Ep 93 - Brad McAllister & Jay Power | $24K/Month More at the Shop with Analytics?

0:00The median tech quote that we saw was $1,482, $1,482 and 254 cars per month. If you raise the close ratio on that by 6 points, that would increase your ARO and then that would be $24,475 more a month for 6 points. The following program features a bunch of doofuses talking about the automotive aftermarket. The stuff we or our guests may say do not necessarily reflect the beliefs of our peers, our sponsors, or any other association questions we may have.

0:33There may be some spicy language in this show, so if you get your feelings hurt easily, you should probably just move along. So without further ado, here's your host, Mike Allen, with Confessions of a Shop Owner, presented by TechMetric, the best software in the history of ever. Alright, so here we are, we're at Tectonic 2026. It's day 1, day 1 and a half.

1:02A lot of us got here yesterday and had the party on the pool on the roof, the, uh, the Texas-shaped lazy river. You noticed? Has anyone actually been in the Texas-shaped lazy river? I tried to get Jay to, but I have not. I have not. It was close though. The lines at the bar were a little bit long for me to have enough alcohol to be able to do that last night.

1:23Yeah, yeah, try again tonight. My previous guest Rochelle Gottsenter was one of the women on the panel, actually both of the women that were in my previous episode, but her father was here and they, I guess, listened to the podcast. Awesome. Thank you for that. But he knows that I'm a big whiskey fan, so he's brought a bottle of bourbon that he wants to share tonight.

1:41So very cool. So we might see you. Yeah, sure. In the pool tonight. About 10:30. Look for me slowly drowning in the pool, flapping around in this blazer. What part of Texas in the pool will you be at? Southeast or? If I get in on the Panhandle and come around with that direction of flow, I'll probably drown by Houston. There you go.

2:01Smart. Yeah, smart. Now, the party was great. Really awesome. Great event. It was really— we were very impressed. Everything so far about this has been incredibly top notch. Yeah. I mean, next level production value and organization. Food's been great. So I'm really impressed with it. From start to finish. I will say last night I did like a 30-minute breeze through at the party.

2:25Yeah, I love small social gatherings, like 15, 20 people. Love it. That's my element. A couple hundred people, I get a little overwhelmed. Yeah. And I'm just like, I'm going to go sit in the corner. So I had to take a little break. I did actually went back across the bridge and sat down over by the little fire pit. Yeah. Talk to my kids for a little bit.

2:46And nice. And then I, then I went to the turtle races last night. So say that again. Turtle races. It's funny, you might think that I stuttered. So I thought I heard you wrong. I thought I had to hear— I thought it was me. So the promotive team invited me to go with them, and there was a place called Little Woodrose. I guess there are 5 or 6 of them around the Houston area, but the Midtown bar, it's like a neighborhood bar.

3:14They've got lots of porch swings hanging up everywhere and cornhole and giant Jenga and all that. But this specific location in Midtown, every Thursday night for 18 years, they have turtle races and they paint numbers on the back of the shell of 10 turtles. And they each have like bios and like cheesy names, like Timothy Shellamay was one. And Shellamay. Yeah, they're all different turtle, you know, puns.

3:43Yeah. But you go get your ticket and you pick your, your horse, right? And then it's like stadium seating all the way around. People screaming and yelling and cheering for their, for their turtle. And they all start in the middle and it's the first turtle to get out of the circle. Oh, okay. So it's not like a straight foot— they're not racing a track.

4:03It's just escape, escape the circle, I guess. I don't know. How did you do? I, I am— it would— it turns out that I need to find a different type of degenerate gambling to become a millionaire on turtle. I'm not good at picking fast turtles. Okay. I did learn that size does not necessarily equate to speed one way or the other. The small ones are super slow and the big ones are super slow.

4:28Medium-sized turtles, it's the way to go. Who knew? Yeah. Now you guys know. All of our listeners. All of our listeners know. I feel like that's a good segue to have you introduce yourselves. Okay. With the turtles. Brad, are you the medium-sized turtle or the small or large turtle? I'm not really sure. Great segue. Oh, mercy. Well, I'll start since I took the bait on that one.

4:58My name is Jay Power. I'm the CEO of OctoRocket. Okay. And I'm Brad McAllister. I am the CTO of OctoRocket and co-founder. And co-founder. Co-founder. Yeah. How old is OctoRocket? Geez, how is it in turtle years or what are turtle years? Are they more or less? Anyway, it's pi. Times, yeah. Yeah, so the voice solution of the platform has been around, what, 10 years, 9, 10 years?

5:24About 10 years now, yeah. Yeah, the analytics side of our business that we bolted on and put it all together really has been around probably 3 or 4 years. Okay, and have you noticed that, okay, back up. Yes. Explain what your business is to our listeners who might not be familiar. Okay, so the way I break it down, and I break it down to kind of key 3 things, 'cause there's a lot of features that we offer within the platform.

5:44Which is what happens when you grow up in shops and shop owners ask you to, hey, can you do this? Can you do this? And you listen and you build those things. But it kind of breaks down into our why. And our why is we help our clients connect with their customers, cut through the noise, and seize every opportunity. So that sounds high, lofty vision.

6:02What it really breaks down is when we connect our clients with our customers, we have a communication system that we built from the ground up, voice, text, communicates through our platform. Service advisor can get in it, handle all the customers, see everything about their customer, right? So it's the communicators, how they connect with their client. Hey guys, Kari Lynn with Turnkey Marketing.

6:22If you are looking to increase cars and you're looking for the right demographic to go after, you want to get the right people who need auto repair right now, then give us a call. We have a service called Direct Track and it utilizes AI to find people in your area who are the great demographic that you wanna go after, have raised their hand and opted in saying, I need auto repair help right now.

6:44We send them an email. As soon as they open the email, we then get their physical address, follow it up with commercial ads on all their streaming services like Hulu and YouTube and ESPN, Fox News, all those different things. And then we also get their physical address and we start sending banner ads and display ads to every single device in that house.

