Car Count Daily
Hi shop owners. Thank you very much for joining me on this edition of Car Count Daily. My name is Ron Ipach, but you can call me Captain Car Count, because that’s all I’ve done for the past 20 years, is help thousands of auto repair shop owners, just like you, to get and then keep all the top-quality customers their shops can handle.
By watching the video above, you’re going to be able to unleash a brand new auto repair marketing and advertising strategy to immediately increase the net profits in your shop. Auto repair shop owners who utilize this method have been known to increase their profitability by as much as 15%.
In giving away $20 in services lets assume $10 parts $10 labor .
Cost to the shop for that $10 part is $5
Cost of labor min. 1/2 hr, time for minor repair maybe a courtesy check $7.50 avg.
Plus the $2.50 net profit you lose while doing the free service
True cost $15
Just fun doing the math and spinning things around . However meeting a new customer who’s referred is almost Priceless!
Yep! We give away free oil change or a free tire repair for anyone who wants to write about their 5 star positive experience. $100 in service is a great idea! People don’t realize how valuable those reviews are
RON. GREAT IDEA. WE KNOW THE # HERE, SO THIS WORKS OUT . i WOULD SAY A FUTURE VIDEO WOULD BE DO YOU KNOW HOW TO COME UP WITH NET PROFIT ? MANY OWNERS DON’T KNOW THEIR GP ON PARTS, LABOR , WHAT JOB SUPPLIES SHOULD,COULD BE. NOT SURE HOW MUCH OF THAT SHOULD, COULD BE FREE ? Anyway question, reviews seem to be the whole thing when new clients are shopping, any new way for getting google reviews . many don’t have G-mail which appears to limit ability to leave a review ? Around our area yelp reviews come easy & easier to leave a bad one then Yelp will reposition up to top of list for no reason
I wish I was crazy like you. great video as usual,Thanks.
Darren
Thanks Darren!
Stephen, thanks for the future video idea. Unfortunately that’s at least an hour-long video that may still leave a lot of folks confused – especially if I try to explain it 😉
As for the reviews, if they don’t have gmail, have them leave a review on Facebook, Yelp, or any of the other zillion review sites. While Google put a lot of the emphasis on their own reviews, they also take in consideration most of the other review sites as well.
The best way to lessen the impact of a bad review is to first, leave a professionally worded response either apologizing for the problem if it’s true or provide a good argument why the bad review may be in error if it’s not; and then bury it in a sea of fresh new positive reviews to keep your star-rating high.
Ron,
Having trouble following your numbers…Try it in reverse. If you operate at 10% net then $100 costs you $90 to produce assuming lost potential sales. We typically run 15-17% net at a 69% GP (based on loaded tech cost), making our cost $83-85 to give away $100. Not saying it’s not a good plan. Please elaborate on how I may be incorrect.
Thanks,
Barry, I’m comparing giving away NET cash to giving away $100 in services.
Using your numbers, if you reached into your cash register and gave $16 cash for a referral, you’d need to perform $100 in services to replace it, right?
Hi Ron, love the concept for give a ways to referrals. Been doing this for a long time and it works. You almost can’t give too much away- it always comes back to you. I do look at the math a little different. (you asked for feedback) You said if you give away $100 sale at 20% net profit, it’s like giving away $20. It has to be more than that because the cost of goods alone is higher than that. $100 in service, assuming 50% split on labor/parts makes the cost of parts about $25 (assuming 100% mark up), and about $25 for labor (assuming paying flat rate), 30% overhead= 80% being your cost of the give a way or $80. You could argue if your paying tech’s salary anyway and paying overhead anyway, you still have the cost of parts. Another way to put it would be if 20% is your profit, then 80% is your cost- your giving away $80 then?
Just my thought
Jim
Hi Jim, this is where it gets a little confusing, so I’ll try my best to make sense (to me anyway 😉 ).
If you’re at 20% net, that means that for every $100 in service you perform – you net $20 – regardless how your costs are allocated. 20% = $20
If you pull a $20 out of your cash register, you’ll have to perform $100 in services (at 20%) to replace it.
Sooooo…. Giving away $100 in services – and giving away a $20 bill are the same thing (@ 20% net).
Remember this is a comparison between giving away cash and giving away services. I think you’re comparing giving $20 in services to giving $100 in services.
I’ve never been a ‘numbers’ guy, so I ran this idea through quite a few minds before I released this video – and none of them found a problem with my math …yet??? If/when I’m proven wrong, I’ll absolutely make a retraction to set the record straight.
Brillant, I love it, Makes total sense
I like the idea but you need to know your numbers to work it. A good give away we have is a bookmark with all our info on. Customers keep these and it woks, We hand out 2 or 3 to each customer so they can pass one on to a friend. Low cost and far better than a card
Bob Perth Australia
The issue with your numbers is the net cost and net profit both have to be considered. Your not giving away your net profit with the services, you are giving away your net cost, or at 20% NP your giving away $80 in cost. Use the $20 from the cash register as an example and stripping it down to entirely $20 to make it clear use this analogy. If your business was brand new, just started and you sat there with only $20 in your cash drawer and nothing in the bank and you gave the customer the $20 for a referral you would be sitting at $0 cash. If you kept the $20 did $100 worth of services you would be $60 in debt. The net cost minus the net profit is your real cost.
The assumption that a $100 service only cost you $20 is slightly flaw. You speak that to give away $100 in service really only cost $20 . NOT SO !!! Because the customer normally is paying for parts and time , after paying for parts cost , labor , shop expenses you’re left with $20 net profit . In giving away $100 in service you pay for the parts , the labor, the shop expenses and lost revenue for time spent on free service. Fuzzy math ??
You see, that’s why I put it out there. So guys like you can point out the flaw in my ‘fuzzy’ thinking! 😉 Thanks!