The $19.95 Oil Change Offer

Hello everybody! I felt compelled to "chime" in on this topic again because of some interesting details. 

I read this topic from the start - wanted to get familiar with where it was going. And on top of that - I understand that it's somewhat of a touchy subject - I get it. 

But after reading everything, here's what I found:

In an earlier post, AndersonAuto said:

"One of my advisors who has been with me for almost 10 years used to complain non-stop about the coupon oil changes. He's on a 100% commission pay plan as are all my advisors and wanted to not include the coupon oil changes in his pay plan. He was absolutely sure they were killing his ARO and GP%. I just pulled out the tracking and offered to remove all the repair orders with mailer coupons for him. All $35,000 worth. He declined. "

Hmmm.... so if you're following, it's NOT about the cheap oil change - it's about what comes AFTER the cheap oil change.

Later in this thread, AndersonAuto advised:

"I looked up where we ended the month for June. $218,789 with a $447 ARO on 489 repair orders."

First of all, nice numbers. But can you see where the truth comes out?? 

With an ARO of $447, I'm pretty sure it's not 20 oil changes on each car, right?

I think (actually... have come to understand) is that most shop owners overlook the fact that from the time most people got their first car, the ONLY service they were told they need was that "oil change". In fact, it was probably "dad" that told them that - something like "be sure to keep your oil changed on a regular basis". 

Amy I right? 

So that's why the oil change works as an INTRODUCTION to your shop. 

Besides, I don't care how good you are - how many tools or scanners you've got - I don't care if you're the most honest shop in your market - Try to fix a car as it's rolling by your door. 

That's impossible.

Also, I wanted to mention to  "AndersonAuto" that it's nice to see that you're tracking your offers. I always say; "If you can't track it - don't do it." I'm not suggesting you've got to look at it every day - but it's nice to have something to reference... and that's why most shop owners don't "get it". If you follow this model - get the customer in the door with an attractive offer on the ONLY SERVICE THEY KNOW THEY NEED - you too can turn your shop into one that produces similar ARO's.

Nice work!

Hope this helps!

Matthew Lee
"The Car Count Fixer"

Get "The Official Guide to Auto Service Marketing"

Ooops... Almost forgot. Got an hour? Join me on this Training Webinar while I'm still doing them. You can register here!

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Matthew

4 hours ago, Stevens Automotive Service said:

Shop Owners 

If you are apposed to a 19.95 oil change that you are afraid brings in the wrong customer this is not a problem. Do something different. 

There is a very easy way that, you can charge your regular rate for an oil change, and get a ton of good customers. 

I agree with Matthew. If you can't track an advertising campaign don't do it.

You can have great numbers as well.

If your looking to get to the next level in the upcoming 4th quarter and have a great 2018 contact me for a free consultation. We can see where your at and where you want to be.    

We presell our oil change services  / we only use Synthetic oil /  last three months 85 presold packages - [ $8,500 to Bottom line ]   We sell them cheap but with that said how much does it cost you to advertise to get 425 visits from your customer.

On 9/17/2017 at 9:25 AM, JustTheBest said:

Hello everybody! I felt compelled to "chime" in on this topic again because of some interesting details. 

I read this topic from the start - wanted to get familiar with where it was going. And on top of that - I understand that it's somewhat of a touchy subject - I get it. 

But after reading everything, here's what I found:

In an earlier post, AndersonAuto said:

"One of my advisors who has been with me for almost 10 years used to complain non-stop about the coupon oil changes. He's on a 100% commission pay plan as are all my advisors and wanted to not include the coupon oil changes in his pay plan. He was absolutely sure they were killing his ARO and GP%. I just pulled out the tracking and offered to remove all the repair orders with mailer coupons for him. All $35,000 worth. He declined. "

Hmmm.... so if you're following, it's NOT about the cheap oil change - it's about what comes AFTER the cheap oil change.

Later in this thread, AndersonAuto advised:

"I looked up where we ended the month for June. $218,789 with a $447 ARO on 489 repair orders."