7:06It has been incredibly effective. It has made shops seem like they're everywhere to those people who need repairs right then. And I mean, I'm telling you guys, the return on investment has been huge. So if you want to increase car count, you want to get great people in the door, give us a call or reach out to us and ask us about DirectTrack Marketing.

7:28Look, when I first opened my shop, I thought my old systems would keep up, the software that I had would continue to evolve, but as we grew, the slow estimates, scattered workflow, increasing downtime, it really just, it was becoming a real problem. That's why I switched to TechMetric. It's not just software, it's a complete shop management system that makes my life easier.

7:49SmartJobs, instant estimates, integrated payments, integrated financing options. I mean, it allows me to focus on the work that actually makes me money and not get bogged down in the other details. My shop's repair orders have jumped over 300% since switching to TechMetric, and when I need help, their support team responds in real time. I actually was online with them asking questions just this week, and I got answers in minutes rather than having to wait for callbacks and emails days later.

8:15If your system is holding you back, it's time for a change. Tap the link in the show notes and see how TechMetric can help you move your shop forward. Our goal is to make our clients expert at their customers when they call in, every interaction, right? Yeah. The second piece, cut through the noise. That's the analytics side. We all have data, we all have reports.

8:35It gets overwhelming, frankly. And owners don't have a ton of time to do a lot of things and figure out what things are going on. So our analytics really allows them to put in projections, goals. They can see whether or not they're gonna hit their goals. A lot, we work with a lot of coaching companies and they use it with their coaches to help the shops do better.

8:52That's the analytics side of cutting through the noise. We help them see their business in a new way, and they can actually go in and say, "Hey, I want to see these metrics all comparison so I can see whether or not these things had any correlation to them." And the last part is the CRM side of our business where we do campaigns, voice, email as well.

9:08Well, email, SMS, and voice campaigns for us that give the advisors automated tasks, things like that, so you can follow up on with customers. And so to use any of your services, you have to at a base level use your VoIP service? Is that right? No, they're all in different packages based upon what the shop needs. We service shops that are, you know, a mom-and-pop.

9:28We actually just talked to one. They're using their cell phones literally for their business, which we see. That's a way. And we have franchises, we have MSOs, we have lots of different types of organizations that use different pieces. So a lot of times what we say for the shop owner, if they're coming in, they say, hey, what do you guys do? And we ask them more about their business.

9:45What are you using? What are you doing? What do you need? And sometimes just having analytics to actually see the data and what it's doing gives them an idea of what they need to do next. So we don't advise a bunch of irons in the fire. Don't throw everything at it. Like, hey, start with something first. At least get visibility. Visibility shows you a lot of what you need to do next.

10:04And then we can figure out the other pieces. But everything is modular. You can add it on, select it in a package. And then we also do a lot with our solutions where we also provide to different like marketing companies, coaching companies, analytics, call tracking, inbound. We do a lot of marketing conversion. We give a lot of visibility into the actual communication you're having that also connects with all the marketing you're doing.

10:28So we, a lot of shops will give their marketing company access to our software so they can go in and say, wow, okay, this is how the marketing's actually working and here's what we can do with your campaigns and set all this up. So I work closely with Turnkey Marketing. Yep. I assume that you guys, work with turnkey clients? 100%. Carolyn's great.

10:46So two of my— shout out to Carolyn, by the way, Turnkey Marketing. Isn't she just a total badass? The director of marketing service. She is a total badass. Yeah, I mean, she's, she's an impressive individual. Absolutely. Um, two of my best friends in the whole industry are big songbirds for you guys. Um, Harrison Rusk and Henry Rogge in Hartford, Connecticut. Love those guys.

11:06Um, and they've been telling me that I need to get on board with OctoRocket for a while now, and I'm I'm, you know, dumbass and slow to make decisions. I get analysis paralysis on almost everything. It'd probably be really bad for me to have access to more data and more analytics. But of the analytics that you provide that might not be available in my primary SMS, what are kind of some of the key things that are really big feature?

11:36Like, for example, Harrison, And Henry, we have a group chat, the three of us, and we talk pretty much every day. They're always talking about inbound call conversions and I don't have the ability to track that. And also outbound sales conversions. Yeah. And I can, I can kind of quasi-track that with my closing rate. Right. So but tell me more about, about those statistics and how that works.

11:59Okay. So I'm— we're going to talk about it, but I'm also going to ask you some questions as an owner. Okay. Because this is, this is an ongoing topic for us because of what the industry really— because like I said, we get a lot of our feedback from shop owners that say, hey, can you do it this way? Do it this way, because everybody runs it a little bit different, tweaks and things, right?

12:17So when it comes to the topic of conversion, it definitely comes— this is the hot topic. So we are— we can do the inbound call conversion from your tracking numbers and all those things. But in terms of what the reporting piece that's a little bit different in the analytics, and I can't talk about analytics without talking about Rick Buffington, who really did a lot of the development.

12:40Rick is our kind of data scientist, mad scientist. We keep him locked away. He doesn't get to come to events. Primary nerd. Primary nerd. Okay. He, um, Rick, I apologize for this, but he doesn't like being at the booth. But he, if you get him in a room with 1,000 people and talk about data and analytics, that guy lights up like nobody else.

13:01So he loves this stuff and he loves figuring out how it needs to be displayed for the shop owners to improve. But That's a little tangent. Thanks, Rick, for all that. I support tangents. They're important. We gotta give a shout out. With the analytics, it allows you to put in your goals, allows you to put in your numbers. So we can do things where we set that up and we actually project that out.

13:22I think I mentioned that to you, but we also do things like outrunning your overhead. We can show you when that's gonna happen, things like that nature. And also with the comparisons. So one of the things a lot of shop owners come to us to say, hey, I made these changes. I want to see how it's compared to last quarter, last month, annually.

