AutoVitals teams up with Roy Foster, award-winning shop owner and business coach, and Jaron Kleber, Director of Sales for Repair Shop of Tomorrow, to discuss the key metrics that impact your shop’s profitability.
Listen to our discussion on:
- The importance of measuring key labor metrics
- Boosting labor hours per ticket
- Calculating and accessing your shop’s labor gross profit
- Improving shop and technician productivity
- and more!
Episode Transcript
*This transcript was generated with Artificial Intelligence. Error may occur. If you identify an error please contact [email protected].
Lauren Thunen (00:02):
Sweet. Good morning and good afternoon everyone that has already joined us, and I am so excited for this edition of the Digital Shop Talk Radio today. I’m sure you guys all know because you registered and you’re here, but we’re going to be talking about key performance indicators to transform your shop operations. Now, I think I have two of the best in the business who have been doing this for decades, optimizing not only their own shop operations, but also working with Jaron. You’ve probably worked with hundreds of NAPA Auto Care center centers at this point over the course of your career, probably within thousands actually, to optimize their shop operations from multiple different perspectives. So really the goal of this webinar is for you guys to sit, listen, and be able to take away a couple actionable items when looking at and tracking your own key performance indicators in your shop. So you can go back this week next and start to optimize those processes. So without further ado, before we get into the bulk of the webinar, Roy, could you go ahead and introduce yourself to the audience today?
Roy Foster (01:03):
Yeah, sure. Roy Foster, I’m in Reno, Nevada, NAPA Auto Care center center, AAA approved Auto Repair. Also a coach for repair shop at tomorrow. Been doing this virtually my whole life. And one thing I would say is once I learned to manage my business by data using KPIs, using all the tools that are available, it’s definitely brought us a lot more success. And so I’m a big advocate for that.
Lauren Thunen (01:37):
Awesome. And as I figured, Roy is one of the most humble guys out there, but Roy also won the 2023 NAPA Auto Care center center of the Year. You’re a AAA top shop, you’re also leading the charge and technician training. I know a lot of your own kids work inside the business and you have a lot of young apprentices in Roy Foster’s Automotive. So again, thank you for all that you do for the industry and for making sure the next generation is just as good or better than the last. So really appreciate you and obviously you’ve been an AutoVitals client for a long time, so thanks for all you’ve done to improve our product.
Roy Foster (02:12):
Yeah, thanks for mentioning that. So I am a big advocate for the Apprentice program. It’s definitely brought us a lot of success. One of the biggest challenges in our industry is having technicians and we have the ability to build our own technicians and to create opportunities for our youth where they can go into a high paying job with no debt and have a lifelong career. So I’m a big advocate for that as well.
Lauren Thunen (02:44):
Yeah, and you run, your Apprentice program is also in conjunction with Napa, correct? With their technician training?
Roy Foster (02:50):
Yes. Yep. It’s the Napa Apprentice program.
Lauren Thunen (02:53):
Awesome. Yeah, and if you’ve been on the Digital Shop Talk radio before, we spend a lot of time talking about technician recruiting and retention. Another great strategy is to just grow your own technicians in the business so you don’t have to look outside. So again, we’re not going to spend the bulk with the time talking about that. But again, just wanted to shout you out, Roy. Thank you for all that you do. And Jaren, could you introduce yourself and also tell us a little bit more about Repair Shop of Tomorrow, just to get our pallets wet?
Jaron Kleber (03:20):
Yeah, yeah. As expected, like you said, Roy’s very humble and so appreciate you throwing out his accomplishments. We’re honored to have Roy on our team with Repair Shop of Tomorrow. He does a fantastic job coaching clients and really being a big advocate for the oil industry. So my background, I started working in this industry when I was 12 years old, believe it or not, my parents owned Napa Auto Parts stores. And so when I tell people, Lauren, I’ve got 25 years of experience in the industry, they kind of look at me a little bit funny, but then of course I give them my history. So currently I serve as the director of Sales and business development for Repair Shop of Tomorrow. I’ve been in this role since 2022. Previous to that, I spent 13 years working with Napa Auto Parts. And the last five years of my career, I was working on the shop side with the shop management software with Napa Trax.
