<![CDATA[Alosi training - Blog]]>Sun, 08 Dec 2024 13:59:13 -0800Weebly<![CDATA[Helpful?]]>Sat, 05 Feb 2022 15:51:43 GMThttp://alositraining.com/blog/helpfulMy wife is a wonderful cook.  She is always trying new things and making the old things even better.  I love it and I want it to continue. If I had to make all my own meals peanut butter sandwiches would be about it.  Recently she made an amazing breakfast, cut up potatoes, onions, peppers, sausage.  Sautéed it all perfectly,  made a few “nests” and added an egg for each of us that she cooked perfectly sunny-side-up.  Being appreciative I like to be helpful by cleaning up. In my capacity as chief bottle washer, I pointed out a few things that caught my attention that she could improve. 
“Hey honey, why didn’t you use the non-stick pan I bought you?  It would be so much easier to clean than the iron pan.”  
“Where did you put the Scotch Pads this time? I looked everywhere.  If you put them back in the same spot I could find them?”
“Honey, you know that expensive German knife is in with the rest of the dishes. It won’t stay sharp that way.  Would you please just wipe it off and put it in the block?
“Hey did you notice all the food that is stuck around the burners?  Don’t worry, I pulled them all out and cleaned them”
Well, everything is improved now!  Cleaning up after making peanut butter sandwiches is much easier.
The point should be pretty obvious, When things are going good, leave it alone! Stop thinking you are being helpful.  
Marshall Goldsmith lists “Adding too much value” as “The overwhelming desire to add our two cents to every discussion” and one of the 20 most egregious everyday annoyances that make your workplace substantially more noxious than it needs to be.  A more common term is "Nitpicking".  It is defined as “Looking for small or unimportant errors or faults, especially in order to criticize unnecessarily” and it easily demoralizes, destroys and disengages people.]]><![CDATA[If this place were a restaurant...]]>Tue, 08 Oct 2019 14:09:50 GMThttp://alositraining.com/blog/if-this-place-were-a-restaurantIf your service department were a restaurant how popular would it be?

I have spent nearly my entire adult life working within the automotive arena, especially the part that doesn’t sell cars.  Recently, many of the stores I work with are complaining that they have too much work and can’t get it all done resulting in long waits, missed promise times, high policy and loaner car costs, lot damage, overloaded storage lots, poor customer satisfaction and retention, etc.  Huh?, “They have too much work”?  or “They took too much work?”

I go to some very popular restaurants with very high customer reviews. They don’t have too many patrons. They aren’t lined up down the street and hovering around waiting for tables to clear. The staff doesn’t complain that they can’t turn tables because they don’t have enough food, cooks or servers to feed them.  They take reservations! They know what they can deliver!  They match their reservations to their ability.  When someone shows up without one, they only accommodate them if they have the ability to treat them in a way that is consistent with the dining experience they want to be known for. They don’t pack the schedule.  They plan for things to change once they open the doors and anticipate the late arrivals, tables lingering longer than expected and walk-ins. 

There is another type of very popular restaurant with very high reviews. These are restaurants who take no reservations and make it visible to their patrons.  You drive up looking for a fast meal, see that the lot is full and people are in line and you make the decision to stay or leave and come back another time. They don’t bring you in, seat you, then make you wait or not serve you at all delivering a bad experience that will keep you away forever. At these places the choices need to be the Customers.  This is similar to Quick Service/Express lube operations.  

There is only one reason to schedule appointments. To make yourself successful! To be successful, don’t mix the two!  Your customers expectations of each are as different as the fine dining patron from fast food patron.  Control the main shop and control their available choices. Make your Quick/Express operation visible to customers with no appointment needed and make all the choices theirs.   Success is meeting your customers expectations and making money doing it. If you are doing it for any other reason then give it up. Just tell them to come on in.