13:38So they can do that, set timeframes. But we also allow you to pick the metrics that are important to you. So if you want to say, hey, I need to see if there's a correlation between these things, or these things really matter for me to track annually and see, we actually do that and we give you the ability to select on those and then we'll depict those in a graph for you as well.

13:55Stuff like that. So there's different ways of using it and different ways of seeing it. Frankly, uh, you know, there's also leaderboards. We can show your advisors and techs and all that stuff what they're doing and how they're, they're doing in their shop. A lot— sometimes shops will have it up on a big board. Yeah. So they can actually see what's going on and kind of get, you know, a little bit of competition.

14:14I've struggled with that over the years because, you know, everybody read The Game of Work 10 years ago and, uh, and wanted to put a scorecard up. And, um, I had dudes who are immediately massively motivated by that. Yeah. And other dudes who are like, oh, fuck, no, I'm just going to be last every day. And I mean, some of my listeners are going to be like, well, then you should have fired that guy.

14:36And but I think it, I think it comes down sometimes to culture of the shop too and how you're using it and how you're motivating your people. I definitely have seen it both ways coming from enterprise sales organizations where you see it, where every Monday you're putting the board up in front of everybody. And of course you have your sales guy who's like, oh man, I've seen this before, you know, song and dance where I mean, every month you're zero, every quarter you're zero, you start over.

15:00Over, but yet he'll go out and just crush it, you know, and do his own thing. And so it's— it kind of works both ways. It honestly, it comes down to me when I think about it with our team, how do I help them just be successful? And does it help them be successful, or does it take away from what I've already been developing in the culture and the personalities that I have in the business?

15:18So we've kind of seen it both ways. Some people love it, they like that kind of competition on the board, and some people go, that's not going to work in my shop if I put that up there, you know. Like, two different ways. Like, for me, I'm I'm very competitive and I'm driven and I love seeing the score. I want to know if I'm winning or losing, right?

15:35Yeah. And so when I was just a service advisor for my dad, there were 5 advisors on the counter. It was a big shop. And, you know, we're getting close to the end of the month and I'm in second place. I'm like out in the parking lot directing traffic into parking spaces and opening the door for them. That kind of obnoxious stuff that makes other advisors hate you, right?

15:56But at the same time, my wife is, my wife is a pediatric dentist. She works in an organization that has like 100 practices. And so they have several hundred doctors and they publish the average daily production by doctor in their internal newsletter. And that includes like all the orthodontists and the pedodontists and the generalists. Yeah. And it is a demotivator for her.

16:26She's like, "I don't wanna see that. I'm gonna do the very best I can for my patients every day until I've seen every patient on the schedule, no matter how late I have to be." And so she's internally motivated by quality and pride in what she does, and she's demotivated by that. So we're the two ends of the spectrum. Yeah. —so this is a bit of a soapbox, a bit tangent rabbit trail here—but one of the things that sometimes leaderboards can do is mask management.

16:57And I'm a big believer that management is—you're fortunate to lead people, you're fortunate to manage people, because they're putting their livelihood in your hands. And you can either help them be successful, or you can cause problems for them. And sometimes leaderboards don't show that, because the leader themselves are ultimately responsible for what's on that board. Mm-hmm. Deming was one of the people I read a lot about, and a lot of stuff he breaks down is basically like it all boils down to management process and management.

17:28And that might be the person doesn't need to be successful at your organization. They could be successful somewhere else. Yeah. What do you tolerate? Right. And so I think in that case, it really comes down to are you owning what's on that board as a manager, as a leader, as a GM? So that is not just their problem. It's how am I coaching them?

17:46How am I training them? Where are they not being successful and how can I help them be successful? And that's what we all struggle with day in, day out is like we just have to own that stuff. Yeah, I think maybe that's one of the things that's playing into it because in my wife's situation, they are, they publish it and goes out to every employee of the company and then they never talk about it.

18:07It's like this passive-aggressive. Oh, really? It's like a white paper that you just shoot out into the ether? Yeah, and right next to, you know, the recipe of the month, you know, some crazy shit. So, um, I, I'm sure that some consultant somewhere that they paid a lot of money to said you should do this. Yeah. And there was the lack of all the other follow-through that you talked about, about the discussion about what the numbers mean and why they're important and how to, you know, have impact on that and what the other considerations are.

18:36You know, a general dentist is never going to outpace the sales of an orthodontist. Right, right. Generally, I shouldn't feel bad about being behind all of the orthodontists in the practice. Yes. I mean, it points to you got to really know the business in order to make sure you understand what that is, not just put it next to, you know, a recipe for a pie.

18:54Always going to be behind the master technician, you know? Yeah. So cool. Well, I did— I answer the question you asked? I don't think so. I don't think I answered. We were talking about conversion. You got out of it. So this is why I'm coming back, Mike, because this guy skated right by it. So you asked about conversion, and we can show reports and stuff, but this has lately come up because we talk about conversion.

19:16Do you, you want to— yeah, I can cover it. So right now our report is call conversion, very first-time call conversion, and the current metric is, hey, are you a first-time caller? We know you're a first-time caller, we've never seen your number in the system before. Hey everybody, I'm going to take just a quick minute out of our show to talk to you about one of the favorite tools that we have in my company to help streamline and make our guys as efficient as possible.

19:41And that's Detect Auto. I've been talking about Detect Auto for almost a year at this point, and my team still loves it. And if you listen to the show, you know that I love the idea of bringing in skilled individuals from outside of the industry to add to our shortage within our trade, right? But one of the problems that you run into sometimes with that is that these guys and gals might not have a full automotive knowledge just yet.

20:04And as a technician, if you've ever gotten a repair order that says check noise, you know how infuriating that can be. Well, this tool, the Customer Concern Tool, is designed specifically for that. The advisor can put in 1 or 2 or 3 words about what the complaint is, and then it's going to prompt them all the questions that they need to ask that customer.