(04:25):
And you’re right, I’ve probably worked with at this point, close to 1500 shop owners over the course of the last eight to 10 years. And like Roy, I have a deep passion for the industry. It’s literally the only thing I’ve ever done. It provided for me as a kid through my family’s parts stores, and now 15, 16 years professionally, it’s able to provide for my family, my wife, my kids, and my goal every day when I get up is to think of ways that we can help improve the industry. So repair shop at tomorrow. For those that don’t know, we’re a business coaching and marketing company. We’re a little unique into the fact that we are Napa Auto Parts endorsed coaching company. So we have an agreement with napa, we coach their auto care centers, and part of our processes is helping shop owners really adopt other programs like AutoVitals as we bring clients in to show them the true benefits and all the resources that they have to them through the NAPA Auto Care center program. So super excited to be here and appreciate the support and the partnership that our SOT and AutoVitals has together.
Lauren Thunen (05:52):
Yeah, thank you Jaron. And yeah, it’s incredible that you have 25 years of experience your young age. When I tell people that I’ve worked for Auto Vital since 2017, they also don’t believe me, so I get it. But you are way well ahead of me in terms of experience. So I’m honored to be with both of you in the presence of so much greatness. So let’s dive into it real quick. Just one housekeeping note is if you are on Zoom live with us, you will see that there’s a q and a chat at the bottom of your screen. You might have to hover over your Zoom window to see it. Please feel free as we go through to put any questions, comments, chats in the q and a box, that’s what I’ll be monitoring. And when we have a natural break in conversation or at the end of the webinar, we’ll make sure to get to all of those questions.
(06:36):
If we happen to run out of time, zoom saves all of your information and your questions and then either myself, Jaron Roy, who is ever the best to follow up with you, we’ll make sure you get a follow up. So again, as we go through any questions, comments, don’t be shy. You have two of the greatest in the industry here. Make use of your time with them here. Alright, so let’s get into it. Now, this webinar is all about key performance indicators. So Roy and Jaren, why did you join for this episode? And in other words, why is tracking KPIs so critical for every shop in the industry? Success?
Jaron Kleber (07:14):
I’ll jump in real quick, I’ll keep it short and sweet. Right. So when you talk about tracking, why is it so critical to track your shop success? Our fearless leader, Mr. Dave Justice, the president of our SOT, he has the saying that he uses all the time. You can’t manage what you don’t measure. And I take it a little bit further and I’m a big sports fan, so I like to use the sports analogy of how do you know you’re winning if you’re not keeping score? And so if you’re sitting here on this webinar today and you’re trying to learn more about KPIs, what’s next steps? What’s important? The first thing is obviously you have to put some sort of process in place to identify where you currently are with your KPIs and when I know we’re going to talk about which ones we think have the most impact for your business.
(08:14):
But then once you have those in place, you have to constantly monitor them. And going back to the sports analogy, if I’m on a football team and it’s the fourth quarter and I have the ball, but I have no idea what the score is, Lauren, well, which play am I supposed to call? What am I supposed to do? Do I need to score the touchdown? Do I need to run the clock out? I’m ahead. So for me, that’s a very basic analogy that I think a lot of people can follow is you want to be successful, but what does that success look like? And so tracking these KPIs and then keeping them in front of your team members every single day through daily huddles, through the tools, the softwares that’s available, it’s critical to the company’s growth, the employee’s growth. And it’s something that of course we preach every day and Roy does with his coaching clients as well as in his own shop.
Lauren Thunen (09:12):
Yeah. Awesome. Thanks Sharon. Anything to add? Roy there,
Roy Foster (09:16):
Man, that was a great, Darren summed it up great. Like I said, having the KPIs to manage your business, having the data, training your staff, what the data means and why it’s important. And I’m very transparent with my team. Even we even talk about the sales numbers each week and to employees that looks like a whole bunch of money. Roy’s getting super rich off of us and we’re just getting the crumbs. But as we’re able to educate them why we have to get this, why we have to have aggressive goals and what’s in it for them? So what’s in it for them is they’re working for a healthy business, we’re able to reinvest, we’re able to give them top pay, top benefits and equip the business with the latest and greatest tools and equipment that they need to do their job. So whenever they need, we have three brand new lifts getting installed here in just a couple of weeks.
