Within Quote. Now....how you arrived at these is very interesting to me. I think Fixed Right the First Time has been beaten into our heads. I remember interning at a Ford Dealer and their training videos repeated that saying over and over. Really, we all know we don't want to keep going back ANYWHERE for the same problem over and over. Done When Promised I feel had to have been a little more difficult to figure out, but perhaps hearing client complain about past experiences may have helped lead to it. Now, as for Priced Within Quote...I think that may have been the most difficult to discover. It seems to me that our industry is very adept and comfortable with the price changing. It seems to me that it is even built into our estimating systems. We give preliminary estimates that are contingent on us getting to a "safe" spot into the repair process, if not until we actually finish. I can see this occurring from time to time, but the client should be educated as to why and its implementation minimized. I know of shops that feel no remorse in quoting an impossible price, and then calling the customer with "bad news" on their findings and a revised estimate. I guess this is a little better than the ones that wait for the customer to show up to pick up the vehicle and then drop the bomb. "Well, Mr. Jones, we didn't break it, build it, or buy it."
Please tell us the story of how you came to these brilliant conclusions...or at least the philosophy used to attain them. Thanks! Later, Matt.
Hi Matt,
You are very kind. What I have tried to do is develop solutions, rather than try to improve on what others are doing in the trade. My aim was never to be a better auto repair shop. Rather my aim was always to try to be the first, "Something new and much better."
Deming always taught that innovation was necessary. Simply waiting for complaints is never enough. People do not complain until they have seen better. When they have seen better, it's too late.
To me the three points you mentioned seemed a good gamble. I would certainly prefer something ready on time than several hours/days late. I would prefer something to cost what I was quoted, rather than more.
Delivering on these promises was a great deal more difficult than conceiving them. I tracked all three characteristics for over three years and plotted the results on charts. We worked on our processes until we felt we could deliver. This involved a new scheduling system, several new procedures. Mostly it involved radically different diagnostic procedures. It also evolved into a totally new form of billing clients.
Once I felt confident that I could exceed these specifications, we announced the commitment. We guarantee on time, or we will pay for alternate transportation.
We guarantee on-price, or we will eat the difference. Occasionally this happens. A vender misquotes a price for instance. The client’s price never changes. If on the other hand the error is in the client's favor the price would be lowered. If the time required to do the job is less than anticipated the price is lowered. The small individual losses are nothing compared to the confidence guaranteed pricing and delivery builds in our clients.
From an old post:
“Nothing has changed, treating people with respect is ONE piece of the puzzle. The shop must also be able to fix cars, right the first time, deliver on time and at the price quoted. These things along with an adequate marketing system will get you considered. Representing a greater value to the client and marketing that ability will create a waiting list.”
Thanks Matt, I hope my answer was not too long-winded.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Tue Sep 18, 2007 10:34 pm Post subject:
louis wrote:
Delivering on these promises was a great deal more difficult than conceiving them. I tracked all three characteristics for over three years and plotted the results on charts. We worked on our processes until we felt we could deliver. This involved a new scheduling system, several new procedures. Mostly it involved radically different diagnostic procedures. It also evolved into a totally new form of billing clients.
Do you mind elaborating? What were the old ways compared to what are they now? I think that these are issues that are challenges for most of us.
We are pretty good at getting vehicles in, to be worked on, when they are scheduled. For the straight forward repairs we are fairly good on the delivery time, but we always pad it some, just in case. We are in a rural area so an incorrect part will cost us another day. We preform an inspection on each vehicle. The issue becomes how much time is allowed for up sells, or should the vehicle be scheduled back in for the additional work needed? The same would apply to diagnostics, how much time is allowed? Then for the needed repairs, how much time? Or, do you handle these on a case by case basis?
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Wed Sep 19, 2007 7:03 pm Post subject:
Dave wrote:
louis wrote:
Delivering on these promises was a great deal more difficult than conceiving them. I tracked all three characteristics for over three years and plotted the results on charts. We worked on our processes until we felt we could deliver. This involved a new scheduling system, several new procedures. Mostly it involved radically different diagnostic procedures. It also evolved into a totally new form of billing clients.
Do you mind elaborating? What were the old ways compared to what are they now? I think that these are issues that are challenges for most of us.
