|
As we enter this New Year we have some new things to announce. The iATN Android mobile app went into beta mid-December, and we are happy to announce that it is now out of beta and available for all members. Download the iATN app from the Google Play Store. We look forward to introducing major new features to both our Android and iOS app in the coming months.
We're welcoming two new corporate sponsors to iATN. Castrol, the well-known lubricant manufacturer, has not only come on to support iATN and the membership through corporate sponsorship, but also chose to sponsor a Castrol Forum. Within the forum you'll find Castrol subject matter experts sharing their lubrication knowledge in discussions with all members.
We also wanted to welcome our second new sponsor, Farsight, who provides a subscription-based tablet diagnostic platform supported by factory-trained service technicians. We also want to say thanks to all of our corporate sponsors for helping support iATN, we hope that you will join us in recognizing their support and dedication to our industry.
And finally, we've just released updates to our two newest services. Auto Pro Careers has had many improvements to the layout and behavior to make it easier to post your job ads and search for employers and potential employees. Auto Pro Reviews, formerly known as Auto Pro Wiki, has been renamed to more properly emphasize it's primary feature: member reviews of products and services in the auto service industry. We've also made it much easier to start a product review, try it today! We will continue to improve this product & service guide with your participation and feedback, so that it can become a great resource for all of us moving forward.
We have many great articles posted by iATN members in this version of the iATN Review, we hope you enjoy!
Scott Brown
iATN President
Stand Alone HSLAN Diagnostic Decisions
Technical Discussion Forum
James from Florida
Recently, I repaired a 2015 Base Silverado with the 4.3 V6 engine. The complaint was SES on all the time. The truck started and drove into the shop normally with the SES on. Scanning the control modules for codes set, I saw this...
[2015 Chevrolet Silverado 1500 LS, ECM/Inputs/Outputs Scan Data]
The P2635 is for low pressure fuel pump performance. The U0074 and U18A2 show a failure with HSLAN communication with the FPCM. The FPCM is on the Powertrain Expansion Bus which is a stand alone high speed network between the ECM and the FPCM only. Since the Powertrain Expansion bus does not connect to the DLC, no scanner communication is possible with the FPCM. The DBDT also cannot be used for the same reason. This complicates data diagnosis.
Why is the P2635 set? If the ECM loses communication with the FPCM, it's commands to the FPCM will not be received and the ECM cannot maintain fuel pressure control. The FPCM will default to a safe higher pressure. Let's look at ECM fuel data.
[2015 Chevrolet Silverado 1500 LS, ECM/Inputs/Outputs Scan Data]
Look at the desired and actual fuel pressure. Then look at short term fuel pump trim. The ECM sees high fuel pressure and is commanding the FPCM to reduce pressure. Since this is not working, the ECM is commanding reduced fuel pump trim to try to reduce pressure. Since pressure is not being controlled, P2635 is set.
How do we test for a communication problem? Usually, we test power, ground, and data lines at the non-communicating module first. Since the module is located above the spare tire and the connector is not very test friendly, and I have only .3 to diagnose with, I took a different approach. I tested the battery and ignition power fuses in the UBEC to the FPCM. They both were good and powered up. The two LAN circuits go from the ECM straight to the FPCM with one connector, x125, in between. This connector is very available under the hood so I diagnosed from this point.
Unplugging the connector, I tested resistance between the two wires, first toward the FPCM and then toward the ECM. I saw 123 ohms toward the FPCM and 121 ohms toward the ECM. Then I tested resistance to ground on both sets. There was K ohm resistance toward the FPCM and Megohm resistance toward the ECM. This shows that my LAN circuits to both components are most likely OK.
With the key turned on and the connector still unplugged, I checked voltage between the two LAN circuits from the ECM. I saw zero volts. With a voltage differential of zero volts, no communication can take place. Either the circuits are dead or equal to obtain zero volts. Measuring voltage to ground, both LAN circuits read 2.457 volts steadily. Unplugging the X1 connector at the ECM caused both LAN circuits to drop to zero. I checked resistance between the two circuits unplugged to make sure that they were not shorted together and saw OL.