(10:26):
Not that our old lifts are bad, but it’s going to help their job. It’s going to improve efficiency, it’s going to make it better for them. And so as I’ve educated ’em working for a healthy business, we’re able to just do these things. We can just cut the check and get it done. And they appreciate that. And just one other example, because I’ve been doing this for a long time, sharing these KPIs and I’m just talking about the gross sales, the dollar amounts, but during Covid, it was uncertain what was going to happen when we were driving to work. There was not another car on the road, businesses closed everywhere. My team showed up and I was able to tell them like, Hey, look, don’t worry, you’re going to get your paycheck as normal. We don’t know what’s going to happen. We don’t know if we’re going to have cars. We don’t know if we’re going to get shut down, but we do know that we’re going to continue to pay you because we’ve paid attention to the numbers, we’ve hit our goals and we’ve turned this into a healthy business. And it benefits them big time.
Lauren Thunen (11:33):
Yeah, absolutely. I like that you both hit on sharing these metrics with your team because again, Jaron, I play a lot of sports as well. I always have said I’d rather be the worst player on the best team than the best player on a losing team. People want to know that the business that they work for is doing it’s motivating. And also Roy pointed out, you want to know that you have job security, and that helps limit folks from looking around. If folks think that they’re in a failing shop, even the shop could be doing great, but they just don’t know. They might be looking for other opportunities just in case things go south. So I love that you guys share that with your team. Now, Jaron, what are a few of the key metrics that we want to talk about today that Repair Shop of Tomorrow focuses on? Because I dig into the AutoVitals business control panel, we have over a hundred KPIs that you can track. So let’s drill down and focus on a few. What are the top ones that you recommend folks look at today?
Jaron Kleber (12:29):
Yeah, well you bring up a great point. You can look at hundreds of KPIs in your business. We really try to focus on 10 key metrics as it relates to KPIs, but for this kind of our discussion, how we’re leading it today, I’d say that the three big ones that we’re always focusing on really all have to do around the labor side of our business. As automotive professionals, I always tell people, parts are what you sell. Labor is what you produce, and there’s a reason Mrs. Jones is coming to Roy Foster’s automotive. It’s because they employ the skilled technicians to work on these vehicles. Anybody can go buy a part and slap it on the car, but it’s really important that we hone in on the labor side of our business because it’s our biggest opportunity for growth. It’s the biggest opportunity to generate revenue, to generate profit.
(13:32):
And so productivity is huge. Productivity as Roy will tell you, has a direct reflection of course on your top line sales, but even more of a financial impact on your bottom line net. So productivity, labor, hours per ticket, labor hours per ticket’s, a huge one. And then tying that into labor, gross profit percentages and just making sure that we’re really healthy on those three metrics. And again, we measure about 10 of ’em, but I think for what we’re really focusing on today on this webinar, those are the key talking points that I think we’re going to address.
Lauren Thunen (14:14):
Yeah, yeah, it makes a ton of sense. And Roy, I see you nodding your head. How have, obviously you’ve been in business for a long time, how has your perspective shifted and how have you optimized pricing your labor and then also how you’re tracking some of the metrics that Jaron talked about here?
Roy Foster (14:31):
Yeah, so for sure, we’ve been a business 78 years. We’re a multi-generational company. We’ve always done, but once I started with repair shop at Tomorrow and really honed in on the metrics Jarron’s talking about instead of having so much noise out there, we can really bring it into focus on what’s most important and what brings the most to the bottom line. And yeah, I would say, gosh, I totally lost my train of thought. I give me that question one more time just so I can make sure I answer it correctly.
Lauren Thunen (15:15):
Yeah, of course. I was just going to say, how has your strategy for pricing your labor changed over the course and what are the goals that you’re looking to hit on labor hours per ticket and then gross profit from your labor?
Roy Foster (15:28):
Yeah, okay. So first of all, when we’re pricing our labor, when I talk to guys, they’re like calling the guy down the street finding out, well, what’s Joe charging? Or they’re afraid I can’t charge that much when reality, we need to at repair shop tomorrow, we actually have tools and calculators to tell us exactly what our labor rate should be. And then when we’re talking about labor rate, we’re also talking about effective labor rate. So the actual labor dollars we’re collecting and not just what we put on the wall, that’s not realistic to go by that. So it is great to have that calculator. It’s great to know what we need to be charging to train our team, why we charge it, and then to sell the value to our clients. And as we sell the value, we have a three or 36,000 mile warranty.