First of all, nice numbers. But can you see where the truth comes out?? 

With an ARO of $447, I'm pretty sure it's not 20 oil changes on each car, right?

I think (actually... have come to understand) is that most shop owners overlook the fact that from the time most people got their first car, the ONLY service they were told they need was that "oil change". In fact, it was probably "dad" that told them that - something like "be sure to keep your oil changed on a regular basis". 

Amy I right? 

So that's why the oil change works as an INTRODUCTION to your shop. 

Besides, I don't care how good you are - how many tools or scanners you've got - I don't care if you're the most honest shop in your market - Try to fix a car as it's rolling by your door. 

That's impossible.

Also, I wanted to mention to  "AndersonAuto" that it's nice to see that you're tracking your offers. I always say; "If you can't track it - don't do it." I'm not suggesting you've got to look at it every day - but it's nice to have something to reference... and that's why most shop owners don't "get it". If you follow this model - get the customer in the door with an attractive offer on the ONLY SERVICE THEY KNOW THEY NEED - you too can turn your shop into one that produces similar ARO's.

Nice work!

Hope this helps!

Matthew Lee
"The Car Count Fixer"

Get "The Official Guide to Auto Service Marketing"

Ooops... Almost forgot. Got an hour? Join me on this Training Webinar while I'm still doing them. You can register here!

Also, I have a new book coming out. You can get on the Early Bird list and get notice of this FREE BOOK before everyone else. Get on the Early Bird List here.

Matthew

 

Thanks Matthew. Whenever this thread pops up I always have a good laugh when I see the tags that Harry put on it. 

One thing I'd like to touch on is something that I knew, but it was even more evident to me a couple weeks ago. I happened to be in Maryland and I stopped by ScottSpec's shop to have a look at his operation, marketing, margins, etc. The thing that you have to consider when designing a marketing program is what you're doing now vs what you want to be doing. Scott currently runs very close to a $600 ARO with great margins, but his car count is up and down. He definitely needs to revamp his marketing, but he did have a good August. The reality of a cheap oil change marketing program is that a $425 to $450 ARO is what most shops can expect if you're doing good inspections and have a good advisor. Your demographics/zip code/vehicle mix obviously will have a big influence on this, but $425-450 is what I've seen. If you're a smaller shop like Scott, with a limited maximum car count due to a single advisor configuration and limited shop space, moving from a $600 ARO to a $425 ARO with higher car count might not make sense. 

The real issue that comes in is that the vast majority of shops need to replace half (HALF!!!) of your customers annually. Scott told me he was only losing about 10% annually. I showed him a pretty simple number which indicated that his losses were much higher, which he then back tested and showed just how scary it is. Scott is losing just over half of his customers annually (as am I) even with a great advisor taking care of his customers. My girlfriend sat in his waiting room and listened to/watched his customer interactions for a couple hours, and she concluded that Scott's customers LOVE his advisor, but he still has to replace half of them annually. That's the reality that most of us have to deal with. Customers are not as loyal as we all want to think they are, and the customers we see all the time give us the illusion that most customers are like them. Scott's numbers and mine have shown that over time customers are becoming less loyal every year.

So the question for shops like ScottSpec is how do you ensure you're attracting enough new customers to replace the ones that don't come back, while maintaining a high ARO? I know exactly how to do it for a shop that can handle 500 cars a month and needs a $425 ARO, but a shop that can do 160 cars a month and needs to carry a $600 ARO is a different kettle of fish. I wish I had better answers. Scott is going to do some A/B testing with a few marketing pieces so maybe he can enlighten us all in a few months.

I do know for sure that the oil change is the only service everyone knows they need, and you can't fix it if it isn't in your shop. I've been wondering though, given the current climate of customer loyalty (or lack thereof), if the way forward is going to involve consolidation of the industry into fewer larger shops, or chains of smaller shops where the owner can count on making his living on smaller net profits from multiple locations.