What does this show? My circuits are good, but I have no LAN+ and LAN-, only rock steady equal voltage. Could I test further? Sure, but it's time to pull the trigger and replace the defective ECM. With the new ECM installed and programmed, what does fuel control and pump trim look like now?
[2015 Chevrolet Silverado 1500 LS, ECM/Inputs/Outputs Scan Data]
The vehicle is in control and the three codes did not reset. But what about the history U0073 and U0077 set in the EBCM? It's very common to see these types of communication codes set as history with no evident problems. They can be caused by voltage surges or several types of glitches. At this point, I'm just clearing and ignoring them unless they reset on a road test.
Incorrect Intake Airflow in 1.4 Cruze and Sonic
Technical Discussion Forum
James from Florida
There are some problems with incorrect and/or unmetered intake airflow in Cruze and Sonic vehicles with the 1.4 turbo engine. They usually result in a rough idle with P0171 set or with no driveability complaints and P1101 set.
If you see one with a rough idle and P0171 set, check the orifice in the PCV cap in the valve cover for drawing air at idle. If you put your finger over the orifice, you will feel vacuum and the idle will smooth out. Replacing the valve cover may only be a temporary fix unless you look for the cause. Pull the PCV tube from the intake manifold and look into the port for a small orange cone shaped valve protruding on the firewall side.
Enlarge this picture and you will see a correct valve protusion.
[2012 Chevrolet Cruze LT, ECM/Inputs/Outputs Scan Data]
If the composite valve is missing, it has been sucked through the engine and spit out the exhaust usually with no other damage. Without this non-return valve present, excessive vacuum has damaged the diaphragm in the PCV cap. Installing just a new valve cover alone will result in another diaphragm failure. The proper fix is to replace the valve cover, PCV tube and intake manifold as the non-return valve is not serviced separately.
If, instead, you see a P1101 set with no other complaints, first check the throttle opening percentage.
[2012 Chevrolet Cruze LT, ECM/Inputs/Outputs Scan Data]
At idle, the throttle opening should read over 8% on the scanner. This vehicle read only 2.8% at best.
[2012 Chevrolet Cruze LT, ECM/Inputs/Outputs Scan Data]
In this case, pull the PCV tube from the intake and either plug or tape the port in some manner. Restart the engine and recheck the throttle position.
[2012 Chevrolet Cruze LT, ECM/Inputs/Outputs Scan Data]
A good position averages over 8%. A lower position shows unmetered air flow into the throttle body. This vehicle ran between 8 - 12% with the port blocked. In this case, replace the PCV tube only and retest. The tube has an internal slide valve on the throttle body end that can stick open and cause excessive air flow.
If the air flow on a Cruze is normal with a P1101 set, remove the air cleaner lid and check that the diffuser has not fallen off on top of the air filter.
Forcing Your Way Into a Ford 'As built' Session
Technical Tips Forum
Steve from California
You can force an "as built" session, by going to the IDS "system utilities" pocket knife screen. On the -right- side about half way down click the "update/special function" option, and a new screen with a blue field will open, type in 53091 then go back and start the normal PMI procedure. It won't seem right at first but it will turn into an "as built" procedure. ~Cheers~
Registering a Battery Pack For a Nissan Leaf
Technical Tips Forum
Jack from California
When replacing a battery pack, battery ECU, or powertrain control module on a Nissan Leaf, a few steps must be taken which may not be immediately apparent to either the shop owner or the technician, and which may affect scheduling.
Nissan's Consult III+ scan tool will be needed to complete any of these procedures. For example, if you plan to replace the battery ECU (referred to as HV Battery by the scan tool, and as LBC or Li-Ion Battery Controller in service information), you'll need to first upload battery data from the old battery ECU to the Consult III+, replace the battery ECU, and then download battery data from the Consult III+ to the replacement battery ECU. These tasks are relatively straightforward.
The fun starts after the faulty component has been replaced and DTCs have been cleared. Typically, the Leaf's powertrain control module (referred to as EV/HEV by the scan tool, and as VCM in service information) will then set a new DTC: P3102 (Invalid Battery) after a battery pack, battery ECU, or powertrain control module has been replaced.
