31 October, 2024

An Automotive Shop’s Most Expensive Employee

December 2016 was one of the toughest months of my career. At 360 Payments, business had plateaued and it felt like we were working hard with no growth. 

Rewind the clock 5 years to 2011.
My partner Steve and I, both in our early 20s, had been making well over six figures when we took a leap of faith to start our first business. We bootstrapped it, putting our personal savings into our dream. We didn’t take a paycheck for the first 2.5 years, and even when we did begin to get paid a few years later, it wasn’t even close to what we had been making before. Our early success was due purely to hard work, but it felt like a rat race. We had received tempting offers to be bought out, but then what? Work for someone else again? We loved what we were doing, but couldn’t seem to break through. Sound familiar?

 

Now, back to 2016.
I had a five-month-old and was figuring out the working mom thing. I was also dealing with (and continue to deal with) “mom guilt.” We were looking for the next best product or marketing idea, but we were overlooking what was right in front of us. We accidentally hired a consultant through a vendor presentation. He was a Harvard MBA grad, charismatic, and used sports analogies we could relate to. He assessed our financials, interviewed our team, talked to our customers, and dug deep into our motivations. He recommended spending a full week with us for $30,000. WHAT.

 

Our biggest purchase at that point had been a bright green Ford Focus for installing and fixing credit card terminals. Were we nuts for thinking of paying this guy that much for one week? We did it, and while we probably overpaid, it was the best $30,000 we ever spent and the hardest week of my career.

 

We white-boarded, dissected financials, and role-played with the team.
We analyzed every employee’s daily tasks and asked “why?” hundreds of times. On the spot, we cut expenses and hired a new marketing firm. We were in our conference room from 7 AM to 6 PM with no breaks. At one point, he asked me, “Who is your most expensive employee?” I pointed to our highest-paid person. He said, “Wrong. Who. Is. Your. Most. Expensive. Employee?” I was confused. He explained, “Your most expensive employee is your sales leader. He has cost you millions of dollars. Bring him in here right now and fire him.”

 

My stomach was in knots. I liked this guy. I played soccer with him; he was there when I tore my ACL.
His sister made our website. He moved so he could work with us in person.
Was he the sales leader who could sell anything to anyone? No.
But had he cost us millions? It started to sink in.
He was our most expensive employee due to opportunity costs.
The consultant showed us our potential financials if our sales leader had hit targets and the impact on our revenue and EBITDA.
He was right … this guy had cost us millions.

 

So, a few minutes later, the consultant repeated, “Bring him in and fire him.” I didn’t. I couldn’t. 

 

I demoted him immediately, despite the consultant’s point that no NFL team demotes their head coach (and once again, he was right – I shouldn’t have demoted him.) The point here is, we made some difficult decisions that week and our growth from that point forward speaks volumes.

 

We talk to automotive professionals all day at Promotive, so I relate this story to your shop.
Ask yourself: Who is YOUR most expensive employee?
If I had to answer that for you, I’d say it’s your Service Advisor. They answer calls, communicate with customers, and their ability to “sell the job” impacts your revenue and your technicians’ paychecks. 

Challenge yourself to think more deeply:

  • What tools are you using to measure their success? 
  • Do you know their conversion rate to get someone into the shop? 
  • What about their rate of selling recommended services after inspection? 

A little deeper:

  • Is your Service Advisor your #1 employee? 
  • Are they getting 30% of calls to come in for inspection? 
  • What if that number was 40%? 
  • Are they getting a 40% approval rate? 
  • What if they got 60%? 
  • What would these rates do to your top and bottom lines and improve your technicians’ loyalty?

Building a $40 million business taught me the critical importance of your Sales Leader and how this person needs to be your #1. If your gut tells you otherwise, it might be time to make a tough decision. While often uncomfortable, recognizing where you are being held back is the first step to significant growth. And, if that blocker happens to be one of your employees, Promotive can help make staffing transitions a little less painful.

 

Curious as to what the second-most important lesson we learned about growing a business from 0 to 40 million? Stay tuned for part 2.

MEET LISA COYLE, PROMOTIVE CEO

Lisa Coyle is an accomplished business leader, entrepreneur, and former co-CEO of 360 Payments, the automotive industry’s leading credit card processor. Under her leadership, 360 Payments has grown from a spare bedroom to an international business with 10,000+ customers, 60 employees, and almost $40 million in annual revenue.

Lisa’s success as an entrepreneur and business leader has been recognized by numerous industry publications and organizations. Most recently honored as 2024 Women at the Wheel, she was also named a Woman of Influence by the Silicon Valley Business Journal and one of the Top Women Entrepreneurs in America by Inc. Magazine. Under her leadership, 360 Payments made the Inc. 5000 list five years in a row and was noted as one of the Best Places to Work in Silicon Valley twice.

Lisa is a dedicated philanthropist and community leader. She is passionate about giving back to her community and donates regularly to several charities and nonprofit organizations. Lisa resides in Walnut Creek, CA with her wife of 17 years, Jen, and their two children, Nixon and Alex. She loves coaching soccer, spending time with her family, and cheering on the New York Giants.

 

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