20:25And then it puts that into a paragraph form that's easy to understand for the technician. So that technician's not getting check noise, check vibration. They're getting all the information that they would like to have from the customer. It just makes things more efficient. It makes guys in the back happier, and it just makes the business run more smoothly. If you want to find out more about this and the other tools available on Detect Auto, just reach out to us through the link in the show notes.

20:58Okay, here's the deal. Uh, at Vision, I recorded an episode with Keith Perkins and Seth Thorson, and I figured that we were going to talk about NASDEF stuff the whole time, but we ended up talking about AI the whole time. And they had just taught a class on building your own AI agents within your business, and it was an incredible conversation. And then after we recorded that, I went out into the show floor at VIZION and I talked to a ton of people who have been at the class, and they were talking about how 3 hours in that class had changed their entire perspective on AI, and they were building their own tools in just

21:283 hours of training. You know, it blew my mind. I've got to have that in my business. And so here's the deal on Saturday, June 13th, I'm flying Seth to Raleigh, North Carolina, and we are going to have a full day— not 3 hours, but a full day class, breakfast, lunch, and dinner included. If you want to come down the night before on Friday the 12th, we're going to do Friday night shenanigans at my business at the Car Fix Bar and Lounge.

21:51It's going to be a great time. I think it's going to change the nature of how we do business. This class is for owners and GMs only. There are limited seats available for this class because it's very hands-on. You're going to need your laptop, you're going to need an active subscription to the AI of your choice. I recommend ChatGPT. GPT and Claude AI.

22:08Early sign-up discount, it's $8.99. If you sign up after May 17th, it's $12.99. Tap the link in the show notes or scan the QR code on your screen to learn more. It's going to be awesome. We connect that to, did we get an appointment? Did we get a repair order? We don't currently track how many dollars in that report were generated from that conversion.

22:29So we've been going back and forth. I'm like, this is a, that's a marketing conversion. We need a sales conversion version of the report. So we are building that and it will be available. But curious to get your take. What, what type of conversion is important to you? So marketing conversions are important, right? My job is to make the phone ring. Yep.

22:55Service advisor's job is to convert a ring ring into a car in the bay. Technician has to convert the car in the bay into findings and needs, right, that then the advisor has to sell and collect. So there are lots of different conversions along that trail. The first and most important, I think, is converting an inbound call into a car, right? And ultimately, I think an appointment is probably enough because no-show rate's pretty low now.

23:26You don't have a ton of people that are no-showing I don't have a ton of people that are no-showing appointments. I don't know if it's a problem industry-wide. What are you seeing with the pool of data that you have access to? Is the average first-time inbound call conversion rate? I haven't— go ahead. It ranges from, if we're doing marketing conversions here, anywhere from 20 to 40%.

23:50Okay. First time is what I typically see. Okay. So it takes 3 to 4, 3 to 5 calls to generate a car. Mm-hmm. So, um, from an owner's perspective, I would say, what can I do to lower that number to 1 to 3? Mm-hmm. Um, is that the quality of my marketing spend? Am I advertising more intelligently and getting better qualified calls?

24:20Do I have erroneous calls because I've got some, you know, bugged out page, uh, landing page on my website, right? Uh, so how do you help? So it's not your job to help people increase that number, you're just reporting that number, right? But we do, we do provide the tools to help with that because in that report, you as an owner or manager can go through and listen to those calls that didn't convert and be like, well, was it somebody looking for bodywork and we don't do bodywork?

24:44Was it somebody they called the wrong number, you know, because of the way the ad was structured. So we can definitely give you the information to fine-tune that. At the end of the day, if it is a sales problem, we're not going to solve that for you, but we can at least show you, you know, what the outcome was of that call.

25:02Yeah, and I think from my perspective, it was coming from the line of questioning of logistically, how would you use it during the course of ownership of the shop or talking to your people? What, what thing are you looking at to then go, okay, I'm looking at conversion, marketing conversion to a car, and that's a metric that I'm gonna use as a KPI with my advisors, and I'm going to be able to talk to them?

25:25And then from the second side, you know, how would you use that just kind of during the course of operation of the business? And so it sounds like you'd break those up essentially between advisor and technician for those types of conversions. I think, you know, from a marketing perspective, it would be I want to know what How many calls from my direct mail piece equals one car versus how many calls from Google Ads equals one car versus how many calls from my community outreach efforts.

25:49Yep. You know, and then it's for each of those funnels, or however you want to phrase it, I don't know all the right buzzwords, but for each of those avenues of inbound calls, what's the average repair order, right? Is the customer— what's the customer retention? Are they one-and-dones or do they stick? Yeah, yeah. Because then I can find out, well, my spend through this avenue to get a car that sticks and spends money— I'm gonna— I'm willing to spend a lot more.

26:19Your acquisition costs. Yeah, yeah. We actually have, um, within the customer information that we gather and build basically a customer detail and journey, you can build reports off of that and tag different customers. And I only bring this up because one of our Euro shops came to us, he said, you know, I'd love to I see the inbound calls converting to these things, but I'd also like to tag them and find out, did that ad bring in the type of car that gets me to higher— Yeah, right.

26:45Quality score. Yeah. So he was— it was Land Rover. He was asking, you know, did it bring in this type of Land Rover? And so you can actually tag that and do it. We were looking at that, but I thought it was interesting thinking about it. Not only did it convert, did it convert to the car that makes you the most money?

26:57Yeah. So it doesn't matter if a bunch of people with Bugattis call my store. It's not going to make any money for me. Yeah. So, um, right. Or, you know, '93 Chevy Corsicas. I don't want those either. So get me in the sweet spot. Once a Chevy Corsica, I'm trying to think, um, are there any left? I don't know. Maybe down here, probably.

