Memorable service driving ARO and customer frequency

Jan. 1, 2020
Knowing that a lot of you shop owners and service managers are convinced that it is all about car count, I am once again going to take a stab at convincing you that customer frequency and average repair order are much more important than the overall
Knowing that a lot of you shop owners and service managers are convinced that it is all about car count, I am once again going to take a stab at convincing you that customer frequency and average repair order are much more important than the overall number of cars pulling on to your lot every day.

Another way to put that would be to say that it is much more important that we do a good and thorough job with the customers we are currently seeing and that we do the things to get them coming back, than it is for us to drive the number of cars we are seeing.

Of course the approach I would describe is going to insist that we go to great lengths to service our customers and give them great reasons to come back and it is also going to demand we ask for their business.

There is no doubt that what I describe will make those demands for excellence and extra effort, both in how we interact with our customers and in our approach to service but I am hopeful that increased sales and profits will be incentive enough to get you off your back side and willing to try something new and different, something that will stress the importance of great service and diminish the importance of car count.

Funny thing about customers is that they can go anywhere they want to get their cars worked on and just as funny, if you are not giving them significant reasons to come back, they probably won’t.

Two great indicators of customer loyalty are average repair order and customer frequency.

Average repair order (ARO) is probably the single most important metric out there for measuring the viability of a tire or repair shop. By itself it doesn’t tell what is wrong with a shop but it can be a great indicator as to whether there are problems within an operation. If the number is very low, something below $275 for most shops in most markets, I am going to dig into customer frequency, tech and service advisor compensation, billed hours per ticket, customer experience and the selling process. If the number is very high but gross sales and profits are low, I am going to look at car count, customer frequency, facility utilization, compensation and production.

I cannot typically look at average repair order and tell an owner what is wrong with his business but I can look at it and tell him that he has a problem. ARO is nothing more or less than a symptom but it will tell me if my sniffles are a sign of something minor and nothing to worry about or something catastrophic that needs our immediate attention. When combined with a customer frequency report, average repair order starts to highlight where I am operationally and where I am with my customers.

 

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I already know that my going here is likely to spark a certain amount of confusion and a certain amount of anger but it is important enough and has a big enough impact across the automotive repair and tire industries that I am going here anyway. Believe me; I have heard every objection known to man and I am telling you, you need to start paying attention. Average repair order and a customer frequency report will tell me who is coming in, how often they are coming in and how much they are spending on each visit.

That seems like the type of data that should give us an insight into the quality of our customer service, if we are getting most of the available service and repair business from most of our customers and it should be a great stepping off point in our analyzing our sales process, our inspection process, the effectiveness of our marketing and how productive and efficient we are. I am hoping that this type of information would be worth having and that armed with it, we could take rational steps to correct things that we might be doing wrong or reinforce the things we are doing well.

Still not convinced? Why don’t you do something that would take a great deal of courage and arrange to have a mystery shopper visit your shop? There are plenty of great companies out there that would be more than willing to do this for us but why don’t we keep it simple and find somebody to just show up and let us know what their experience was. Better yet, let’s get two or three people. Every time I have done this exercise with an owner or with a service manager, we all end up embarrassed. We have certain ideas in our heads as to what is happening behind our counter and when we are faced with reality; well the picture is not as rosy as we would hope. We will only know if we are willing to see what our customers are seeing and experience what they are experiencing.

We of the automotive repair and tire worlds are as hard working a group as you will find but way too often this is because we are not working as smart as we could be and because we are unwilling to change. Technology and communication make it easy for any customer or would be customer to explore all of the service and repair options out there. Think of this the next time you sit there and listen as your service advisor goes through his recommendations, obviously disinterested and obviously not giving a damn about what he is saying or who he is talking to.

Several weeks ago, early on a Sunday morning, I went out to purchase a set of tires for my wife’s car. The guy that eventually got my $1200 was not the cheapest, did not have the nicest facility and was not the most polished. He was the one guy after five previous attempts that went to the trouble of asking me where and how the vehicle was used and the guy that actually seemed to listen to what I had to say. That is six stops to buy a set of tires!

That our service advisors are not rude or disrespectful is not enough, I would expect that anywhere I went. To get me to come back would require something extraordinary, like being attentive to my needs and at least pretending that you were glad that I was there. Customer service is of such poor quality out there today that those who are able to deliver great service will not only have a lot of cars but will have a customer base lined up and willing to wait for us to do the things we do and willing to come back again and again and maybe even recommend us to their friends.

Sitting here writing this article I went to Google and put in “top ten consumer complaints”. What comes up as number one is a CNN ‘Money’ article from July of 2010. Want to guess what the number one consumer complaint was? Page down in Google and you will find the automotive repair industry very well represented. Through the challenging economy of the past several years the automotive repair industry has found a way to outpace banks, credit card companies, utilities and even oil companies in consumer dissatisfaction.

I want you to keep telling me that I am mistaken and that you are different and that everything is just fine. I love the automotive repair and tire industries enough to look at what we are doing a lot of the time and enough to demand better. Denial is easy but is short on solutions. Look at average repair order and customer frequency and go where those statistics take you.

Do something different; really give a damn about your customers!

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