Reducing Personnel Expense

As everybody is adjusting to the new normal and becoming more efficient in the collision industry's changing environment, personnel expenses need to be reduced. Eliminating positions in a business is never an easy process, even when it's necessary to remain profitable.
The implementation of lean, which promotes efficiency and continual improvement, has already reduced administrative positions throughout our industry. As shops adopt more lean processes, the number of shop floor personnel also can be reduced. One position to look at is the production manager. In most shops this is considered a needed non-production expense. Repair planning and blueprinting are making the repair process smoother and eliminating the "spot fires" that a production manager would be employed to put out. Depending on where you are in the lean process, this position could be eliminated without affecting workflow. Combining lean processes with effective management system use further justifies eliminating this position.

To read the complete article visit: http://abrn.search-autoparts.com/abrn/Training/How-to-recude-personnel-expenses-in-your-body-shop/ArticleStandard/Article/detail/729086

JSe-Newsletter is coming

The first edition of the JSe-Newsletter will be out soon.  The newsletter will include collision industry related tips, product reviews and short stories from my shop visits.  To be included in the distribution list send an e-mail to johnshoemaker1@cox.net with Newsletter as the subject.

"JSE Consulting is working today to change the habits of yesterday to make the collision industry better tomorrow!"

Costco Adventure

I decided to get a Costco membership the other day since I am near it more than BJ's so I stopped by and went to the Customer Service area.  This is where the adventure begins.  The first communication I had with the person under the sign "Customer Service" was "What you need!"  I can't really type it the way it come out of her mouth but the way she pronounced it resembled one word.  I replied "I would like a membership", her response "Well you need to stand over there!"  Somewhat confused I asked her if I was at customer service, that was met with "Yea you are in the right place." then said "You need to fill out this form and give me your driver's license!"  Was it just me or was there some love missing here? 

I started talking to her about the membership and she continued to present demands rather than requests, then she wanted to upsell me to the "Executive" membership", when I asked her to explain it she said "It's all written right here!" and then gave me a look like that was not a question I should have asked.  Then she wanted me to sign up for an American Express card, when I told her I did not need it she announced "I hope you know that is the only credit card we accept!"  I assured her it was fine, I did not need a credit card.  I guess she punched a code into her computer because a manager came over and told me "You get a $25.00 voucher when you sign up for the American Express card that you can use today, and the offer is going to expire today!"  I told him I did not need the American Express Card and he walked away.  I guess I know where she got her training.

Ok, the purpose for the story is to illustrate that to provide customer service you need more than a sign.  You need people that care and feel the customer is the most important person to them.  It also needs to be displayed from the top down.  The customer makes a choice when they walk into your business, how you treat them determines whether they will act on their choice or make an alternate choice andgo somewhere else.  My guess is the people at Costco feel they are the only one around so they do not have to provide customer service.

When I left Costco I thanked the person that helped me, she said "No Problem!"  I told her I thought it was because the entire time she was helping me I felt like I was a ten year old and or that I joined the Air Force again because she never talked to me, she barked orders like I was misbehaving.  The manager came over and asked if everything was ok, I told him I received my membership but that was about it.  Then I handed them both my business card and explained to them what customer service was to me.  They both looked amazed, guess they never had customer service explained to them before.  I guess I can now add Costco Consulting to my resume!

To use the words of David Tooman "Sales without Customer Service is like stuffing money into a pocket full of holes."

Teamwork & Partnership

John Maxwell's minute with Maxwell http://johnmaxwellteam.com/partnership/  reminded me of an article I had written about paint vendors http://abrn.search-autoparts.com/abrn/Training/Jobbers-should-be-partners-with-collision-repairer/ArticleStandard/Article/detail/658178 and how they should become your partners.  This partnership should be carried by you the manager or owner to your shop, you should become partners with your employees.  Make them part of the solutions of the situations you deal with on a daily basis, the will feel included and you might be able to hang up that fire chief's hat.  Like John said in his message today, Teamwork makes the DreamWork!

JSE Consulting is working today to change the habits of yesterday to make the collision industry better tommorrow!

Interview with Bill Park

Here is the link http://www.youtube.com/user/mpoweruco?feature=mhee to my interview with Bill Park from Park & Associates LLC and the creator of mpoweru where we discuss some issues surrounding the collision industry today.

KPIs increase paint profits

While some key performance indicators (KPIs) are outdated there are several that are still effective in maintaining paint profits. Refinish flag hours per repair order (RO), average paint and material sales per refinish flag hour, paint materials costs per refinish flag hour, and dollar per mix average are a few of the KPIs that will help you increase paint profits.

Follow this link to see the complete article http://abrn.search-autoparts.com/abrn/Training/Follow-KPIs-to-increase-paint-profits/ArticleStandard/Article/detail/728035

JSE Consulting working today to change the habits of yesterday to make the collision industry better tomorrow.

Communicating with the customer

There are some simple things you can talk to the customer about to establish a bond, to create a relationship by adding the human element to your service. A customer might be more worried that one of the aftermarket wheels were scratched more than the fact his right front fender is torn off. They could be special wheels. They could have been a gift or discontinued. The time you take to discuss a customer's concern about  wheels or other concerns could mean the difference between the customer having a great experience or a bad one. What about the customer that has never been in an accident before, do you treat them different?  Unless you talk and listen to the customer, become more than an order taker, you might not know what the customer's real need is – the need you must address to satisfy them completely.