[2013 Nissan Leaf S, Scan Data]
The DTC indicates that the battery pack must be registered or re-registered with the powertrain control module.
Service information directs the technician to perform Li-ion battery ID registration, and may refer to a Li-ion Battery Registration Operation Manual, depending on model year. However, information on this procedure cannot be found in Nissan's repair manual, and none of the CONSULT III+ menus include the option to do so. Time to do a bit of digging.
The contact email address on Nissan's service information website (nissan-techinfo.com) does not go straight to Nissan, but to Tweddle, a third party that manages websites for OEMs. This means that there will be a bit of a delay as Tweddle escalates the issue to Nissan, provided that the technician clearly explains that there is a gap in service information and scan tool function which needs to be filled.
After a few emails back and forth, Nissan provided me with the Li-Ion Battery Registration Manual (a one-page procedure, really), and let me know that I would need to purchase a battery registration security card and adapter, part number J-47446-EV-DIAG, from Nissan's tooling website (nissantechmate.com), which is also run by a third party (Bosch Automotive Service Solutions). I was already aware of the existence of this card, but that information alone was of no help unless I had the authorization to purchase it.
You cannot order the card online, but must call Bosch to get approval to purchase the card. If you're not a dealer, you need to show proof that Nissan has approved the sale. I got an email address from the person on the other end of the line, and forwarded them the email I'd received from Nissan.
[Nissan Battery Registration card]
Once I had received the battery registration security card (which also comes with the Li-Ion Battery Registration Manual), I inserted the card in the scan tool and made sure that the computer had recognized it as new hardware. I now had a new tab (Load Batt ID) in the Diagnosis (All Systems) menu for the powertrain control module. You may have to scroll to the right to reveal the tab.
[2013 Nissan Leaf S, Scan Data]
From there, the scan tool walks you through the procedure.
[2013 Nissan Leaf S, Scan Data]
[2013 Nissan Leaf S, Scan Data]
Registration is almost instantaneous.
[2013 Nissan Leaf S, Scan Data]
Overall, the information access process took about a week from the time I contacted Nissan to the time I had the card in hand. My impression was that most of the folks whom I encountered along the way were not used to receiving a request for this card from the independent sector, but that all were more than willing to help once they had dug up the necessary procedures for fulfilling the request.
Air Ratchet in Tight Spaces
Technical Tips Forum
Leo from New York
Every once in a blue moon, a have to run an air ratchet in a space too small to operate the trigger. A neat side effect of the setup is that the unpressurized section of hose from the extension trigger to the ratchet creates a "soft start" effect.
[Air tool]
Easy Lookup of Mopar Connector Repair Kits +Free Wire Pinouts
Technical Tips Forum
Scott from Michigan
found this i am sure plenty of people know about it but i figured i would post it up anyway
http://connectors.dcctools.com/home.htm [dcctools.com]
you can search by vehicle and it gives you a list of connectors and shows you the pinout as well as a picture/terminal identification and part number for the replacement connector
i have several information sources but it can still be difficult to locate a pinout from time to time
Lee Rosenhan's Management 101 Revisited
Shop Management Forum
John from Oregon
Almost a generation has passed since Lee wrote this series
and shared it with all of us here on iATN.
I have consolidated all the parts here for ease of reading
for those who have never seen it before. It requires no
modification as it's timeless and every word of it applies
today. Below lies the formula for financial success in this
business. This is solid gold so enjoy!
JC
Marketing 101 By Lee Rosenhan
Ideal #1: The total cost of production labor (wages,
benefits, vacation, holidays, etc.) should never exceed 40%
of the labor money taken in. We are talking about production
employees, technicians, not management or service writers.
That part of a working foreman's hours that go to production
should be considered as well as the compensation he is given
for that. You should calculate this ideal monthly, averaging
the last three months. This ideal should be labor driven,
meaning that one should consider first what it costs to have
and keep good, qualified, productive people and then use
that to decide what the shop's average labor rate will be.
You will be tempted to fudge on this. If costs creep over
45% you will be in trouble.