Exactly how do you obtain a $425 average with 500 cars? I'm into this business less than five years and would like to know how you know how to do  this? Aside from listening to the customers, selling the dirty filters, overdue or due maintenance, pipelining upcoming needs like soon to expire brakes/tires, what else should we be doing? We inspect nearly every car and admittedly, we do have some lapses on finding things, but we do a good job for the most part. 

46 minutes ago, 3PuttFever said:

Exactly how do you obtain a $425 average with 500 cars? I'm into this business less than five years and would like to know how you know how to do  this? Aside from listening to the customers, selling the dirty filters, overdue or due maintenance, pipelining upcoming needs like soon to expire brakes/tires, what else should we be doing? We inspect nearly every car and admittedly, we do have some lapses on finding things, but we do a good job for the most part. 

In addition to Stevens points I would add....

Inspect every vehicle, the more consistent you can be the better. Identify all needs. Estimate all needs, present all needs to customer in order of importance, along with estimates to correct. Watch average ticket grow.

To improve results add in Stevens points:

Dont market to bottom feeders. Market to value.

Treat people well, serve them and consistently deliver.

Hire the best you can find and help them be as efficient as possible.

Also, get sales training. While you need (IMO) to be genuine knowing the tools and how to use them will assist in closing some of the more difficult sales and close more of the easy ones.

2 hours ago, 3PuttFever said:

Exactly how do you obtain a $425 average with 500 cars? I'm into this business less than five years and would like to know how you know how to do  this? Aside from listening to the customers, selling the dirty filters, overdue or due maintenance, pipelining upcoming needs like soon to expire brakes/tires, what else should we be doing? We inspect nearly every car and admittedly, we do have some lapses on finding things, but we do a good job for the most part. 

What those guys said. Remember, 500 cars is a lot of cars. Concentrate on figuring out exactly how many vehicles your shop can handle, and do an exceptional job with those vehicles.

One metric that I used to measure, and I really should get back into, is the number of jobs found per RO. We all work on pretty much the same vehicles, 10 years old with 120-150k on the clock. Things are broken on most of those cars. Your job is to find what's broken, and tell the customer every single time. When we were measuring jobs found per RO, we were looking for about 5 to 5.5 jobs found per RO. Some cars need nothing, some cars need 13 things, but in the end we looked for the average. If a tech could only find 2.5 items per car, we knew he wasn't doing a good inspection. We also tracked the sales closing ratio by the SA, and broke it down by technician. If I have 3 advisors and 2 of them sell everything a particular tech gives them, and one advisor doesn't sell anything for him, we have a personality conflict that I need to get involved in. If I have 3 advisors and 6 techs, and all my techs are finding 5 items per car, but all the advisor closing ratios on one of those techs is complete crap, I know I have a tech who's pencil whipping his inspection and the advisors don't believe him. Lots of interesting things you can find out when you track that stuff.

When we do an inspection, I have the techs give the advisor the list in a specific order.

1. What the car came in for.
2. Safety items. Actual safety like metal to metal brakes and ball joints that are about to fail.
3. Things that will become a safety items in the near future.
4. Things that won't become safety items, but get more expensive if you wait.
5. Needs fixed but won't get more expensive.
6. Maintenance. 

7 hours ago, AndersonAuto said:

So the question for shops like ScottSpec is how do you ensure you're attracting enough new customers to replace the ones that don't come back, while maintaining a high ARO? I know exactly how to do it for a shop that can handle 500 cars a month and needs a $425 ARO, but a shop that can do 160 cars a month and needs to carry a $600 ARO is a different kettle of fish. I wish I had better answers. Scott is going to do some A/B testing with a few marketing pieces so maybe he can enlighten us all in a few months.

Hello Everyone - I kept getting those notices too and when I read the above, I wanted to "chime in" again. 

With all due respect - I don't think it's a matter of right or wrong. I think it's a matter of which business model do you want to run. 

