Creating a Successful Shop Culture
To a passerby, there’s not much that stands out about Keller Bros. Auto Repair. Actually, it’s difficult to even notice it.
The shop sits in a sunken strip mall, a good 10 feet below street level on East Dry Creek Road in Littleton, Colo. Its stucco exterior, Spanish-tile roof and red-lettered sign blend in so well with its neighbors that the shop is as much a part of the suburban Denver landscape as the fir trees and rock gardens that line every parking lot.
Pick a cliché: Don’t judge a book by its cover; it’s what’s on the inside that matters.
And now look at the numbers: Keller Bros. squeezes $3.5 million in annual sales out of 8,500 square feet of space. Its average ticket tops $450. Overall technician efficiency exceeds 100 percent, and co-owner David Rogers says you can count the comebacks from the shop’s nearly 8,000 jobs a year on one hand.
Some consider Keller Bros. to be one of the best, if not the best, shops in the country. (They have the awards to back that up.) But it has little to do with those numbers, and even less to do with its run-of-the-mill facility.
“It’s the way we treat people,” customer service manager Tim DeWeese says matter-of-factly. “And I don’t just mean customers.”
Keller Bros. has crafted a shop culture that puts the needs of people—customers, vendors, employees, everyone—over the needs of its bank account, but not at the expense of it. Through a systematic operational approach, co-owner and founder Terry Keller says the shop has become the business he “always dreamed of running,” a business that does things “the right way and still gets the right results.”
“But I didn’t think it was possible,” Keller, 63, says now. “I know what it’s like to truly struggle—for 25 years, and I mean really, really struggle. … But there’s a way out of it. It’s about creating a culture that allows you to get out of it, and allows you to be successful.”
A Familiar Start
For the first two decades of operating his shop, Keller often fell back on one tactic when dealing with an angry customer.
“He’d just pull out his checkbook, and have his pen on paper before the customer even finished the complaint,” says Rogers, who joined the company as a service advisor in 1997.
That helped quell the complaint, but did little as far as providing a real solution, Keller says. That’s because the real source of the problem wasn’t from the error (or perceived error) in handling the customer’s vehicle; that’s where the complaint came from.
The problem was institutional. It was the shop’s overall approach to operations. It was its failure in developing the proper systems.
“It wasn’t a pretty picture, and for a long time, I didn’t really know what I was doing,” Keller says. “I remember one of the first years I was in business, at the end of the year, the accountant sent me 102 W-2s for my employees. I only had 14 people on staff. That gives you an idea of where I was at in terms of running a business.”
Keller bought his shop 40 years ago at age 23. He struggled to lead his team and to hold them accountable. He wanted to give the utmost attention to each customer, but day-to-day operations were a blurry mess of putting out fires.
“And staff was blowing through here,” he says. “There was no accountability, and all anyone cared about was a paycheck.”
“Terry’s always had that heart of gold with customers and employees,” Rogers says. “He had a lot of things going for him—incredibly honest, great integrity, treated everyone really well. He just never looked how to make himself OK at the end of it.”
When Rogers came in to manage the front of the shop 16 years ago, Keller Bros. was doing roughly $1.2 million in sales, working on almost 65 cars a week. They were busy but weren’t profitable. They had customers, but weren’t giving them a good enough experience.
Although a relative newcomer to the industry, Rogers had the solution.
Creating a Culture
The concept is simple, Rogers says. “Good culture equals good systems.”
“We have an ongoing mission to treat anyone who garners our attention as our most beloved family member, whether that’s a customer, co-worker, neighbor, whoever,” Rogers says. “And that’s a great mentality, but how do you do that? How can that be achieved? Culture has to be a lot more than just a slogan.”
It didn’t take Rogers long to size up the situation when he came on board, Keller says. He quickly saw a constant dysfunction that was brought on by a lack of direction in the staff. Systems and procedures were absent in the business, and Keller and Rogers went about changing that.
It started with a required 40-point inspection on every vehicle and moved into every aspect of operations, from the way phones are answered to the way vehicles are delivered. And Rogers and Keller began religiously tracking it all through numbers. They kept tallies of the amount of potential work found in each inspection, how much of it was sold. They looked at productivity and efficiency numbers. They kept a close eye on all their margins, and they adjusted all their systems and processes to make regular improvements.
Efficiency rose almost immediately, as did average repair order (ARO). The staff got more and more out of each car, raising ARO above $400 and cutting car count nearly in half. Within the first year, sales nearly doubled to $2.3 million. They topped $3 million the following year.
While the shop had some turnover during that stretch, they were able to find people who meshed with this new way of operating. And, as the systems became more and more ingrained in the staff, they found they had more freedom and opportunity to interact with customers appropriately.
“They give us a lot of responsibility,” says 29-year-old service manager Chris Wardlow, who’s been with Keller Bros. for nearly 10 years. “Everything’s tracked through numbers, so they’re not looking over your shoulder. The systems and processes tell us what to do; they give us solutions.
“When you have all of that set and don’t have to worry about that, you can then focus on customer service and doing right by that customer,” says Wardlow.
In 2008, Rogers and Keller used an in-house software developer to take all of their systems, processes and measuring strategies into one concise management system. Now called the RPM Toolkit, the software helped spur a new business opportunity for Keller and Rogers—adding to Auto Profit Masters (APM), a repair industry consultancy firm they founded in 1999 based on the practices they used in Keller Bros.
There are now more than 836 RPM Toolkit users across the world, from New Zealand to Dubai.
Beyond Auto Repair
When a business’s culture is successful, Rogers says, you’ll see it in the numbers. The message is more clear anecdotally, though.
