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Tom Ham Read Latest Reply ›.
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I just hared a new service advisor! (first one for me) He has about 15 years xperiance and has worked for me for about 3 weeks. He has great skills and really nows how to do his job but I have noticed that he prices things higher than I do. and he tends to sell a lot of menu priced things, which is great but I fear that he may scare some my clients off. I have talked with him about our price matrix and he says we are not chaging enough for parts so he over rides the matrix. He has worked for a big name in the tire business for a long time and has had lots of trianing in this area. I guess I just want to know if I should let him do his job or should I limit whathe can chage?
kipp galloway wrote:
> I just hared a new service advisor! (first one for me) He has about 15 years xperiance and has worked for me for about 3 weeks. He has great skills and really nows how to do his job but I have noticed that he prices things higher than I do. and he tends to sell a lot of menu priced things, which is great but I fear that he may scare some my clients off. I have talked with him about our price matrix and he says we are not chaging enough for parts so he over rides the matrix. He has worked for a big name in the tire business for a long time and has had lots of trianing in this area. I guess I just want to know if I should let him do his job or should I limit whathe can chage?
A couple of things come to mind.
When pricing requires adjusting, assuming that it really does, it is best to do gradually in most situations….at least for me. If a 10% adjustment is required 1% for 10 months or maybe 2% for 5 months might be ways to do it. Big changes fast can cause issues for many shops.
To me, selling, customer relations and similar things are the job of the advisor according to shop policy. Specific pricing would seem to me to be the job of management…at least that is what we do.
Bottom line…it is your shop and you should make sure that it is run the way that you want it run.
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Tom Ham
Auto Centric
5355 Plainfield Ave. NE
Grand Rapids, MI 49525
616-364-4001
www.AutoCentricRepair.com
Tom@AutoCentricRepair.comI totally agree! But I have to wonder if we are under priced or if he is just seeing what he can get out of a ticket. I guess a price guide sheet is in order!
kipp galloway wrote:
> I totally agree! But I have to wonder if we are under priced or if he is just seeing what he can get out of a ticket. I guess a price guide sheet is in order!
We have all of our pricing set in our computer system and specific guidelines for anything new that we have not priced in the past….so there is no editing on the part of the advisor. He either uses the existing price or uses specific formulas to calculate any new prices.
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Tom Ham
Auto Centric
5355 Plainfield Ave. NE
Grand Rapids, MI 49525
616-364-4001
www.AutoCentricRepair.com
Tom@AutoCentricRepair.comKipp, Tom, I’m getting ready to hire a manager with the intention of placing my customers in his hands. Probably the hardest thing I’ve had to do, but I think it will be for the best.
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Kipp, your SW is doing exactly what I’d like. If he’s going hog wild, and you’re getting complaints, it’s probably time for an adjustment. If you’re not getting complaints, and he’s handling everything else professionally, let him go and monitor him for a while. The other side of the coin is taking away some of his autonomy may actually hurt what you’re trying to accomplish. Charging more money isn’t a bad thing, unless you’re seeing some other negative result.
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Tom, Thank you for the advise it helped put things in perspective. Unfortunetly, we are starting to see some complaints and I am finding that I am staying late to fix the problem while he goes home, and I have him on salary! Am I wrong for thinking that you should stay and get the customer taken care of before you run out the door?
kipp galloway wrote:
> Tom, Thank you for the advise it helped put things in perspective. Unfortunetly, we are starting to see some complaints and I am finding that I am staying late to fix the problem while he goes home, and I have him on salary! Am I wrong for thinking that you should stay and get the customer taken care of before you run out the door?
That depends on how you set the rules. It should be clear how you expect this to be handled.
As far as your situation overall, it sounds familiar to me. Now, I’m sure there are a lot more details, but it reminds me of when I have hired someone who seemed to “take over the shop”. Next thing I knew I was working for him….he became the “boss”. It did not last long…I moved him down the road and found someone who understood who the boss was.
He is likely correct that you are due for some adjustments, but you must be the one to lead in that area.
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Tom Ham
Auto Centric
5355 Plainfield Ave. NE
Grand Rapids, MI 49525
616-364-4001
www.AutoCentricRepair.com
Tom@AutoCentricRepair.comWell I sat him down and talked about all of my concerns and all of his concerns and I think things are going to be good. We both agreed that we need some policy and procedure improvement and he agreed that saying no to the boss is not an option. thanks for the coaching.
Just a quick addition to this thread. I didn’t see it early so I’m adding my two cents after the fact.
I started as a service advisor at a different shop about six months ago. We had quite a few growing pains because I too needed to modify some faulty pricing. I noticed you didn’t get into specific percentages on what he was changing and how much but I’ll give you some perspective on my experience, along with my conclusions.
First, the parts pricing was too low. The average gross profit on parts was only about 37 to 39 per cent. Their rule was to charge list price or double the cost, whichever was less. They did well on brake parts but really sucked on some things like filters.
