"My fear is that there are many different ways to react to this," O'Connor said.  "Too many just bury their heads in the sand and hope it will go away."

The effect is not the same from one town to the next, O'Connor said, and even in the same town one shop may do well, while the next is hit hard.  "We still have a fair number of individuals -- that top 10 or 15 percent that are doing fine," he said. 

"I don't think a lot of shops realize the profound affect what's happening is going to have on their business, though," he added.  "Expenses that you don't often focus on--like the cost of paper, shipping and handling, and anything else that requires transporting--are skyrocketing as a result of the increase in fuel costs.  I don't think that they're realizing the changes in the cost of business that they are already  experiencing."

O'Connor said he worries about shops that are talking about decreasing their prices in an attempt to grab more market share, while at the same time that their fixed costs are beginning to increase.

Customer behavior is definitely changing, O'Connor said.  For example, he said he and his wife used to drive to work separately but now carpool.  In addition to the obvious drop in miles driven, he said, it has changed how they use their vehicles.  One of the vehicles has 6,000 miles, while the other has only 1,800, and yet they were purchased at the same time.

"When you are interviewing a customer, you need to find out how they are using that vehicle so you can tailor your services to that," O'Connor said.  "Most shops don't do this.

"Is there opportunity out there?  "Absolutely," he said.  "We have client shops that are setting records while others in the industry are sliding."

Contrary to popular opinion, one of the most damaging problems that many shops face is not a lack of car count but too many cars.

"A lot of people view activity as a measure of success," O'Connor said.  "But if you have three technicians and your goal is to bill nine hours each that is 27 hours.  If your average RO is only an hour, it will take 27 vehicles each day, which is impossible for technicians and advisors to efficiently handle.  But if you are billing three hours per RO, it will only take nine cars, which is  much more manageable and efficient.

"The reason they feel they don't have enough cars is they aren't going through the process of evaluating each of those cars and determining what services it really needs," he said.

 
Increasing the average number of labor hours helps maintain the proper balance of technicians to service advisors and allows them both to be more efficient, O'Connor said.  While the average repair shop bills only 5.3 of the technicians' eight hours each day, the most successful operations are selling nine to 11 plus hours.

"This business is really about their ability to buy and sell their labor hours," O'Connor said.  "The mistake they make is thinking that they are selling automotive service and maintenance.  What they really do is buy and sell technician labor time, and customer service is the product that they create."

One way to provide a customer service and improve profits is to recognize the products and services that customers are interested in buying and provide them, O'Connor said.  "The revenue streams for independent auto service centers have to change with customer's desires and wants," he said. 

 
For example, vehicle accessories are a part of the business that most service centers fail to capitalize on, O'Connor said.  "The dealers know how to accessorize, but once the vehicle leaves the dealer, what is the independent service center doing to capture the accessory business?

"People want their vehicles to fit their need and appear different from the other guys," he said.  "They want hands-free phones, i-pods, bicycle racks,  custom wheels and tires, window tinting, tonneau covers, etc.  Here is all of this money sitting right under our noses, and we look right past it for the very same things we've always sold--and a lot of those things have now turned into commodities, meaning there is not much money left in it."

The independence that causes many people to open shops can be the same thing that prevents them from maximizing their potential, O'Connor said.  "That top 15 percent comes from the shops that are willing to get the help that they need," he said.  "There is a lot of help out there, and most of it is good."

Among the training options that are available are one-on-one coaching, group training sessions or workshops, online training, live online workshops, and 20 groups, O'Connor said, noting that each can be appropriate and that a shop is often best served through a combination of services.

"One-on-one coaching is the most expensive and, in my estimation, is often the least effective," he said, "especially when it's done on site at the shop.  There are too many distractions."

Group training, whether in person or online, can be very effective because it offers information in a structured way while still allowing interaction between the students and the instructor, O'Connor said.  "To me this is one of the most economical ways to learn what you don't know," he said.

While in-person training may seem to have an advantage over online training, O'Connor pointed out that the economics of putting on in-person training requires that a lot of information be delivered as quickly as possible, while online training allows the training to be broken up into smaller segments that are more easily absorbed.  "The retention from the online training is much, much higher."

O'Connor's Bottom-Line Impact Groups (BLIGs), which are derived from the 20-group model, combine the concepts of training and consulting with an intense dose of peer review and personal accountability, he said.  "Probably the greatest return on investment comes from the BLIGs," he said.  "That is why we have spent 18 years continuously developing and upgrading them.

"A facilitator in a 20 group is a significantly different person than an instructor," O'Connor said.  "You have to learn how to stretch people to where they are almost ready to break and then back off, nurture and support them, and help them grow, and then you stretch them again."

The greatest advantage of the BLIGs comes from the interaction of the shop owners, O'Connor said.  "In a 20 group, you go and you learn and you have peers that pledge that they are as committed as much to your business as they are to their own, and they offer up everything that they know to try to help you.  You have not only the training and the improved retention but also the peer pressure to implement what you learn."

O'Connor said he thinks the groups work best when they include shops with different specialties, of various sizes, and from different parts of the country. 

"By having all of the different segments and aspects of the automotive service in the same room, it lends a very powerful mixture to the group," he said.  "The guy doing $15 million may be overlooking the fundamentals, and by helping the guy that's doing $350,000, he revisits things that he may have known but that he hasn't looked at in a very long time."

The groups also allow exercises that just wouldn't be possible otherwise, O'Connor said.  For instance, he said when they are visiting a shop, he will send two groups of attendees in different directions.  They walk into local businesses within a two block radius of the shop and say they are having car trouble and ask who the person would recommend. 

"Probably 90 percent or more send the person somewhere besides that shop, which is only two blocks away," he said.  "It's a real eye opener.  They realize that they've never gone in and introduced themselves and asked for their business.

R. L. O'Connor and Associates offers 42 management classes ranging from four hours to 48 hours, O'Connor said, as well as a five-day Advanced Selling Skills workshop, a 24-month online Professional Service Advisor Development program, and eight BLIGs.

When a shop approaches the company about training, O'Connor said the process begins with a preliminary interview.  "There isn't any cost in getting acquainted," he said.  "We have to find out what they have done, where they stand on performance factors, and how committed they are to improving their businesses. 

 
"We rarely recommend just one thing. Diagnosing a business is a lot like diagnosing a car.  We advise them of what we are recommending and in what order they should proceed."