# automotive service #boating industry #usafordcem]]><![CDATA[Embraced?]]>Sun, 28 Jul 2019 17:13:00 GMThttp://alositraining.com/blog/embracedI visited Italy for the first time this year. I wanted to see what it was like where my mother lived when she was a girl. I was going somewhere I have never been before, meeting people I have never met before. I was anxious. How would I be received?

I visit a car dealership that averages close to 800 new customers a month.  That is 800 people who have never stepped foot on their lot before. The majority of them are there for service and most have decided to hang around till the work is done.
Just stop and think about that for a moment. Imagine your favorite church with a loyal congregation and more than 175 new visitors every week! Seeing the opportunity to grow and spread the Word, they would probably design a process and have people in place to engage every new arrival and welcome them to the family!  

I went to their Sales manager and said, “I have a guaranteed program that will bring hundreds of new prospects to your showroom each month”! Most sales managers would jump at that opportunity to sell more cars and I’d be a rich man.  When he asked, “How would you do that and how much will it cost?”, I said, “You already have it in place and it didn’t cost a dime!” I walked him to the full “waiting” room and pointed out that they were already there.

Get everyone’s head in the game. Have them imagine that you are in the theater business and suddenly you have an audience file in and sit down. You don’t have anything planned, yet.  You haven’t decided which show to put on, what roles the actors will play or what the set looks like.

Then, have them consider this. Instead of looking at service customers in the showroom as an inconvenience (for you and them), look at them as your audience. It cost you nothing to get them there. They are folks who already know, like and trust you enough to do business with you. They paid the admission and are waiting for the show to begin. Entertain them properly and they will return and tell others.  They may even want to participate in the production, (be drawn into the selling process). What a huge gift to have people there, watching the show, just waiting to be engaged!  Your theater is filled.  Now, take advantage of it. The choice is yours.  You can ignore them, avoid doing things to upset them, or engage them.

Even though I don’t speak Italian and my distant cousin doesn’t speak English we were embraced and invited into his home, the same one Mom lived in. We celebrated New Year’s Eve with 22 other family members and were welcomed into another cousins home on New Year’s day to continue the celebration of family. 

​When someone new contacts your business for the first time they are anxious. How do you receive them?  Are they embraced in a way that will make them eager to return and tell others. ]]><![CDATA[My 2 Year Old Coach]]>Thu, 30 Nov 2017 18:45:36 GMThttp://alositraining.com/blog/my-2-year-old-coachI have a grandson who rocks!

‘Why?’ is his most frequently asked question.  “Let’s put your boots on - Why? - Because it is raining outside - Why? -  Because clouds turn into rain when they cool off - Why? - We need rain so the plants grow.”  You know the rest of this story! 

He asks his next most frequent question when in his car seat.  “Where are we? - We’re on Limeport Pike.”  We drive for a few minutes. “Passing aunt Jan’s house? - Yep.”  A few miles later.  “Where are we? - Crossing Rt. 309 - Going to your house? - Yep”. “Where are we? - Turning onto Butternut Road where my house is - OK.”  He is so smart.  I turned onto a road I seldom ever go on.  From the back seat I hear, “I have never been on this road before”.

Why is this important?
I started to think how his questions relate t0 Maslow’s Hierarchy of Need. The basics begin with physiological needs.  When my grandson was born, his physical needs came first and still do.  Everyone needs to eat, sleep and have a dry diaper on.  Once those needs are met, the next layer includes security and safety.  Am I safe?  Does this make sense?  Is everything OK? Why? and Where are we? are quests for safety and security. 
Every human being, especially those who work for you, need to know why they are doing what they are doing and where they are on the journey!  We all have the basic need to know what the vision or mission is, what my part is and how I am doing.