Of course, ideally we would like the margins to average to around 50% on parts but I too was limited in what I could do to avoid “sticker shock” with not only the customer but with the owners. With some minor modifications and following a realistic matrix, disregarding the almighty “LIST PRICE” for a bit, I have been able to bring the parts margin up to about 42.5%. It doesn’t sound like a lot but 3% of 20,000 a month is another $7,200 of NET PROFIT at the end of the year.
This was only part of the changes that I made and maybe your guy is doing too. Being aware of value added services (legitimate only) such as flushing the cooling system when replacing the water pump and actually looking at the odometer and suggesting mileage sensitive services has helped to bring this shop up by 20 to 30% per month – with happy customers.
Quick warning: Don’t think it’s a coincidence if things get better and sales go up because of the new guy. My employers just made that mistake at the end of the six month trial period and I will be moving on to help improve somebody else’s shop.
I’m not bragging about what I did or what I do, I’m just illustrating that sometimes owners can have a bit of shock when a new person starts changing things. I’m glad you took the approach of getting advice instead of completing shutting down your new service advisor. Being open to new ideas will help you survive through the trying times to come.
It’s very common for the owner to NOT charge enough. An employee will almost always get more for you than you can do yourself. I would definitely work on some procedures and limitations with your SA. Another thought, you might want to consider putting him on performance based pay. That will help keep him there to take care of his own problems. Also, set up policy for bonuses and consequences,everyone needs to know whats expected of them. I would consider doing the same with the techs.
HEY JEFF IF YOU WANT TO MOVE TO OREGON OHIO CALL ME WE NEED AN AGRESSIVE SERVICE ADVISOR THAT THINKS OUT OF THE BOX http://WWW.DANRSAUTO.COM // EMAIL DANRSAUTO@AOL.COM 1-888697-5399
Jeff, sounds like you’re trying to improve things (one of the reasons for hiring an SM or SW) and you didn’t have the support. It also sounds like you gave it a good shot. Oh well, it’s got to work for both parties, in that it’s a very important position. I have hired my first mgr. to replace me in my current position. I plan on returning to the job of entrepeneur. I had two others in the past, a franchise trained experienced guy, who wouldn’t follow procedural rules, would not pitch a job within earshot of me, and eventually forgot to get paid on a job. Just forgot. The other was my son in law, a great car salesman, but couldn’t understand the concept of a relationship, rather than blast ’em and pick up the chips later. Gone also.
This new guy? We’ve posted similar ideas for years on numerous forums, and although he doesn’t start till the 21st, he’s already working on the position. Wish us luck, although I don’t think we’ll need it.
I’ve held a few jobs as a SW,SM,CM whatever you want to call it, and sometimes it worked out for 13 yrs, and sometimes a month. Don’t look at your current employer as wrong, just too stuck in his ways to change. Good luck.
Jay Alfsen wrote:
> It’s very common for the owner to NOT charge enough. An employee will almost always get more for you than you can do yourself. I would definitely work on some procedures and limitations with your SA. Another thought, you might want to consider putting him on performance based pay. That will help keep him there to take care of his own problems. Also, set up policy for bonuses and consequences,everyone needs to know whats expected of them. I would consider doing the same with the techs.
Jay, I think you are right about an incentive program of some type for the SA, techs or some kind of a team thing. I really want to do that but I feel like every time I gear up to introduce it everything falls apart! IE: this last week one of my techs was doing a motor swap in a 4.0l jeep cherokee that took him almost 25 hours and Im sure you have an idea of what book time is on it. the bad thing is i pay my guys hourly, so when stuff like that happens i really cant afford any incentive! any ideas on different types of programs? please give me some direction!!
Jeff, I think that you were doing a great job and I wish you well in finding the nest. I also think that my SA is doing a great job over all. We figured out that he wasnt being PERFECTLY clear on the final bill mostly due to my clients that have the attitude that “if it needs it do it” because they trust us. I learned early that those are the people that really need to understand what is being dine and waht the final price is going to be, where he did what they told him to do but then the client had sticker shock do to our “moderate” price increase. And I think a little common sense is needed for pricing on some things. IE: charging 7.85 for a quart of oil because “that is what the matrix set it at” HELLO!
kipp galloway wrote:
> Jay Alfsen wrote:
> > It’s very common for the owner to NOT charge enough. An employee will almost always get more for you than you can do yourself. I would definitely work on some procedures and limitations with your SA. Another thought, you might want to consider putting him on performance based pay. That will help keep him there to take care of his own problems. Also, set up policy for bonuses and consequences,everyone needs to know whats expected of them. I would consider doing the same with the techs.
>
>
> Jay, I think you are right about an incentive program of some type for the SA, techs or some kind of a team thing. I really want to do that but I feel like every time I gear up to introduce it everything falls apart! IE: this last week one of my techs was doing a motor swap in a 4.0l jeep cherokee that took him almost 25 hours and Im sure you have an idea of what book time is on it. the bad thing is i pay my guys hourly, so when stuff like that happens i really cant afford any incentive! any ideas on different types of programs? please give me some direction!!