(16:25):
We have master technicians working on your car, the latest tools and equipment, clean facility as we’re selling the value labor or price becomes a non-issue. So we can’t be afraid to price our labor for what we need, what we’re worth. We’re bringing a lot of value to our clients, much more than most other shops are able to bring through the Autocare program especially. And then some of the KPIs, like we talked about, labor hours per ticket. Just to give you an example, we like to see at least three hours per ticket and to get there, that’s where AutoVitals comes in to really help us to achieve that, right? If we’re just doing what’s coming in, like Mrs. Jones just wants this noise fixed or whatever, and we’re never going to achieve that. But what we need to do is we need to be inspecting every car thoroughly.
(17:23):
We need to have metrics on our inspections, how many recommendations per ticket? How long is the customer looking at the inspection? Are they being educated and understanding what’s going on? Are the inspections being sent out? Lauren and I talked about this yesterday, that’s a pet peeve. I have coaching. We see shops that do a lot of a high percentage inspections, but a very low percentage of inspections being sent to the client. So we have to make sure that information’s getting to the end of the road, getting to the client. And as we’re keeping an eye on these things and measuring and managing by the data, then we just get better and better and we achieve higher aros, more customer satisfaction because we’re giving them the big picture. We’re really doing them a service as people are afraid to present too much stuff. But in reality, people want to know what’s wrong with the car. It’s not a high pressure thing, it’s just like we’re giving you the information, it’s your car, it’s your choice, it’s your money, but it’s our duty to provide you all the information because we don’t want to send you down the road into car that’s unsafe. So those are some of the things we can really focus on to drive those numbers for sure.
Jaron Kleber (18:50):
And I just want to touch on a few things Roy said real quick, and I’m probably going to get slapped for not saying this earlier as far as metrics go, effective labor rate, as Roy said, is one of the most important numbers in your business. Gross profit per hour of course is very important as well. But Roy talked about from a pricing strategy, Lauren, I hear it all the time. I’m meeting with potential clients and we’re going through and we’re looking at their numbers and we’re doing an evaluation for them. And to Roy’s point, the what should I be charging gets brought up all the time. And so one of the calculators Roy referred to is simply a labor calculator, an employee calculator. So we know what we’re paying our people. However, your cost as a business owner is not what you’re paying your people.
(19:51):
It’s also what percentages of taxes you have to pay to the government. It’s your percentage of workman’s comp. And then think about it as an owner, what other ancillary benefits are you giving those employees? Do you have paid holidays? Do you have retirement? Do you have insurance? And so what’s really cool on the calculator is you input all these numbers into the sheet. And so let’s just say Roy’s a $30 an hour employee, but by the time we go through and add all that up, we see that Roy actually costs me 40, $44 an hour. And then we take it a step further from that and say, okay, well what labor gross profit do you want to hit? We would love our clients to be in the 70 to 75% gross profit on their labor. However, if we want to hit that gross profit percentage, we need to know what our effective rate needs to be to hit that right Roy.
(20:50):
And so it’s really eyeopening, Lauren, when you go through this worksheet and you see her employee, what their effective labor rate needs to be to generate the labor profit percentage, that 70, 75% in most cases, people are 40, $50 off from their posted labor rate, not even getting into their effective labor rate. And then we’ve taken it a step further and tied that into productivity to show them how that metric lowers that effective labor rate need. So if my shop is running at 90% productive, I might need to be at $150 an hour on my effective labor rate, but if my shop Roy is only 60% productive, guess what? Now that employee’s effective labor rate needs to be 180 5, 1 90 an hour. So you have to look at it. You have to analyze your business, each individual employee to make sure you’re capitalizing and you’re capitalizing on these KPIs in these metrics that we’re talking about.
Lauren Thunen (22:02):
Yeah. Awesome. Really good points. And just going back to something that Roy said in the new Echo, Jaron, is be aggressive with your pricing. You’re a great shop. Train your service advisors to handle that over the phone in the sales process. And Roy, I’m going to ask you a little bit how you do that with your team, but I take my friend’s cars to get fixed because boy howdy, will they not do it? And every time I take it, I take it to an NAPA Auto Care center center or Bold center out in San Diego, shout out to Miramar Automotive if you’re listening. And every time I tell them, this is going to be more expensive than the shop that you’ve previously taken your car to, but when I get in your car, I’m scared for my life. So you need to take it to a shop that is going to do their own inspection and has the best technicians because they’re going to fix your car correctly and they’re going to give you a true state of their vehicle.