What to do.
A leader must have willing followers.  A clearly articulated and shared vision plus regular updates on progress pave the way. Knowing ‘Why’ provides their need for safety and security. Answering, ‘Where are we?’ through regular feedback provides their need for relationships and feelings of accomplishment. Thanks to my grandson, as a performance coach I have begun asking these questions of frontline employees before meeting with their leaders.  They tell me about what they are trying to accomplish. I ask, ‘Why?’ and follow-up with ‘So, how is it going’.  If everyone I talk to is on the same page their leader is meeting the basic needs that are the foundation for achieving one’s full potential.
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]]><![CDATA[Make Teamwork Simple]]>Wed, 01 Nov 2017 16:31:06 GMThttp://alositraining.com/blog/make-teamwork-simpleDefine teamwork. What I get in response when I ask clients to do this varies so widely that I believe it is the root cause of poor teamwork. Even when I ask this question of leaders in the same organization, the answers can be in direct opposition to each other.  It only gets worse the deeper I go into the organization.

Why is it important?  Stronger teamwork is a common long term goal of many of my clients. Leaders and managers everywhere are frustrated with their efforts to build a stronger team. They certainly spend a great deal of time and money trying to improve it.  Employee retreats, trust falls, ropes courses, motivational posters and speakers, teamwork videos and football analogies are common.  Actual strong teamwork isn’t. 

Teamwork has a direct correlation to another common initiative and catchphrase, “Employee Engagement”.  I define engagement as willingly involved and working. If people are working on a common goal it is the basis of teamwork.

There are so many videos online that illustrate teamwork.  There is a great one showing a town in India where a fallen tree has blocked traffic and everyone is frustrated.  A little boy tries to push the tree to no avail. Then one-by-one others get involved until enough people working together push the tree out of the way.  There are many that show soldiers working with each other to overcome an obstacle that requires everyone to ensure that no one is left behind.

So, what to do.  Start by defining teamwork. I like this one, “Everyone engaged in a common activity”. Everyone doing something small will net more results than a few people doing something dramatic. 

​How do you attain it?  Start by determining something that everyone can do. Following is an example.  I was working with an organization where there was rampant negativity and a sense of helplessness.  My client was concerned and exploring what he could do to change it.  Most teamwork initiatives seem overwhelming or risky leading to inactivity. Inactivity long enough leads to that sense of helplessness.  I asked him to start with something simple everyone can do, ban sarcasm.  It is easy to identify and something everyone has within their control. It might even be fun if administered as a challenge or game.  Doing that one small and common activity would mobilize everyone in the organization to accomplish a task.  The task would be relatively easy and the benefits obvious. ]]><![CDATA[Romance or Retail?]]>Thu, 27 Apr 2017 14:33:30 GMThttp://alositraining.com/blog/romance-or-retailAs the evening progresses you notice that someone attractive across the room keeps looking in your direction. Your eyes meet as they approach. You have been feeling a little lonely lately and were hoping to finally meet someone you could have a relationship with. They walk up to you and say, “Hi”, you look like you could use some company.” You reply, “Name”? They are a little set back by that. They regroup and say, “I was hoping we could have a drink and get to know each other”. You reply, “Have an appointment”? They say, “No I don’t, but I thought you might like to talk.” You reply, “You need a pet”. 

Funny? Stupid? I see this kind of behavior all the time. Just replace “romantic interest” with “service customer”. I use this analogy of romance and relationships because we all know how it feels. Think about how people act around a romantic interest. They make eye contact, smile, extend a hand shake, listen without interrupting, stand close and ask questions. Whether on a date or at work, developing a lasting relationship requires the same skills and genuine interest in the other person.

