By John Lee and Rich Diegle, ALLDATA Tech-Assist Team
Our friend, let’s call him Jim, is a great mechanic. He’s even
better at writing service orders and taking care of his
customers. Like many good mechanics, after years of providing
great service at someone else’s shop, he decided to make the
transition to opening his own shop.
He began as a one-man operation and grew to employ three
mechanics and a service writer. Over the years, his shop made
money for him but not much more than what he made as a good
flat-rate mechanic. No matter how hard he worked or how many
tedious hours he put in, he just couldn’t seem to make a “better”
living as an automotive shop owner. Does this sound familiar?
Unfortunately, this is the most common tale in the automotive
There are so many facets to owning a successful automotive
business—it’s much more than just repairing vehicles and
providing good customer service. We would like to share our
“prescription for success,” a few simple business tricks and
tools that we’ve both used over the years. Following these can
immediately impact your shop’s productivity and profitability.
Market Your Business
You can really increase your car count by dedicating about three
hours per week to marketing your shop directly to other
businesses that are within a one-to-two mile radius of your
location. This type of marketing targets specialty businesses
such as used car lots, rental-car companies, cab companies or any
type of business that has a fleet of cars and trucks. Even
medical and dental offices—they always have a “captive” audience.
Deliver to each of them a basket of fruit, muffins or bagels
along with a stack of flyers that offer the employees of those
businesses, and their customers, a “special” discount. It goes a
long way to consistently return every week or so to prove that
you are dependable. If you show up just once or twice, your
flyers are likely to end up in the “round file.”
Track Employee Productivity
Most shop owners/managers believe that they have a fairly good
idea of how well their techs and service writers are performing.
Unfortunately, they are unaware of many time-consuming tasks that
can be wasteful and adversely affect a shop’s bottom-line. Here
are two examples:
Diagnostic research is the most common un-billed task.
Establish a criteria for how long your techs should spend on
researching a difficult problem. Most successful shops settle on
no longer than 20 minutes. After 20 minutes, techs should ask for
help from other techs, automotive forums, diagnostic hotlines,
etc. There is usually at least one tech out there who has
encountered the same problem so there is no need for a tech to
waste more time. Explain to them that it’s okay to ask for help.
The service writer’s down-time is another common un-billed
task. It’s a great time to make marketing calls in the late
morning or early afternoon, when it’s rare to have customer
traffic. Have your service writer call other businesses to
schedule a time for you (or them) to briefly explain the benefits
your shop can bring to their business.
Host Customer Appreciation Events
Events that bring your customers into the shop to thank them for
spending their hard-earned money with you can reap huge rewards.
Remember, customers have a choice of where they take their car,
so don’t just tell them you appreciate their business: show them.
You can organize many types of events that include special
pricing just for VIP customers. For example, plan a special event
that promotes scheduled maintenance.
On a weekend day, hire local musical talent, such as a
guitarist or a small group, to perform at your business. Invite
families and offer snacks or invite a food truck to set up. The
event could be paired with a 30k/60k/90k maintenance service.
These kinds of events are golden!
Offer a free 25-point (or however many points you want)
inspection for A/C service in April or for winterizing in the
Evaluate and Adjust
As a business owner, one of your primary duties is to review shop
reports, evaluate information and trends, and then adjust your
business practices accordingly. It’s imperative that you analyze
all of your reports every month—not just sales, expenses and
profits. Here are a few important financial practices to
Repair trends – Track what types of repairs the majority of
your customers are purchasing and why they came in. This is how
you measure the effectiveness and performance of your
advertising, marketing and telephone-sales skills.
Advertising ROI – Evaluate the return on investment (ROI)
from direct-mail coupons and other advertising campaigns. Are
those discount coupons attracting customers who purchase the
repairs you recommend or are they just there for a cheap oil
change? Spending a few advertising dollars pursuing new customers
is fine but it’s ultimately more profitable to send those coupons
to your existing customers. They are the ones who should be
rewarded for their continued patronage and are more likely to
return for regular service and repairs. Promote customer loyalty
– it’s much more profitable!
Pricing – It’s very important that you communicate to your
customers the options and outcomes of buying quality parts versus
cheaper parts. Use the “good, better, best” pricing strategy.
Buyers appreciate having a choice and it gives them a basis for
comparison. Three-tiered pricing gives your shop credibility
because it demonstrates that you are equipped to deliver high-end
parts and services. On the other hand, offering more
cost-effective parts and services allows you to effectively
compete against the discount shop down the street. Be sure to
define both verbally and in writing how different price points
result in different quality results and warranty periods. It’s
also important to review your parts suppliers every month. When
they change where they get their parts, you may need to adjust
your pricing and warranties accordingly.
Due to the fact that every shop is a little different, there are
thousands of ideas we could suggest but these should be the
highest priority on every shop’s “To Do” list. Follow these
guidelines and you can expect greater success. In closing, we
would like to say that the only “magic pill” that really makes a
positive impact on your business is the one you take EVERYDAY—and
it’s called BEHAVIOR! The behavior of following
through with evolving your business is the one thing that will
allow you to change your status from “a mechanic who also owns a
shop” to a “successful business owner.”
About the Authors
John Lee, ALLDATA Manager of Operations, Automotive Support
has over 37 years of industry experience with over 15 years as a
Certified Business Consultant.
Rich Diegle, ALLDATA Tech-Assist Team supervisor, has over 40
years of industry experience with over 10 years of automotive
marketing and editorial experience.