Ideal #2: MINIMUM profit on parts sales should be 40%. If
you sell a banana for 100 pieces, 40 of those pieces should
be yours. This is an annual average of all parts sales. Your
parts are a separate business center and should be operated
with that in mind. It should be self supporting. Some parts,
like engines, may need to be marketed lower, so other parts,
like small parts or performance parts, may need to be
marketed higher to compensate. On annual parts sales of
$200,000 - one percent will make a $2,000 difference, enough
to buy a new piece of equipment or computer system. This
ideal should be checked weekly to see if you are on track.
If you check something at the end of the year it is too
late. If you check something monthly, you have 12 chances to
correct the problem. If you check something weekly, you have
52. If you sell an engine, your percentage may drop for a
few weeks till it is made up. If you sell a lot of engines
you may need to make some adjustments to bring things back
into line. This is for mechanical parts sales only. Gas and
oil - as in gas stations - is a different profit center and
is not considered here. Sublet sales should follow the same
rules as your mechanical parts sales.
Ideal #3: You must have more than one labor rate.
To some this will be a huge understatement. To others it
will be a new idea. Remember this is only management 101. It
is meant to establish some simple rules to more
profitability and all that comes with it.
Each labor dollar is worth it's face value plus the parts
profit or other profit it generates. A repair order with
half labor and half parts, with 60% gross profit on labor
and 40% gross profit on parts, has a labor dollar worth
$1.40. This repair order would represent your ANNUAL
AVERAGE. You may find your annual average repair order is
more like 60% labor and 40% parts rather than half and half,
in which case each labor dollar would be worth $1.32 at the
same gross profits.
Today we diagnose more than ever. There are no parts
attached to diagnosis. Thus the need for more than one labor
rate. It may not be as simple as charging out diagnosis at
140% or 132% of the rate you would charge to install a water
pump. There is expensive diagnostic equipment that has to
produce a return on investment as well as sharp diagnostic
technicians that demand higher compensation. All these
things must be taken into consideration in forming a labor
rate scale. There will be as many ideas on this as there are
shops but the ideal is that you must charge a higher labor
rate for diagnosis and other like situations. You may settle
on a simple formula of diagnostic labor being one and a half
times standard labor. It's a place to start. On the other
end of the scale, you may find you can charge a lower labor
rate for maintenance services because you may have less
skilled and lower compensated people doing this work with
low tech equipment. So right off you can see the possibility
of three labor rates. Some honest book keeping may reveal
the need for more. You be the judge, but don't give away
diagnosis.
Ideal #4: You must have a minimum service charge.
Every other professional charges one, so should you.
A case in point: Yesterday I had to take my youngest son to
get a physical for school track. We were at the clinic about
30 minutes. Mike was fine. Charge? $95. I wasn't offended at
the cost, it made me a little nervous, as any bill does, but
I didn't take it personal. I guess you could say I expected
to pay even though Mike was fine. After all, I had been
provided a service. Now, I know that I probably could not
charge $95 for a quick check over of a car that took, say,
30 min. of my time. Or could I? Other than being used to
paying a doctor, there were other things that made it
acceptable to pay the $95. The office was professionally
appointed. The counter was clearly marked with a nice sign
indicating where to pay and that payment was expected. The
people that talked to me clearly knew what was expected of
me and looked (dressed) and acted professionally. When
someone approaches you dressed that way (nice blouse and
skirt / shirt and tie) with papers in their hand and that
confident and expectant look on their face, you
automatically reach for your wallet. And I had value for my
money also. I had papers in my hand clearly indicating the
service provided and Mike had his form to take to school.
Value Received. Is any of this making sense? Are we getting
the point? If the medical technician had slapped Mike on the
back and said "can't see anything wrong at this time, why
don't you just go ahead and go", I might have felt cheated
and certainly less secure. I might even have said something
to a friend or relative.
CHARGE A MINIMUM CHARGE, but be prepared to give value in
return and look and act like you believe you deserve to get
compensated. You might prepare a standard form to use in
these kinds of situations. Charge what the market will bear
and what the service is worth. You decide what that is, but
you might at least consider .5 hr. at your standard rate. A
place to start. Have something to place in their hands - as
much as possible - to help support the perception of value.