Let’s look at some typical steps in dating and what they often look like at work:
You meet them for the first time: 
  • On a date: Make eye contact, smile and extend a hand shake. “It is so nice to meet you. How is your day going so far?”
  • At work, “Name?” while looking at your computer
You try to get comfortable and build some rapport:
  • On a date: “How about a cup of coffee? I know a great place nearby. Would you like to go there with me?” Then, listen to and acknowledge their response.
  • At work: “Have an appointment?”
You want to make a good impression and agree on something mutually satisfying:
  • On a date: “What would you like to do next?”
  • At work: “You’re due for an oil change and tire rotation.” 
You present an option and are told no:
  • On a date: “Tell me what you are thinking?” or “What would you like to do?”
  • At work: “I’ll make a note on your repair order so you don’t forget.”
You want the next date:
  • On a date: “I really had a great time. How about you?” 
  • At work: “They finished all the work. The bill is with the cashier.”
If she says she had a good time:
  • On a date: “I am glad. When can I see you again?”
  • At work: “Someone from the factory may send you a survey. Make sure you answer completely satisfied. It’s my report card!”
You want her to know you still think about her:
  • After a date: “I was thinking of you today and what you might like to do next”.
  • At work: She may get an automated CRM message reminding her of the survey.

Why do I bring this up?
For 6 years, I have worked on a project for one of the largest multinational companies on earth. Their goal is to differentiate themselves from their competition by creating an experience that their customers love and are eager to tell others about. Their research shows that above all, customers want four things: 
1. Trust 
2. Respect 
3. In-Control
4. Relationships. 

My experience shows that most of the people I coach and many who lead these initiatives are skipping over the fundamental element of a signature experience and spending far too much time, energy and money focused on the wrong things. How do you discover the right things? When I started my coaching career, a mentor told me that any performance issue would be attributed to one or more of five things:
1. People
2. Process
3. Training
4. Support
5. Pay Plans. 

He said if I examined these closely I would find the source of the issue and be able to offer an effective solution. Of the 4 things that the research said customers desire most, it is obvious that “People” have the biggest impact on the greatest number.. Consider this. Have you ever met anyone who didn’t think of an individual and their behavior when you ask them to talk about a time when they felt Trust, Respect, In-Control or Relationships? I haven’t. So, “People” create a great experience! 

Why is it important? 
Many managers approach trust, respect and relationships at work in ways that would make absolutely no sense in their personal lives. Sadly, they focus on perfect satisfaction surveys instead of lasting relationships. Their emphasis on good surveys will often drive relationships, loyalty and advocacy down! Yet, I have never seen an organization focused on lasting relationships that did not have great surveys, loyalty and advocacy. Loyal customers who return are like family or close friends. They already know, like and trust you. You see them often and have a relationship built on knowledge of each other and common interests. They are willing to give you some leeway when their experience isn’t perfect. At least half of the people that come into a car dealership don’t have that lasting relationship yet. Many of them are there for the first time, a first date. They are important to you and the business. You should want to develop a relationship with them. Many of your front-line folks struggle with that first date, let alone a second one. 

The bottom line. 
Managers must monitor behaviors and coach their people. To create the lasting relationships that will drive satisfaction, loyalty and advocacy up, try this simple approach. Teach everyone to ask themselves this question before saying or doing anything, “Would I say or do this on a date?” If not, then don’t say or do it!]]><![CDATA["Forecasting Service Net" - #7 Expenses]]>Thu, 09 Mar 2017 21:31:22 GMThttp://alositraining.com/blog/forecasting-service-net-7-expensesThere are seven things you control that directly influence your Service bottom line.

    1    Calendar Utilization
    2    Daily Clock Hours
    3    Number of Technicians
    4    Proficiency
    5    Effective Labor Rate
    6    Gross Retention Rate
    7    Expenses

This installment deals with Expenses.

The most understood controllable is Expenses.  To begin with, all of us deal with the reality of expenses in our personal lives. If we don’t spend as much as we bring in there is money left over to save or enjoy. If you are a manager in a service business you also deal with it at work.  How many of us have had a banner month in the works, high repair order count plus high hours per repair order plus high effective labor rate, only to find out that final expenses ate up all the gross profit and we were left with nothing. Early in my career I remember closing each month and then waiting anxiously for the office to post final expenses so I would know if we made money or not.  If we did, I would be very happy.  If we didn’t, somehow that was the office manager’s or store owner’s evil plan.  The next month, it would be the same thing all over again.  

