The Repair Order Trick Every Top Advisor Uses, Part 2

Picking up where part one left off 0:00

Steve Shaw: And we're back. We are back. I let my hair grow a little longer, too. Hey, everybody, welcome back to Fixed Ops Focus, Steve Shaw and Dave Rogers. Dave, what's going on? What's on your mind tonight?

Dave Rogers: Man, end-of-the-month crunch. I had a couple of phone calls tonight, which is nice: "Help me close this RO, help me close that RO." I love it when people are running through the finish line and doing the month-end slam. Hopefully we have a good June, put it behind us and move on to the second half of the year. Other than that, just enjoying the weather and the last day of the month.

Steve Shaw: Awesome. When this episode airs, it'll be the first of the month, or it might even be next week.

Dave Rogers: Everybody might still be hungover from their July Fourth holiday weekend. So this is part two of the last episode, as promised. I think we left off talking about adding lines to the repair order. The next step, if you're going to do an intake form or a preview, was the declines. How do we incorporate those into this write-up process?

Put the previously declined work on the RO 1:18

Steve Shaw: I think that's the next step. Just to catch everybody up, we're talking about preloading additional items on the repair order. I look at it as a tool for advisors, and I think Dave's pretty much in agreement that it's a great idea and a great process, and we should explore how it would work. There's a lot of education involved. You don't just go out tomorrow, put alignments on every ticket and not explain to anybody what you're doing. I know people will do that, because that's what they do. But I actually wrote out an entire program. You've got it on the screen right there. I was going to do it in post.

Dave Rogers: Look at that, man. I've got it up.

Steve Shaw: So let's say you have the alignment and one or two fluid maintenance items on the ticket, plus the factory maintenance minimum requirement. The next step is the previously declined items. Everybody and their dog will tell you that's our process. That's the middle page there, the sample repair orders. We instruct our people to go through the history and look for previously declined items, and everybody in my classes says they always do that. Well, how many times do you add a previously declined item, or in Steve's world a previously failed item, to the RO? Not very often. I think we're bullshitting, and we're not putting those previously declined items on the RO.

That's the simple part: "You were here last time, and you declined these items. I don't have a record of them being taken care of, so they're still failed today. Would you like to go ahead and do those while you're here?" Making that offer. That would be the third or fourth part of the RO marketing, the preloading of the RO. What do you think about adding declines?

Dave Rogers: I think it's a great idea. Some software does it. I think Xtime does: if you make your next appointment online, it brings up your declines from last time, which is a great tool. I'm not sure the others do it. Maybe myKaarma. I don't think CDK does, but correct me if I'm wrong. Put a comment in, send me an email, slander me online, give me a Google review, whatever. And looking at this sample repair order, this is what I meant when I said an intake form, a menu, an express write-up sheet. This is perfect. The customer circles it or declines it. It's easy and simple.

Steve Shaw: And maybe I got excited about it because there are tools that do it. If we were all doing it, people would say, "Steve, that's old." Well, it's like the kiosk. We had this amazing tool, the kiosk, and our advisors are the ones who TD'd it. Our advisors said, "No way, we're not going to use that, because it'll run me out of business." It's the same thing here. I've never paid close attention to myKaarma, and I should ask Craig, or you'd know more about the intricacies of Xtime. But if it has the capability and we're not using it, that's even more reason for somebody with executive status like yourself, a GM or a dealer principal, to say, "We have to do this." In my world, until somebody of your stature or higher says, "We are going to do this," they're not doing it. Not unless it's a mandate.

Dave Rogers: It's going to have to get circulated and pushed through, and it does take buy-in from the general manager down. I notice it in the stores that run the best, with year-over-year growth. I saw Damon the other day, our friend from Canada, and he's still running a forty-two percent year-over-year increase. He's just pushing it, man. We've got to get him back on for a follow-up, because we had him on in January or February. He was one of our first guests.

Steve Shaw: We made him famous.

Dave Rogers: They're pushing the program. Forty-two percent year over year is fantastic. It's all about whether you have the desire and the ambition, and the direction from above. Everyone's going to have their take on it. Some people like fluid services and some don't. Some like brake fluid exchanges, and you do get some blowback from the manufacturer sometimes. But this is just an example. It can be customized. The alignment, though, nobody can argue with. Every car needs one at least once a year. You need an oil change every six months and a tire rotation every six months. Those are no-brainers. You should get them done every time. And then the declined work is work that needs to be done. We told them last time.

