Finding Added Value in Your Menu

Aug. 19, 2020

This is how operators make sure their service menus have everything they need and nothing they don’t.

Take a look at a quick lube’s service menu, and you’ll see a reflection of the communities that they serve.

Take Quality 1 Lube and Repair in Muskogee, Okla., for example. As a rural, agricultural community, Muskogee has a lot of trucks and diesel engines roaming around. Owner Kevin Flock is set up to handle a higher volume of those.

Through the years, operators need to make little tweaks here and there to improve service. In Flock’s case, one tweak came when working with a fleet client, which had a lot of diesel vehicles that could be serviced by an injector cleaning machine.

It was great maintenance for the vehicles, but it took a toll on bay time.

“We did all those trucks when we first started, but it’s time consuming,” Flock says. “It takes an hour and a half to two hours to do it that way.”

Through a vendor, Flock later found a pour-in treatment that allows the vehicles to get the same benefits with much less time spent. Though he had already spent around $1,000 for the injector cleaner machine, the switch to a pour-in helped his shop while still benefiting the fleet vehicles.

That’s just one example of how many forces shape the shop’s service offerings. It’s among the add-on services that you really get a sense of what a shop’s customers prefer. That’s also where operators can add crucial numbers to their tickets, but striking the right balance can be tough. Investing in equipment for a new service or add-on sale must be weighed against running a lean, quick operation.

There’s no correct answer. All shops are continually forming that balance for themselves. In this story, NOLN takes a look at three operations and how they’ve added onto the traditional oil change service. Read about how something as commonplace as the cabin air filter or as uncharacteristic as a latte can help shops have success.

A Classic Because It Works

Kevin Flock, Quality 1 Lube and Repair

Flock has been in the business since 1996. He runs a successful operation that sees up to 50 cars per day in two bays. In the early days, he and a business partner flirted with some general repair work. But less than two years in, Flock became the sole owner and he focused on being a lean quick lube.

 “I wanted to just concentrate on the lube-oil change side and not on repair,” he says. “And it’s evolved into the busiest quick lube in Muskogee.”

To that end, Flock has a tried and true service menu. In addition to oil changes, the offerings include bulb replacements, transmission services, differential services and diesel services. There are also retail items like cabin and engine air filters, as well as wiper blades.

There are a few benefits to this kind of operation that most operators will recognize as a staple of the quick lube industry. Speed is the name of the game, and volume is the result. 

Having such a lean operation simplifies inventory as well, which in turn aids in speed.

“I try my hardest to not have to call my parts store to bring us anything,” Flock says. “I have, probably, the biggest inventory of anybody around.”

Flock’s most successful add-on is also one of the most common items, according to the 2020 NOLN Operator Survey. The cabin air filter is stocked in nearly every quick lube in the country, but examining what makes it successful for Flock reveals the real strategy behind effective add-ons.

Top 4 Add-On Sale Items 

1: Air Filter
2: Wiper Blades
3: Tire Rotation
4: Transmission Service

(Source: 2020 NOLN Operator Survey. Special thanks to Valvoline for sponsoring this year’s survey.)

Adding On… To the Ticket

Flock has had cabin air filters in stock for a few years, but it was just in the last 18 months or so that they started to take off in sales. Nowadays, they’re selling at an excellent rate.

“In the last couple years, the cabin air filters have really come on strong,” he says. “There are days that we do 50 cars and sell 18 to 20 cabin air filters.”

According to the 2020 NOLN Operator Survey, cabin air filters are the fourth most popular add-on item. They come in behind engine air filters (98 percent of operators sell them), conventional wiper blades (94 percent) and bulbs (92 percent). That’s a strong endorsement from operators.

In Flock’s case, the climate plays a big part in his customers’ needs. The hotter summers lead to a lot of air conditioning use, which leads to a lot of particulates getting caught in that cabin filter.

“It makes your car smell so much better on the inside,” Flock says. “If you have a musty, dirty smell, a lot of times a dirty cabin air filter will cause that.”

With Flock’s bulk inventory strategy, the cabin filters aren’t sold at a huge markup. They go for anywhere between $19.95 and $24.95. He says that he tries to make up the revenue by purchasing them in bulk.

On the sales side, tickets get a huge boost from an additional twenty bucks, especially when the service can be done quickly. That’s an additional 33 percent when added to a $60 service.

“It’s a really good add-on sale if you get a full service with a cabin air filter, wiper blades and an engine air filter,” he says.

That’s why things like bulbs, wipers and air filters are at the top of add-on services. Customers can see when those items malfunction and recognize the need. Operators can purchase them in bulk and quickly perform the replacements.

What Else Ya Got?

Flock says he’s also found success in another common service: transmission flushes. It took an investment to get the level of service he wanted. A truly successful add-on service pays off for the shop and also creates added value for the customer.

