Building Successful Businesses
Create a Foundation
How Rissy Sutherland helped Honest-1 Auto Care become America’s fastest-growing MSO—while keeping its focus on the customer
RISSY SUTHERLAND, Chief Operating Officer, Honest-1 Auto Care
Background Sutherland is an industry lifer, having grown up in her family’s automotive franchise business. She has done everything from changing oil and rebuilding transmissions to writing and implementing the training and operational systems for all 300 auto repair franchise locations for Moran Industries—the automotive giant that purchased her family’s shops. She has been with Phoenix, Ariz.–based Honest-1 for five years, and is considered by many to be one of the nation’s foremost experts in shop operations.
Six years ago, I sat down for coffee with Jack Keilt. He was coming off stints as an executive with some large corporations—Jack in the Box, Fantastic Sams and some others. And he was looking to get into the automotive repair business. He wanted to pick my brain a bit.
I grew up in this industry, and I have plenty of opinions about it. At the time, I wasn’t looking for a new opportunity; I wasn’t looking to jump ship or start a new company. I was thinking that I could learn so much from someone like him about how to run my shops.
But then he asked a question that changed my whole career: If you could start a shop from scratch, what would you do?
There were two main problems I battled every day in my company at the time of that meeting. I could see a shift happening in the industry, and with the sheer size of our company, there wasn’t much we could do about it. We were stuck.
The first issue was our changing demographics. I remember when I first took over a shop, our customers were 70 percent male. By that time in 2008, it was reversed. Most of the shops were around 66 or 68 percent female. I had one shop in our company that was 90 percent female. Yet, the entire customer experience was not geared to them—not at all.
The other issue was trying to incorporate environmental service aspects into the repair industry. There were starting to be more and more options to do that—eco-friendly fluid lines, eco-friendly buildings, and eco-friendly services. These were things that shops simply weren’t taking advantage of.
That cup of coffee with Jack turned into a daylong talk. In January of 2008, Jack and I jumped off that cliff with this new shop concept and moved forward with Honest-1.
Having a concept like this and scaling a concept like this are two different things. There were really three areas of the business that we were going to accomplish these goals in.
First off, we needed to produce quality work, so it was crucial to set up each shop with the right staff. We have a primary manager at each shop, then two or three other managers and a GS tech, a master technician, and a mix of B and C technicians depending on the size and market.
Then, there’s the building. We want each building to be sustainable. We created a program that we call environmental sustainability actions. We took the environmental standards from the most stringent states and incorporated them into our operations. It incorporated simple things like having skylights in the lobbies or low-usage toilets or automatic lights. Our facilities are also very nice—we have granite counter tops, flat-screen TVs, comfy seating, a children’s play area, free beverages and snacks, and nice, clean restrooms.
Finally, there’s our customer service approach. It’s all about transparency with the customer. We use Virtual Vehicle MD as a sales tool, to show customers the exact issues with their vehicles. We have windows that look into the shop floor, or where that’s not possible, we have a video system where customers can view their vehicles being worked on. We also offer the option of eco-friendly fluid and maintenance services for their vehicles.
The growth in the company has been astronomical in the last few years. Sales have improved by more than 30 percent, year over year, for the past three years. By the end of 2014, we’ll have more than 60 shops nationwide. And it’s because each franchise has bought into these concepts.
We hire true customer service employees for the front of the shop, and we have in-depth training, continued training, for all of them. This is a customer-service industry, and there’s nothing more important than that.
Become an Expert
How Rich Cox took Orion Automotive from a truck and a box of tools to the leading European vehicle repairer in Michigan
RICH COX, Owner, Orion Automotive Services
Background Like many in the auto service industry, Cox built his business on quality work that produced a stellar reputation. His focus on technology, training and customer service has led many in the industry to point to his Ann Arbor, Mich., shop as one of the top specialist facilities in the Midwest—producing high margins out of a small facility.
I just feel like we’re always having to fight perception as an industry. With our new facility that we just moved into on the first of the year, things got a little bumpy with the township in getting the zoning for it. Just the perception they had of us—it got a little confrontational.
Don’t call me a car guy. That’s what I told them. You don’t understand anything about what we do.
But that’s the perception: People think of the dirty shops, oil on the ground, smokey lobbies. Everything we do, we’re going against that perception; we want to change that perception one customer at a time.
We’re in a customer business. We want to be experts in everything we do in the shop, and we invest heavily in equipment and tools and training to do that. But that’s on the inside of the shop; customers don’t see that. What they see is on the outside, and that’s why it’s critical to be a customer-service-focused business. I like to think of my shop like a high-end restaurant, where you have two very distinct parts: the front of the house—the area the customers see—and the back of the house. The back of the house, the shop, has to be perfect; that’s the expectation, the minimum. The front of the house is where you set yourself apart.
From the beginning, I’ve always specialized. I raced Saabs, and then BMWs. So that was just a good fit right away to work on. As I got bigger, I moved to a two-bay facility and worked out of there all through the 1990s. It was just me and, eventually, one other person. My last year in there, I was doing about $350,000 a year. We had barely any overhead. I felt like we were just raking it in, and we invested heavily in our tooling and equipment.
