Category: Business

car warranties: buy one or just save your money?

Rob Morris 0 Comment Auto Industry, Business, Car Care

“Extended warranties.” “Monthly service plans.” “Repair insurance.” Should you buy some sort of warranty plan to help cover eventual repair costs on your car?

These warranties may be offered by dealers when you buy a car, or they might be offered by independent companies like CarShield or Endurance.

Our customers at lowell’s frequently ask us whether such warranty plans are worth it.

With a few specific exceptions, we think warranty plans are a waste of your money. Here’s why:

Insurance companies are like casinos: The house always wins

Warranties are a form of insurance, and insurance companies are structured like casinos. Like a casino, they’re betting that they will never pay out what you pay in for the warranty. They rig the warranty ‘game’ in their favor to help protect their profit. Based on our experience dealing with a variety of insurance companies, here’s how they rig warranties:

  • Friction. At every turn, warranty companies throw hassle and delay into the process of collecting on your claim. Long customer service wait times. Obscure phone mail menus. Unresponsive representatives. Multi-step, multi-day approval processes. By prolonging and overcomplicating the process, they hope that customers will simply give up before they ever have to pay.
  • Coverage. Warranty companies often severely limit what repairs they will actually cover. For example, they might promise to cover ‘powertrain’ repairs for the engine and transmission. But then they bury loads of exclusions – emissions, exhaust, steering, suspension, electrical components, brakes, etc. – in the fine print. And then, they classify most of the things which regularly go wrong as falling into those excluded categories.
  • Quality. When they will cover a repair, warranty companies often challenge our shop’s part recommendations. When we give them a repair estimate, they will often only pay for cheaper, lower-grade parts. As a shop that prides itself on providing durable, quality repairs, this second-guessing degrades the premium service our customers have come to expect out of lowell’s.

By installing barriers, limiting what they will cover, and sacrificing quality, warranty companies maximize their profit. And they are extremely profitable. That’s how they can afford to run non-stop nationwide  television and radio ads featuring minor celebrities. At most dealers, warranty and financing activities generate more profit than they get from selling cars. (The dealer’s service department also generates more profit than it gets from selling cars. Cars account for the vast majority of overall dealer sales, but the profits on car sales are very slim.)

In their ads, the companies scare prospects with big-ticket repairs that rarely fail (like engines and transmissions). But they don’t tell you that they won’t cover the stuff that most often breaks down.

While our experience is with automotive repair warranties, we think that the same critiques apply to many home warranty plans, like large appliance warranties and HVAC system maintenance plans.

These companies are in the business of making sure you don’t get your money’s worth out of a warranty.

When does insurance make sense?

Insurance makes the most sense when you face a potentially catastrophic risk. We carry auto, health, life, and homeowner’s (or renter’s) insurance because we need to hedge against really awful (and costly) possibilities – a severe illness, a crash, a fire, or a death. (And often we carry that insurance because we are legally required to do so.)

Automotive repair warranties may make sense if there is no other safety net for your vehicle. If, for instance, driving your vehicle is central to your job, or if there is no feasible emergency option to get where you need to go, then you might reasonably consider a warranty.

::

Instead of purchasing an auto repair warranty, we’d recommend that you save that money in some sort of rainy day fund (where it might also accumulate some interest!). Then, you can maintain full control over those funds without a warranty company trying to restrict your access to your money.

how a loaner vehicle can make your visit easier

Rob Morris 0 Comment Business, Lowell's

We know that visiting a mechanic can involve a lot of complicated logistics. With all that you have going on, coordinating getting to and from the shop can be a major hassle.

  • How do you coax your grumpy relative out of bed to pick you up at the shop and take you to work?
  • Where do you wait if the waiting room is closed?
  • How do you get all of your errands completed?
  • How do you get back to the shop when your vehicle is ready? Uber? Work friend? That grumpy relative?

Not an actual loaner.

A lot of customers don’t know that we’ve offered a different option for more than 15 years: a small fleet of free and easy-to-use loaner vehicles. Instead of depending on the kindness and availability of others, we figure that it is much easier for you to just drive yourself wherever you need to go.