27:15There's no rust down here out west. Yeah, so maybe. Still don't want it. Yeah. Yeah. I think you have to, like, never mind. Sorry. If you're driving a Corsica, it's because you don't have a Yeah. Tell us in the comments. Yeah. Yeah. Do you still have it? And why did you get it? Yeah. 704 confess. That's right. 704 confess. So I'm doing a coaches panel tomorrow morning and it's got, you know, 8 different coaches from, from different coaching organizations around the industry.

27:44And I'm going to ask permission. I don't know if they're going to let me do it or not. I probably should ask before the day before. They're kind of busy, but I'm going to sit down with my phone and put it down on the, on the table next to the chair. And I'm going to say, okay guys, 704-CONFESS, text in your questions that you want these coaches to be asked.

28:04And that way, one, it's not like, hey, somebody run a microphone over to them. They got a stupid question. I don't want to read it. You're right. You can scroll or if they're just going to talk forever, you know. Yeah, I might not have time, right? You got 8 different coaches on there. An hour is going to go by quick. But if I have some extra time, you know, send me your zinger questions that I want to hear about.

28:22That's good. Well, the panel today was fantastic too. I thought it was really good. Yeah, I mean, really good, insightful stuff. What's really— the dude from Christian Brothers was very quiet. He didn't— it's like, he was a bit— when he said that about the question he was worried about, boxers or briefs? Yeah. Like, man, I did not expect that one. So, well, and the weird part is, right after the mics went off, he said, and the answer is Commando.

28:48Oh, did he really? I think he did. I think he did. All right. So So I'm interested to hear from you guys and I want to, I want to come back to kind of the history, like what you guys did before OctoRocket and what was the genesis of OctoRocket. But first, you're telling me that, I mean, you guys have had the ability to analyze a very large pool of data across the industry, right, over multiple years.

29:16Can you tell me a little bit more about that and what are some of the interesting findings you've got there? Yeah, sure. I've got some pulled up. This year we're releasing— it's an industry report. Okay. It is a little bit unique in that we're pulling in shop data from our customers as well as some communication information. And when you think about doing communication, CRM, and the analytics of the business, we can see some really interesting things and try and make sense of it.

29:44And of course, Rick spends many hours in his office with the door closed walking back and forth, pulling his hair out, but loves it. But basically, I pulled together some reports and some data just so we can talk through it. But the way that the report's going to be structured, we're hoping to release this Q2. If you don't mind, I'll do a shout out.

30:03If you go to our website, oktorocket.com, O-K-T-O-R-O-C-K-E-T, or as we like to say, it's okay to rock it. It's okay to rock it. Mike, you knew it was coming. No, I didn't see that. I fucking love it. You can't unsee it. Okay, but there's a link for industry report. If you sign up, we'll send you the report when we get it. And the thing we're also going to do is when you go to the page, it's going to be reactive that you can actually put in some of your own data from your shop.

30:31So if you're not a customer of ours, you can actually put in your data. We'll show you where you are in the rankings and also tailor the report that we're going to send to you. So we're trying to make it more, more kind of like a calculator. You can actually go in and say, okay, well, where do I rank, right? What is important to me?

30:44Because different shops have different things that are important for them to look at. But We're essentially going to break it up in 7 different ways by percentile bands, revenue tiers, tech count, staffing, gross profit bands, effective labor rate, and regions. But I brought some that are essentially a couple of callouts from 2024 to '25 and some other different regional things. The thing that we saw from '24 to '25— now this is over 1,000 shops, right?

31:10This isn't just survey data that people sent us. This is actual data. Gathered across all the different SMS systems that we integrate with. But close ratios from '24 to '25 decreased by 6.3%. No shit. Like they went from 50% to 44% or— Close ratios dropped on average by 6.3%. Well, I say on average, I might say that accidentally. We really look at medians because averages sometimes get peaks and things in there.

31:37And data— Rick will correct me if I say it wrong, but So 6.3%, depending upon, you know, ARO, that could be quite a bit of change. So close ratios decreased, effective labor rate and GP per hour increased by 5.5% and 5% respectively. I believe that. Yeah. Everybody's raising their rates. Yep. Cars per day, what's your guess? 24 to 25? Vehicles in operation.

32:07Went up a little bit, but not by a lot. I'm going to go with cars per day went down by 5%. It was effectively flat. I would say pretty close. Yeah. But it's interesting you say that when you think about the number of cars and we're talking about here at the conference about things being difficult, it makes you ask questions like if there's more cars, but it was flat, there's less— effectively less cars.

32:35Yeah. Is there something about that? You know, you were talking about intervals are increasing, right? Yeah, uh, that's definitely a part of it. And I also think that we're talking about '24 and '25 there, we weren't really feeling a pinch until the second half of '25. First half of '25 was still kind of happy days, it felt like. Yeah, maybe that's anecdotal from my own experience in my marketplace, so I don't know how the country— my market has been relatively economically secure.

33:00I haven't had felt a lot of, uh, the pressure that might be felt elsewhere in the country. So, right. Yeah, we call those the salad days from Raising Arizona, if you recognize that reference. Um, at all? Don't you? Don't? Never seen it? Never watched Nick Cage? Raising Arizona? I hear it's great, but no, never seen it. You gotta go watch it. It's fantastic.

33:22Anyway, parts cost. Came down by 1.5%. Down? So that means people are buying shit parts then? Mike, I don't know what they're doing. I don't know what price has gone down. Yeah, I mean, you're looking at the data. I'm looking at the data. I'm just telling it how it is out of the data. But, um, wait, so that's a, that's a percentage as a percentage of the retail cost of the part, right?

33:49So that might mean that they're cranking up their margins. The cost. Yeah, and then margins went up. Yeah, so maybe they got aggressive on their parts metrics. Yeah, which one of the finders in here is about parts cost control. The number one driver of GP we found was just parts cost control. Look, when I first opened my shop, I thought my old systems would keep up, the software that I had would continue to evolve, but as we grew, the slow estimates, scattered workflow, increasing downtime, it really just— it was becoming a real problem.