(22:53):
And again, like Roy said, when my friends get the inspection reports, they’re absolutely blown away because no one has done that level of service. And for me and my age group, by far, a car is the most expensive thing that I own, that my friends own that I will own, that I’ll probably own for a long time. So making sure that you’re making the proper investments in that is critical. So Roy, I kind of alluded to it, but I know a lot of folks probably listening want to be more aggressive with their pricing on their labor and even their parts markup. How do you train your team to see the value in having a high labor rate and higher cost? And then how do you give that value to the customer to ensure that they want to stay at Roy Foster’s automotive?
Roy Foster (23:39):
Yeah, so let me just start with the perception is, especially with advisors and people like, ooh, that’s a lot of money. But as we train them on the numbers and stuff that I alluded to earlier, they have more of an understanding of what the business needs to make. And our business has been undervalued forever. There’s an analogy I like to use. I think of the plumber. The plumber’s got a van and his tools, he has a pipe threader and he’s got some torches and his van is equipped to go out and do any job he needs to do, and his training hots on the left and crap rolls downhill, and there’s not a lot of technical training as a plumber. And yet then you look at and that guy’s getting 250 bucks an hour come into our facility, we’re spending thousands just on subscriptions just to be able to work on the cars, to get the data to be up to date.
(24:47):
That’s just technology charges, not counting all the tools and equipment and the facility and the high paid employees. So step one is they need to understand what our value is that we’re really bringing and what we deserve to charge. And then for them to sell the value, they just need to talk about the things we’re doing for them. So one thing is perception. They come into our business, it’s clean, it’s organized, the employees are clean, there’s not old parts laying around, it’s just everything’s well kept, and that’s a reflection of how we’re going to take care of their vehicle. And then as we sell value, price becomes a non topic. So we’re telling we’re getting a three year, 36,000 mile warranty. We can give you no interest financing. We can, like I said earlier, the master technicians and talk about the investment. We have to properly work on their cars.
(25:53):
And above that, even the inspection, because like you said, people aren’t used to getting that. They get the text and we prepare them and we set the expectation like you’re going to get this text. We show ’em how to use it. And that’s the number one Google Review we get is transparency, communication all through the process. And that’s just where we’re really winning. So as we’re doing these things, prices becomes a non-issue. And whenever price is an issue, it’s usually on the parts side, almost never on the labor side because it’s almost impossible to know what a labor charge is for something so many variables, they’re just never going to really know. But as long as we’re charging a fair price, we’re using our labor to set our rates so we know we’re charging properly on each repair order. It just all comes down to training and education, both on the advisor side, on the technician side and the client side.
Jaron Kleber (26:57):
Yeah. Roy, you mentioned Google reviews. I like looking at our client’s reviews and when I’m working with a potential prospect, I’ll do some research and see their online presence and different things. And my favorite reviews, and I haven’t looked at Roy’s, but I guarantee you there’s some in there. Roy Foster’s automotive man, they’re not the cheapest in town, but they’re the best. That is the golden review. They took the time to go online and say to millions of people, these guys might not be the cheapest in town, but they’re the best. And I took time out of my day to leave them a five star review. And then of course the opposite is I get a little leery when I see reviews that say cheapest in town fair pricing. And it’s like, I don’t know. So look, the highest price shop or highest price business in town very rarely goes out of business. So keep that little nugget of information as you look at how to price and how to go to market in your individual areas.
Lauren Thunen (28:23):
Yeah, awesome. And I like Jaron and Roy, what you both said as well, of focus on your business and the percentages that you need to hit to be profitable versus looking outside at your competition. First, compete with yourself and that’ll tell you where you need to be versus trying to play race to the bottom or even race to the top of who’s around in your area. Because if you’re on this webinar and you’re learning more information, you’re probably not like most of the shops in your area, you’re a grade above. So don’t be afraid to be Jaron. You’d also mentioned that if your shop isn’t achieving your productivity goals, then of course you’re going to have to inflate your effective labor rate because you need to make money somewhere. So how do you work with shops to measure productivity? Because I think that’s something that a lot of folks struggle with is like, yeah, I feel like we’re getting a lot done. We’re super busy, but you might not be as productive as you think. And then how do you set goals there too?