Here’s a brief overview of our loaner program:

  • Our loaner vehicles are well-used and decidedly un-fancy (the oldest just turned 30). But they will get you where you need to go.
  • Loaners are popular and not always available, so make sure to reserve a loaner vehicle in advance when you make your appointment. That way, we can make sure to keep one for you.
  • Here’s the elaborate process for taking a loaner: When you drop off your car, we’ll give you the keys to your reserved loaner vehicle. No paperwork. No charge.
  • If you are waiting while we service your vehicle, you can use the loaner as a kind of personal waiting room. Feel free to use the heating or air conditioning for your comfort. You can use the restroom in our lobby if needed.
  • We try to keep enough gas in the loaners for you to get around. You do not need to fill them up before returning them. (If the gas gets a little low, just put in enough to cover your personal driving needs.)
  • You can use a loaner to drive yourself home. You can take yourself to work. You can just hang out in it. Or you can use it to run errands. The main thing we ask is that you are considerate of other customers. Don’t smoke in the vehicle. If you eat in the car or run errands, make sure to clean up any resulting debris. (Just leave the vehicle like you’d like to find it.)

At lowell’s, we pride ourselves on providing a great service experience for our customers. We designed our loaner program to uncomplicate the process of getting your car fixed. Hopefully, it does just that for you!

honest pricing

Rob Morris 1 Comment Business, Lowell's

When you have your car serviced, you deserve absolute clarity on what will be done to your vehicle and what it will cost.

At lowell’s, we give you all-in, honest prices for our services. We know that getting your car fixed can be intimidating, so we do all we can to give you control over your vehicle’s service.

no games

“Shop Supplies.” “Recycling Fee.” “Document Retention Fee.” “Environmental Disposal Charge.” “Fuel Surcharge.”

A lot of places find ‘creative’ ways to make you pay more. They often include special fees and charges like those above. Other places hide costs in fine print. Some places underquote by leaving out commonly-used parts.

We don’t do any of that.

We never use fine print, and we quote a fair price for the entire job. If we end up not needing parts that we initially quoted, you won’t pay for them.

lowell’s charges for just three things: 1) the parts we use, 2) the work our employees do, and 3) the Kentucky sales tax we are required to collect and pass along to the state. That’s it.

no pressure

What we do with your car is your decision.

We’ll tell you what your Toyota or Lexus really needs.

We’ll identify what needs your attention now, and what can wait for later. And we’ll never try to scare you or trick you into making a service decision.

If you choose not to approve a service item, that’s fine with us. If you don’t have enough time for service right now, that’s fine, too.

It’s your car; we let you decide.

no surprises

We get your permission first.

We always ask you before doing additional work on your vehicle. That way, we can prevent any unpleasant surprises when you pick up your car.

 

No games. No pressure. No surprises. We think this is the right way – the only honorable way – to do business.

making it easier to get on with your life

Rob Morris 0 Comment Business, Lowell's

We know that getting your car serviced isn’t always convenient – you’ve got plenty to do, and waiting for a repair or arranging a ride can be a hassle.

A lot of customers don’t know that lowell’s can help you get on with your life while your car is being serviced. Consider any of these options to make your life easier for your next appointment with us.

Shuttle Van

Let lowell’s give you a ride to work or back home in our Sienna courtesy shuttle. A lot of customers who live or work close to downtown like this option, but we provide rides all over town!

Loaner Vehicles

Or, drive yourself wherever you need to go with one of our loaner vehicles. lowell’s has a fleet of six loaner vehicles which are free to use while your car is being serviced. When you make your appointment, just let us know that you are interested in a loaner, and we’ll reserve one for you!

Loaner Bikes

Finally, if you are feeling particularly energetic, lowell’s offers loaner bicycles so that you can pedal where you need to go.

You are always welcome to wait in our lobby or our great neighborhood. But if you’ve got places to be, we hope that one of these options will make your next visit with us a little (or a lot) more convenient!

The True Cost of South Limestone

Rob Morris 3 Comments Better Lexington, Business, Community, Lowell's, Neighborhood, Predictions, Streetscapes

The South Limestone streetscape project began with the closure of South Lime two months ago today, and the project is slated to continue for another 10 months.  Meant to better connect downtown with the University of Kentucky campus, the project includes the widening of sidewalks, the installation of bike lanes, and the underground placement of utilities.

When the project started, we wrote about the chaotic process of closing the street and about the need for practical planning and design on South Lime and other urban development projects.  How has the project evolved since then?

Not well.

Severed Artery
The closure dramatically impacted traffic patterns between downtown
Lexington and the south side of our city, resulting in gnarled traffic
on a number of alternative routes to downtown.  At various points in the project, intersections with cross-streets (High, Maxwell, and Euclid) have also closed with little notice, adding to confusion and gridlock for downtown commuters and shoppers.  In effect, the closure of South Limestone has walled off downtown from Lexington's south side.