34:19That's why I switched to TechMetric. It's not just software, it's a complete shop management system that makes my life easier. SmartJobs, instant estimates, integrated payments, integrated financing options. I mean, it allows me to focus on the work that actually makes me money and not get bogged down in the other details. My shop's repair orders have jumped over 300% since switching to TechMetric, and when I need help, their support team responds in real time.

34:43I actually was online with them asking questions just this week, and I got answers in minutes rather than having to wait for callbacks and emails days later. If your system is holding you back, it's time for a change. Tap the link in the show notes and see how TechMetric can help you move your shop forward. Um, labor costs went up by 5.3%.

35:02That sounds low. Jesus. Yeah, it does. I mean, there's certain areas definitely, and I mean, again, this is regional and across American— that's just me being jaded. Don't worry about that. That's right. Um, I mean Looking at it, the thing that we really come to is that the close ratios is the biggest gap. And how do we do that? How do you increase close ratio in your shop to improve things?

35:27But that was kind of the biggest thing. As far as regional performance, the highest we saw was out of Euro in the Northeast. They lead at GP per hour at $194 on a median. And then highest ARO was around $1,120 for average repair order. You have a region? Well, okay. But you think about the type of— yeah, the type of shops that use OctoRocket are not typical shops.

35:49It depends. It depends. We do have some that have, uh, high-end stuff that they go through their shop, so high ROAs. Yeah, I would say that an OctoRocket client shop is already better than average to be looking for tools like that. Yeah, if they have analytics, they're trying to understand their data. Yeah. Yeah. Um, okay, so back up to the closing rate because that is a a big variance, 6%.

36:14You said it went down 6%, but went from what to what? I don't have that for you. I just know it went down 6.3%, but it will be in the report. All you got to do is go to oktorocket.com and click on industry. So there you go. There you go. But out of that, when we look at the median tech quote that we saw was $1,482, $1,482.

36:41And 254 cars per month, right? If you raise the close ratio on that by 6 points, that would increase your ARO, and then that would be $24,475 more a month. Yeah. For 6 points. I mean, 6 points of close ratio, 6% GP, that number adds up in a very big way. Yeah. Over time. And that's what we're— feel like we're a window into a conversation we had with our team earlier this week.

37:09We had a full team meeting Tuesday night, so Just got just a couple of points, move the needle a couple points, it's going to make an enormous difference. Well, that actually, that makes me ask the question because we provide a lot of the data. We both had shop experience. I GM'd a European shop many, many years ago. He grew up in shops and his dad shops.

37:30But you as an owner, what do you do to invest in your service advisors to close that gap? Or that, is there something that you're doing to try and raise that point margin? Well, so the first thing you got to do is figure out why you are where you are, right? So the conversation stemmed from us being abnormally low for the previous month, and we had a spike in major jobs, a lot of engines and transmissions, a lot of tire jobs, that kind of thing.

37:58And so that's going to drive down GP, but it's going to drive up GPH. And so that's what we saw, that GPH was also very high. So So, you know, the net effect is okay on that front. But just, you know, what gets measured, right? Gets done. And bringing it to front of mind for them that, you know, hey, don't just trust the estimate to be good to go.

38:22Review the estimate, look at your GPH, look at your margins. You know, you check RepairPal and see, are we under the window for what's expected? Are we leaving some— are we leaving some meat on the bone there? Um, and just be thinking in terms of how do we maintain the quality standard that we expect, because we're not going to go get, you know, Chinese parts for everything, right?

38:47Um, because we want to maintain that 5-year warranty that we're putting out there. But we also have to maintain margin, because if we're putting a 5-year warranty out there, we got to stand behind it for 5 years, right? The margin's got to be there. It's got to support the business. Um, and so I I think if you've got the right team members, explaining the why is 90% of the work, right?

39:07And then, you know, we tie compensation directly to gross profit. So, and that seems to kick it into high gear. Yeah, seems to incentivize that. It's weird how incentives work. Yeah. Don't forget though, any incentive-based pay plan is the devil and it's horrible to incentivize people to do good at their job. I hear you. I smell that sarcasm. That just kind of came right across the table.

39:33Another Altoid. So, okay, give me, give me backgrounds. You referenced that a little bit. Brad, start with you. Tell me about your, your history in shops. Yeah, so I grew up in my dad's shops. He had started with a single shop in Illinois in '93. I was 14. So, is your dad Doug McAllister? Doug McAllister. Yeah, my dad was in a 20 group with him.

39:58Okay. Yeah, back in the day. That's awesome. Yeah. Uh, Earl O'Connor first and then Elite. Yes. Yeah. Yep. Yeah. So that was my dad. Okay. Still your dad. Still my dad. He's still fantastic. Um, he eventually had 3 shops. Growing up, I figured I would be a tech, probably maybe an advisor, but I got into the whole computer thing and I was like, Dad, this— I like this stuff too much.

40:24I was always their IT guy. I would, you know, that was my job. I'd work on the computers back when it was, you know, all data was on DVDs or Mitchell, and we'd swap them out and I'd build disk towers and all the crazy stuff. So I grew up doing that, went the tech route. I worked for Cisco Systems and I was a voice engineer.

40:44That was kind of my— the route that I went. And I started building him voice systems. I'm like, oh, this is cool. And we could do all this fun recording and stuff, but it was complex, expensive. And I started tailoring things for just his shops, and then his buddies in the groups would be like, "Hey, we want it. We want that too."

41:04I'm like, "I got to figure out a way to build this in a way that works." So eventually, I started building the voice, the CRM piece, and they'd say, "Well, what about this?" And I'd start linking different things together. And it was just a side hustle for me until 2 years ago. 2 years ago. Yeah. And I ran it under Digital Concierge, or DC was the name of the company back then.

41:28So as a side hustle, I was working at Cisco and then I went to Twilio, learned the whole SMS world. And I loved all that. But DC got too big and I had way more fun building my own stuff. Yeah. So then I got connected with with Rick. We had mutual customers. They were asking me, hey, can you build the reports OctaRocket has?

