Helping Shop Owners grow into the successful entrepreneurs they imagine themselves to be.

Wednesday, September 21, 2016

How To Sell The Complete Estimate

How To Sell The Complete Estimate

By

Eric M. Twiggs




Sales are contingent upon the attitude of the salesman - not the attitude of the prospect"   W. Clement Stone 


“Ted” has owned his shop for thirty years and is the face of the business.  He had always been the only service writer and customers ask for him by name.    With certain people, he would prioritize the ticket before they raised any objections, clarifying what had to be done in the current visit, and what could wait until the next one. 

He believed his longtime customers would keep coming back as long as he was there to give them the lowest price.   This belief kept Ted at the shop working IN the business, and made him reluctant to recruit for a service manager. 

After coming to the first ATI shop owners class, Ted realized the importance of working ON instead of IN the business and decided to hire “Rick” as his service manager.   Ted’s first order of business was to bring Rick up to speed on his customer’s buying habits. 

One of his patrons named “Alan” dropped off his Ford 150 requesting front brakes and oil maintenance service last week.  

Ted has known Alan for over twenty years and Alan NEVER invested in recommended services beyond what he came in for.   When the technician came back with an estimate that included lower ball joints, struts, and a transmission service, Ted knew it was time to warn the new guy. 

“I’ve known Alan for twenty years, so don’t feel bad when he declines the additional work. He’s got two kids in college and money’s tight.” Armed with this knowledge, Rick called Alan and presented the estimate findings.

The call only lasted seven minutes, so Ted was pretty sure of what happened.  He went to console his new hire, but before he could say anything, Rick interrupted him with the following statement:” Everything has been approved, and the parts are on the way!”

The original work that Alan requested was around $300.  The final ticket came to $3,100!  Ted now understands the difference between his perception and the customer’s reality. 

The sooner you realize that your perception isn’t always the customer’s reality, the better you’ll get at selling the complete estimate!     Stay with me to learn to strategies that will help you embrace this mindset.   


Acquire The Beginners Mind

I began my career in automotive as a service advisor in a tire store with no background in automotive.  As a beginner, I consistently produced the best Road Hazard and Average Repair Order results in comparison to the other four advisors at the location. 

They had been working on cars their entire life, and had worked at the location for an average of five years.  What gave me the edge? 

My lack of industry experience gave me the beginners mind.  Unlike my coworkers, I didn’t know that our customers didn’t purchase road hazard.  I didn’t know that our area was different from the rest of the locations in the district. 

My selling skills at the time were average at best and not as strong as the others.   Since I didn’t have any perceptions about the customer’s reality, being new was my competitive advantage.     

Noted Author Shuryu Suzuki is quoted as saying: In the beginner's mind there are many possibilities, but in the expert's mind there are few.”

I challenge you to approach your customer interactions with the beginner’s mind, so that you experience the possibilities. 


Leave Your Wallet At Home

I was having a conversation with the service manager of a former client, who suggested that we lower his prices because he was losing customers.   I asked him how many he’d lost and he said he didn’t know.  I asked how many customers had complained, and he said he hadn’t heard any complaints.

I thought this was odd until I spoke with his shop owner. She mentioned that the manager was going through a divorce and experiencing some financial problems. And then it hit me.  HE was the one who thought it was too expensive, not his customers! He was selling with his own wallet.    

The key is to know the difference between sympathy and empathy.  Sympathy is when you feel compassion or express understanding for a customer’s situation based on your perspective.

Empathy involves getting out of your own head and viewing things through the eyes of the buyer. This begs the following question: What do your customers really want?

According to a 2011 American Express Survey, 70% of the respondents said they would be willing to spend more money with companies that provide excellent customer service

While money is important, the most common consumer concern is receiving value for the money.  You will be positioned to deliver value, if you leave your wallet at home and embrace the customer’s perspective.



Conclusion

So there you have it.  Ted’s new service manager has helped him to acquire the beginners mind and to leave his wallet at home

As a result, he’s having his best sales and gross profit year ever!  If you embrace these strategies, you will sell the complete estimate, and have more money to put in that wallet you left at home! 



Eric M. Twiggs
The Accountability Coach


PS.  Looking for a tool to increase your writer’s belief in selling maintenance? Email etwiggs@autotraining.net  and I will send you an article that spells out the true cost of not maintaining your car.
   