Several businesses along South Lime have struggled to cope with the substantial loss of customers and the physical disruption of their businesses.  Last week, Joe Graviss, the owner of the McDonald's on South Lime, pleaded with Lexington's Mayor and Urban County Council to add extra shifts or more workers to speed the project.  

City officials responded that extra shifts will not accelerate the project.  The project's manager noted that the city's concrete supplier closed in the evenings and that local utilities were already providing personnel to assist with the location and relocation of utility lines.  At one point, he admitted that he had no ideas for speeding the South Lime project along.

Vice Mayor Jim Gray – the CEO of Gray Construction and the only councilmember to oppose the project – countered the project manager's claims.  "It would be wise of us not to be extravagant in describing the difficulties of this project…  With 2000 projects under my belt, I've never seen a project that couldn't be improved or accelerated."

At this point, most elected leaders and city bureaucrats seem unprepared to take significant action to accelerate the South Limestone streetscape project.

That's because they have been thinking about the impacts of South Lime on the wrong scale.

Estimates on the price of the South Lime project vary, but the early $5.2 million estimate has ballooned to somewhere between $13.1 and $17 million.  The newer, higher price was partly meant to help expedite the project. 

But, as we'll see in a moment, that price far underestimates the true cost of the project to our city, our economy, and to our future. 

South Limestone's closure is not a mere inconvenience – it is a severed
artery that is bleeding the life from downtown.  It demands an urgent response from our leaders.  The cost to the city is too
dear to delay action, especially in this difficult economy.

Disruption: Anecdotes and Hard Data
A number of weeks ago, on the first day that the High Street intersection with South Lime was closed, I worked in my office and overheard two different customers from the south side of Lexington talk about the enormous problem of getting to our downtown shop – the confusion from suddenly closing the High Street intersection had made traffic especially difficult to decipher.

Then, we had an elderly customer from Nicholasville make an appointment for the next day, asking for directions on how to get to the shop with all of the construction.  Concerned about getting lost, she decided to do a dry run the day before.  After experiencing the jams, diversions, and delays, she called back and canceled her appointment.

Last month, I talked with another downtown business who is in our same industry.  They were scratching their heads about why their August business "fell off a cliff".  I talked with them again last week, and their business was still much slower than usual.

Yesterday, a regular customer who owns a shop in Festival Market came into Lowell's and opened the discussion with a flat "Business sucks".

When I started hearing these anecdotes, I began to think that the impacts of the South Limestone closure extended far beyond South Lime.  I wondered about the effects of South Lime as a customer deterrent for our business:

  • How many of our customers come from the south side of Lexington?
  • How many of those south-siders might have chosen to stay away from "the mess" downtown?
  • What could that data tell us about the impacts to all of downtown Lexington?

And what I saw in the data was astounding and troubling:

  • About 30% of our customers come from ZIP codes which would use Nicholasville Road (which turns into South Limestone) as the primary corridor to downtown
  • Since July 22nd – the date of the closure – we have lost one third of the business we'd normally expect from those ZIP codes.  By comparison, the rest of Lexington is relatively flat or growing.
  • The net of this was a loss of 10% of our sales (and a much bigger hit to our profitability) directly attributable to the South Lime closure.

I disclose these facts not as a woe-are-we pity party, but as a fact-based assessment of how "the mess downtown" affects one downtown business.  Our business is a relatively healthy, well-respected business with incredibly loyal customers (Last week, we won "Best Honest Mechanic" from Ace Weekly readers).  And, still, the closure of South Limestone accounted for a loss of a full third of south-side customers.

Ripple Effects
Can we extrapolate from just one business to the whole of downtown?  Not with any degree of certainty.  But my conversations with other business owners make me believe that my business' experience with the South Lime closure is not exceptional.  Admittedly, not every downtown business is as impacted by traffic disruptions, but most are impacted in some fashion: lost customers, lost productivity, supply chain delays, etc.

Hard data for downtown Lexington is difficult to come by.

  • Just how much of Lexington's $11 billion economy takes place downtown?
  • Which businesses depend upon the smooth flow of traffic?  To what degree?
  • How many of their customers / employees / suppliers come from the south side?

Depending on the assumptions used, the estimate of impacts to downtown can vary wildly.  Our best "conservative" estimate?  Downtown Lexington loses about $360,000 each business day that South Limestone is closed.  (Depending on our assumptions, the estimates ranged between $275,000 and $600,000 each day.)