The one-line oil change ticket 7:05

Steve Shaw: Exactly. But think about this. I have to hold a class to teach people how to sell an oil change and tire rotation package. Mercedes people tell me customers come in saying, "I'm here for my A service or my B service." Okay, I'll buy that the Mercedes people might be doing that. But in most dealerships, customers drive in and say, "I'm here for an oil change. My light's on." At the Honda store: "My light's on, I'm here for my oil change." Today, in stores across the United States of America, people are asking for an oil change, and we're proud of ourselves because we added a fucking tire rotation to the ticket. How many tickets go through that are just one line, LOF? It's ridiculous. What you're saying is they need the oil change and tire rotation. That's what we call the minimum requirement. It has to be on every RO. Done.

Dave Rogers: I agree. It has to be on every RO, just like you said.

Steve Shaw: And then, you can see it on the screen here: the oil change, and then we automatically have the MPI line, and everything goes above that MPI line, like we talked about last time. It took us a while to get everybody to build an MPI line on the repair order. I have dealers right now who aren't doing a multi-point inspection on every car, even though it's on the ticket. You'd think that's an anomaly, but it's not.

Dave Rogers: No, it's not.

Steve Shaw: So I've got the oil change and tire rotation as the minimum requirement, I've got the alignment, and on this sample I add a fuel service and a brake service. Does every customer who comes into your store know that you sell tires, that you do brake jobs, that you do all of these things? No, because we don't present them. That's why they go to tire shops.

Dave Rogers: Right. I tell this story. Back when I was in Turnersville, after they finished building the mall, we lined the drive-throughs with tires. We had tires all over the drive-through, with Michelin sleeves, displays and racks. They weren't as neat as they should have been for Roger, and the first couple of times he asked, "What are you doing this for?" I said, "We're in the tire business. We're selling tires." I got a lot of blowback in the beginning, because it looked dirty. So they found a way to Penske it, cleaned it up with sleeves, tire racks and inserts, spent twice as much money, and it looked great. A couple of months later they were giving a tour to the Wall Street people, back when it was hard to get Wall Street interested in car dealerships, and these people from Wall Street were going, "Why do you have tires here? You guys sell tires?" Some of these people didn't even drive. I'll never forget it. Yeah, we sell tires. But you're right. People don't know, because we don't tell them. It's crazy.

Present it every time, not 75 percent 10:25

Steve Shaw: That's why I call it RO marketing. We're just marketing with our RO. So now we've got the alignment and a couple of fluid services, which we'd normally just call additional services. In the Steve Shaw world, we already get 20 percent penetration when people ask for additional services. Now we're adding two fluid services to the ticket, and, like we're talking about today, why aren't we adding the declined services as well? Now we have a full package to present to the customer. If AI could do it and put it on every RO, I'd get behind it. The message I've been trying to share with people I know, my friends, is: guys, we're missing the boat right now. We're leaving so much money on the table. It's absolutely insane.

Dave Rogers: There are a lot of people who just aren't doing the basics, the blocking and tackling, which is a shame. They get tunnel vision, they get stuck in the grind, in the rut, and they're not looking for that next way to make money. I think this is a great way of doing it. I'm trying to work it out in my head, because you almost have to idiot-proof stuff. You really do. We have to make sure we get the advisors to do what we want them to do. That's the biggest thing. So we've got to make it simple and bulletproof. I like this intake form or quick write-up sheet. How hard can it be to populate it with other stuff? It could have wiper blades on it. Wipers should be replaced once a year. I'll get blowback from the Mercedes guys because they're $248. I don't care. They should be done once a year.

Listen, you didn't buy a $125,000 car because it has seventeen-dollar wiper blades on it. It's got $248 wiper blades on it. That's what made it a $150,000 car.

Steve Shaw: I got some pushback when I presented this, not from the dealer, who's very smart, but from a couple of his service managers, and they're pretty good guys. One out of the four stores does a really good job, and that manager pushed back the most: "Well, we really do a good job." But a good job for him was presenting alignments 75 percent of the time. To me, that's a failure. I'm not trying to insult anybody, but outside the car business, if you're not doing your job 25 percent of the time, you'd probably get fired. And we tolerate it. "Seventy-five percent of the time is pretty good." No, it's not. Why not write a process so it gets done every time?