Using the math and numbers from what I quoted above, the difference is this:

160 cars/month x $600 ARO = $96,000
500 cars/month x $425 ARO = $212,500.

Of course if the 96K is returning a 10% profit, it's still better than 212K at 5%. Now, I'm not saying those profit numbers are correct-  I am just making a point that it's not all about gross sales - it's about "what sticks". I get it. But I'm thinking that with the tracking and work you've put into your business, the 212K is doing better than 5%. 

But the issue I always struggled with is that when you're smaller - fewer people - and fewer customers - there just seems to be more room for the bottom to fall out. In other words, if half of the 160 customers left - it would a much bigger problem than if 1/2 of the 500 customers left. See what I'm talking about. Now, with that said, of course, nobody wants to (or likes to) lose customers. I'm just looking at extremes. 

A loss of 1/2 of the customers a year is rather surprising... and this is what I talk about with my clients. When it costs between $75-$150 to get a new customer, would you spend $15/year to keep your old customers?? I have to think the answer is a "yes". 

That's why I've always instituted a real, printed and mailed newsletter with my clients. Okay, I can see you rolling your eyes now - so STOP that! ;)) But really, it's another channel to market, and when you can turn postage stamps into dollars - can you lose? 

The nice thing about the newsletter is (shhhh... don't tell anyone, okay?) is that all the Customer Only offers are done WITHOUT A DISCOUNT. That's because we use a strategy of "stacking value". As an example, let's say your oil change is (regular price) $40. Just using round numbers for the example. Then you add things that you probably do anyway... like Unlimited Fluid Top Up, Check all External Lights, and stuff like that... AND ASSIGN A VALUE TO THOSE (like $22 or fluid top up and $15 for external inspection of all lights) you get a TOTAL VALUE of $77. Sell that at $40 (your regular price) and you can promote a CUSTOMER ONLY OFFER that will list "SAVE 48% or $37". 

Go ahead - laugh. But it's like taking candy from a baby. Got stacks and stacks of records to prove it. 

Now, there's a little more to it than that - but understand that's the math behind it. 

On top of that, my clients get tons of great reviews (because we know how to get them), clients do contests, give-a-ways and all that stuff - and some even have "fresh hot popcorn" in the waiting room. 

Go ahead - laugh. 

But when I work with clients that are serious - I'm serious about building solid TWO COMMA shops that are profitable. 

One last comment - if you think this is too much work, then picture this. Picture a person trying to start a fire rubbing two sticks together. Got it? Now, picture him doing that s-l-o-w-l-y.

Not the same, is it?

Hope this helps!

Matthew Lee
"The Car Count Fixer"

Get "The Official Guide to Auto Service Marketing"

Fix Your Car Count in 17 Minutes... Guaranteed!

 Get on the Early Bird List for my new book! See this post!

Just had a car in here from a new customer. Complaint was grinding noise. We assume brakes and look the car over. He's got high mileage, two broken springs and blown struts, a bad RF wheel bearing. Manager asks me what to do. He's thinking we just lead with the wheel bearing. I tell him to let the customer know all that it needs because that's what we're here for and broken springs may result in other issues that if we don't tell him and something happens how is that not on us? I follow MAP standard of communication - a broken or failed part is a 'required' fix and other worn parts are a 'suggested' fix. On this case - the RF wheel bearing and two springs/struts are a required fix and the other two springs/struts are suggested since both broken springs were on the driver side. Customer declined all repairs. My Manager is upset we let the wheel bearing walk out the door. We didn't let him walk out the door unless we purposely omit the other issues on the car to simply get a $275 wheel bearing ticket. The customer applied for financing, was declined, and didn't do anything with us. My Manager thinks someone else will get the bearing work and we lost a sale. I like he's fighting for the business but if a customer has multiple things that need attention now and they pass with us because they can only afford one thing so be it. I can live with that rejection knowing I did what was right. Customer may go to another shop, ask for a bearing R&R, and that shop may take his money and then mention the things I hope they find. Any thoughts on how we could have done better? A little off topic but in the vein of inspecting cars and presenting findings...

