PRESIDENT'S MESSAGE: MILE HIGH PROFITS: Fast Lubes throughout the nation are feeling the weight of flat car counts, increased cost of goods and a weakening economy. They are searching for ways to sustain profitability during these challenging times. Should you cut or allocate additional funds towards advertising? Continue to squeeze labor costs? Raise prices? A solution you may have not considered is a high-mileage oil change service. According to the R.L. Polk & Co. vehicle population report released on February 15, 2007, the median age of passenger cars in the U.S. reached a record high of 9.2 years in 2006. It also stated that vehicles 11 years of age and older represent 35.8% of the light vehicle population, also an all-time high. The passenger car scrappage rate was 4.9% in 2006, down from 6.4% in 2000. These numbers show that, more than ever, the general driving public is holding on to their vehicles longer. If you use the national standard for miles driven per year, 12,000, the median U.S. vehicle has 110,400 miles on the odometer. How many of your service customers drive vehicles with 75,000 miles or more? Half or maybe more? The high-mileage motor oil category was introduced in 2001 to capitalize on this developing trend. Since its inception,the high-mileage category has taken off. In six short years, high-mileage motor oil represents nearly 8% of the total passenger car motor oil market. To put this growth into perspective, the synthetic motor oil category only has 4% market share after 20 years of availability and millions spent on advertising.
Puratech High-Mile
American Lubrication Equipment
A.O.C.A
High-Mileage motor oil was introduced to meet the demands of a maturing engine. As an engine wears, it breaks down the oil quicker rendering it less capable of lubricating critical engine parts. An ageing engine is prone to increased wear, oil consumption, oil leakage, and low-cylinder compression. These problems can lead to spark plug failure, excessive deposits, and loss of power. Seals become brittle, rings wear and valves may not seal as tight. Diminished ring sealing allows more combustion gases to contaminate the oil. This expedites oil oxidation, which causes oil to thicken and age prematurely. High-mileage motor oil was designed and is recommended for engines with 75,000 miles or more. The formulation begins with a standard conventional motor oil additive package and high quality base oil. Additional anti-wear additives, seal conditioners, burn-off inhibitor, seal swell agents, cleaning agents and friction modifiers are added. The result is a lubricant that reconditions and revitalizes engine seals thus reducing engine oil consumption and driveway leaks. It maximizes mature engine performance and minimizes exhaust smoke while protecting your customer’s engine from high-mileage wear. High-Mileage motor oil is recommended for vehicles with any of the following: 75,000 miles or more Sooty or smoky exhaust Oil leaks Excessive engine wear Engine oil consumption Loss of power Besides the practical benefits to your customers, it is a great profit center. An upgraded high-mileage oil change brings an additional $10-$20 of net profit per service. Let’s assume your shop services 20,000 vehicles each year. If your greeter up-sells 15% of these customers to a high-mileage service, you perform 3,000 high-mileage services. Keep in mind over half of your customer base are prime candidates. Your cost of goods difference is around $1.50 per service and your labor rate is the same. You charge your customers a $20 up charge for the benefits of a high-mileage service. Your business nets an additional $18.50 on 3,000 services, generating an additional $55,500 in net profit for the year. As with any addition or change to your business, implementation and execution is everything. Simply adding the product to your shop and the service option on your menu does not guarantee success. Training your staff on the benefits of high-mileage motor oil is a great starting point. They need to understand how and why this service is valuable to the customer. If your staff believes in the product, it will sell. The second step towards successful implementation is compensation. I recommend offering a small “spiff” to your customer service team for each high-mileage service sold. You may want to offer this for the first quarter. This gesture will build immediate momentum and will begin to build a high-mileage customer base that your facility will profit from for years to come. To hold your staff accountable for on-going performance, I would also add the percentage of high-mileage services to your monthly reporting procedures. The monthly percentage should be a topic of discussion and accountability at periodic management meetings. The substantial profit potential and the valuable vehicle benefits have combined to equal the current success of the high-mileage motor oil category. Automotive trends and advancements in vehicle technology continue to influence motor oil technology. You must also adapt your service menu to the changing environment. Don’t wait to capitalize on this profitable venture. Please contact myself or my staff with any additional questions about this great opportunity. We welcome the chance to evaluate your individual needs and show you how to make mile-high profit from high-mileage motor oil. Shane Terry President North American Lubricants, Co. (800) 430-6252
info@nalube.com
www.nalube.com
Automotive Oil Change Association Offers Manager Training Courses in U.S. and Canada in 2008 Your managers are the front line of your business, so it is critical that they are well-trained. The AOCA Manager Training Course is designed specifically to train fast lube managers in: hiring, training and motivating employees; bringing in and retaining more customers through advertising, marketing and excellent customer service; staying on top of the latest Canadian and U.S. government regulations; maintaining equipment and monitoring inventory; and organizing business records and files. Attendees will also receive the Manager Training Guide, which is full of valuable information, ideas, and templates. The course is taught by a successful lube operator, with many years of experience in the industry. The price to attend this course is only $395 for AOCA members and $345 for each additional person. The price for non-members is $500. AOCA is offering the Manager Training Course in the following locations: Toronto April 15-16 Dallas May 20-21 Chicago September 16-17 Portland October 7-8 Atlanta November 11-12 By the way, many owner/operators have found this course a great educational value as well.