Wednesday, September 14, 2016

The Philosophy Of The Accidental Winner

The Philosophy Of The Accidental Winner

By

Eric M. Twiggs






 Failure isn't fatal, but failure to change might be” John Wooden.


What’s the philosophy of the accidental winner?  I stumbled across the answer back in 2000 when I was the new district manager over seventeen corporate automotive service centers. 

Of the seventeen, the most puzzling location was my Southern Maryland, center which was run by "Ben” the store manager.  If the district as a whole produced a 10% revenue increase for the month, Ben would be up 15%. 

The group average for net profit as a percent to sales was 18%.   Ben produced a 24% result.   As far as net profit dollar increase, the collective average was a 9% improvement, compared to Ben being up 13%. 

Being new to the market, I wondered what he was doing to consistently outperform the group.   I decided to pay him an unannounced visit, with the goal of gathering best practices to share with the other locations. 

When I arrived I found out exactly what Ben did to deliver those results: NOTHING!  The place was a complete mess!  The shop was filthy, the counter was disorganized, and the phones rang an average of ten rings before anyone answered.

It was so bad, that I once overheard a customer ask the writer: “Do you need me to answer that for you?”  Clearly, Ben was an accidental winner.  But how was he able to experience such a breakthrough in a broken shop? It’s because he was the wrong guy at the right time.

Sixteen years ago, customers didn’t have smart phones and shops didn’t have websites.  Since finding another service option was more difficult, patrons were more tolerant of bad service.  If the location was convenient, many consumers would continue to visit because it’s what they always did.

This caused many shop leaders to embrace a similar mindset which leads to the philosophy of the accidental winner:  It’s the belief that you can win by simply showing up and doing what you’ve always done. 

When was the last time you purchased a Blackberry Smartphone or a Blockbuster video?  Both companies have taught us that what you’ve always done, doesn’t always work.   Today, the amount of information your customers have at their fingertips exceeds their demand for your service. 

This explains why many of the shops you considered to be accidental winners are no longer in business.   So what can you do to avoid embracing this philosophy?  Keep reading and you will learn.


Dare To Be Different


When your potential customer types “auto repair near me” into her smart phone, six different shops may appear on her screen.  Why would she choose you instead of your competition?  Having a clear answer to this question will help you to differentiate.

Noted author and CEO Brian Wong highlighted the importance of being different when he said:” The more differentiated you are, the more indispensable you will become.”   Studying your competition is the first step to discovering your difference.

Who are your three biggest competitors, and what do you do that differentiates you from them? If you don’t know, mystery shopping your competition, reading their google reviews, and reviewing their website can help you find out.   

The next step is to identify what you can do to personalize the experience.  Making the transition from being transactional to becoming relational will help you stand out in your customer’s mind

Most shops are transactional, so ideas like hand written thank you notes, making thank you calls, and providing your customers with welcome and parting gifts, will set you apart. 



Drink the “LATTE”


In his book, The Power of Habit, Charles Duhigg writes about how Starbucks trains their employees to respond to irate customers. 

All new employees are required to learn what the company calls the “LATTE” method of responding to unpleasant situations.  The latte is a popular Starbucks drink, so they have turned it into an acronym to reinforce the right habits.

The LATTE method involves: Listening to the customer, Acknowledging their complaint, Taking action by solving the problem, Thanking them, and Explaining why the problem occurred.  Thanks to their training, the Starbucks “Baristas” are prepared when they encounter a yelling customer.   

This is critical because back in 2000, the average unhappy customer would tell eleven people about their bad experience.  Today, an unhappy individual can tell eleven thousand people by pushing a button on their phone while standing in your waiting room!

Studies show that 68% of all customers who stop doing business with a shop, do so because of a perceived attitude of indifference by the company representative.  Doing Role plays of the LATTE will keep your customers coming back and your reputation intact.



Conclusion


Unfortunately, Ben’s story didn't have a happy ending.  He and I agreed that it was in his best interest to leave the company.  If he would have dared to be different, and drank the LATTE, his wins would have been intentional instead of accidental! 


Your story can have a happy ending if you reject the philosophy of the accidental winner!