Dave Rogers: When you look at a couple of dollars per repair order... say your average repair order is five hundred dollars in parts and labor. People can do the math on how many cars they need a day. You and I have had these conversations, and I've had them with managers in the past and present: what if you got twenty-five dollars more per repair order, and not one more customer came in the door? What does that equal at the end of the month, at the end of the year? What does it do to your paycheck and the technician's paycheck? That's the kind of stuff you have to look at.

I was very proud of my guy down in Wilmington, my Mercedes guy. I'll shout him out. Damon put him on a mission to get the multi-points up. They were at a very low percentage. I think most of them were getting done; the box just wasn't getting clicked. Last month, 97 percent of the vehicles coming in got a multi-point. Very proud of them. That's a big improvement, and that's the first step: not 75, not 50, not 45, but as close to 100 percent as you can get. We still have other stuff to work on there, but now I know every car coming through the door is getting looked at. You can't start without that. And then the other thing is whether everything gets presented. You're taking it out of the tech's hands, and out of the secondary presentation, by putting it on the repair order to begin with. Because that delay is where you lose sales too. You wait for the tech to find it, and now the customer has been there two hours and doesn't want to wait anymore.

Steve Shaw: Exactly. That's really what got me fired up. If a manager got behind this and really understood that it's a tool for advisors, like I said, we're taking all of the sales skills away from them. If you have sales skills, congratulations, you're going to run with this and set it on fire. But if our advisors aren't presenting, we're putting it on the ticket. And like you said last episode, I have to track the lines that get removed from the ticket, and I have to track my declines. There's either going to be an alignment on the ticket or a decline. I hate saying that, because when I worked for AutoNation, they said there had to be at least 25 percent declined lines on repair orders. This was a long time ago. So what did everybody do? They just added decline lines to make the metric.

Dave Rogers: It's Mickey and the metric, man.

Steve Shaw: So you're really looking at: was it presented? Was there a no? Were any lines taken off the ticket? There are things to work through, but I fell in love with the idea of putting this on the ticket. And the math is astronomical.

The math: one advisor, one million dollars 16:33

Dave Rogers: I want to talk about the numbers.

Steve Shaw: This is what blew my mind, because I had no idea. I just thought it was a great idea, and we'd get some incremental growth, a couple of tenths. We'd go from 25 percent alignment penetration to 50 percent. Twenty-five percent alignment penetration on ten or twelve ROs equates to about two tenths. I've done the math a million times. So if I got 50 percent penetration, I'd get another two tenths. That's pretty cool. That's another month's worth of pay for an advisor in a year, and another month's worth of sales for a dealership in a year. So I thought it would be incremental. But I'm not very good with math, so I asked Claude, given these parameters...

Dave Rogers: Let me jump in real quick. You wrote on there: advisor asks for an alignment, 25 percent closing originally. Then minimum requirement plus the alignment on the ticket, 50 percent closing ratio. Then step two, two fluid services. You jumped from about $138,000 to $724,000 per advisor.

Steve Shaw: It's crazy. And then if you add the declines, it goes to a million two.

Dave Rogers: $1.2 million.

Steve Shaw: Per advisor. It's a million bucks a man.

Dave Rogers: Additional annual income per advisor. It's stupid.

Steve Shaw: I'm sure we could hire somebody just to do these ROs.

Dave Rogers: Can you imagine that? It's insane. And you're not even looking for anything crazy. You're not using your buddy's 80 percent closing ratio on alignments. You're using fifty.

Steve Shaw: Exactly. And I tried to go with the lowest dollar amounts: 50 bucks on an oil change, 75 bucks on an oil change and tire rotation, 100 bucks for an alignment, 150 for a fluid service, and the declined items at about 150 to 200 bucks. Then ten ROs a day per advisor, times 23 days a month. Do the math. It's fucking nuts. That's what blew my mind after I got home and had Claude put the math together for me. Listen, if somebody has a better way to make a million bucks a man, I'm all in. But this set me on fire, and I've been so excited to tell all my clients. All I care about for my clients is that they make more money and do better. That's all that matters.

What about CSI? 19:34

Dave Rogers: What about CSI, though? That'll be the other excuse. What do you think the blowback on CSI would be, if any?