We are pretty good at getting vehicles in, to be worked on, when they are scheduled. For the straight forward repairs we are fairly good on the delivery time, but we always pad it some, just in case. We are in a rural area so an incorrect part will cost us another day. We preform an inspection on each vehicle. The issue becomes how much time is allowed for up sells, or should the vehicle be scheduled back in for the additional work needed? The same would apply to diagnostics, how much time is allowed? Then for the needed repairs, how much time? Or, do you handle these on a case by case basis?
Thanks,
Hi Dave,
Those are all great questions. I’ll try to answer them one at a time, and please remember I’m trying to condense three years of effort into a few sentences. Primarily what we are talking about is prediction.
Dave wrote:
Do you mind elaborating? What were the old ways compared to what are they now? I think that these are issues that are challenges for most of us.
The first thing I approached was bringing every man’s work into statistical control. This means no special causes. Production was plotted and watched and special causes resolved as they showed up. Once each man was in statistical control, their output could be accurately predicted.
With accurate prediction it was a matter of devising a scheduling program [remember this was the late eighties.] This was no small task but was accomplished by modifying a multi-user data base program.
Dave wrote:
We are pretty good at getting vehicles in, to be worked on, when they are scheduled. For the straight forward repairs we are fairly good on the delivery time, but we always pad it some, just in case.
I quickly learned, thorough inspection and history were key to prediction. Our sales approach had to change from quoting prices and getting the vehicle in, to selling diagnosis [again remember this was the late eighties, this was very new stuff at that time.] With a proper diagnosis and a consistent work force time could be accurately predicted. At this time an accurate delivery date can all but be assured.
Next was knowing how much time to allow for repair. This was greatly aided by two approaches. First, the person on the phone was trained to ask a number of questions and pre-write the work order. From this interview a fairly accurate prediction could be made in many cases. Obviously this was much easier for vehicles on which we knew the service history. This reinforced our belief that repeat clients would be far easier to serve. Our marketing efforts were revamped and targeted to repeat clients.
With service history, the work order could be reviewed against the history and much more accurate prediction made. Obviously this can never be perfectly predicted. Since our commitment was to deliver “on time” we had to allow for worse case. This could result in waste so every effort had to be made to improve prediction.
We also began offering a drop off service for those that wanted it. For instance, on very intermittent problems, rather than pay me to continuously check, the vehicle could be left to be worked in. This worked well to fill our extra time and worked well for the clients also. Once the problem was learned, accurate completion could be easily predicted. There are also people who are in no particular hurry and these vehicles can be used as fill. Many people drop off, leave for vacation and pick up when they return.
The second phase was to move away from books to estimate time required and build our own system, based on inspection and experience in our shop. This could be a whole other topic and I will post more on it later, if there is interest.
Dave wrote:
We are in a rural area so an incorrect part will cost us another day.
This could be a hindrance, but not a show stopper. One of our primary considerations in picking our location was proximity to our vendors. We have also had to build a strategic inventory in some cases. I also try to preview up coming jobs and sometimes pre-order parts.
Quality of parts is also a very important consideration as defects can reach havoc. This expands into parts verification programs. This clearly illustrates the difference in price and cost, to us. I can’t afford to use cheap parts. (Boy this is getting long, I hope you’re still awake)
Beyond very accurate diagnosis, I think building relationships with vendors and have them stock more of what you need? One redeeming grace might be, your competition would have the same concerns. Overall delivery times might be longer, but delivering when predicted may be able to be greatly improved.
We also track salespeople at different vendors. Those that most accurately and consistently deliver are the ones I use. I have private phone lines or personal cell phone numbers for each. I also found that things are better when I refuse to place an order without giving the VIN number first. Other than that, I buy lunch for several of them about once a month, just to grease the wheels. Also being very nice to the delivery folks helps a bunch. That’s my wife’s department and there is a small budget set up just for that.
Dave wrote:
The issue becomes how much time is allowed for up sells, or should the vehicle be scheduled back in for the additional work needed? The same would apply to diagnostics, how much time is allowed? Then for the needed repairs, how much time? Or, do you handle these on a case by case basis?
My personal choice is not to allow time for upsells. Doing so would mean turning others down, on speculation. Instead, we stress letting us know everything the client would like for us to check when making the appointment. This sometimes means re-scheduling and many times the client will leave the vehicle until we can complete the work. For instance, we complete what was scheduled and give an additional completion date for the additional work.