Have your conclusions clearly stated on the form and any
recommendations clearly explained to help confirm the value
of what you have done for them. With the medical form, it
took just checking a couple of boxes and circling a sentence
or two.
Remember, someone performed that service and if he is
working flat rate it is just that much more time to add to
his wage. Over a week's time it can add up and it makes for
happier techs and a more profitable shop.
On the occasion when in the spirit of customer bonding you
do say "it's on the house", at least it will have some
meaning, but be prepared to pay your tech anyway.
Making more money and paying our people more by just
charging for what we're already doing. What a concept!
Ideal #5: Use "block" operations to increase shop
productivity and value to your customer.
Somewhere between the complaint "I have to keep adding
water", and replacing the water pump, is a block of time
that brought you to that conclusion. How well was that time
used and what value did the customer get from it? It's very
possible that you could get down on one knee, look under the
car and notice the stain in the appropriate spot on the
bottom, front of the engine and correctly conclude the water
pump was the source of the complaint. Was the customer
served? Was your risk of a comeback increased or decreased?
Was it a professional repair? Consider instead a in - house
operation that printed out the same each time and read
something like this:
DIAGNOSE COOLANT LOSS; Includes: fill and pressurize coolant
system. Raise car and check for leaks. Check condition of
hoses, clamps and belts. Visually check radiator flow.
Pressure check radiator cap. Check overflow system. Check
condition of coolant.
You will want it to read easily and in terms understood by
your customer and represent honest value. You get two things
from this. One, is your technician has a set procedure to
follow each time, that helps prevent comebacks and missed
steps. The other is that your customer gets a more complete
job and real value because he doesn't want to come back
still having some secondary problem.
Say you charged .5 hr. for this service, and since it is
diagnosis, it is charged out at your diagnostic rate. Say
you built such blocks of time for "the battery is dead every
morning", "It overheats", "the brakes squeak", "it runs
rough and stalls", "my wipers don't work", etc., etc. You
would feel more secure in that all known checks for each
problem were included in each block of time - that you were
getting compensated for it, and your customer was getting
real value. You can manually adjust the time up or down to
suit almost any situation. It takes no time for the
operation to be printed out and, after the "block" operation
is finished, about one minute for your technician to
complete a "check chart" handed out with the repair order.
With this "check chart" attached to the invoice, the
customer has more proof of the value of your service.
There are many ways to do this. The ideal is to make your
diagnostic time billable and of real value to your customer.
On the line above the standard "water pump" operation on
just about any invoice should be a "block" of time that
brought you to that base repair.
Ideal #6: Honesty in accounting, the key to controlling
expense.
We're talking about the old axiom "garbage in, garbage out".
In other words, if the figures you're dealing with do not
represent reality, the resulting conclusions are worthless.
I am one of the biggest offenders in this area. My nature is
such that I don't really enjoy playing with numbers. I just
want to fix cars, make money, not offend anyone, buy what I
want and live happy. Why can't it be that easy? This
personality trait has cost me many tens of thousands of
dollars over the years and less security for my family.
Learning to be honest about accounting has become a learned
trait brought about by necessity. I now enjoy the challenge
of keeping this living, breathing thing called a "business"
thriving. It can be as much fun as fixing cars. Remember, at
the end of the year whether you have money in the bank, had
to borrow money, went without or stayed the same, you will
have "accounted" for every cent. Why not account for it on
paper daily, weekly, in advance, so when the end of the year
comes there will be no surprises because you will already
have been there on paper. I don't want to offend anyone, but
in my opinion a CPA seems to be little help in this area.
With today's software you can know almost to the minute how
you are doing.