Steve Shaw: I think it makes CSI better. I put that in my marketing report, because it's transparent. It's on the ticket, and we're not making anything up. It's not like I'm asking you to do some wacky shit. And even if I was: "Hey, Dave, would you like fries with that? Would you like a hot apple pie?" Craig and I were talking about this, and you and I talked about it on the podcast the other day. When I go to Culver's, they literally move me from a hamburger and add about five items to the ticket. I crack up. "You want a hamburger? Want to make it a double? Would you like bacon? Fries or large fries? Do you want a milkshake? Would you like to try anything else freshly made for you today, Steve?" Next thing you know, there are five additional items, my burger went from nine bucks to 27, and I'm the happiest fat guy sitting in my living room eating a Culver's burger from the drive-thru. I'd like to call it the Culver's approach. If Culver's can do this with people making fifteen to twenty bucks an hour, and we have hundred-thousand-dollar advisors, can't we do it too?

Dave Rogers: I agree. If you're not pushy about it, it doesn't take forever. The transaction can't take forever. We have to be convenient and quick. But if you get a fifty percent closing ratio on any of this and add three-quarters of a million to a million dollars a year, per advisor, like you said, it's a no-brainer. The biggest challenge, and we talk about it all the time, is getting people to do it. You've got to have the stomach, the fortitude as a manager. You've got to believe in it.

I had a conversation with a couple of service advisors in a store the other day about oil changes and six-month services. I gave my mini rant, and I gave one guy my conspiracy theory, because he loves conspiracy theories, and he was eating it up.

Steve Shaw: Have him call me.

Dave Rogers: And then of course the other guy goes, "Well, I've got this one customer who only does a thousand miles a year. I would never recommend two oil changes a year." And I said, "No, that lady needs two oil changes a year more than anyone else," and I went into the oil and the gasoline and the condensation and everything else. I felt bad for the guy. But there's always one advisor who has to do that. Okay, if it doesn't work for grandma doing a thousand miles a year, fine. But I'd still recommend it. I do four thousand miles a year on my Charger now, and I still change the oil twice a year. That's just what I do.

Would you like fries with that? 22:40

Steve Shaw: I want my car to last a long time. And if there's something I don't want to spend money on, I'll say, "No thanks." It's okay. We're not doing an overcoming-objections approach here, where if a customer says no, you have to go through a process to sell it. All we're saying is, can you make a presentation? That was my message when I first started going hotel to hotel: it's okay to ask. "Would you like to do the minimum requirement today? Would you like fries with that?" If we present it correctly, no one's ever going to get mad. No one ever got mad at the McDonald's guy for asking, "Would you like a hot apple pie today?"

Dave Rogers: Never.

Steve Shaw: Never. And how many times have you heard me talk about "Would you like a double shot for two dollars more?" at the airport? You probably had it happen when you went to Atlanta the other day.

Dave Rogers: I wanted to tell you that. Twice it didn't happen to me, and I was so disappointed. I actually wrote it down: "I've got to tell Steve Shaw I found two places that didn't ask me." But 98 percent of the time I'm asked that same question: "Would you like to make it a double?"

Steve Shaw: Somebody from the Atlanta airport needs to call me. "Would you like a double shot for two bucks more?" "Would you like a man-sized beer?" at Tilted Kilt. Everybody's asking. It's just standard. If you want it, great. And you said you wished they'd asked, because you would have gotten the double. They didn't ask. They have yet to ask me for an alignment on my Wagoneer. I've gone somewhere else and gotten the alignment. That dealership didn't ask. I wanted it. You lost 150, 200 bucks as a dealer because you didn't ask. It's as simple as that.

When I first started doing training, I worked with a gentleman out of Miami, Bill Mercado, and he said, "Steve, the best salespeople I ever met asked the same question three times, maybe a different way each time." And I ran into a service advisor in Portland, Maine, who was awesome. I'd watch him ask the same question three different ways: "Today your vehicle qualifies for an alignment. Is that something you'd like to take care of?" "Are you aware the manufacturer says you need to perform an alignment?" He'd make the customer say no three times, and he had great CSI. This guy was amazing. A big, bald guy with a big smile on his face, jovial all the time, the nicest guy you could meet. Great CSI, huge performer.

Dave Rogers: The more we talk about this, a lot of times we just have the wrong people out front. Either they're not trained, the service manager doesn't believe in it, or the general manager is paying attention to something else. I was doodling before, and I was thinking: when's the last time anybody out there looked at their breakeven point, or what they need in the service department to net thirty percent? If your expenses are a hundred thousand, what do you need to net thirty percent? Take some of these numbers: a million dollars in sales is half a million in gross. I have four advisors. What does two million in gross profit do to your business at the end of the year? A million dollars is a lot of money at the end of the year for your department.