There may never be a perfect system, but most people are quite content with something much better than what they may find elsewhere. Years of experience helps and we meet or beat promised time about 99.8% of the time. In the other .2% we are normally within a couple of hours and know this far enough in advance to make arrangements. If necessary we have a rental waiting at the promised time. This happens so infrequently that the cost is of no concern.
This is just a bit of all that goes into it, but I hope give some insight. Thanks Dave, I appreciate your interest.
Joined: 15 May 2007 Posts: 146 Location: Garden City, KS
Posted: Fri Sep 21, 2007 9:10 am Post subject:
One thing that stands out after reading your responses, Louis, is that it reaffirms the fact that using Deming's philosophy is a "top down" approach. Said another way, it is up to management to put forth the effort for improvement, first. It can be plainly seen that you put forth A LOT of effort! Thanks Louis! Later, Matt.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sat Sep 22, 2007 10:44 pm Post subject:
Louis,
Thanks for the reply. There is a lot to digest and work on.
louis wrote:
The first thing I approached was bringing every man’s work into statistical control. This means no special causes. Production was plotted and watched and special causes resolved as they showed up. Once each man was in statistical control, their output could be accurately predicted.
What were you tracking, the book time compared to actual time, come backs???
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Tue Sep 25, 2007 6:44 am Post subject:
Dave wrote:
Louis,
Thanks for the reply. There is a lot to digest and work on.
louis wrote:
The first thing I approached was bringing every man’s work into statistical control. This means no special causes. Production was plotted and watched and special causes resolved as they showed up. Once each man was in statistical control, their output could be accurately predicted.
What were you tracking, the book time compared to actual time, come backs???
Dave
Hi Dave,
Book time has no relevance to my situation. Rather we can track billed time compared to actual, which tells how good we are at estimating [this is a primary concern.] This also helps locate special causes, like time loss looking for a bolt, re-tapping a stripped hole, wrong part delivered, etc. These factors are important to me, as I wish to prevent them as often as possible. This reduces work time and makes us more consistent, which makes accurate estimating [prediction] far easier.
Each tech can also track time required to perform a standard task, compared to his own past time. For instance MIL diagnosis on Ford may take 0.5 to 1.0 hours on mean. After specific training it moves to .5 to 0.8 hours on mean. Variation and time have been reduced, we can estimate more accurately, the cost reduction is huge over the course of a year. The same could be done with a new new piece of equipment being evaluated, etc.
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Fri Sep 28, 2007 12:24 pm Post subject:
Louis,
louis wrote:
Book time has no relevance to my situation. Rather we can track billed time compared to actual, which tells how good we are at estimating [this is a primary concern.]
I agree that the important thing is to accurately bill for the time that a job takes. To accurately estimate jobs is another matter. If I understand what you are saying, you are not using a book to estimate how long a job will take. I assume that you go back into your data base to see what similar jobs took, then use that as a basis for an estimated time? Or have you found the book times to be off, so you adjust the books estimated time up or down accordingly?
Thanks.
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 15 May 2007 Posts: 146 Location: Garden City, KS
Posted: Sat Sep 29, 2007 8:05 pm Post subject:
I feel regardless of what the book says, it cannot be consistently accurate. Times do (I feel they have to) vary from car to car. Meaning, that '99 Ford Taurus 3.0L vin U your putting a water pump on can take X-amount of time, but the one coming in immediately afterwards for the same repair may take "Y". The first one was well maintained and cared for, the second one severely neglected. In this situation, you could argue that the diagnosis on both should have involved dis-assembly to the point of reassembly for the accurate estimate. In this way, the client has paid for, or knows the cost of the diagnosis and you can give a very accurate estimate on the repair. If you were to estimate the repair before dis-assembly, you would inevitably end up calling the second customer back to acquire more time. That, or you'd be eating some labor on it. This manner of diagnosis and inspection is very foreign to us. We are used to performing a "quick" diagnosis. We want it diagnosed in .2 or .5 hours and recommend a host of "maintenance items. In the example above, the diagnosis may have taken an hour or a little more, but the reassembly would be much less than the published time for the water pump R&R. I feel with a thorough explanation to the client, plus pictures and/or a tour of the vehicle post dis-assembly will build a lot of trust and thus a lot of repeat and referral business. What's your take? Thanks. Later, Matt.