“You buy one of those machines, and I'm on my second one,” Flock says. “That last one I bought was like $4,700, but we do enough of them. If you maintain a vehicle, keep the fluids changed in it. It keeps your vehicle going strong and saves you from added repairs.”

That’s proved especially true with his fleet customers. He says that those commercial vehicles are seeing fewer part failures when those fluids are maintained on schedule. 

As mentioned at the top of the story, Flock has experimented with other add-on services. While the injector cleaning machine didn’t pan out as an investment, he was still able to find an effective alternative that solved the bay time issue.

That’s the unknown element with big equipment investments. What if something new comes along that makes that equipment obsolete? What if vehicles no longer require that service?

Not only that, but adding equipment for new services adds to the training of staff and complicates the shop. It can certainly be done, but some operators choose to stick with a winning formula.

“You get into unhooking fuel pump modules and doing all this stuff, and you need computer software,” Flock says about the injector cleaning equipment. “And it was just more than I wanted to get into. I wanted to stay simple, quick, easy.”

That’s also the reason that Flock hasn’t gravitated toward offering mechanical repairs. For his shop, the calculation is one of speed and efficiency.

“If it takes you over 30 minutes to perform a service on a vehicle and you’re doing it in a quick lube shop where your two bays are designed to be drive-thru, you’re tying up your bay too long,” he says. “Because how many oil changes could you do?”

Gaining an Edge With Repair

Travis Miller,  Speedy Lube

Travis Miller has been with Speedy Lube of Bozeman, Mont., for a long time. While attending college, he started working at the shop part time. He worked his way up and as of spring 2020 became the third owner of the three-bay facility.

Speedy Lube’s core business is all the quick lube maintenance, but when asked about the add-on that’s had the highest impact, Miller says it’s the shop’s foray into repair work.

“Probably our biggest one was doing some minor mechanical work,” he says.

How they arrived at an efficient repair segment is an interesting story.

Developing the Model

About seven years ago, Miller was the manager at Speedy Lube. The owner decided to start taking a few repair jobs here and there.

The Speedy Lube building was well made for this. Beneath the wide A-frame building is the customer waiting area and two bays with pits. But off to the side, out of the way of the drive-thru lines, there is a third bay that doesn’t have a pit.

“We used to just do our transmission and coolant services in there,” Miller says. “We said, ‘We’re kind of missing out on some of the money we could be making by offering some of those repairs.’”

One important tip for shops looking to add some mechanical repair aspects is that it’s tough to do it halfway. That means that to be successful, operators should invest in the people and equipment needed to be efficient. Both Miller and the owner at the time had knowledge in the repair field. Miller’s father ran a service station back home in Judith Gap, Mont., and Miller also had experience as a service advisor for a dealer.

Speedy Lube invested in some equipment and added a lift to that third bay. But the personnel investment wasn’t made right away. Miller and the owner decided to perform repair jobs themselves in an ad hoc manner. They’d see a customer need, schedule service and order the parts to finish the job. It was time-consuming and drew their attention away from the quick lube operation.

Ultimately, the owner decided that he needed to hire a mechanic. After two years doing repair work themselves, Speedy Lube did just that.

Lube Plus and Repair Operations

The 2020 NOLN Operator Survey saw a higher number of respondents representing lube plus, tire and full repair shops. Roughly 36 percent of respondents said that they have both lifts and pits in their shops, and an additional 35 percent have only lifts.

The shops with lifts will be geared more toward a lube plus or general repair model, which added insight to this year’s survey. Higher ticket averages, lower car counts and slower bay times have been anecdotal hallmarks of these shops, but what do the numbers say?

Let’s take a closer look at the operating statistics for those shops that only have lifts.

Average Number of Bays: 4
Ticket Average: $98.19
Daily Oil Changes Performed: 10
Bay Time: 36 minutes
Retail Price for Synthetic Blend Oil Change: $38.93

(Source: 2020 NOLN Operator Survey. Special thanks to Valvoline for sponsoring this year’s survey.)

The fix is in.

General repair work now accounts for about a third of the shop’s revenue, Miller says.

The mechanic is one of nine employees at Speedy Lube. Miller his manager help to schedule general repair appointments in addition to overseeing quick lube operations. With their advantageous shop setup, it hasn’t negatively affected oil change business. In fact, it’s occasionally an extra set of hands.

“If he gets a job that’s cancelled, he’ll actually come and help us,” Miller says.

Like many repair processes, it just took some fine tuning to get there. What Miller’s team was doing back in the early days was finding that balance for their brand new add-on service. He knew they were in a great position with the knowledge among management and the ability to save the shop from a new hire while opening a new revenue stream.

That’s why they took on the initial jobs themselves.

“I would think that we’ve just been lucky with the background knowledge that Mike (the previous owner) and I have had, and the abilities,” Miller says.

After a while, they decided that the shop would be better served by investing in that mechanic. Sometimes you never know what will work best until you try it.