41:51They were asking Rick, hey, can you do the phone system and CRM? And we're like, ah, should we do an integration? What would this look like? And then eventually we're like, let's just merge this thing together and build something awesome. So we did. January 25th was when we officially merged companies. And it's been awesome. We've been growing like crazy. Eventually we're like, we need somebody to run this thing because I don't want to run it.

42:17I want to do all— I want to build stuff. Rick wants to build stuff. So we found this guy and, um, it's been, it's been good. So yeah, we have a lot of fun. I mean, you think about what organizations, what kind of makes them different, the people who are in them, obviously. And we have a blast. So hopefully you can tell we, we enjoy joking with each other and kidding around, but it We've all grown up in technology and been around, you know, large companies, large enterprises.

42:44And we're just super thankful to be doing what we're doing together and to be in this industry because we find it a lot of fun. That's super cool, man. Yeah. So, and your background prior to this? I have had lots of different things of employment, but I've always gone through technology. I did GM a European shop. I would say I did not do it very well, and I have some definitely scar tissue from that piece of employment, but not well enough to know that I knew how to run it right.

43:18But I was at a technology company, left there, went and did that, and then left and went back into technology. So my background is in telecommunications, customer experience, those types of things that I really grew up in. So building networks, building voice systems, And that's where it came through and used to manage software companies and then started talking to these guys. And what was interesting to me is that in the enterprise space, you see very large logos, very large brands that I've been used to serving.

43:48Most of the brands we— you probably frequent. And I see them trying to connect different pieces of software to build a customer experience in the journey with their brand and their interactions. And I met these guys and saw what they were doing, I was like, you don't realize what you've done or what you've built is something that brands everywhere are trying to build.

44:09And you mentioned at the very beginning about the competitive landscape. He came through Cisco, I came from Extreme through another manufacturer, and it was always, I mean, you were selling the exact same thing, right? So you're always high competition. But the thing in which we operate is that we've built it from the ground up and we own it. And we are very rapid in terms of how we were able to do things and tailor it for our customers in the shops, which is really fun to us.

44:36We love it. And so as we build things and as we put them together, we can do a lot of cool stuff, which is what we're excited about. So the root of the question that we did talk about earlier that you just referenced was the, the competitive landscape. Yeah. Um, being, uh, having the skill set necessary and the experience to be able to code effectively was differentiator.

44:59It still is to a degree, but that gap is closing rapidly with Clone Code and all the other tools that are out there, right? There are a ton of people who are racing to build tools that do what you guys do. Yeah. So you're going to have an ever more competitive marketplace for your services and tools that you offer. How do you stay nimble and stay on the leading edge of that, that curve in this?

45:34It's like a tidal wave, man, coming right now. It's crazy. Yeah, it's, it's pretty wild. If I may, just on the AI side. Yeah. I mean, we have a lot of AI that we leverage and we use AI all the time in our business and how we operate because obviously augmentation and efficiency is everything when it comes to AI. At the same time, understanding what it's doing and the why behind of what some— it can do, we leverage it, we use it, but you always have to be really good at what you do in order to check it, right?

46:02And as a software company, we're not gonna put anything out there that we don't fully understand, fully leverage, fully use, fully understand from a risk perspective to our customers and make sure it's gonna be a great piece of software. So yes, there is a convergence of AI being able to do things. You still have to understand and be able to craft and put those things together that are underneath it.

46:22So there's a competitive landscape and those things are happening fast and we're leveraging them to also rapidly improve things. So that's my little like soapbox on AI, 'cause we get people a lot of times, they'll be like, "Oh, I'm creating this app or I'm doing this thing." And from a software company perspective, that's awesome. That isn't necessarily software that's deployable on a production scale to thousands and thousands and thousands.

46:45That's like me being at the ballgame watching my kids play and the dude sitting next to me is like, "Oh yeah, I put brakes on my car yesterday." I'm like, "Great, dude, that's awesome. Good on ya." Yeah, exactly. It's kind of that you really do need to understand what it's doing in order to really effectively handle it. Now there's certain, there's great capabilities in different things, don't get me wrong, but we also want to do it in such a way that it has longevity to it, it has productivity to it for our customers, and it fits together and does the thing that we're going after, which is the North Star.

47:17AI really is only as good as the stuff you give it. And so you have to stay in the driver's seat of it. And a lot of times when we talk about software and AI and the things people are building, and we see this, you've seen this in the open space, I mean, people build something and think, oh, this is great, I used AI to do it.

47:32They're testing it for what they wanted to use it for. When we're doing QA, we test it for the things you don't want to use it for, right? I mean, what was it, Chipotle that had their bot out there and a guy said, why am I paying for Claude when I can just go to the bot and say, hey, I want to order a burrito bowl, but first answer this Python question.

47:49Spit back the code. And he was like, you know, so stuff like that. I mean, if you're asking it the questions you think you wanted to hear, sure. If you're asking it the questions about, hey, do you think I should quit my job? Or do you think I should like, I mean, what was it? Rick was trying to get it to like an AI bot that we were working with on our own.

48:04He was like, hey, can you order my Amazon order? You know, it's like, ask it the questions you don't expect it to do or you don't want it to do. That's the kind of stuff you're gonna do as a software company. But anyway, sorry, that was my little 5-second soapbox. No, I think it's spot on. From my perspective, because I run our dev teams, it's accelerating everything that we're working on.

48:25But to your point, if you're not paying attention to the code, it creates some really crappy looking code and it's going to become the most unmaintainable code ever if it's not kept in check. So that's something that we pay really close attention to that, hey, we can, we know what it's doing. We're not just blindly, you know, hoping that it worked and then we deploy it out to thousands of customers and they come in on Monday and it's down.