That translates to between $7.0 to $7.7 million in lost business every month, or between $84 and $92 million for the year-long duration of the South Limestone project.  That's around 700 to 1000 jobs which could evaporate from downtown Lexington, especially as the closure drags on.

Are these numbers absolute?  Not by any means.  But they do provide a ballpark idea of the true cost of the South Limestone project. 

Much of the focus on the costs of South Lime have focused on either a) the direct taxpayer costs ($17 million) or b) the costs to businesses on South Lime.  And while those South Limestone businesses deserve special attention for the degree this project impacts them, our estimates suggest that our leaders and our community have been thinking about 'cost' on the wrong scale.  There is a much bigger, much more urgent cost which must be addressed.

The irony of South Limestone – as the cycle of lost customers, declining businesses, lower employment, and more lost customers continues – is that the project may well end up strangling the very downtown that the streetscape is meant to connect with.

Our leaders frequently assert the necessity of a vibrant, livable downtown.  It is time for them to live up to their words. 

With the South Limestone closure, they must now choose: Will they continue to choke off downtown from a significant portion of the city, or will they act with urgency and extraordinary effort to accelerate and improve the project?

Their actions now will determine whether the prediction from our Chaos post will come true:

"And the results of the chaos are easy to predict.  Confused commuters
and shoppers stay away from 'the mess' downtown.  Downtown businesses
die.  And, after fits and starts, Lexington ends up with a beautiful
street.  To nowhere."

Time to choose.

LowellsSquare

Health care reform: A small business perspective

Rob Morris 4 Comments Business, Community, Ideas, Lowell's

This week, we’re finalizing our shop’s health insurance requirements for the next year.  Our policy will be 25% more this year for the same coverage.  Last year, it grew by 16%.  Compounded, that’s 45% in two short years.  No other cost increases on that scale for us.

As a small business, the spiraling costs of health care hit us particularly hard each year.  And the need for a new approach to health care is particularly acute, for us and for our employees.

I’ve been puzzling over health care for a long while – and I won’t claim to have the answers here.  But I thought it could be helpful to step away from the town hall and cable channel histrionics and fear-mongering to share some observations on health care from a small business perspective.

Insurance companies are like casinos: The house always wins.
Insurance companies have received a lot of criticism during the
health care reform debate.  But they are doing precisely what they are
designed to do.  They make money for investors by taking bets on the
health requirements of their customers. 

Insurance companies operate like casinos or racetracks: the table is
always tilted in favor of the house.  They may lose big on a single
‘jackpot’, but across the full array of customers they nearly always win.  And when they don’t win ‘enough’, they’ll raise the cost of making bets with them. 

When we enter into agreements with insurance companies, we’re always taking a sucker’s bet that we’re very likely to lose.  The only reason an insurance company takes our money is because they ‘bet’ that we won’t need that amount of medical care.

Ultimately, as with the casino, the house wins.

The oddity of employer-provided health insurance.
We don’t really question it much today, but it is just plain strange that something as personal and as private as health care is mediated by employers at all.  We don’t usually involve our employers in house payments or banking or appliance purchases or car insurance.  But, somehow, we’ve come to expect them to provide health care insurance.

Employer-provided insurance is an historical artifact from negotiations between General Motors and labor unions in the late 1940’s and early 1950’s.  Charles Wilson, GM’s CEO, saw it as a last-ditch concession to help prevent the ‘nationalized healthcare’ system that Harry Truman was championing – which Wilson saw as a threat to the integrity of the free enterprise system.  (Funny how many things just don’t change.)  Soon, other employers adopted health care coverage as a standard part of their benefits packages, and employer-provided insurance became the norm.

But, really, why are we employers involved at all?

Leverage
One reason that employers remain involved is that they often have more buying power than individuals.  Over the past 60 years, we’ve been able to provide leverage which lets us negotiate somewhat better plans with insurers and medical providers. 

But small businesses have scant more negotiating leverage than an individual.  Often, our employees choose to get independent coverage rather than participate in our group plan. 

When Lowell’s bid out to three other health insurance companies, the results were disheartening.  The other three companies offered rates that were 200% to 300% higher than our current rates with Anthem.  So we’re ‘trapped’ with Anthem.

Expanding waistlines, increasing costs.
As a nation, we’re getting a lot unhealthier.  We eat more.  We exercise less.  We sleep less.  We’re in worse health.  We’re living longer.  And we need more care.