One thing that is absolutely true is that every dollar of expense equals one less dollar of net profit. Let’s say you have a well run service shop that retains about 15% of sales as net profit.  This store needs to have close to $7 of sales to cover every $1 of expense you incur.  If you have $18,000 in expenses you need to have $120,000 in sales!  So ask yourself is it easier to save a dollar or sell seven to cover it? That being said, you must spend money to make money.  The key is knowing what to spend, what the return will be and how long it will take to get the return. Broadly speaking there are four types of expense. Some have a return, some don’t.  Some you do to earn more, others you do because they support who you are or your store mission. Don’t treat them all the same.
  
  1. One-time expense is once and done.  If you make a mistake you only pay for it once. 
  2. Tracking expense is variable and increases or decreases with sales like supplies or certain incentives. Negotiate or eliminate these to decrease the % of sales they consume.
  3. Fixed expense doesn’t change or changes little. Things like rent, heat, electric.  Be vigilant about supplier pricing and price increases over time.
  4. I am stuck with this damn expense forever and can’t turn it off.  Be very wary of taking on any expense that involves a long-term contract. Like personal credit card debt, you pay forever regardless of your income. When business turns down you need to be able shed expense.

What to do.  Don’t wait till the end of the month to look at expenses. Look at them before you incur them. Use the numbers worksheet to help you make decisions by forecasting their impact on your bottom line. The following story is a simple example. I was running a shop with 10 technicians. I observed that every technician spent time wandering the lot, finding their next job.  I wanted to paint lines and number each spot. One glance at the key tag and the tech would know exactly where to find their next job.  I began to time it. About 3 minutes were being lost per job x 5 average jobs a day = 15 minutes per tech per day or 2.5hrs for the shop. Having this time to work on jobs would translate into a 3% bump in Productivity.  Plugging that number into the spreadsheet increases the monthly net profit forecast by $2,200, more than enough to pay the one-time $1,200 the painter wanted to do the job. I knew before I spent the money that we would retire the expense in about 2 weeks and net an addition $1000 in the first month. After that all the additional sales would go right to the bottom line for a total of around $25,000 a year. I knew the return and the timeframe. Other expenses like a company picnic may not have a direct return or payback. Plug that expense into the worksheet prior to incurring it to see your adjusted net forecast. If you need to generate more gross profit to cover that expense, look for realistic opportunities to improve one of the other controllables.  A simple and minor change may do it. 

Next: How to execute your plan - 4DX and Wildly Important Goals.

​]]><![CDATA["Forecasting Service Net" - #6 Gross Profit Retention Rate]]>Sun, 26 Feb 2017 14:06:56 GMThttp://alositraining.com/blog/forecasting-service-net-6-gross-profit-retention-rateThere are seven things you control that directly influence your Service bottom line.

    1    Calendar Utilization
    2    Daily Clock Hours
    3    Number of Technicians
    4    Proficiency
    5    Effective Labor Rate
    6    Gross Retention Rate
    7    Expenses

This installment deals with Gross Profit Retention Rate.

As I mentioned in an earlier post, the only thing a service oriented organization has to sell is time. Everything else follows that. You buy time from an employee and sell it to a customer.  What you have left over is gross profit.  Gross retention rate is how you measure it.  It is the percentage of the sale that you retain after wages. Gross profit is what pays the bills and if there is more of it than there are bills, what remains is net profit.  Net is what you keep.  It is yours!  We’ll discuss this further in the next post.  

Any time you want to make a decision about pricing and compensation you need to consider your Gross Retention Rate. It seems like it should be simple to understand and control. Raising sale prices without raising wages increases it.  Raising wages without raising sale prices decreases it.  It is far more complex than that.