www.aoca.org/education.cfm
800-331-0329. Not a member of AOCA? Join now and get the member rate on the Manager Training Course. For information on all of the benefits of AOCA membership, go to
www.aoca.org/operators.cfm , or call AOCA or your NAL representative.
TECHNICAL TIPS: What is TPMS? It stands for Tire Pressure Monitoring Systems. There are about 4 million cars on the road with TPMS right now. 20% of new vehicles have to have them by September 2006 and 100% of new vehicles with a Gross vehicle weight under 10,000 pounds must have them by September 2007. This is not a question of “IF” you will see them in your shop but “WHEN” you will see them and what does it mean to you. There is no way to avoid this. You are just going to have to learn how to deal with it. How can you tell if a car has a TPMS? One good way is to look at the valve stem. If it is metal and has a nut around the base, that's a good indication of a valve stem sensor. The first kind of TPMS was an indirect system that used the ABS to detect a tire that was low. If the pressure in one tire is lower, then its diameter will be reduced and it will rotate faster than the other 3 tires. The TPMS then warns the driver with the proverbial idiot light on the dash. The problem with indirect systems is they won't warn the driver if all 4 tires are equally low. That is why the National Highway Safety Traffic Administration was sued and subsequently changed the rule so all newer TPMS must alert the driver when any one tire is below the set under inflation threshold. Enter the direct system. This type of TPMS uses a transmitter built into the valve stem and measures each tire individually, sometimes even the spare. It will alert the driver with a warning light on the dash, or in some vehicles, a dash information center will show the exact pressure and the location of each tire. If you are doing tire rotations you need to know about recalibration. After every rotation, the TPMS must be recalibrated before it will work right. Sometimes it is automatically calibrated after the vehicle has been driven for a certain distance, or more likely, the transmitter will have to be retrained to its new position. This will require a tool, available from many vendors in AOCA, to "trigger" it at the right time during programming. It's different on each car and nobody thought of standardizing this procedure so you will have to learn how to do each one. Much like resetting the oil change light on cars now. All TPMS sensors are triggered magnetically, electronically with a continuous wave or with a modulated wave. You will need the right tool or tools to recalibrate the sensors. You may also want to test the TPMS sensors before you remove the wheels. Sensor costs can easily exceed $100 each. If you test them first, you eliminate the responsibility for replacing a defective sensor. Down the road, you will also have sensors showing under inflated tires that aren't under inflated. That's because the sensors run on batteries. While they say batteries will last 7-10 years under the almighty "normal" usage, we will just have to wait and see. The whole Tire Pressure Monitoring System idea may be new, but with the proper education and tools, you will be just fine. Dave Everett National Training and Sales Advisor Service Champ (800) 221-0216 X 153
deverett@servicechamp.com
ASK THE LUBE DOCTOR: We are excited to announce the addition of our new monthly column, “Ask the Lube Dr.” This open forum gives you the opportunity to submit technical lubricant questions to North American Lubricant’s corporate lube engineer and technical director. Dr. Arnold Shugarman has over 25 years of technical experience and is considered a lubricant industry leader. Please
send all questions to info@nalube.com or click the “Contact Us” button on this newsletter.
Please type “Ask the Lube Dr.” under subject on your email. Have a question about a lubricant application? Do you need clarification on recommended specifications? Ask the Lube Dr.!
CONTACT INFO: (800) 430-NALC(6252)
www.nalube.com
info@nalube.com

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