There are almost limitless ideas on how you can do incentives. We pay hourly, review production, and adjust pay accordingly based on what they produce over a 90 day period. For immediate incentives we use QuickTrac where everyone on staff can see what everyone is doing both in sales and production live. We offer some small incentives based on the daily and weekly results, however I believe the largest benefits are in both the peer pressure and goals which are provided. They all watch the graphs and numbers constantly to see how they are doing and how everyone else is doing.
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Tom Ham
Auto Centric
5355 Plainfield Ave. NE
Grand Rapids, MI 49525
616-364-4001
www.AutoCentricRepair.com
Tom@AutoCentricRepair.comKipp,
Just because you are not getting complaints doesnt mean things are ok. Many people will leave without letting you know why. Check your market, if your parts are under-priced, it is your decision whether or not to raise prices.
Good luck,
Rick
kipp galloway wrote:
> We figured out that he wasnt being PERFECTLY clear on the final bill mostly due to my clients that have the attitude that “if it needs it do it” because they trust us. I learned early that those are the people that really need to understand what is being dine and waht the final price is going to be, where he did what they told him to do but then the client had sticker shock do to our “moderate” price increase. And I think a little common sense is needed for pricing on some things. IE: charging 7.85 for a quart of oil because “that is what the matrix set it at” HELLO!
Hey Kipp,
Sounds like you have a good shop to work for. Just like diagnosing a vehicle, you took the time to “diagnose” your service advisor. I am currently speaking to some forward thinking shop owners who are open to marketing ideas and business building strategies.
With this competitive market, especially here in Michigan, I have some ideas to try to help bring our marketing into the 21st century, including but not limited to YouTube video postings to link to our web site for an always available customer clinic, CD-ROM or DVD marketing handouts with a link to our website, perhaps containing an automotive glossary, and a service recommendation schedule or a fillable spreadsheet the customer to use to keep track of their mileage or vehicle expenses. There’s a lot of ways to try and compete now that won’t cost an arm and a leg and might get some buzz out to potential customers.
> Hey Kipp,
>
> Sounds like you have a good shop to work for. Just like diagnosing a vehicle, you took the time to “diagnose” your service advisor. I am currently speaking to some forward thinking shop owners who are open to marketing ideas and business building strategies.
>
> With this competitive market, especially here in Michigan, I have some ideas to try to help bring our marketing into the 21st century, including but not limited to YouTube video postings to link to our web site for an always available customer clinic, CD-ROM or DVD marketing handouts with a link to our website, perhaps containing an automotive glossary, and a service recommendation schedule or a fillable spreadsheet the customer to use to keep track of their mileage or vehicle expenses. There’s a lot of ways to try and compete now that won’t cost an arm and a leg and might get some buzz out to potential customers.
That is just what our market needs but I think being competitive part is something we bring apon our selfs. lets face it. we all know there are more cars on the road today then ever before and if something were to happen that shifted the balance from all those shops to just a few (competitive market) there is now way that those few shops could ever dream of handling the car count! In my perfect world the market would be a little more level. No more crap talking abput the guy down the street that mis-diaged a drive ability issue, no more price wars between eachother which would get rid of those price shoppers we all love. If things were more like that then I wouldnt hesitate to tell a client “hey joe down the street specializes in xyz and it would save you money in the long run to see him on this one.” and I could trust that “Joe” would return the favor. aahhh how would it be? sorry for rambleing. but lets face it more often then not WE are killing our own image by putting our brothers down just to appear better then the guy down the street.
The marketing you are talking about will work great if you can get some shops on board and have a unified front. Have you thought about broad band movie clips on your web site? nothing crazy just a short clip of xyz service you provived touching on some key points and maybe a before and after shot? Just a thought.
I have a Service Writer who has been on a Salary Based pay with the ability to earn commission if the business sell a certain amount each month. Recently he has not been producing as he once did (plays with his cell phone, visits on telephone, gives a lot of discounts) so he hasn’t earned any commission as before. Now he wants to be paid differently (thinking he will make more money)! I want to pay him based on his performance only! Just a note I do a lot of the service writing and so does another employee, his commission is currently based on total sales not just his sales. Please give me any ideas, I am not sure how to go about changing this to base his pay on his performance only.
James Lowe wrote:
> I have a Service Writer who has been on a Salary Based pay with the ability to earn commission if the business sell a certain amount each month. Recently he has not been producing as he once did (plays with his cell phone, visits on telephone, gives a lot of discounts) so he hasn’t earned any commission as before. Now he wants to be paid differently (thinking he will make more money)! I want to pay him based on his performance only! Just a note I do a lot of the service writing and so does another employee, his commission is currently based on total sales not just his sales. Please give me any ideas, I am not sure how to go about changing this to base his pay on his performance only.
Some shops simply pay a flat percent of what an individual sells. Others have a low salary plus a flat percent. Many will increase the percent as the numbers go up. With multiple service advisers it would seem to make sense to tie their pay significantly to how much each one sells.
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Tom Ham
Auto Centric
5355 Plainfield Ave. NE
Grand Rapids, MI 49525
616-364-4001
www.AutoCentricRepair.com
Tom@AutoCentricRepair.com
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