We don’t spend much time, effort, or money on the preventative health care and self-care which would help eliminate the much more expensive catastrophic care.  We’re too busy to exercise.  We don’t want to pay for the mammogram.  We don’t like waiting in the doctor’s office. 

And we require more medical care as a result.  Often, we get that
care after a catastrophe built upon years of self-abuse: We have a heart
attack.  Our knees fail.  The cancer spreads.  (We see the same phenomenon with routine maintenance in the car business – put it off, put it off, put it off, then replace an engine.)

Health care is getting more expensive, in part, because we are getting unhealthier.

Rising expectations, increasing costs.
We’ve
come to expect more from our medical system.  We expect our doctors,
staff, drugs, equipment, and facilities all to improve.  And we should expect improvement as medical science advances.

But
those advances are costly.  The astronomical research and development
costs for the medical ‘miracles’ of MRIs and cholesterol-fighting drugs
and ‘little blue pills’ have to be paid for in some fashion.

And doctors, hospitals, and insurance companies won’t simply absorb those costs.  They will pass them on to patients.

Health care is getting more expensive, in part, because health care is getting better.

There are no painless solutions.
We’ve seen politicians, lobbyists, pundits, and fellow citizens all offer various versions of ‘painless’ solutions to the healthcare problem.

They promise that government should bear more of the burden. Or that government shouldn’t bear any of the burden.  Or that we just need full, universal insurance.  Or that insurance companies should pay.  Or drug companies.  Or hospitals.  Or doctors.  Or that we shouldn’t have to pay for the chronically uninsured.  Or that we should just collar all the lawyers and their malpractice suits.  Or we should just have more competition.

Nobody says that we must bear the responsibility.  But we must.

If we refuse to provide insurance or government coverage for the roughly 45 million uninsured Americans, what happens to those who can’t pay?  Hospitals and emergency rooms will still provide care.  Their costs will go up.  And they will pass those costs to other patients in the form of, say, an $8 dose of ibuprofen.  We pay.

If we provide government-paid health care to them (or to ourselves), what happens?  Our national deficit will rise.  This week’s projection of a $9 trillion deficit over 10 years amounts to about $30,000 per man, woman, and child.  Which will have to be funded through taxes.  We pay.

If we have full universal coverage in a government program, what happens?  Because they don’t bear the initial brunt of the costs, patients get more health care than they really need.  And doctors and medical institutions will happily provide (or suggest) that profitable care.  More deficit.   More taxes.  We pay.

If we squeeze insurance company profit (or put greater requirements on them), what happens?  They will likely refuse coverage for the riskiest, least profitable customers.  Unable to find private coverage, those customers will opt to go without coverage or to go with a public plan.  More $8 (or, now, $10) ibuprofen.  More taxes.  We pay.  

If we squeeze drug or equipment company profits, what happens?  They have less to invest in research and development.  They take fewer risks, and release fewer blockbuster drugs or fewer equipment breakthroughs.  Improvements in our medical care falter.  We pay.

If we collar lawyers and malpractice suits, what happens?  Doctors’ malpractice insurance costs will likely go down.  But a few careless doctors who commit malpractice may inflict injury or death without significant penalty.  And who ultimately bears the cost of that irresponsibility and that injury or death?  We do.  We pay.

If we allow more competition between insurance companies, what happens?  The insurance companies look at the same basic actuarial tables.  They evaluate risks in the same way.  They put a price on the ‘bets’ they are willing to take in the same way.  And their prices remain about the same as without as much competition.  We pay.

We want ever-better medical care.  We are getting unhealthier.  We want someone else to pay for it.  But they won’t.  We must bear the responsibility.  We must pay.

Can government, insurance companies, hospitals, and doctors get more efficient?  Sure.  Are there opportunities to eliminate waste?  You bet.  Can we patients get healthier and do more preventative care?  Absolutely.  But it will cost us in some way.

There are no painless solutions.  In the end, we all pay.

The moral obligation
“Is health care a right or a privilege?”

It is a question that we don’t talk about enough, and which underlies much of the national divide about health care today.  Is health care a right to which all people are entitled?  Or, is it a privilege bestowed only upon those who have earned it?  

It is an interesting question, and the health care debate has hinged upon how people answer it.

Except that I think that it is the wrong question.

The “right or privilege” question presupposes that rights and privileges are somehow separable. I don’t think that they are.

I think of health care in many of the same ways as I think of citizenship or, even, to being a human being.  As citizens and as humans, we have certain ‘inalienable’ rights.  Heck, our country was built upon them – “Life, liberty, and the pursuit of happiness”.  