Jaron Kleber (29:17):
Yeah, so I think there’s a lot of confusion about productivity, about efficiency, and a lot of times those numbers get misconstrued. So when we’re talking about productivity, typically we’re looking at how productive is the shop as a whole. And so productivity looks at your build hours divided by the clocked hours that you were in the building. So if Roy can turn 32 hours, but he’s clocked in for 40 hours, he’s only 80% productive. And so a lot of times I feel like the shop owners, the business owners, they’ll look at productivity and they’ll measure it and they’ll look at it individually, which is good. We look at it individually of course as well, but then they want to start pointing the fingers and playing the blame game on the technicians all the time. Well listen again, it’s build hours divided by the clocked hours. So if I’m a technician and you can’t provide me with the cars to generate those build hours, that’s not my fault as a technician.
(30:37):
And a lot of factors come into play when you talk about productivity. Let’s say you have one service advisor and you have five technicians that that service advisor has to manage. Well, think about the workload that you’ve just put on that advisor. They have to build every estimate. They have to source the parts, they have to send the AutoVitals inspection, they have to call the client, they have to get the approval. Now all of a sudden, I have technicians that aren’t being able to be as productive as they would like as their owners would like, because there’s an issue with workflow, there’s a bottleneck in the business. And so the majority of clients, Lauren, that we work with, they come to us like Roy Foster did in 2019. Roy was already an amazing shop owner, but he knew that, Hey, I know there’s more here.
(31:32):
I know that I can be a little bit better. I just need the tools to do so. And the biggest, I think, challenge in how do we address it, it comes down to SOPs and it comes down to workflow and the AutoVitals product. When you talk about, listen, there’s a lot of great digital vehicle inspection softwares out there, but Lauren, you and I have had conversations, right? AutoVitals is a total workflow solution, and so we’re not talking bad about any of your competitors or anything like that, but it’s not just a digital inspection product, it’s a complete workflow management system and the control the business dashboard, Roy obviously has access to that. He has his coaching clients, he sees their numbers and he’s able to coach. So he can speak more specifically on the dashboard side, but a lot of cases is it’s the bottleneck in the facility and we got to look at how we can help the team be successful.
(32:38):
And maybe that is adding another employee, maybe that is adding another advisor. If you don’t have tools like AutoVitals, right? Let’s talk about putting in a software that’s going to help you manage that. Because like I said earlier, production has a direct reflection on your bottom line net profits, and it’s not about working on every single car. It’s about maximizing every opportunity that comes through your door. And so we’ve all heard the analogy, we have to slow down sometimes to speed up 1.4, 1.5. Labor hours per ticket is the average across the United States. I can verify that. I would like to say pretty accurately because I’m doing hundreds of evaluations of businesses every single year. And so there’s a direct correlation, Roy, if my labor hours per ticket are 1.5, my a RO is below the benchmark and my production is typically below the national average of about 67%.
(33:47):
So it’s combining all of that knowledge and saying, okay, what processes do we need to put in place? We need to focus on these key metrics, which by the way, are now going to have a direct correlation on the production of the shop, which is going to drive our sales. Our a o is going to go up, our net profits are going to increase into Roy’s point. You’re going to be able to provide your employees a business that is healthy where they can make a lot of money as well. It’s not about the owner having two boats and an airplane and doing all this stuff, right? Sure, they’re taking a lot of the burden of being the business owner, but the good ones, they want their people to have the luxuries in life that they want and they want them to take care of their families as well. So that’s how we try to approach it and give them the tools necessary so that they can see those results not only for them, but like I said, for their employees as well.
Lauren Thunen (34:55):
Awesome. Thanks Jaron. And you mentioned Roy, you came to Repair Shop of Tomorrow, back in 2019. And like Jaron said, you were already a great shop, had a great reputation. What were some of the things that you’ve changed over the last five-ish years to increase that productivity in terms of reducing bottlenecks so your team can get more done in a day?
