Littleton, CO - Aftermarket service dealers now keep more than two thirds of the motoring public on the road. That situation is beginning to change, however. The gap between new vehicle technology and traditional aftermarket repair capability is widening, said Brian Bates, co-owner of Eagle Automotive Service. That is why Bates, who has Honda dealership experience, and his wife and co-owner, Rhondi, have aligned their independent repair shop with key aftermarket providers to ensure their success.
"In this business, the shop owners that remain complacent will get phased out real fast," Brian Bates said, using the jump from carburetors to fuel injection technology to illustrate his point. "Many technicians wouldn't touch fuel-injected vehicles."
After purchasing the four-bay shop in 2004, Bates said he made some immediate changes to keep the business viable and competitive.
Bates said he aligned his shop with NAPA and is now affiliated with the NAPA Colorado Select AutoCare Centers, a group of independently owned shops that market themselves together and host a weekend radio show on KHOW AM. To run the shop properly and efficiently, he said he purchased an R.O. Writer shop management system. Those two moves, he said, have had the greatest impact on the shop's bottom line.
"There is no silver bullet to running a business," Bates said, adding that the NAPA alignment and the Writer system proved to be the two biggest pieces of the ownership puzzle.
National recognition through the NAPA brand and its good reputation adds to the trust factor, he said, adding that the NAPA Colorado Select radio show offers great exposure for his shop. "Visibility and credibility equal profitability," he said.
While working as shop foreman at a Denver-area Honda dealership, Bates said his mentor was the dealership's service director, who told him that any business is like a three-legged stool, composed of employees, customers, and the business. "If any of these get unstable, the business is in trouble."
Striking a balance between treating customers and employees fairly can be tricky, Bates said.
"Charging customers a fair price and paying employees fairly is sometimes a tough thing to do. It's a balancing act," he said, adding that "sometimes you take it in the shin for a customer. If a job takes longer than anticipated, we may not charge the customer for the extra labor hours."
The previous owner had a good base of customers with domestic vehicles, Bates said, adding that with his background, "I wanted to specialize in Honda initially." In this part of town, he said, he quickly realized Honda customers were extremely loyal to nearby Ralph Schomp Honda. He said he came to find the nearby vehicle demographic included a high concentration of Volkswagens and Audis, and adjusted his tools and equipment to emphasize those models but to include all makes.
Bates likened his customer relationship skills to "farming," noting that some shops "hunt" for their customers, a practice that yields a one-time return. "Hunting is short term," he said. "Farming involves sowing seeds, planning, and letting customer relationships develop and grow. You can sheer a sheep many times but only slaughter it once."
Bates said he uses a Honda training guide with illustrations to communicate technical information to customers to explain why a repair needs to be completed. For example, he said, "we can show a customer that their water pump is driven by a timing belt," he said, "and show them why it's wise to replace the water pump with the timing belt.
"The biggest thing with the customer is trust," he said. "If they don't understand what you're saying, they will have some doubt in their mind. Trust is what makes people recommend shops to their friends."
Bates said he relies on his R.O. Writer shop management system to keep current with customers and show them that he's looking out for their best interests. "It allows us to stay in touch with customers," he said, adding that they can send out reminders for oil changes and brakes. "It lets the customer know that you're actively seeking their business."
The Writer program is better than using an ad agency, he said, adding that since implementing the system, "Our business has increased exponentially."
The shop sends out a welcome letter to all new customers and a thank you letter to customers on their second visit, which increases loyalty. "A $1,000 ticket is a big deal to a customer, but it may not be to a shop. You want to keep people talking about you and tell their friends."
The system keeps track of the parts and eliminates mathematical mistakes from the cost of goods to the sale price, he said. "Everything is right there." That makes processing a repair order easy and keeps service writers busy taking care of customers, he added.
Just as Bates has equipped the shop with the proper management tools, he said he has also done so in the bays with the latest scan tools and training.
Bates, a certified ASE and Honda Master Technician, said he works alongside his three technicians using a Bosch/Vetronix Mastertech scan tool, which is OE for Honda and Toyota, and Snap-on 2500 and Genysis scan tools. For Honda computer reflashes, he said he uses a Honda Interface Module (HIM) and a mobile computer reflash service through Rush SRS.
"You can't justify $15,000-$20,000 worth of OE scan tools to do $1,500 worth of flashes a year," Bates said. In the near future, he said, he believes laptop reflash technology will close the gap. He said he's looking at purchasing a system from Auto Enginuity that has that capability.
To keep abreast on vehicle technology, he said he relies on the CARQUEST Training Institute (CTI) and the NAPA Institute for Automotive Training (NIAT). "It's good to know new technology, such as telematics and tire-pressure monitoring systems (TPMS)," Bates said. "Although dealerships may only be servicing vehicles with this technology (telematics), it's something you'll see in two to three years. You don't want to look incompetent with a customer."
Bates said his goal is a 20 percent increase in gross profit over last year. He said he pays close attention to gross profit rather than gross sales. "It's a better indicator, especially if you're subletting work and doing a lot of heavy repair."