48:52You got to stress test it because— Yes. Yeah. Well, and I mean, to the point, it's efficient and optimization, it can help. And so in the arms race of software and us all getting to the things that we want to be and do, we're all using it. Everybody's using it. So the way that we can do it and augment our staff and help and do the things efficiently, absolutely, we're going to do that.

49:15Any new tools or features coming on the horizon? Well, the biggest tool or feature that our customers are asking for right now, speaking of AI, are AI agents, voice agents. So we have it in beta right now with about 20 customers testing it. So after hours scheduling, things like that, or overflow. There's a few asking for primary, I'm not really sold on that.

49:40Overflow and after hours. Yeah, those are the two that I'm really tuning it for right now. It's working really well. We're just kind of getting a sense of how customers interact with it because that's what I've seen is actually the biggest gap. They don't either one want to, they hear it's AI and they're like, click, and they hang up. So just kind of making it sound more human and not even announcing, hey, I'm an AI agent, seems to be more effective.

50:05Really? Yeah, I would think it'd be like, hey, I'm Mike Allen's fake AI robot. Mike's busy right now, but I can answer your questions. They just hang up. Yeah, it's very interesting. So we've been kind of monitoring, seeing what type of messaging works the best, um, how customers are reacting, and kind of guiding the customer through their options. If you just want to leave a voicemail, fine, just ask to leave a voicemail.

50:31Has latency gotten Is it quick enough now that it's conversational? Yes. And you can't, there's not that half a second delay that makes it awkward? Yeah, there's almost zero delay now. The only delay is if you need to do a lookup on a calendar to see availability and you're gonna have human delay there, so. Well, you can program ums, program in the ums and ahs.

50:50Some comfort noise in there. Yeah. Yeah. So that's probably one of the big items that we're working on right now. We did last year launch Rocket Shield, if you wanna say anything about that. Rocket Shield was a big one. We're seeing, I'm sure you felt it, Robocalls are just a total time suck for advisors. They get lots of them, and when you're picking up that call, you're missing a potential customer calling in.

51:14So we created Rocket Shield, and it's essentially— I don't know how your current phones work, if they ring straight through or if you have a menu in front of it. The menu is the best way to get rid of those spam calls, but a lot of shops are like, no, we want the personal touch, we want it to ring straight through. So Rocket Shield gives you that, the ability to do that.

51:34If we see that the incoming number is a little fishy, you know how you get this potential spam on your mobile, we use those same signals, and then we can put a menu in front saying, "Thanks for calling, press 1 to speak to an advisor." That eliminates almost all those spam calls, unless it's an actual salesperson still dialing through. They're going to make it through.

51:56And one of the unique things on that is for customers, again, customer experience is key in making sure that we're lowering friction to sales. And so once the customer, if a customer comes through and they have a suspicious number and they come through that, once they say, "Hey, I want to talk to somebody," we then record that number. They'll never hear that again, even if their call still comes to us as suspicious.

52:14I mean, that's the whole point. If we can keep from that being the front experience and lower friction for the customer, then that's what we want to do. But we still want to effectively improve the time that your advisor is getting, having to answer calls. They're— For sure. It's an expensive resource, right? Right. So what I'd love to see is if I had phones and, um, you guys know I'm a happy, healthy Techmetric user, um, and I'd love to have Techmetric on one screen and I'd love to have my phone system on the other.

52:43Mm-hmm. Um, and as I'm having the conversation with that customer, be that an inbound call where I'm trying to get them to come in to visit me or an outbound call while I'm, where I'm trying to sell. I'd love for the tool to have all of my base level scripts and all of my base level objection handling routines loaded and be able to identify the objections that the customer is giving the advisor and prompt them with the bullet points of how to overcome that objection.

53:10It's like a, it's like a call coach in real time on the screen. In the contact center, we'd call that agent assist, which is essentially where you hear the conversation and you're putting up things for them to next best action. And sometimes those are defined in the journey of the customer and how that comes in. But yeah, so we definitely hear that a bit from customers about being able to do that and present those to it.

53:33It's not something we have at the moment. Not quite. But Brad is obviously— here's the thing about Brad, he's the guy that's coding. He's going to sit here and write checks all day. You can't get him to do that. But it is a really interesting thing because if we can present done it in such a way that it helps them stay on script because, you know, that's really important, obviously, with the customer trying to close that close ratio for that gap.

53:57Um, but yeah, we hear that a bit. We don't have it yet, but that's something that's important. Look, man, I need you as the, the face sales guy to be like, yes, we can absolutely do that, it'll be in 6 months, just sign up now. Yeah. And then it'll be on you to make it happen, deliver. Yeah, it's classic technology sales. I hear you.

54:15I do. Well, Awesome, guys. I appreciate you guys taking the time to come and hang out with me. Yeah, we're honored to be here. Thank you. Yeah, Digital Concierge first and then Octo Rocket. My guy's been beating me over the head to get on board for years. And it sounds like I need to get off my ass and actually take action. So if I have an agent assist, you'll take a look at it?

54:36Heard it here first. Okay. All right. Cool. Thanks for listening to Confessions of a Shop Owner, where we lay it all out. The good, the bad, and sometimes the super messed up. I'm your host, Mike Allen, here to remind you that even the pros screw it up sometimes, so Why not laugh a little bit, learn a little bit, and maybe have another drink?

54:54You got a confession of your own or a topic you'd like me to cover, or do you just want to let me know what an idiot I am? Email mike@confessionsofashopowner.com or call and leave a message. The number is 704-CONFESS. That's 704-266-3377. If you enjoyed this episode, be sure to like, subscribe, or follow. Join us on this crazy journey that is shop ownership.

55:17I'll see you on the next episode. All right, guys, AI class. Learn how to use AI so that you can make it your bitch and you don't become its bitch. Saturday, June 13th, Seth Thorson's teaching a full-day class in Raleigh, North Carolina. Tap the link in the show notes or scan the QR code on your screen to learn more. It's going to be awesome.