_________________ Matt Fanslow
ASE CMAT/L1
Crag-Technologies, Inc
www.wavehook.com
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sat Sep 29, 2007 10:37 pm Post subject:
MattFMN wrote:
I feel regardless of what the book says, it cannot be consistently accurate. Times do (I feel they have to) vary from car to car. Meaning, that '99 Ford Taurus 3.0L vin U your putting a water pump on can take X-amount of time, but the one coming in immediately afterwards for the same repair may take "Y". The first one was well maintained and cared for, the second one severely neglected.
I agree with you, the same job on two different vehicles will take two different amounts of time to do. There are a lot of factors that can cause this. It is interesting, we use four different labor guides. They rarely have the same times. I have seen the difference between them be as much as twice the amount of time.
MattFMN wrote:
In this situation, you could argue that the diagnosis on both should have involved dis-assembly to the point of reassembly for the accurate estimate. In this way, the client has paid for, or knows the cost of the diagnosis and you can give a very accurate estimate on the repair. If you were to estimate the repair before dis-assembly, you would inevitably end up calling the second customer back to acquire more time. That, or you'd be eating some labor on it.
So, you are saying that we should, to use your example, dissemble the vehicle to the point that the water pump is off. That way we know any other things that need repaired along with the water pump. Then we could accurately give a price to repair the broken bolt as well as reinstall the water pump.
MattFMN wrote:
This manner of diagnosis and inspection is very foreign to us.
Yes it is. It would also be foreign to the client.
MattFMN wrote:
We are used to performing a "quick" diagnosis. We want it diagnosed in .2 or .5 hours and recommend a host of "maintenance items. In the example above, the diagnosis may have taken an hour or a little more, but the reassembly would be much less than the published time for the water pump R&R. I feel with a thorough explanation to the client, plus pictures and/or a tour of the vehicle post dis-assembly will build a lot of trust and thus a lot of repeat and referral business. What's your take? Thanks. Later, Matt.
I need to know more because I am afraid that it almost sounds like bait and switch to me. Once the vehicle is torn apart, the client almost has to repair it. The client drove the vehicle in, they expect to drive it out after the diagnosis. I think they will feel like they have no choice in the matter, the car is torn apart, it has to be fixed now. They will not have the option of doing any thing else.
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 15 May 2007 Posts: 146 Location: Garden City, KS
Posted: Sat Sep 29, 2007 11:54 pm Post subject:
Quote:
So, you are saying that we should, to use your example, dissemble the vehicle to the point that the water pump is off. That way we know any other things that need repaired along with the water pump. Then we could accurately give a price to repair the broken bolt as well as reinstall the water pump.
Yes.
Quote:
I need to know more because I am afraid that it almost sounds like bait and switch to me. Once the vehicle is torn apart, the client almost has to repair it. The client drove the vehicle in, they expect to drive it out after the diagnosis. I think they will feel like they have no choice in the matter, the car is torn apart, it has to be fixed now. They will not have the option of doing any thing else.
In reality, if you've given the original quote for the water pump, and now it is apart and the tech found more wrong, or had issues with broken bolts, you have to call the client with a revised estimate. Now, the client has been called twice with "bad news". First one, you diagnosed the water pump and gave them a quote. Second, you taken it apart and now you've found the water pump cut into the timing cover, or the two bolts broke off flush with the timing cover, etc. This, and a new price to repair the car. The car is apart, they thought it would only be the first cost, now it is more (in some cases A LOT more). They thought they'd get their car back that day, now it may be a couple of days.
I don't know. Do we ask the client before hand? Kind of a "pick your poison"? In one case, we assume the repair will go normally. In the second we try not to assume anything. I feel with a thorough explanation, the client will see the logic in the dis-assembly. In that way, there are no surprises.
Maybe Louis can step in and point out the fault in either approach, or give an alternative.
What my shop did was if we disassembled it, and they chose not to fix it we got our diagnostic $$$ and reassembled it for them, same as it came in, or as close as possible (assuming broken bolts were involved and it wasn't our "fault" they broke). To be very honest, it was very, very rare they didn't fix it and even more rare that they disagreed with the approach.
