It’s Your Business
- Subject: Compensation for shop owner’s or service writer’s time spent with customers
- Essential Reading: Shop Owner, Center Manager
- Author: Terry Greenhut, Transmission Digest Business Editor
Psychiatrists and psychologists charge an awful lot of money for an hour’s worth of their time. Unlike us, they really don’t fix anything quickly. They mostly turn it around on the patient and ask, “How do you feel about that and what do you think you should do about it?”
Can you imagine trying to ask your customers either of those questions? It would be the last time you ever saw them. They want us to diagnose and fix it right the first time, as fast and for as little as possible.
Many of our customers have found a new way, though, to save on the cost of visiting with a shrink: They don’t go; they use us instead. For some reason our customers like to unload their problems on us. Not only do they tell us about their automotive problems but also as we converse with them, working toward closing the sale, many of them begin to tell us their life stories.
Do they do it because we seem like good listeners? We might, because we have been trained to listen for all the details we need to find cures for their automotive problems. Maybe they think we can find cures for their personal problems as well. Are they trying to get us to feel sorry for them and charge less? Always worth a try. Or do they just need someone to talk to and we are the most-convenient set of ears at the time?
While visiting one of my consulting clients the other day I witnessed the entire phenomenon play out. A woman whom the owner had already started to tell me about showed up at the shop. It seems she had written him a nasty letter about how upset she was with the outcome of some repairs on her VW Passat. She accused him of everything from overcharging to selling unnecessary repairs to not caring and paying enough attention to her. It was all over a noise in the front end that she could hear but nobody else seemed able to. I couldn’t hear it and neither could the shop owner or any of the technicians. They all did hear it when the car first came in for repairs, but no longer. She insisted the noise was still there. This wasn’t the first time the car had been back with the same problem. Aftermarket struts were installed on the first go-round. Then the shop tried a set of OEM. Both times the only one who could hear the noise was the customer.
Now she was standing in the office going up one side of the boss and down the other. He was trying to get her out of there so she wouldn’t infect other customers, but she wouldn’t go. He finally got her out to the parking lot by talking to her in a very soft voice while leading her out the door. It worked because she had to stay close to hear him. He was out there with her for 45 minutes more. I later found out that she spent the time telling him her life story – how both she and her daughter were cancer patients, how tough their lives were and how he was adding to the problem.
When he came back in I could see in his face and by his demeanor that he was totally drained. It was as if a vampire had just sucked the life’s blood out of him. The first thing he said to me was, “If you happen to be here and that woman ever tries to bring any car in again for anything, block the door while you give her the address of the competitor we hate most.”
“But she’s spent a lot of money here over the years,” I said.
“There isn’t enough money in the Bank of America to get me to put up with her anymore,” he said as he walked away shaking his head.
Later, when we discussed it, he said: “It’s not that I don’t empathize with her situation. We all have our problems, but I can’t let a customer’s problems become mine. If I do I’ll spend all of my time on them and never get to do what I’m here for: to fix cars and make money at it; so when someone takes it to that extreme I have to end the relationship and move on for the good of the business and the other customers who I can help.”
How do you get compensated for someone taking your time away from profitable endeavors? You have only a certain amount of time in a day to make your money. If your customers routinely take that time from you without paying you for it, you very soon will find yourself in financial trouble and maybe in need of a shrink yourself.
There are many costs that shop owners eat every day in the course of doing business. The cost of listening to long, sad stories is one of them. They are never charged out to the customer because they don’t fall into any category for which we can charge out labor or a part, but they can amount to an awful lot of money and therefore should be figured into the shop’s labor rate and parts markup.
These conversations with customers take different forms. One I like to call the “schmooze factor.” It’s the time it takes to get a customer to like and trust you so you can sell something. It can take anywhere from five minutes to more than an hour in extreme instances. Another is the time you take to calm them down and save them as customers after it all goes wrong. Yet another is having to defuse their upset when you didn’t do anything wrong but some outside influence caused them to become disillusioned or unhappy (like someone low-balling a price after you’ve already come to an agreement with them and have started working on the car) or the time they spend bending your ear about things totally unrelated to the business at hand just because you’re there with what they think is a sympathetic ear. The one that seems to cost us the most is the time it takes to try to make customers understand exactly what’s wrong and why we need to spend so much of their money on the best-quality parts. This is especially true when they have no mechanical knowledge but seem quite concerned about what they’re paying for and why.
What we need is a line in the labor column that reads “Consultative Service” with a space for the amount of time spent and a price next to it. Of course, if any of us were to do that Consumer Affairs or the DMV would pull our licenses and maybe have us locked up, so obviously we can’t do it that way. Instead, we have to revert to the way we get paid for anything else that becomes a cost of doing business; we have to figure it into our selling price by increasing, if necessary, our hourly labor rate and parts markup to cover any additional costs. We can’t do that, though, on individual jobs. It has to be done as a blanket action; a couple of dollars more per hour and a point or two on the parts markup might be enough to compensate for the lost time.
I know that the concept of charging money for talking with a customer seems outrageous to some of you, but so does a customer repeatedly wasting hours of your valuable time because he or she has the time to waste or just feels like talking to someone. I know it sounds cold and hard, and I’m not recommending that you click a stop watch when they start talking and again when they stop. I am recommending that you treat your time as an owner or service writer as a valuable commodity, that you not allow customers or anyone else to squander too much of it and that you figure it into your cost of doing business.
I know most of us are pretty good at charging out shop time. We look it up in our estimating software and are good about watching for the add-ons. The problem is that the software accounts for only the technician’s time, not the owner’s or the service writer’s when they get into a lengthy discussion with a customer. Keep that in mind, especially if you are not in the habit of charging for diagnosis, because you really wouldn’t have anywhere else to put that time.
Now don’t get me wrong; I’m not advocating that we stop listening or giving our customers the attention they deserve. What I am stressing is that we become more aware of the time we spend with them, how we can logically shorten it to some degree and especially what it costs us in terms of what else we could or should be doing to make money while that time is being spent. After all, we are not “shrinks” even though we may act and sound as if we are at times. We need to keep our eye on the prize, which is primarily fixing cars and getting paid for it.
Terry Greenhut, Transmission Digest Business Editor. Visit www.TerryGreenhut.com.