When we work on a brand in our shop, we want to know absolutely everything about it. We dive right into it. The quality is absolutely essential to building a reputation. As I said, it’s the foundation for it all, and it’s the expectation. For us, we want to be our customer’s expert.
That’s what has helped us grow. We moved into a four-bay facility in 1998, and we were there until January. Our new shop is about twice the size, and I feel like we’re really ready to grow substantially.
I’ve always approached things differently. We’ve never really done customer-acquisition marketing. It’s more about our reputation in the area. We do concerts every year at our shop; that’s something we’ve done for 18 or 19 years. Our waiting room has always looked more like an art gallery than a shop.
It was about creating an atmosphere, an attitude for our business. Most customers are not going to be car people, so they don’t want to be in a “car guy” atmosphere. At our shop, everything’s divided: We’re knowledgeable, expert technicians in the back, and we’re customer-oriented people in the front. This isn’t a car-service business; it’s customer service. We’re not car guys.
Steps to Specializing
Orion Automotive specializes in European vehicles, their expertise covering more than a dozen manufacturers. And Cox and his staff don’t jump into working on a new brand without being prepared. Cox has a strict procedure he follows for setting his shop up to work on a specific manufacturer’s vehicles.
1. Identify the need. First, Cox or his staff must be able to demonstrate how many vehicles the shop sees—and cannot repair—because of the lack of expertise in a certain make, and then determine the amount of sales lost.
2. Research the brand. Cox then assigns a service advisor to thoroughly research the brand’s history—how its vehicles have evolved, what separates it from others, what are common issues and characteristics found in the vehicles.
3. Research the equipment. Then, Cox determines the exact tools and equipment his shop needs to fix every aspect of that manufacturer’s vehicles.
4. Determine the ROI. Cox wants to justify the cost of the investment within 12 months of beginning this process. If the costs don’t align with the demand for the work, then it’s not worth the repair.
5. Train a tech. If the cost can be recouped within a year, Cox will then send one of his three technicians to receive training on the specific manufacturer.
6. Purchase equipment and market the service. Cox has a special landing page on his shop’s website for each make his staff specializes in, and he focuses on organic SEO rankings.
Don’t Dream Big–Dream Bigger
How Matt Curry went from one of America’s most successful shop owners to the man whose new business may change the entire industry
MATT CURRY, CEO, The Hybrid Shop
Background Curry is the former owner of Curry’s Auto Service, a $20 million-a-year, 10-shop operation in Virginia considered by many to be one of the best, MSOs in the country. He sold Curry’s in mid-2013 to focus full-time on The Hybrid Shop, the company he founded to help the industry transition into a new era of auto repair and service.
One of the biggest problems that shops have is that they don’t know how to sell to customers. It’s a problem you see again and again. I tell people all the time that this should be one of the easiest industries there is—people need us, they need our services. Yet, somehow, we still struggle. It’s all because of an inability to make sales and connect with the customer.
The thing our industry needs to understand is that customers want to know what they’re buying and they want to understand the value. That’s what our jobs should be—demonstrating that value. We always had a show-and-tell sales philosophy in my shops. We’d bring customers to the vehicle and explain everything. It builds trust. It adds value.
I think people get caught in a mindset that they’re a small shop or this or that sort of shop, and they’re stuck doing what they’re doing. You can’t think that way. If you think small, you’re going to stay small. You’ve got to always think and act bigger than you are.
That’s where The Hybrid Shop concept came from. When I owned Curry’s Auto Service, I liked to think that we were the best at what we were doing. We’d been doing hybrid work for the last several years, and we had eight hybrids of our own that we used as shuttles and things. But, it felt like we were only doing a small portion of the work that we could on them.
So, we had Mark Quarto with Automotive Research & Development come in and give us training, and I was blown away with what we didn’t know.
I also saw an opportunity, because I figured if we were behind on this stuff—and we thought we knew hybrids—then so many people in the industry had to be even further behind.
Mark has 27 years of experience with this technology. He was at the ground floor of it with General Motors, and he’s developed his own battery conditioning equipment.
I figured there was a way to bring this technical training and support—and a sales system for it—to shops around the country.
That’s what The Hybrid Shop does. We enter into franchise or “dealer” agreements, as we call them, with existing shops. We provide the hybrid equipment, training and marketing for the new services. The idea is to go into a shop and make them the hybrid experts in their area.
Ten years ago, there were two hybrid models available. In 2013, there were 57. This is a growing market, and it’s an opportunity for shops to add a new profit center to their businesses. And these are large tickets—our 10 shops in the The Hybrid Shop program average $2,000 per ticket on hybrid work.
But it’s all about the way you look at it. Adding a service or improving your business is going to cost money. You can’t look at it as a straight cost, though: These are investments in your company’s future. Whether it’s hybrid work or specializing or taking on a new service, it doesn’t matter.
When I just had my one Curry’s Auto Service location, I tried to operate it as if I had 10. I offered our customers nationwide warranties and other things that big chains do. I knew I wanted to get bigger and grow, and I wanted our customers to see us that way.
It’s about having a vision for where you’re going. You have to be looking down the road at where your business is going and where the industry is going.