In the last post I talked about your Effective Labor Rate and how it varies.  You can post a rate, but you are never going to collect that exact amount. Unless you are tracking Effective Labor Rate closely, you really don’t know how much you are collecting for every hour you purchase.  It is the same with how much you pay for labor, or technician wages.

Let me illustrate how this all impacts gross retention rate.  The very simplest example would be a shop with only one technician who gets paid flat rate.  Flat rate pay is a fixed amount per hour billed to a customer. You would think you have absolute control over your cost of labor per hour.  It should be the same for every hour you sell to a customer.  Here is the catch. If there are hours you pay the technician for that you cannot sell to a customer or need to discount, your gross retention rate is going to take a hit.  You are paying for time that you cannot sell, or sell at full rate.

Gross retention only gets more complex from there. If your technicians are paid hourly or a salary, you labor expense is fixed regardless of how many of those hours you sell.. You have a break even point.  Let’s say you want to retain 70% of your sales.  You will need $3.30 of sales for every one dollar of wages.  Until you sell that much your gross retention rate will be below 70%.  Once you sell above that amount it all goes directly to your bottom line.

If you have a shop with several technicians with several pay levels it really gets interesting and adds to the complexity.  Now, the type of work and who is doing it has an impact on how much your gross retention will be.  Work mix makes a huge difference. If you give your highest paid technicians jobs that are not your highest priced work, gross retention suffers.  The opposite is true.  If your lower paid technicians can competently perform higher paid work, the gross retention increases.  

Why is it important?  The higher you increase your gross retention, the sooner you retire you expenses.  The sooner you retire expenses, the more money you have left over to enjoy.  

What to do?  Use the Numbers worksheet to track your gross retention rate every day so you can make adjustments if you need to. Don’t wait till the end of the month. Match the work you bring in to the pay level of your techs and vice versa, match the pay level of your techs to the work you bring in.  In other words, unless you have an empty shop you need to fill, don’t advertise price leaders.  Advertise the value of higher priced items. When you do bring in discounted items ensure they go to the lower paid technicians.  This means balancing your workforce to match what you are offering in your market. It would be great if you had all master technicians.  Unfortunately, unless you are a specialty shop that provides a service no one else does, you need to be competitive.  To be competitive you need to control your cost of labor. 

Next:  Controllable #7 - Expenses]]><![CDATA[​The Coach or a Spectator?]]>Fri, 10 Feb 2017 12:38:01 GMThttp://alositraining.com/blog/the-coach-or-a-spectator
The moments when managers are most needed and create the strongest bonds are often the most uncomfortable and overlooked. 
 
Everyone seems to be talking about engagement.  Are we engaging our customers?  How engaged are our employees? After working with retail organizations for 40 years, I know exactly the one question to ask to discover the answers.  How engaged are the managers?
 
Let me explain.  With all the talk about engagement I find few people who can define it.  For me, the term reminds me of a clutch in a car or lawn mower.  “Engage the clutch”. What it means to me is that people are active.  They are working, not idle, either physically or mentally.  Some people can describe it when they see it.  “Look at how Sarah is with that customer. She has them fully engaged in the conversation”.
 
In stores where I see high employee engagement it isn’t being created by the fabulous building, great pay plan, generous benefits, company picnics, recognition plaques, employee of the month parking, consistent training or name tags with years of loyal service.  Although these are all nice, we all have seen highly engaged employees in places where none of this happens.  What I have discovered, and clearly makes the difference, is the amount of time a manager spends alongside their employees at the moments of truth. 
 
I know you already know this if you raised a child.  One of the first high level skills we teach them to do is color with crayons.  I am sure you didn’t hand them the crayon box, explain how they work and then leave the room.  I would also bet that when they showed you a picture, you didn’t throw it in the trash or say, “Better luck next time”.  It ended up on your refrigerator. How about when they got their first bicycle?  Did you tell them how it works, ride it around a little to show them and then leave them alone to figure it out? In each case, you stayed with them.  You explained, showed them, let them try and helped them master the skill. Depending on what it was, and their skill level, you may have hung in there for years.
 