Let's look at where we are to this point. I recently read in
a trade magazine that the average annual sales for the
reporting shops was $250,000. Let's use that figure for an
example. Let's say the parts sales were $112,000, labor
sales were $123,000, you took in $12,000 from sublet sales
and you decided to create a "supplies" category that brought
in another $3.000. That totals $250,000. Let's look at parts
first. Let's assume you have been completely honest in your
entries and every part you purchased that was not consumed
as supplies was invoiced either to a customer or the shop
and therefore the costs were figured against your parts gp
and you ended up with a 40% gp or $44,800. Your gp on labor
you kept at 60% or $73,800 and you were equally as honest in
including all wage and benefit expenses. You tried hard, but
the best you could do for the year on sublet gp was 30% or
$3,600. Supplies were a wash because you were just
recovering cost and so there's
no gp there. This adds up to a total gp for the year of
$122,200. Lets give you plenty of room and say your overhead
was 30% of sales or $75,000. After taking out another
$40,000 for yourself you end up with a net of $7,200. Not
much room for error.
If your true parts gp dropped to 30%, your net would be
($4,000), in the hole. If your parts stayed at 40% but your
labor gp dropped to 50%, your net would be ($5,100), in the
hole. If both dropped, sell. (just kidding). On the other
hand if your true parts gp was 45% and your labor gp was
65%, then your net would be $24,550. A little more room. The
shop these figures represent is likely a modest shop with
one working owner (fixes some cars), one good tech and some
part time office help, and not much time off.
Lets look at the overhead (after labor, parts and owners
salary, everything else you paid out). In this scenario we
used 30% of sales. This is probably high unless you just
built a brand new shop on a busy corner with great signage
(why would anyone put such a burden on their backs when less
costly options are available?). Sounds like some idealistic
thing I would do. If overhead dropped to 20% of sales then
the net on our beginning scenario would be $32,200. Wow. Now
you could take a little time off or buy your wife something
nice. But only if you maintained your parts and labor gp.
Proper control of overhead requires a budget. OH, the B
word! This runs contrary to my most basic nature but is
absolutely necessary to survive, prosper and provide for
your family and your employees. In my opinion, a owner who
refuses to budget violates the trust between himself and his
employees, not to mention his family. A good friend of mine,
Jim McFarland recently posted in the Open Discussion forum
about, through necessity, lowering his overhead $1,200 a
month or $14,400 annually. It can be done. If you E-mail
him, I'm sure he will tell you how he did it.
BTW, a few years ago I participated in an accounting profile
sponsored by ASA. Over 100 shops responded. The average
overhead (less owners salary) as a percent of sales was
20.8%. The top 25% of the shops had an overhead of 14.8%.
Food for thought. I won't tell you what mine was.
Ideal #7: Shop Productivity, the essence of life.
All other percentages, formulas, principles and procedures
pay homage to this principle. All things are subject to it
and all efforts in other areas fail if it is not understood.
Let's visit again the shop scenario in Ideal #6. If labor gp
was a true 60% then obviously labor costs were 40% of the
labor dollars or $49,200. A pretty good wage for one real
good tech. These techs are hard to find, so, more likely it
will be like I suggested that we have one good tech at say
$35,000 (still not bad for most parts of the country) and
one working owner (tech, gone owner) who, along with service
writing and managing, fixes cars. Say he does the balance,
or $14,200. This will still work and there is room in the
budget for some office help to take some of the pressure
off. This is because the important gp has been maintained.
Let's look at a more common situation. Same shop, but the
owner doesn't fix cars and has two techs putting out the
same volume. $49,200 divided by two is $24,600 each. This is
gross (pun intended). Not much take home there.
The pressure is on. The techs need more, the owner knows it.
He doesn't want to lose anyone because it's such a hassle to
find replacements and he didn't get into business to be
doing this all the time anyway. He raises compensation to a
point where he feels his men will stay around. Let's say
$35,000. Now his labor gp has dropped to 43% and the shop is
($14,000) in the hole, assuming nothing is done about
overhead and the increased compensation did not result in
increased production.. Now, he won't want to go in the hole
so he takes less home and falls into the poverty level. We
won't argue about who's at fault here, it's the owner. If
his people cannot work faster because of their nature then
he must replace them. If his people just cannot work faster
at his shop then he has to fix the shop. If his people can
improve he has to learn how to encourage it. If the way he
compensates needs to change, he will have to do it. It's the
owner's shop, only he can fix the problems. Here is where a
lot of pressure is created between techs and owners. The two
techs mentioned would be operating at about 50%
productivity. In order for the owner to meet the required gp
without the situation changing, his average shop rate would
have to be $70 per hour. Everybody loses, including the
customer because it takes longer to get his car fixed and he
has to pay more.