Rogers tells the story of a woman who came to the shop, having a problem with the turbo on her Audi. The Keller Bros. staff didn’t hesitate:
“They told her that thing better be under warranty and to bring it to the dealer,” Rogers says.
The dealer refused to honor the warranty, saying the issue was brought on by neglecting maintenance.
Rogers’ team took up the cause. They made repeated phone calls to Audi, the dealer and anywhere else they could look for info. Still nothing happened. So, they called the local news station. After a reporter called the dealership, that dealer called the customer to say they’d honor the warranty.
Keep in mind: This entire situation had no direct financial benefit to Keller Bros.
“I don’t like to dwell on that story,” Wardlow says. “That was a pretty obvious situation of what’s right to do. What says more about our staff are the little, everyday things.”
Last winter, four technicians left the shop in the middle of the day to help an elderly customer get her garage door open, which had been frozen shut. The 80-year-old customer wasn’t coming in for an appointment; she had to go to the doctor and didn’t know who else to call.
Wardlow has taken another elderly customer grocery shopping; he and the staff check their database weekly and call customers to notify them of recall issues; and employees will take customers to the bank or to work when their vehicles are in the shop.
But, more important than that, Keller says, is showing his staff that he and Rogers take this philosophy to heart too.
“They need to see the same support from us as we expect them to give to each other and to customers,” he says. “We get very personally involved with our staff. A lot of the gurus out there will tell you that’s a bad idea. Well, it might’ve been 20 years ago, but this is a different industry now.”
Look no further than DeWeese, the shop’s customer service manager, who only two months after starting work at Keller Bros. in 2013 was mugged and stabbed seven times. He was in the hospital for a month. Despite being new to the company, Keller Bros. stayed by him through his recovery, ensuring his job would still be there when he was healthy enough to take it on.
“I just get emotional even thinking about it,” DeWeese says. “They said in my interview that they were this way, and … they followed through on it. They didn’t have to, and honestly, I don’t know of other places that would’ve done the same thing.
“I was surprised by it all. I really was. I’ve been in this industry for 20-plus years, and this is the first and last place I’d want to work for again.”
A Universal Truth
Not every shop is the same, and not every system or process works the same everywhere, Keller says.
“We’ve talked with hundreds of shop owners and we’ve implemented these processes in hundreds of shops, and I haven’t found a better way to go about it,” Keller says of using systems to carry out the shop’s overall, guiding mission. “Other people can judge that. I just know what I know, and from my experience, this is the only way to truly sustain that culture over time.”
Rogers, who stands 6-foot-7 and weighs 250 pounds, says it’s always easier to yell or scream at employees. It’s always easier to try to be like the football coaches you see on TV. But how long do those coaches last?
“Eventually, that act gets tired. There’s no substance behind it, there’s no foundation to back it up, and no one is going to respect that,” he says. “I don’t know everything, and we’re far from perfect in what we do. That’s why we’re always looking to improve what we do.
“You can never be perfect in this industry, but you can be perfectly honest with each customer and honest with yourself and your staff about what we can improve on. That’s what it’s all about.”
A TALE OF TWO (MORE) SHOPSTwo shop owners explain what implementing the Keller Bros.’ systems has done for their shops.
Size: 6,000 square feet
Monthly Car Count: 330
Annual Revenue: $1.3 million
Michael Harris’ grandfather founded Harris Garage in the 1940s, and for 60 years, his grandfather and then his father ran the shop the way most mechanics always did in their day.
“They fixed cars first and worried about bills and getting paid later down the line,” Harris, 36, says.
But it always came with a strong focus on putting the customer first, Harris says.
And, when Harris took over day-to-day control of the Hayes, Va., staple 10 years ago, he wanted to “take more of a managing approach” to operations.
He had a regular focus on numbers and put processes in place to help his staff work through routine tasks, but it wasn’t until starting his work with Keller and Rogers in 2009 that the shop really took off.
“The difference was really having the tools in place to train employees and actually improve when we saw weaknesses,” Harris says.
They switched to incentive-based pay across the board and stayed focused on working with each employee on meeting and exceeding his or her customized benchmarks.
The shop grew its total sales by 37 percent in just four years.
“The biggest thing is that it created a team environment,” Harris says, “where everyone understands their roles and, because of the openness of the numbers, everyone sees how their role affects everyone else and what we’re trying to accomplish. We don’t have individuals anymore, there’s no one focusing on what they can get out of it just for themselves.
“It took a while to get here and create that culture.”
D’s Transmission & Auto Tech
Size: 6,000 square feet
Staff: Seven full-time, two part-time
Monthly Car Count: 140
Annual Revenue: $1 million
Daris DeGroot, 29, opened up shop with nothing more than a scan tool, a hoist, and a box of tools in 2005. By 2010, the shop had grown to a five-person shop operating out of its current location doing roughly $500,000 in sales.
The business had also grown to the point where DeGroot was taking on too much overhead for the output his team produced, although he couldn’t quite put his finger on the problem, DeGroot says.
Thats when he began using the RPM Toolkit to implement systems throughout the business, from the front of the shop to the back.
The shop saw quick gains in efficiency, revenue and profit. He did lose some staff in the transition, but was able to replace them with people who better fit the culture he was working to create. The shop topped $1 million in sales in 2013, and the staff has almost doubled.
The biggest difference, though, was the accountability it provided throughout the team—and the way the numbers could help his staff demonstrate their improvements and value to the business.
The shop tracks metrics in real time, but also watches the way they fluctuate over longer periods of time. It’s helped to identify short-term and long-term problems, DeGroot says.
“It helps me remind myself that these are quality people,” he says. “The number-monitoring system protects the employee. It might feel like they’re being monitored, but we’re building data that protects them.”