Diesel Connect Recap: 5 Lessons From Shop Owners at Day One’s Roundtable
A long time ago, at a Diesel Connect far, far away…
Okay, it was in June, and DC took place in Phoenix. We knew we had to cap the first day with something special, and we did: the first-ever live-action Shop Owners Roundtable!
If you tune in to our webinars, you know we present these Roundtables semi-frequently—you can check out our previous offerings here—but we’d never done one live, in front of a massive audience. Like, whoa, dudes.
For this grand experiment, we tapped some folks you probably know and love (especially if you’ve followed our blog or other webinars);
- Dale and Chase Bowman of AM PM Diesel Services
- Stacy Conner of Equipment Experts
- Luke Todd of The Service Company
What was different about this particular roundtable was the topic—or rather, topics. We didn’t have a set one going in; instead, host (and Fullbay CEO) Patrick McKittrick brought in questions from the audience. The guests chatted for nearly an hour about flat vs. hourly rate, how they kept managers accountable, how they decided to expand the business, and more.
So grab some gummi worms and keep reading—we learned a lot!
ASSESSING YOUR RATE & TELLING CUSTOMERS IT’S GOING UP
Labor rates—how to set them and how to raise them—have been a hot topic for our blog and at DC itself. Naturally, the audience wanted to know how our Roundtable quartet handled such things.
“Usually it’s every year,” Chase said, indicating that discussions begin about a quarter out. “We’ll tell our customers the reason why we’re going up on the rates. We’re not increasing them just because it’s been a year; we’re increasing them because we want to improve their overall operation.”
That could mean purchasing more service trucks for that dedicated account, or because insurance went up for them. Chase also shows customers data (through Fullbay!) to indicate where they’re saving money. “Just because the rate is going up doesn’t mean your overall maintenance cost is going to increase,” he pointed out. “We’re also going to show you where you’re cutting your cost.”
In short, it’s a phone call or sit-down conversation about rates—and they’re extremely transparent about it. Customers, Dale said, have remarked on just how transparent AM PM is about everything.
Granted, AM PM is a large operation—so how would a smaller shop face that question? “Most people don’t care, really, what the labor rate,” Stacy reported. “They care about the total cost.”
Back when Equipment Experts was first starting out, they would send letters to customers indicating the labor rate was going up. “It was a non-issue. It wasn’t a thing,” she said. Customers were more concerned about the quality of work they received than whether that work cost them a few dollars more.
ADDING ADDITIONAL LOCATIONS
Part of a repair shop’s growth may involve opening up new locations—a second one, or a fifth one, or a tenth one, for example. But what goes into that decision?
The shop owners offered some good advice to anyone thinking about opening a new location:
- What is the demand for your services (or a new service you could offer) in that area?
- How much competition is in the area? (Dale recommends visiting NTTS Breakdown to see how many repair shops are already in a given community.)
- What is the labor rate in that area? For example, what are the dealerships and shops in that area charging for work?
- Do you already have a customer (preferably a fleet) in that location?
- Are you already driving far enough to reach your customers that you might as well open up a secondary base of operations there?
OFFERING BENEFITS TO EMPLOYEES
Benefits are a huge topic of conversation in the diesel industry, in part because a shop needs decent benefits to attract and retain techs. Unfortunately for all of us, benefits are also…how can we put this delicately…freakin’ expensive.
Unsurprisingly, there were a lot of questions from the audience about when and how to get started with them.
Each shop owner had a different answer. Luke thought they had 15 employees when benefits first appeared on the scene; Stacy thinks her numbers looked about the same. AM PM Diesel goes through a slightly different process; they utilize a PEO (or professional employer organization) that “holds” its employees and leases them back to AM PM—this allows the shop to get the best rates for healthcare, vision, dental, and everything else. They got started with that quite fast; “about three months in,” Chase said.
Because the PEO company is so big, they can get much better deals on benefits. Which, as you all know, are getting more expensive by the year (and can often be cost-prohibitive for a smaller operation).
Dale put it this way: “As soon as I had $10,000 in the bank, we started an employee benefit package. We got insurance right away. I wouldn’t feel comfortable with me having health insurance and one of my employees not being able to and having a catastrophic health problem.”
MANAGING THE MANAGERS…AND THE TECHNICIANS, TOO
It’s hard enough to find qualified techs—getting them to stick around can be a whole other battle. Providing them with good pay and benefits is part of that fight, but it often comes down to that terrifying word—you know, the one that starts with M.
No, not marketing. Management.
The question was specifically this: How do you manage the managers?
There’s more to that question than meets the eye. How can you empower your managers to do right by your shop, the customers, and the people they manage?
“I’m a firm believer in manage by the numbers,” Luke told the crowd. “I know what we need, and they know what we need. [But] there is also that empathy part that falls into it, too. I don’t want to get so numbers-focused that we don’t actually care about people. That’s always something I want to work with.”
He cited the old adage of leading by example. “You work with people, and you teach them, so they say ‘I know what Luke would do in this situation.’ That’s good. If they get into a sticky situation, bounce it off me—that’s fine. Care about the customers, of course, and care about the team members that work for you.”
Stacy told us that Equipment Experts had taken some of the emotion out of management and retention. The shop has a deeply developed mission, vision, and values (among them safety, integrity, communication, and results); “Between the KPIs and the values, if [the managers] are doing something that isn’t optimum, it can usually be assigned to one of those values or to the KPI. So if they’re doing something that’s not in alignment … it takes the emotion out of it.”
Equipment Experts also allows any person who works for them to take a leadership course—yes, a 16-week leadership coaching class. It’s a half-hour a week, the company pays for it, and as Stacy explained, “[It shows] that we care—that we want you to flourish.”
PARTS IS PARTS
Last but not least, Patrick hit on that other topic repair shops fret over constantly: the parts shortage! Did any of the shop owners onstage see their inventory levels rise to combat that—and if so, how did they manage the added costs?
Luke recalled the dark days of the pandemic, when you couldn’t get various parts—and thus had to jump on a trailerload of this or that. The end result is that The Service Company does carry more parts on hand than they used to, simply because they don’t want to run out.
Chase did something similar. “Whoever had something in stock…we bought them.”
As in all of them.
“I’ll escort you out,” Patrick joked.
Equipment Experts, on the other hand, is starting to pare things down—they’re making an effort to unload older inventory.
EVERY SHOP WILL DO THINGS DIFFERENTLY
As you might expect, there wasn’t one all-encompassing takeaway from this roundtable, aside from the importance of things like benefits and communication. But the idea behind this gathering—and behind our other roundtables, and behind Diesel Connect in general—was to get people talking. “How are you handling this” is a question so few repair shop owners get to ask each other—and that’s a darn shame, because we can learn so much from each other just through conversation.
So, take what you can from this roundtable recap. Check out our other roundtables, too! And next time you meet up with a fellow shop owner—whether you’re at a parts vendor or you spot them at a local restaurant—strike up a conversation. Odds are they’ve got lots to share.