In the beginning of this series, we said it would be assumed
shop productivity was 80% or above to make the series have
meaning. If you didn't know why before, you do now.
Someone once said that the world is made up of two kinds of
people, those who understand interest and those who pay it.
The same can be said of shops. There are two kinds of shops,
those who understand productivity and those who are broken
by it. Good management classes will help you learn to do all
of the above better. The purpose of this series is to help
you understand the basics. Productivity IS everything.
Ideal #8: Establish "closed loop" customer service.
I use the words "closed loop" because it is a term we all
understand. Just like the computer in your car knows what
your engine needs by the input from its sensors, we also
need to know what our customers' needs are by establishing a
feedback system. At first blush, one might feel trepidation
at the prospect of inviting people to vocalize how they feel
about you.
Kind of like posting to a forum.
On the other hand, think for a minute, if a customer was
less than satisfied, wouldn't you want to be the first to
know? How will you know unless you ask? Sometimes, quite a
few times, customers never say anything. They just change
shops and you never know why. People don't like to complain
and it's often easier to just go somewhere else. Of course
we're talking about establishing a CSI, or Customer
Satisfaction Index. There are many ways to do this, most
seem to involve handing out or mailing out a card and hoping
for a response. These programs may do some good. NAPA has
one and so does AAA. I have never gotten a negative card
returned. All returns that I can remember have been
positive. I am good, but not that good. Here is my problem
with these programs, most people throw away this kind of
mail, and again, people don't like to complain. I've always
wondered how many cards are still running around in peoples
glove boxes attached to old repair orders. The only way I
know of to measure the success of these programs is to pay
attention to the size and nature of the response. I will
tell you what I have settled on over the years. It works for
me. I am happy with the response and the opportunity it
gives us to catch a problem before it costs us a customer.
We call each one.
Or rather, I have someone do all our calling. This happens
in the evenings when people are home. When people hear it is
us on the line they are generally interested and not
bothered by "another call". After all, they just spent some
money with us and are pleased to get the feeling of being
served. I get REAL response and feed back with this method.
We catch the problem, if there is one, before it goes too
long. Our calling person has the authority to schedule
appointments on the spot and this adds to the feeling of
being served. People talking to people, hard to find these
days. I have been stopped in the store by people and, as I
was listening to them, trying to figure out where I had seen
them, come to realize they were talking about the
conversation they had with our calling person and how
pleased they were with what our person had said to them and
that we had called. You can't get that from a card. Our
calling person - how did I get started calling her that? It
sounds too clinical. Her name is Marilyn, and she has
wonderful phone techniques and knows our business well.
Marilyn stops by the office and picks up invoices a couple
of times a week and brings them back with notes on each one.
Those needing immediate attention are tagged.
Each one of us can form their own best method, but the ideal
is that you must have one, it must be done each time, and it
must work. "Work" means it has to bring you the information
you need to improve your service. Calling has been the only
thing that has done that for us.
Ideal #9: Large or small, develop a Marketing Plan.
When a shop undertakes to come into the light and make the
changes necessary to become profitable they will find that
in addition to all the attitude changes that take place,
they will also experience a clientele change. Not every
customer, but many will migrate to other shops who are still
like you once were. This phenomenon is best described by
Phil Fournier in his post titled "The shop owners
inferiority complex", posted here in archive 13. To get your
message out and reach the people who now fit your business
you will need to develop a marketing plan. Every shop will
have its own unique needs in this area. I do not pretend to
be a marketing expert. Two things I have learned about
marketing is, it is necessary and you must quantify it. I
remember the picture of a man kneeling and praying in front
of a toilet while pouring money in. The toilet was labeled
"advertising". Many of you have had this experience. At
first blush one might say, I have always been busy and I
have never needed to advertise. When we take that attitude
it is usually with a sense of personal pride, like somehow
we personally must take credit for this great situation.
