Editor's note: TB asked Joan Koebernick of Dakota-K Auto Repair Center & Tires in Arlington Heights, Ill., to share the views and policies of her family's dealership after it won the Better Business Bureau's Torch Award for Marketplace Ethics in Northern Illinois and went on to become one of only eight small-business finalists in the BBB's national competition. This is the second of three thought-provoking articles she authored in response.My grandfather always said: "Do as I say, not as I do." As a kid, I used to think that was funny, but even then I knew it didn't make sense. My husband, Neil, and I always have tried to set a good example for our employees, but we've learned that a good example alone is not enough. In fact, one of the toughest things we've had to learn is how to deal effectively with employee issues.
Most of our problems early on resulted from not having well-defined expectations for each staff member and providing the follow-up necessary to help them achieve those objectives.
I'm sure much of the respect we've since garnered is due to our becoming better organized and more thorough in regard to employee relations.
Our staff members know we're totally honest—with them as well as with customers, vendors and even the Internal Revenue Service. We've had a few employees who've suggested cash bonuses would be a real incentive. We replied that we "don't do cash."
We've learned that providing excellent customer service is highly dependent on our staff members being happy and well-trained. We try to work with employees to help them become the best they can be—and to recognize their hard work and superior performance.
Our salaries and wages are competitive and our employee benefits are comparable to those of much larger companies. We provide paid vacations and sick days, an excellent insurance plan, Section 125 (cafeteria) plan, bonuses, a 401(k) plan and profit sharing.
Our continuing-education programs consist of on-the-job training, company-paid classwork and ASE certification.
During slow business months, we encourage technicians to take advantage of any day classes available and expect them to meet yearly education requirements and become ASE certified. With the proper supervision and mentoring, we believe we can "home-grow" a group of honest, capable technicians.
Before an employee is hired, we screen him or her carefully. During the employee interview, we emphasize the importance of honesty and integrity to our business and listen carefully to each candidate's comments for any hint of dishonesty.
We explain that selling only what is needed and taking the necessary time to properly perform a repair is critical to maintaining our valuable reputation. We make it clear that any behavior to the contrary is cause for immediate dismissal. (This is one area we've never had a problem with following up on.)
The result, we believe, is a positive and honest work environment that benefits both our employees and customers. Our employees are proud to be part of Dakota-K. They have told us we provide the community with the best automobile repair service by being honest, very reliable and fair priced.
Some comments of staff members epitomize those values:
"As an apprentice technician, I have worked at two other places. This is the only place I have worked that has helped me learn to become a good technician. The others would just let me struggle through each job with no idea of how I might do it better."
Another employee wrote: "Our company reflects old-fashioned ethics as far as hard work and making the customer happy. We treat the vehicles like they are our own."
This business philosophy has had a continuing impact on previous employees. One young man who worked for us many years ago now owns several clutch shops in California. He was featured in a newspaper article and sent us a copy along with a note of thanks:
"I hope you realize what an enormous positive effect you have on the young people who work for you. I believe the success that I have had is a direct result of the outstanding role models I had the good fortune of working, living and associating with.
"The result of such phenomenal support is an individual with the creativity to visualize and the confidence to pursue his dreams and visions and make them a reality."
Another young man, who had stolen from us, returned later to tell us how sorry he was, knowing how much we cared and had tried to help him. He had come back to make restitution. We asked him to donate the money to Father Jim Close's Mercy Home for boys and girls.
Some time ago, I read an article about "negative word-of-mouth advertising." It covered all aspects of the subject including how employees can contribute to the demise of a company's business image. I have given this a great deal of thought, and that awareness is helpful in eliminating even the most innocent of comments that a staff member—or customer—might take the wrong way and carry home to family, neighbors and friends.
One of our pet peeves is the promotional line: "We fix it right the first time." While that's everyone's goal, what kind of expectation does that set up in the minds of customers?
We think it says: we never get a defective part, our technicians never make a mistake and the repair world is always perfect.
Expectations play a huge part in whether customers feel we're being honest and ethical with them. It's interesting how often we can set ourselves up for problems by just telling customers what they want to hear, as opposed to the facts.
Another advertising practice we avoid is potentially misleading offers like "$59.95 brake specials" and "$49.95 tune-ups." This type of advertising can mislead customers to believe they're going to receive more work than actually will be performed or that it will adequately solve their vehicle's problems.
More likely, such customers will need additional, more expensive work. Again, we do our best to avoid unrealistic expectations.
We'll advertise tires for $7 over cost for in-stock tires. That is exactly what the customer receives, and we'll order enough tires to meet the demand.
We receive no benefit for selling up to a "better" tire, nor do we carry "economy" tires. We carry the tire line that, in our opinion, offers the best value for the money.
When talking by phone with call-in customers, we explain the benefits of the tire, quote the final price, including valves, balancing, taxes etc., and encourage the caller to require the same information from every outlet they call to obtain a price.
Our goal in advertising is not merely to get customers to come in the first time, but also to have them return again and again. We strive to see results from our advertising, but realize our approach takes a little longer.
It is the combination of all the formal marketing, done consistently, along with the word-of-mouth and our on-going internal efforts at improvement that will grow our customer base.
Since quality parts are paramount to our business, we use only those made by reputable companies and that have a low defect ratio. We select only the best part for each particular vehicle.
Most of the time, a quality aftermarket part does a fine job. In some instances, however, only original-equipment parts will function properly, and we buy those directly from the auto dealerships. We also use those OE parts that are less expensive than their aftermarket counterparts.
This is another area (learned the hard way) where we can come off looking dishonest—as though we are overcharging. Unless we know what the competition is doing and the best part available for the cost, we could lose business and our good reputation.
We don't want to nickel and dime our vendors to death. But at the same time, they—like us—must watch the competition and always provide the best product for the money. It doesn't help them or us if customers think we're ripping them off.
We partner with our suppliers in a number of ways. Often, we co-op with our vendors in carrying out promotions and advertising. We actively track product defect ratios (manufacturers are reluctant to share that information with us). While tracking the products we install, we sometimes find a whole product line that we do not wish to carry, or, in some instances, we will manage to narrow it to a specific product number. We alert the manufacturers to these types of problems.
The frustration comes when they choose to ignore our efforts. When a manufacturer neglects to work with the installers to find and correct the problem, it causes the loss of thousands of dollars for the manufacturer, parts house, warehouse, installers and customers.
In researching the subject, I was amazed to find that many manufacturers consider a defect ratio of 15 percent or more cost-effective! My question is: cost-effective for whom?
Our vendors appreciate the fact that we do not send back parts AS defective that we misdiagnosed to begin with. we pay our bills when they are due and don't expect them to wait for their money. We care about their financial success as much as we hope they care about ours.