Roy Foster (35:18):
Yeah, so one thing I realized is I needed another advisor. So we have an advisor for every two techs because face it, that’s probably the hardest job in this whole industry. Like Ger was saying, the guy’s got to do the estimate, he’s got to edit the inspection, he’s got to send the inspection, he’s got to source the parts, look up the labor, and in between all that, he’s got to deal with the technician coming in, telling him he’s got the wrong part, and the people come into the counter to pick stuff up, drop stuff off, the phone’s ringing. So the improving our efficiency and knowing where those pain points are in our efficiency drives our productivity. So we need to figure out what’s affecting our efficiency. So in my case, a big part of it was my advisors were just overwhelmed and consequently just processing cars.
(36:18):
So the inspections are getting done, but they don’t have time to sit down, really polish and edit the inspection and spend time going through the inspection with the clients. Rather, they’re just like, we got to get Mrs. Jones’ car back out right now. We got to get this next one in. So exactly what Jaron said, sometimes we just need to slow it down just to, and the fruits of that is the overall experience for everybody’s better. So instead of the 1.4 hour per ticket average, now we’re at three hours per ticket consistently like year to date or better, and our advisors are a lot happier. We’re not burning them out. So by identifying just that one efficiency problem in the business really helped our workflow, helped the overall customer experience, and definitely helps the bottom line.
Lauren Thunen (37:21):
Yeah. Yeah, that’s awesome. And I think it’s important to note from what you said Roy and Jaron, is identifying where you want to spend and invest money in your business of if you’re having a profitability problem or you want to hit a new profit goal, oftentimes you have to spend money by hiring an additional person, hiring two additional people, investing in a software program, investing in a new lift, new tools for the technicians, things like that in order to get to that next step. So really identifying when you’re looking at your business, where can I spend more money to increase my return on investment, and where am I potentially wasting money? Are there things in the shop that you’re not using? Are there employees that are not as effective that you need to train? But not being afraid to spend money in order to make money, I think is important from what I just heard you and Jaron say.
Roy Foster (38:13):
Yeah, one of the things I hear a lot from clients is like, I can’t afford another advisor. And it’s like you can’t afford not to. And again, we have calculators to prove this stuff out. So what’s it going to cost me to put in another advisor and what’s it going to bring to my bottom line? There’s tools to figure all this stuff out. We’re not just throwing darts at the board. We actually have it down to a science where we can prove, Hey, it’ll cost you this much to have another advisor to bring you this much more to your bottom line. And that’s what’s really cool about managing by the data. But in my case, before I came, I didn’t know what I didn’t know. Like Jaron said, I was running a good business, my clients were happy, my employees were happy, but we just weren’t maximizing the business. And some of the things, another thing Jaron mentioned was just having SOPs. So having processes in place where everybody knows. So we’re producing the same result every time for every customer is getting the same experience, the technicians and advisors and managers, everybody knows what their roles are. And in addition to that, just think of the value that that brings to your business by having these things in place. When you want to sell your business and you have an operating manual, you have all this data to back everything up.
(39:44):
It’s worth the investment just to do those extra steps to bring all that value to your team, to your company, to yourself, clients, everything.
Jaron Kleber (39:56):
And listen, I know we could talk for hours, and I know we’re probably getting close on our time here, but just one thing quickly, which I can’t do anything quickly, so I apologize in advance when we talk about I can’t afford to do this, I can’t afford to do that, right? One metric, I’ll just say we have the tools would be more than happy to discuss with anybody what those look like. But an important KPI to look at that is gross profit dollars per hour, and you take your gross profit dollars divided by your bill hours, that gives you your gross profit per hour. Once you know that number, you can use that, like Roy said, for basically anything, right? Roy, for technician, for advisors, for new pieces of equipment, for technology, because we know what we’re collecting per hour, what do we think adding that technician is going to produce?
(40:51):
Or what do we think adding that advisor is going to produce? Or if we add another lift, what do we think that can produce? And what’s really eye-opening, Lauren is, and I’ll go on the technician side, we run these numbers and they’re like, man, I just can’t afford to hire a technician. We go through this whole analogy with them and I’m like, okay, so let’s just say you have to pay this guy $1,500 a week. Here’s your current GP per hour. You realize he only has to produce 10 hours a week, or she only has to produce 10 hours a week to pay for herself. And they’re like, how can that be? And it’s like, here’s the data. Going back to what Roy said, managing your business off the data that is provided to you and through the AutoVitals platform. I mean, you guys have, again, data upon data. We love it as RSOT. A lot of our clients use it. Our coaches love it because now they have that extra layer of information that they can use during those coaching calls to really effectively put the right processes in place to help these shops be successful.