JSE Consulting is working today to change the habits of yesterday to make the collision industry better tomorrow

Estimate Consistency

Whenever I begin to talk to a shop manager about estimate consistency I get a stare that makes me feel like I grew antennae and turned green.  Getting stares like you just turned into an alien are familiar to me because through JSE Consulting I talk to shop managers and owners about areas they are not looking at.  Estimate Consistency is one of them.  When you have more than one estimator estimate consistency becomes a problem.  Each estimator knows what he needs to put on an estimate however, it might not be exactly what you the manager fell should be going on the estimate.  The only way to determine if you have a problem is to perform a spot-check audit.  You can do these yourself or you can call me and I will do them, regardless, they must be done to ensure you are sending the same message through your estimates everytime. 

"JSE Consulting is working today to change the habits on yesterday to make the collision industry better tomorrow!"

HRAA Training

I presented my Repair Planning course to the members of the Hampton Roads Autobody Assn last night.  In addition to my company donating the course and my time, Enterprise Rent-A-Car made a conference room available and LKQ Norfolk provided dinner for the attendees.  Special thanks to those two businesses that help me present courses to HRAA members free of charge.

The next course will be on August 16th when I present "The 5's of Lean" so look for flyers from HRAA

"JSE Consulting is working today to change the habits of yesterday to make the collision industry better tomorrow!"

Connecting

My wife gave me John C. Maxwell's book "Everybody Communicates Few Connect" for Father's Day. I have read through it and while connecting seems like a simple process, it is actually very difficult to most people.  Brings me back to an article I wrote http://abrn.search-autoparts.com/abrn/Feature+Article/How-to-get-from-good-to-great-customer-service/ArticleStandard/Article/detail/704198 and how important "connecting" with customers really is.  I know we all talk to our customers but how often do we connect with them?  I think you can look at your closing ratio and get a sense of whether or not you are connecting.  Looking at repeat or referring customers is also a good measurement.  In the book John Maxwell talks about the correlation between achievement and the ability to care for and connect with people.

High Achievers care about people as well as profits, view subordinates optimistically, seek advice from those under them and listen well to every one.

Average Achievers concentrate on production, focus more on their own status, are reluctant to seek advice from those under them, and listen only to superiors.

Low Achievers are preoccupied with their own security, show a basic distrust of subordinates, don't seek advise and avoid communication and rely on policy manuals.

Which category do your customer service people fit in?  How about your estimators and managers?

Now is a good time to look at where your people are and move them towards the High Achievers.  Access my article through the link above and you will see some ideas to help you.

"Working today to change the habits of yesterday to make the collision industry better tomorrow!"

Who Pays for What?

In a recent Collision Repair Industry Insight Magazine there is an article about which insurance companies pay for what regarding P-Page reimbursement.  Looks like the collision industry is gaining because in the article it states the "never pay" percentage is the lowest since they started surveying the items in 1997.   Although this looks like a gain, some of the items the industry is not getting paid for is upsetting.  Abnormal test fitting of parts for example, if you are required to use an aftermarket part you should be paid to test fit it.  Looks like most insurance companies believe hazardous waste disposal as well as tire and battery disposal is a cost of doing business because not many are stepping up to pay for it.  My thoughts on all this is (most of you knew this was coming) is document what you do and assign a value you to it.  Put that value on your invoice and let it stand.  To settle your accounting you might have to "discount" or "coupon" the value to balance your invoice but the key is you have to document what you do to your customer's vehicle.  Eventually the insurance companies will understand that you are providing a complete repair, your documentation will show it, and you will have served your customer to the best of your ability not the best the insurance company would let you.

Marketing To Gen Y's

Is your marketing working?  Are you still relying on that yellow-page ad?  Now is the time to look at your marketing tracking and see where you are getting the return on your investment.  Times are changing; your business environment is changing as well as the age group of your customers.  If you are still marketing the way you marketed ten or even five years ago you are behind the times.  Digital marketing has grown tremendously over the last few years to meet the needs of the Generation Y market.  The Gen Y market is the fastest growing and highest spending group in our history.  They are a group that wants it now, they demand immediate results and the majority of their communication is done through mobile devices.  In most cases you will spend less money and be more effective with a digital marketing program.  Contact me at johnshoemaker1@cox.net for more information about digital marketing.

Don't Panic

I was reading an article on Jim Muehlhausen, author of The 51 Fatal Business Errors and How to Avoid Them and came across this statement that I felt was worth sharing.

“Decisions made out of panic and anxiety are rarely, if ever, the right ones. I’m not sure there is a single business book or consulting firm that has recommended running scared when times are bad. That being said, far too many business owners let fear affect them and their choices. Times are not great, but people still have money and companies are still spending. For every business that is closing, ten more are surviving. So, relax, focus and get smart about how to navigate the tough times. You may find you wind up doing even better than before.”

Achieving is a necessity!

What John Maxwell talks about today is in tune with today's collision industry. Many are sitting back on their laurels because they have always been good, however, the climate is changing, if you are not growing...achieving...you are being left behind.

http://johnmaxwellteam.com/achieve-2/