Eric M. Twiggs
The Accountability Coach



PS.  Looking for ideas to differentiate yourself from your competition?  Email etwiggs@autotraining.net and I will send you my top seven differentiation strategies.

Wednesday, September 7, 2016

How To Put More Profit In Your Pocket

How To Put More Profit In Your Pocket

By

Eric M. Twiggs




  

"You can have anything you want if you are willing to give up the belief that you can't have it."ROBERT ANTHONY


“How do I put more profit in my pocket?” Asked “Jason”, a shop owner who heard about our upcoming webinar on the topic.  I responded as follows: “Jason, you’re averaging a 32% parts margin over the last four weeks, so using the parts matrix would be helpful.” To which he replied “Yeah, but It’s a down economy and my customers are feeling the pinch.”

“OK Jason, what about increasing your labor rate? You’ve been charging $70 for three years now.” “Yeah, but it’s an election year and people are uneasy about spending money.”  “But Jason, many of our clients are having their best year ever.” 

Since he felt challenged, he replied by using the classic response embraced by shop owners around the world who have negative gross profit dollar lift: “Yeah, but my area is different!”   

Since I hear this so much, I wondered if he was right.  I decided to check the median income levels of the customers in his zip code using a zip code demographic  tool .  

He was right, his area really was different!  The customers in his zip code had a HIGHER median income than the average consumer in America, his state, and his county!  The problem was his limiting belief, not his level of buyer. So what’s keeping you from putting more profit in your pocket? 

The key is to make sure your beliefs, and your bottom line aspirations are aligned.   Aspiring to achieve a high profit goal, but believing you can’t raise your prices is like driving from Baltimore to Boston using highway 95 going SOUTH.   No matter how hard you drive, you won’t get there!  

So how can you tell if a limiting belief is lowering your bottom line?   Keep reading to learn two tell-tale signs.


Learned Helplessness

One of the best illustrations of learned helplessness, is the story of the circus elephant.   Did you ever wonder why such a powerful animal is able to be contained by a small chain with a stick nailed in the ground?   It all started when the elephant was a baby. 

The trainers would tie the chain to the elephant’s leg and nail the stick to the ground and watch the infant to struggle to break free.  This struggle conditioned the babe to believe it wasn’t strong enough to break the chain. 

As a result, the elephant grows into one of the most powerful animals on the planet, still holding onto the limiting belief from its past.   The elephant has learned to be helpless. 

What beliefs are you still holding on to?  Having the wrong perspective on your past experiences leads to learned helplessness.    Instead of dwelling on your failure, focus on the takeaway. For example, remember “Mary” with the Mazda who declined the additional services you presented?  Ask yourself the following question: “What could I have done differently to demonstrate the value?”

Answers like explaining the warranty, using the fluid trays, and showing her pictures from the tablets would come to mind.   Focusing on the takeaway will force you get better instead of becoming bitter, and help to overcome the learned helplessness habit. 

Confirmation Bias

Confirmation bias is when you use a singular event to confirm what you already believe, while ignoring evidence that tells a different story.  Let’s use our friend Mary with the Mazda to illustrate the point.   You’ve installed the labor matrix in your shop and Mary was the fourth customer you worked with yesterday. 

If you suffer from this bias, you will use the fact that she questioned your labor pricing as confirmation that the matrix doesn’t work, even though the first three customers paid with no problems.   

When shop leaders say: “My customers are complaining about the new pricing”, I usually discover that it was only one or two people and not everyone.    If you want to put more profit in your pocket, use price objections as confirmation that you’re on the right track.   This will change the confirmation from a bias to a benefit! 

If nobody EVER questions what you charge, it’s because you aren’t charging enough!  This makes hearing objections a benefit, because they give you the opportunity to increase your profits and to improve your communication skills.   The more objections your overcome, the better you get at overcoming objections.


Conclusion

Please take note of this important disclaimer:  Just raising prices without upgrading the level of service you provide will NOT increase your profits in the long run. 

It’s been proven however that patrons who feel the value, will pay the price.   Overcoming the habits of learned helpless and confirmation bias, will position you to deliver more value and put more profit in your pocket! 


Eric M. Twiggs
The Accountability Coach

PS.  Now that we have addressed your beliefs, I can share my profitable pocket checklist.  Email etwiggs@autotraining.net  if you would like a copy