Someone once said that folks in that situation are either
really lucky or they are not charging enough. You will find
that if you want to charge low enough that you will have all
the friends and work you want. Unfortunately that does not
translate into prosperity and freedom, two things we went
into business to get.
Any good management course will teach you of the necessity
of quantifying. This is the procedure of measuring the
results of your efforts. With each marketing effort you try,
you must measure the results. If the results can't be
measured, don't spend your money. For instance, say you
bought some time on the radio or late night cable. These, by
nature are hard to measure. The other extreme would be a
coupon that people must bring in. You know immediately how
well you did. There are more subtle areas of marketing, like
Yellow Pages, that are sometimes just assumed bring in
business. How about that sign out front? It is assumed it
brings in people. How do you know? Have you asked? You must
ask every new customer how they came to be in your shop and
keep records of your findings. The results will surprise
you. You may find that Yellow Pages does very little for you
and you can decrease the size or your add and have no
negative effect. Money saved. The same can be said for
signage, for newspaper and other local advertising.
Quantification takes effort and we all want things to be
easier, not harder. Make it simple It can be as easy as a
paper by the phone that you can mark in different categories
about who is calling and why they are calling, how many
appointments result from the phone calls, new or old
customer, etc..
How much should you spend? The average of reporting shops is
between 2.5 and 3% of sales. Quantify every cent and adjust
as necessary.
Summary
We go into business to gain freedom, control of destiny, and
return on investment. All this, we feel, will bring us that
sense of satisfaction we so earnestly seek.
How are you doing?
If you had put all your money in the bank and worked for
someone else would you be better off financially?
It is generally felt that business should provide a better
average return than the bank or stock market, otherwise no
one would take the risk of opening a business. That's why
people invest in the stock market, to make money on
businesses without going into business. How is your business
doing?
Let's review. A shop with an average 80% productivity,
making a minimum of 40% annual gp on all parts sales
incident to production, similar on sublet sales, making 60%
gp on labor sales, the owner taking home about 16% of sales
($40,000 on $250,000 annual sales), with overhead kept at a
maximum of 20% of annual sales (including office and
management help), will have a net (return on investment) of
14%.
The average McDonalds franchise, I am told, has a return on
investment of 18%. No wonder the franchise is so popular.
Banks are giving what, about 5%? The stock market maybe 10%?
If you are not accurate in your entries, or you think you
cannot charge this much, then where do you think the money
will come from? Do you have a money tree out back (bank
loans, wife's credit cards, selling personal items, etc.) ?
If you cannot find the courage to make changes then you must
have a gene that enjoys despair, poverty, debt,
discouragement and anger. I'm not trying to offend anyone,
I'm just being frank. Numbers don't lie.
Each one of the proposed percentages will give you a "block"
of money annually from which to pay expenses and get a
return. You cannot cheat the numbers. Money is like a pile
of rocks. If you take a rock from one pile and place it on
another, no amount of fantasizing, wishful thinking, or
ignorance will return the piles to their original size.
Barring famine, pestilence, insurrection, the demise of
OPEC, huge economic down turns, fire, theft, or death, the
above numbers will provide for a good business with decent
return.
One last item. Perhaps it should be Ideal #10. Watch the
small stuff.
At 14% net, a .32 cent stamp will cost you $2.24 in
production dollars. At 5% net, it will cost you $6.40. If
you let out $100 a month in small items not billed for, then
it will cost you $700 in production dollars, if your net was
14%, to pay for those items. If your net was only 5%, then
that $100 would cost you $2000 in production dollars (100 /
5 = 20, $100*20 = $2000). One more trans job to do for free.
If your operating in the hole, then the effect of the cost
becomes, shall we say, Biblical?!
Work toward these Ideals as fast as circumstances will
allow. Believe in yourself. You have the POWER.
I wish you well.
I would like to thank iATN for this forum and the
opportunity to post this series, and to all of you for your
interest and comments. Doing this has benefited me. I have
had to take a closer look, again, at my own business and
improve areas where I had become casual.
Lee Rosenhan
Owner/Manager
Lehi, Utah, USA
| |
