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Investing in Mobile Repair

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As a specialty technician for over 22 years at a San Francisco-based Mercedes dealership, Jon Iverson eventually noticed a major gap in his local marketplace. His affluent customer base often didn’t have time to stop in for repairs, and grew frustrated with the lack of convenience with stopping in and losing their vehicles for days at a time.

In 2007, without any prior business experience, he quit his job and took a major leap, starting Mobile Mercedes Doctor, a German vehicle specialty shop out of Mountain View, Calif.

Though Iverson didn’t start with a brick-and-mortar shop, he insists the challenges he’s overcome throughout the years are something any shop owner should keep in mind when implementing mobile repair.

“The model works because of the area, the customers, the importance of convenience to the customers we have, the way we serve our customers and the trust we built with them,” Iverson says.

In addition to investing in all new equipment, Iverson, and, later, his growing staff, had to invest in training to learn how to work as a service advisor, as well as a talented technician. One of the biggest keys he says, is learning how to communicate with customers and build a relationship with them.

As his business grew, Iverson added a brick-and-mortar location in 2014.

To make Mobile Mercedes Doctor a profitable business, Iverson had several significant learning curves to overcome to bring his business to the now thriving $750,000 repair center.

 

The Backstory:

After observing the area the dealership was in, and, more specifically, the customers, Iverson saw a few main problems consistently crop up. Busy customers often complained about how long it took to get their cars back after repairs, and how much those repairs cost when they were finally done.

From there, Iverson identified a gap in the marketplace that wasn’t serviced by his dealership, or any other shops in the surrounding area. Other repair shops in the area weren’t able to offer a convenience factor, where customers could get their vehicles serviced on their time.

To cater to customers who wanted a more convenient repair experience, Mobile Mercedes Doctor started in 2007, exclusively as a mobile repair service for Mercedes, solely run by Iverson.

 

The Problem:

Before starting his business, Iverson had moonlighted small mobile repair jobs for a few years, but was still relatively unprepared to go entirely mobile. Without any prior business experience, Iverson set up this business to reach his underserved customers.

With this, he had to learn the steps any shop needs to take when implementing mobile repair. There was, of course, the major initial investment—buying a Sprinter van with the proper tools, diagnostics, parts and advertising to do mobile repairs—but there was also a significant investment in training, and finding the right staff members who could both fix cars and communicate with customers.

With the level of communication needed with his new customer base, he, and the rest of his employees who eventually took to the road, had to learn many new skills, such as how to sell repairs, and what to discuss with customers before the repair took place in what he calls the “initial interview.”

 

The Solution:

As his shop grew throughout the years, Iverson needed to focus on three main keys to improve and grow his business:

 

Invest in all necessary equipment and diagnostics:

In 2008, he ran the business out of a station wagon, and started with the tool set he had from working in a dealer. He then had to invest in diagnostic computers needed to talk with the vehicles, which was a relatively small investment overall.

In 2011, Iverson took a major leap, making a $35,000 investment in a Sprinter van, which he calls his “rolling toolbox,” then fitted it with shelving, toolboxes, mobile diagnostic equipment and advertising on the outside.

“When it comes to German cars, specifically, the diagnostics are an absolute must,” Iverson says. “All of the typical diagnostic equipment that a shop needs is one thing, but having computer equipment is primary to this specific line of vehicles.”

All in all he estimates it took $60,000 for the full investment on his current vehicle. Once it was all set up, Iverson had to make sure he kept a fresh inventory of parts in the vehicle so he wouldn’t run out. Additionally, he soon found out that his diagnostic equipment needed to be updated every couple of years.

“If you show up with software that will only talk with a 2012 model, and the car is 2014, the tech won’t be able to do anything,” Iverson says.

 

Hire uniquely qualified employees:

After a few years of ownership, Iverson realized he needed additional help to deal with increasing demands for his services.  

For his first employee, Iverson made sure to hire a technician who was not only very skilled, but also had a willingness to communicate well with customers.

“Most of the time you don’t know what you’re getting into when you go out to a job,” Iverson says. “That’s where experience is a huge tool.”

His first technician came with 10 years of experience working with German cars, and had a willingness to learn more about customer communication. Iverson soon started training him to do service advising.

After adding the brick-and-mortar shop, he had to hire an additional employee, who mainly does in-shop repairs.

 

Invest in training:

One of the main keys to making this service work, Iverson found, was the technician has to be able to “interview” the customer on what they need. Often, Iverson finds he does initial interviews over the phone, to pinpoint the exact service the vehicle will need. Then this technician will need to sell repairs, which can often be around $5,000.

Therefore anyone going out for a repair needs to be able to sell work, understand the cost of parts, the resale of parts, and the entire labor side of estimating. Iverson knew that this was something with which traditional technicians had very little experience.

Aside from traditional Mercedes training, both Iverson and his two technicians have taken several service advisor training courses. Additionally, Iverson has taken much of what he’s learned throughout the years to personally train his techs.

“The success of this business model comes down to the individual who’s running it, and it needs to be personal,” Iverson says. “You need to develop a personal relationship with your customers, to develop trust.”

 

The Aftermath:

The groundwork Iverson has laid out throughout the years brought the shop to the $750,000 revenue mark last year, and he says that much of this has come from building a loyal customer base, and the referrals of quality customers throughout the years.

Iverson is now working on the business to find ways in which it can be more scalable, and possible to be reproduced.

As his business grew, Iverson needed a place to work on bigger repairs, so he added a brick-and-mortar location in 2014. Iverson now estimates that 25 percent of his repairs go directly to the shop, while 75 percent of repairs are done out in the field.

“The business model changed significantly over the years,” Iverson says. “We offer the mobile service to both new and existing customers that really need the mobile side. Then we take a lot of the big work, and bring it into the shop.”

 

The Takeaway:

For any shop trying to implement mobile repair, Iverson recommends the shop owner work with someone who has already created a mobile repair model, and is willing to invest in what it takes to get that information. Additionally, this shop should already have a strong customer base and a profitable ground business.

“I’d only recommend this business model for shops that are doing really well, and have a firm customer base as well as a good relationship with their customers,” Iverson says.

 

Expert Advice: Is Mobile Repair Right For You?

Cecil Bullard has spent 32 years visiting repair shops across the country as part of his consulting group, the Institute for Automotive Business Excellence, and works with Jon Iverson, owner of Mobile Mercedes Doctor, as a part of this group. He details how to know if mobile repair is right for you, and the important aspects in setting it up.

A lot of people in our industry, they leap before they look. Especially before implementing something major like mobile repair, you need to look, and be aware of what you’re getting yourself into. Cover your fixed expenses, and ensure your business is profitable enough to add another major service.

You need to put a lot of thought into who you’re putting on the roads. You need to make sure you have somebody who makes the customer feel good and will be able to fix the car. It’s a pretty unique skill having both.

If you’re a brick-and-mortar shop, make sure you’re marketing, make sure you charge the right price, have the right people. Jon works because he’s more expensive, and he caters to a very specific clientele that are wealthy, are willing to pay for that service. You need to be charging for the concierge service.

 

SHOP STATS: Mobile Mercedes Doctor  Location: Mountain View, Calif. Operator: Jon Iverson Average Monthly Car Count: 45  Staff Size: 3  Shop Size: 2,400 square feet Annual Revenue: $750,000 

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