Thanks everyone. Very good stuff here.

8 minutes ago, 3PuttFever said:

Just had a car in here from a new customer. Complaint was grinding noise. We assume brakes and look the car over. He's got high mileage, two broken springs and blown struts, a bad RF wheel bearing. Manager asks me what to do. He's thinking we just lead with the wheel bearing. I tell him to let the customer know all that it needs because that's what we're here for and broken springs may result in other issues that if we don't tell him and something happens how is that not on us? I follow MAP standard of communication - a broken or failed part is a 'required' fix and other worn parts are a 'suggested' fix. On this case - the RF wheel bearing and two springs/struts are a required fix and the other two springs/struts are suggested since both broken springs were on the driver side. Customer declined all repairs. My Manager is upset we let the wheel bearing walk out the door. We didn't let him walk out the door unless we purposely omit the other issues on the car to simply get a $275 wheel bearing ticket. The customer applied for financing, was declined, and didn't do anything with us. My Manager thinks someone else will get the bearing work and we lost a sale. I like he's fighting for the business but if a customer has multiple things that need attention now and they pass with us because they can only afford one thing so be it. I can live with that rejection knowing I did what was right. Customer may go to another shop, ask for a bearing R&R, and that shop may take his money and then mention the things I hope they find. Any thoughts on how we could have done better? A little off topic but in the vein of inspecting cars and presenting findings...

No offense but it sounds like your manager needs a lesson on ethics. Will someone get that wheel bearing job? Probably. Some hack shop. If the customer couldn't afford to properly repair their vehicle and you exhausted all of your options to help them then there is nothing you could do.

That was my concern (ethics). He knows and understands that we did the right thing. If I ever find we're selling 'what we can get' he'll be terminated immediately. 

16 minutes ago, 3PuttFever said:

Just had a car in here from a new customer. Complaint was grinding noise. We assume brakes and look the car over. He's got high mileage, two broken springs and blown struts, a bad RF wheel bearing. Manager asks me what to do. He's thinking we just lead with the wheel bearing. I tell him to let the customer know all that it needs because that's what we're here for and broken springs may result in other issues that if we don't tell him and something happens how is that not on us? I follow MAP standard of communication - a broken or failed part is a 'required' fix and other worn parts are a 'suggested' fix. On this case - the RF wheel bearing and two springs/struts are a required fix and the other two springs/struts are suggested since both broken springs were on the driver side. Customer declined all repairs. My Manager is upset we let the wheel bearing walk out the door. We didn't let him walk out the door unless we purposely omit the other issues on the car to simply get a $275 wheel bearing ticket. The customer applied for financing, was declined, and didn't do anything with us. My Manager thinks someone else will get the bearing work and we lost a sale. I like he's fighting for the business but if a customer has multiple things that need attention now and they pass with us because they can only afford one thing so be it. I can live with that rejection knowing I did what was right. Customer may go to another shop, ask for a bearing R&R, and that shop may take his money and then mention the things I hope they find. Any thoughts on how we could have done better? A little off topic but in the vein of inspecting cars and presenting findings...

If they tried financing approval for just the wheel bearing, as well as the whole job, and the guy didn't get approved, and he didn't have money to fix it, no sale was lost since no sale was there. Really though, this guy is not your customer...has no money to fix or maintain his car. If trying to get a single job creates a pattern of the advisor not being thorough on his process, many more jobs will be lost, not just a single wheel bearing on a cheap customer.

He had $300 to spend. He needed $1500. But I still feel we didn't lose a sale - we did what was right and can live with our advice. My SA is young but good. He's trying. True, I was concerned with the reason for being disappointed but it was the right thing to do. Hindsight, my question was kind of dumb. 

I'm with you...it would be a decent daily driver if these repairs were made. He can't afford it and I can't afford to only do what he can afford.