I am not saying that employees are like children, but they do need the same attention when they are learning a new skill or are performing to less than their potential.  Most managers tend to avoid this type of close interaction with their people.  They are busy and it is far easier to tell someone what to do, hope that they do it well, and take “corrective actions” when they don’t.  It also requires closeness and caring.  It is a place where people are exposed and vulnerable.  Both manager and employee can be afraid of criticism. I see this all the time when I teach managers how to conduct training that involves role-play. It requires the manager to be fully engaged.  When they are engaged, it creates an environment that engages the employee.  If done frequently enough it creates healthy relationships and strong loyalty. 
 
Because it is time consuming and uncomfortable for some, what happens in its place is that the manager instructs prior to the performance and critiques or criticizes afterward. Here are a few examples you will recognize. A salesperson has already attempted to handle a customer objection and comes to their manager.  The manager tells them what they did wrong, tells them what to say, makes them repeat it and sends them back.  When that doesn’t work or a different obstacle is hit, the manager does it all over again!  A service manager describes an issue to his team.  He tells them what information they need to get, what questions to ask and how to behave in front of customers. Unless the issue happens again, it is as if his people are invisible or have left on vacation. When it does happen again the manager does the same thing all over again!
 
Can you imagine a football coach using that approach?  I can’t. Good coaches don’t play the game, but are fully engaged during the game and practice.  They don’t just create plays, hand them to the team and wait to see what happens.  They actively help each player get better. They engage, so their players engage.  They are on the field, not commentators or spectators. 
 
Studies have shown that people don’t quit businesses.  They quit their manager.  This explains those places that are not particularly nice, but have fully engaged employees.  These are the places where the manager is fully engaged with their employees. These are managers who make it a frequent routine of spending time with each person when they are doing the critical tasks that make them feel successful and the business thrive. No matter how busy I was as a service manager, I would spend the first two hours, an hour in the middle and the last hour of every day with my advisors. I engaged with them. I watched, supported and often guided.
 
So, what to do.  As difficult as it can be, you must spend time with your people at the point of contact with customers.  It is difficult for two reasons.  It takes time you may not think you have.  You may not think you need to unless you have consistently bad results.  Engagement is personal. It is close. You are talking to people about their performance and talents.  A huge benefit, especially for those who are already performing at a high level, is that they get better.  By being an engaged manager many of the things that create a great organization happen automatically. Following are the first 12 questions from the Gallup Employee Engagement Survey. Their research indicates that organizations with employees who answer “Yes” to these questions are far more productive and profitable than those that do not.
 
01. I know what is expected of me at work.
02. I have the materials and equipment I need to do my work right.
03. At work, I have the opportunity to do what I do best every day.
04. In the last seven days, I have received recognition or praise for doing good work.
05. My supervisor, or someone at work, seems to care about me as a person.
06. There is someone at work who encourages my development.
07. At work, my opinions seem to count.
08. The mission or purpose of my company makes me feel my job is important.
09. My associates or fellow employees are committed to doing quality work.
10. I have a best friend at work.
11. In the last six months, someone at work has talked to me about my progress.
12. This last year, I have had opportunities at work to learn and grow.
 
Look at your routine.  How much time do you spend with your front line?  The answer will tell you who you are.  If you spend a lot of time engaged with your people making them better, you are a coach.  If you spend your time talking about what they should or didn’t do you are a commentator.  If you are buried in other activities, you are merely a spectator sitting on the sidelines.   Be the coach!  Win the game!]]><![CDATA[“Forecasting Service Net” - #5 Effective Labor Rate.]]>Mon, 30 Jan 2017 01:30:33 GMThttp://alositraining.com/blog/forecasting-service-net-5-effective-labor-rateThere are seven things you control that directly influence your Service bottom line.
    1    Calendar Utilization
    2    Daily Clock Hours
    3    Number of Technicians
    4    Proficiency
    5    Effective Labor Rate
    6    Gross Retention Rate
    7    Expenses

This installment deals with Effective Labor Rate.