Standing Out in a Crowd

Dustin Olde, Lube and Latte

Sometimes an add-on service isn’t something that directly benefits the customer’s vehicle. In certain cases, operators will do something that makes them stand out in the crowd, ultimately benefiting the shop’s branding.

That was Dustin Olde’s plan from the beginning. He wanted to provide quality automotive service, but he also wanted to shake up the customer experience and make some improvements.

After launching in 2007 as a quick lube, Olde says he quickly discovered that his one-way lift bays weren’t set up for volume. He pivoted to a full service auto repair shop with a flair: full-service coffee.

“We put in the cafe. We paid a bunch of money for this Italian espresso machine that even the health department could not decipher the manual for it,” Olde says. “Added pastries and that sort of thing. Made a cafe with the bar and bench seats. We poured the concrete porch out front for an outdoor setting.”

That’s how Lube and Latte of Lakewood, Colo., gained a local following as the shop with a complement of caffeine. It wasn’t a gimmick—this was an add-on that provided value to vehicles and to the shop’s bottom line by attracting customers.

Mixing Drinks and Drivelines

Having a quiet coffee shop atmosphere in your customer area is one thing. Getting it to catch on with customers and not detract from your core business is another.

That was the challenge for the shop: Make the “Latte” part in the shop’s moniker fit seamlessly with the “Lube” (and repair) part. It’s the same balance that any operator faces with add-on services.

One logistical challenge was how the coffee segment should be staffed. Olde says they went through some trial and error in that department. In the end, the shop decided to try and optimize staffing for multiple roles.

“For about half of our existence or more, I've had a barista whose only job was to make coffee,” Olde says. “Some years back, we decided it was easier to train our service writers and service managers to make the coffee, and that seems to work better for the structure.”

Having a service writer also make coffee presents its own challenges in multitasking, and Olde says this might be one reason that a model like his hasn’t been more widely adopted. But it has worked for Lube and Latte, and he says the staff members have been excellent in adapting to the process.

Another advantage of the Lube and Latte model is that it’s primed for a promotion. Olde says customers get a free drink with an oil change, and that’s been popular. In fact, preventative maintenance at the shop has been so popular that he’s limited the number of daily oil change services they do.

“If we did not do that, we could easily do oil changes all day long,” Olde says.

Occasionally, people will schedule an oil change two or three weeks out at his shop. With those changes to staffing and operations, he’s honed the model to be efficient as an auto shop while keeping the feel of the coffee shop.

Having the Customers’ Attention

A testament to Lube and Latte’s success is the fact that a few people come into their local auto shop just for a coffee.

Olde says the shop has been a hit with the locals—even the skeptical ones.

“We’ve been in business for 13 years, and I still have people who say, ‘I've driven by this place for years, but I never stopped in because I didn’t think you guys would make it,’” Olde says.

He says he wants people to know the shop as something unique, which is something that small businesses pursue all the time. That word-of-mouth promotion is incredibly valuable to a shop’s brand.

“I’ve spent like next to nothing on marketing dollars on Lube and Latte,” Olde says. “I think the coffee has gotten us out there on social media where people say, ‘This is really different and you should try this.’”

That’s one way the latte side proves itself as an indirect profit center. Olde says they’re not reaping big profits from selling coffee drinks, but it’s a valuable part of the brand awareness and customer service.

Bottom of the List

The 2020 NOLN Operator Survey didn’t quantify how many shops have incorporated coffee sales into their model, but it does have an exhaustive list of how often 38 different services are used by quick lubes.

Here are the five least popular add-on services that might deserve a second look.

1. Wheel alignment
2. Smog/emissions tests
3. Transmission stop leak additive
4. Coolant stop leak additive
5. Windshield rock chip repair

(Source: 2020 NOLN Operator Survey. Special thanks to Valvoline for sponsoring this year’s survey.)

From Drinks to Fluids

In the customer area of Lube and Latte are menu boards, much like you’d find at an eatery. One of the boards is for coffee; the other is for cars.

While the coffee segment has been a big add-on service in terms of branding, the auto shop has also had impactful add-ons. Olde says that one of the biggest has been the addition of fluid exchange services.

After investing around $12,000 on machines and equipment, the challenge was to let customers know that the services were available and worth the money.

“The first three years were rough,” Olde says. “We had trouble conveying to customers that not only do they need those things but that we provide them and how often.”

Olde and his staff hammered away at the educational component with customers, but it was a small change that really helped convey the message: those menu boards in the waiting area. Adding one for cars set up customers to pick from an a la carte menu of add-ons.

Olde says it just felt like a friendly, no-pressure way to convey their services.

“I would say year three and beyond, the shop really started thriving and we were making between 5 [percent] and 7 percent increases in revenue profits or more per year,” he says. “It really blew up in terms of revenue.”

Score another point for the coffee promotion. Sometimes, it’s that customer attention that really helps align success for a shop.

“I think we, to a certain degree, want our company to have that self-perpetuating style where people talk about it because it's cool,” Olde says.