Lauren Thunen (41:58):
Yeah. Yeah. Awesome. And like you said, we are running a little short on time. So last question for you both, and then I will ask you too, both to share how to stay in touch with both of you and Jaron, of course, with Repair Shop of Tomorrow, folks are interested, but leaving this webinar is, and these questions are hard, but what is the one biggest piece of advice you’d give if someone doesn’t listen to it? Forgets everything else that was talked about? What point do you really want to hit home for listeners? Roy, why don’t you get us started?
Roy Foster (42:29):
Just say me. No, you’re good.
Lauren Thunen (42:32):
I mumble sometimes.
Roy Foster (42:33):
Yep. First, be committed to want to change and then be willing to go out of your comfort zone. It’s uncomfortable making these changes. It’s kind of scary spending that extra money or bringing those extra people or hiring, taking on a new service like AutoVitals or repair shop at tomorrow, whatever coaching company it could be, or DVI, it could be. You just got to be willing to change. It’s a changing world ever changing every day. And the more we can stay ahead of it, the more we can use technology and data to manage our business, the better. And sometimes it takes a little humility. I know what I’m doing, and most shop owners do. They do a great job repairing the car. Most shop owners we’re former technicians and now they’re business owners. So now they need to get the training on how to manage their business. Just having the humility and willingness to get uncomfortable. I always say if you’re too comfortable, you’re not growing. And if you’re not growing, you’re too comfortable. So be willing to get out of your comfort zone and great things can happen.
Lauren Thunen (43:51):
Awesome. Jaron,
Jaron Kleber (43:54):
I’ll keep it short. So review. Yeah, I know. Review where you currently are. Okay. So use your SMS or use tools like AutoVitals to review where you currently are in these key metrics we talked about with a big focus on productivity, effective labor rate, labor hours per ticket, and then put a plan together to show you where you want to go. So it’s funny, I heard this somewhere, we talk about business coaching and coaching. The word coaching actually generated way back in the day from the word stage coach because the stage coach took people from where they were to where they needed to go. So again, identify where you’re at, put a plan together and work with your team and collectively decide where it is you want to go.
Lauren Thunen (44:54):
Awesome. Yeah, I think that’s great. And using the software to help you get there. And I have the pleasure of talking to some of the brightest minds in the industry, and every single one of them always echoes the importance of being part of either a business coaching group, a networking group. All of the people that I know that are smarter than me are smarter than me because they use all of the resources at their disposal. And you don’t need to go into these changes alone. There’s tons of people who’ve paved the way. So make sure, regardless of who you go with, obviously we love Repair Shop of Tomorrow. It’s great to be part of a larger networking group to bounce ideas off of each other. So in that vein, if folks are interested in staying connected with Repair Shop of Tomorrow, Jaron, what’s the best way for them to do so?
Jaron Kleber (45:41):
People think I’m crazy when I say this, but I give out my cell phone number, how everyone gets ahold of me. So if you want to chat, if you’re interested, (618) 334-8489 is my cell phone. And then of course you can get online and find us at Repair [email protected], as well as social media on Facebook, LinkedIn, and Instagram as well. So I would give out my email, but it’s the world’s longest email and my name is always misspelled. So use those resources first and would love to have an opportunity to chat with anyone that’s here listening or listening later on through the recording.
Lauren Thunen (46:28):
Awesome. Perfect. Yeah, we will include the Jarron’s contact information, including his cell phone number. Yeah, that is a little wild, but I respect it in the follow be. Most of you didn’t have a chance to jot that down. Stay tuned. We’ll send you an email later today. I just wanted to thank both of you so much. It’s always a pleasure getting to spend time with you, especially 45 minutes. So thank you both for your time. The entire AutoVitals team is very grateful to have Jaron you as a partner and Repair Shop of Tomorrow. And then Roy, thank you so much for being such a loyal client to us and you’ve done so much to help push our product forward. So definitely we are indebted to you. So thank you so much for spending some time with us.
Roy Foster (47:04):
No problem. My pleasure.
Lauren Thunen (47:05):
Cool.
Jaron Kleber (47:06):
Thank you. Appreciate it. Thank
Lauren Thunen (47:07):
You. I’ll see you guys later. Have a good rest of your day. You too. Thanks. Bye.