Why is it important? 

As I mentioned earlier, the only thing a service oriented organization has to sell is time. Everything else follows that. You buy it from an employee and sell it to a customer.  You need to know how much you are collecting per hour.  

At this time of year store owners are often faced with decisions about pricing and compensation. You are trying to decide if you should raise your prices or if you can afford to pay the technicians more.  Until, and unless, you know how much an hour you are actually collecting, you cannot determine either.  

Let’s say you post your labor rate where everyone can see it (In some states you must).  Let’s say it is $120.  It’s a lie and you know it.  You can’t avoid it. It is a lie because you seldom collect that amount.  Competitive items get priced down to match or beat the competition. Some jobs get discounted so you can capture the work. Many services you do for free to create or maintain loyalty. Technicians sometimes take far longer than you expected when you quoted the price (Some states require that you stick to your quote within a certain range). It also depends heavily on your work mix and the type of work you do! There are so many reasons you don’t collect your posted rate. 

Customers look at your posted rate and assume anything you do is going to cost them $2 a minute.  They know they don’t make that much and are hesitant to even talk to you about things they might like above and beyond their primary need. To make things worse your technicians look at the posted rate and wonder why they may only be getting paid $24 for every one of those hours.  If you are really keeping 80% of every dollar you collect you are probably too busy spending your money to be reading this post.   We’ll look at this more closely when examining “Gross Retention Rate”. 

You can have a low effective labor rate and be having one of the best months you have ever had.  Let me explain.  Let’s say you do a promotion of a simple maintenance item that is steeply discounted and brings a flood of new traffic to your store. It fills your shop. Many up-sells and a few unit sales are made.  You add several first time customers to your client list. The high volume of discounted items makes it look like you are doing a bad job even though you rock!!!  Who wouldn’t want a shop full of work over and empty one with a high effective rate!  It would be great to have both.

So, how do you accurately assess your effective labor rate?  You could just divide whatever you collect by the number of hours you were open.  What if it is low?  There are so many reasons why it might be low and too little information to diagnose why.  Remember this is a LABOR rate.  When thinking of profit, it refers to how much you sell each billable hour of labor you purchase. 

Using the Numbers Worksheet, the forecast breaks out the number of hours you were open, the number of hours the technicians were working on jobs and the number of hours you were able to bill customers.  It divides the labor sales by the billable hours for each technician and for the entire shop.  You can use it to run different scenarios and see the impact on your bottom line.  i.e. Add the cost of a promotion for a simple, repetitive maintenance item.  Bump up the tech efficiency based on how quickly they can do it compared to a more difficult repair.  Increase the gross retention rate based on the fact that lower paid technicians will be doing these jobs.  There are other things to consider when doing a promotion, but this will tell you if you will make more or less money doing it. 

How do you increase your effective labor rate? If your prices are not obviously lower than your competition and market, just raising them isn’t an option unless you provide service that is noticeably different and valuable enough to charge a premium for. You may be able to increase it in several other ways.

  • The number one way is to add additional items by requiring a thorough inspection of every vehicle, boat or motorcycle every time - no exceptions.  Don’t present anything to a customer until you have the inspection in-hand. 
  • The second way is to attract work that you can charge your highest rates for.  If you have enough customers to keep busy, advertise items of value, not necessarily the cheapest.
  • If you do need to advertise the cost leaders, combine the offer with an additional item that you can charge more for.
  • Keep technicians.  Treat turnover as a kiss of death.
  • Constantly train your technicians to be able to efficiently handle those difficult but lucrative jobs. 

Next:  Controllable #6 - Gross Retention Rate.

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