Steve Shaw: Parts and service.

Breakeven, absorption and selling your way out 26:34

Dave Rogers: These are the things you have to look at. If you work backward, and call this a semi-GM tip of the day: most of your service and parts departments hopefully make money. If they don't, you've got a real issue, and you should hit us up and we'll tell you what to look for. If you're not making thirty percent net to gross in service and at least thirty percent in parts, you're missing the boat. Something's going on. And what better way to fix it? Your expenses stay the same. You pay a little more in commissions; that's really all. It doesn't require extra people to ask for more money on every transaction. Every F&I manager, every GM and every sales manager knows this: if I can make an extra two hundred dollars per unit, what does it do? If I can make two hundred dollars more per repair order in sales, what does that do? Multiply it out at a hundred dollars in gross, and that's your number right there.

Steve Shaw: It's funny you mention breakeven analysis and net to gross, thirty percent. I'll let the cat out of the bag: I've been working on the last and final book I'm ever going to write, and one of the chapters I was going through today was breakeven analysis, how to do a breakeven. Steve Shaw has never said that to a client once since he started training. But it's an important number. The reason I put it in my book was pricing strategy. How do you know what to price a job if you don't know your breakeven first? Is it just willy-nilly, a hundred bucks, two hundred, five hundred? I have no idea what to price something at if I haven't done a breakeven analysis or decided I want to make 30 percent net to gross. You've got to do that first. That's hilarious that you said that, because we're on the same page.

Dave Rogers: It's something I look at every single time. I evaluate my departments every year and every six months, when I look at what we're tracking. I'm not going to look at January and February and say, "You guys suck." It doesn't work that way. You blend the whole year in the Northeast. I've got some service departments at 117 or 120 percent absorption. I've got parts departments netting forty-five percent to gross. And I've got some that aren't, and some of the bigger ones are challenged to get there, but it's incremental.

You have two choices: cut expenses or grow the business. Nobody wants to do it with fewer people or cut things out, and if you're running a good business, you don't want to anyway. The best approach is to sell your way out of these issues. If you're not close to a hundred percent absorption, I know your GM and your owner are sweating it. They're having a hard time paying the bills and a hard time with net, because they're not making money in new cars or used cars right now. F&I, service and parts are where the money is right now, and this is a big part of it. If you can figure out a way to get an extra million dollars per advisor... there will be bugs. Anybody listening, it's not going to be smooth. There will be issues. You've got to sell your people on it first, because they won't do it unless you sell them on it. But you can start small. Why not add the rotation every time? Why not add wiper blades once a year? Then do the alignment. I think the alignment once a year is a great one.

Start with one item for 30 days 30:08

Steve Shaw: That's why I wrote that document. For the next 30 days, focus on one item. I say alignments. Then add the next item or two, a fluid maintenance item, because those are generally high-gross items. Once you get that done, go into your history. Take the next six months so you can add that million dollars. I don't expect anybody to go from zero to hero. We never do that in training. But if you start small, exactly: for the next 30 days, focus on one thing. How do I get that on the ticket? You'll put yourself in position to go a long way. I wrote this in my book, too: when's the best time to plant a tree?

Dave Rogers: Seven years ago.

Steve Shaw: Seven years ago, baby. If you didn't plant it seven years ago, the next best time is right now.

Dave Rogers: Do it right now. That's exactly right, and that's what you do with this. Bring one idea to the table, start rolling it out, get some volunteers, and little by little a few people jump on. That's all it takes, a little here and a little there. This business wasn't built the way it is now in one day, and it's not going to get destroyed in one day. We just have to work at it. I think everyone's running a little scared. They're worried about retention and loyalty, and they're listening to all the noise out there. But people leave your dealership because they pull out, hear a squeaking noise, pull into Midas or Meineke and find out they needed brakes, because you didn't tell them. It happens all the time.

Steve Shaw: That's the whole deal. The independent shops are still thriving, and we're sending our customers to them every day. Probably a good time to wrap us up, Dave. I think we got the point out. One advisor, one million dollars. That has to be the title of these episodes.

Dave Rogers: That's it. All right, buddy, I'll talk to you.

Steve Shaw: All right, man. Good talking to you.