The best thing that ever happened to us was a potential client approached us for an estimate on brakes. We refused to dispatch anything but a best case/worst case scenario estimate without inspecting the brakes. He didn't appreciate this. I explained my point of view on it and he agreed to disagree. He took the vehicle to a competitor and they shot him an estimate to get him in the door. After a full WEEK in their shop and a lot of $$$$, he got his vehicle back. He drove straight over to our shop with the invoice and we discussed it. They called him 4 times with revised estimates. Now he saw my logic on the full dis-assembly prior to an estimate. On his other vehicle, he brought it to us for a brake inspection. We charged him for an hour to diagnose (it was a 1 ton dually truck) and estimated the cost for repair and reassembly. He okay-ed it and the work was done. No second calls were made, other than to inform him that we were in the process of assembling it and that the repair was going well and that it should be done at the time promised. Needless to say, he's been a great addition to the shop's "family" and has brought in a lot of work from other fleets that we could never have advertised to.
I have found that women also love this approach. Especially if you have new parts there to show them good vs. bad with an explanation of how it works. This is time well spent and it is amazing how many of their friends end up coming to the shop for repairs because of referral.
It's a different philosophy, there's little doubt about it. But, maybe it is a philosophy worth having to separate yourself from other repair shops? What do you think? Later, Matt.
_________________ Matt Fanslow
ASE CMAT/L1
Crag-Technologies, Inc
www.wavehook.com
Joined: 19 May 2007 Posts: 206 Location: Camp Verde, AZ
Posted: Sun Sep 30, 2007 1:58 pm Post subject:
MattFMN wrote:
I don't know. Do we ask the client before hand? Kind of a "pick your poison"? In one case, we assume the repair will go normally. In the second we try not to assume anything. I feel with a thorough explanation, the client will see the logic in the dis-assembly. In that way, there are no surprises.
Seems to me it comes down to customer expectations. As service writhers we have a couple options.
#1 - Offer the client both choices of estimating styles, give them the pros and cons of each, and let them decide.
#2 - Explain to the client that the best way to get an accurate estimate is to completely take apart the components and inspect. (The repair now becomes more of a set price, than an estimate.) It will cost $$ to take it apart. If the customer declines, then offer the second choice. Just be sure to let them know that we are not 100% sure until it is taken apart. (This is very much still an estimate.)
The tear down and insect method will give a much more accurate price to repair. How do we arrive at the price to do the tear down and inspect?
Sorry Louis, I have derailed your thread.
_________________ David Wittmayer
Owner / Manager
Hansen Enterprises Fleet Repair, LLC
Camp Verde, AZ
www.hefrshop.com
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Sun Sep 30, 2007 4:06 pm Post subject:
Hi Dave,
Dave wrote:
Louis,
louis wrote:
Book time has no relevance to my situation. Rather we can track billed time compared to actual, which tells how good we are at estimating [this is a primary concern.]
I agree that the important thing is to accurately bill for the time that a job takes. To accurately estimate jobs is another matter. If I understand what you are saying, you are not using a book to estimate how long a job will take. I assume that you go back into your data base to see what similar jobs took, then use that as a basis for an estimated time? Or have you found the book times to be off, so you adjust the books estimated time up or down accordingly?
Thanks.
I don't think the method is as important as billing more accurately. I think book time could be used as a starting point and adjusted as needed. Over the years I have used several methods and now rely primarily on thorough inspection.
For a more detailed explanation please check out the new section, ALTERNATIVE BILLING just added under MORE INFORMATION.
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Done When Promised I feel had to have been a little more difficult to figure out, but perhaps hearing client complain about past experiences may have helped lead to it. Now, as for Priced Within Quote...I think that may have been the most difficult to discover. It seems to me that our industry is very adept and comfortable with the price changing. It seems to me that it is even built into our estimating systems. We give preliminary estimates that are contingent on us getting to a "safe" spot into the repair process, if not until we actually finish. I can see this occuring from time to time, but the client should be educated as to why and its implementation minimized. I know of shops that feel no remorse in quoting an impossible price, and then calling the customer with "bad news" on their findings and a revised estimate. I guess this is a little better than the ones that wait for the customer to show up to pick up the vehicle and then drop the bomb. "Well, Mr. Jones, we didn't break it, build it, or buy it."