But those citizen’s (and human) rights come with deep responsibilities.  We must participate.  We must act in certain ways.  We must work together to improve our nation and our well-being.  We can’t abuse the fundamental rights we have been given.

For me, health care comes down to a moral issue.  I can’t tolerate 45 million fellow citizens living without a safety net.  I can’t tolerate wasteful spending on needless tests and procedures on the public dime.  I can’t tolerate 45% increases in insurance costs over 2 years.  I can’t tolerate ‘competition’ which triples my existing rates.  I can’t tolerate people (including me, unfortunately) who don’t take good enough care of themselves.

I can’t tolerate the status quo.  Can you?

For me, health care is a citizen’s right.  And an earned privilege.  We must strive to provide health care for fundamental human needs whenever possible, while simultaneously striving to ensure we grapple with the responsibilities that come along with that privilege.

So to the politicians, lobbyists, pundits, and citizens engaged in the public debate, I say: Grow up.  Step up to the plate.  Quit attacking.  Get realistic.  Have adult discussions.  Lose the scare tactics.  Work together.  Compromise.  Take responsibility.  Live up to your moral obligations.

Then, maybe, just maybe, we can build a better health care system.  For our nation.  And for one another.

LowellsSquare

LexMob: Final Schedule

Rob Morris 0 Comment Business, Community, Fun Stuff, LexMob, Neighborhood

When we started LexMob on July 22nd, the idea was to keep patronizing
businesses affected by the closure of South Limestone for a month. It has been extremely rewarding to meet fellow LexMobbers and to meet owners and workers in the targeted businesses.

It has also been very time-consuming.  I’ve decided to stop organizing LexMobs after Monday, August 31st, so that I can better tend to my business.

This doesn’t mean that LexMobs have to stop.  In fact, we’d be thrilled if LexMob continues into the fall.  And anyone can organize a LexMob for South Limestone: The idea is to ‘show up’ with our feet and our wallets to help out these businesses.  Whether it is a mob of 1 or a mob of 100, simply show up and ask others to show up as well.

The easiest way to organize a LexMob: Send out a notice on Twitter with the hashtag phrase “#LexMob for #SoLime”.  In my experience, it is good to send out a few tweets at different times of the morning to let different people know when and where the LexMob will be.  Then, after your LexMob, tell the twitterverse how it was and thank those who came.  That’s all it takes. 

I’ve had a number of suggestions for how LexMob could continue:

  • LexMobs could be weekly (or a couple of times a week) instead of each day
  • Perhaps the businesses on South Limestone could organize LexMobs themselves
  • We could just see what happens; Hopefully, other LexMobbers could continue to organize mobs without a central planner

We support any or all of these options. 

In any case, here is our ‘final’ schedule for LexMob:

  • Wednesday 8/19, Lunch: Sav’s Grill
  • Thursday 8/20, Lunch: Hanna’s, Zag’s, & Failte Irish Imports
  • Thursday 8/20, 7 PM: Social Event at Pazzo’s Pizza Pub (sponsored by the Lexington Fashion Collaborative)

  • Monday 8/24, Lunch: Banana Leaf
  • Tuesday 8/25, Lunch: Tolly Ho
  • Wednesday 8/26, Lunch: Cloud 9
  • Thursday 8/27, Lunch: Han Woo Ri, The Album, Sqecial Media, and ReBelle
  • Friday 8/28, Lunch: Sav’s Grill and Oneness

  • Monday 8/31, Lunch: Pazzo’s Pizza Pub and CD Central

We hope to see you there!  Who’s in?

LowellsSquare

What you told us: How Zappos would fix cars

Rob Morris 3 Comments Auto Industry, Business, Customer Service, Fun Stuff, Ideas, Lowell's

This week we asked for your help in defining an astoundingly great car repair experience.  We summed it up this way: How would Zappos fix cars?

In Wednesday’s post, we talked a little about what Zappos does and why customers love them, including the famous I Heart Zappos post.  And in the past two days, we’ve gotten some really great responses on Twitter, Facebook, and here on the blog – including one response from a Zappos employee!

Zappos

Over on Facebook, Joan commented that she thought that Zappos was actually the “Lowell’s of selling shoes“.  (We heart Joan.)  We love that sentiment and will try to live up to it, but still think we have a lot to potential to improve our own customer service.

On Twitter, Jim suggested that Zappos “would come to your house and fix it at night while you slept“.  Allan and Mari joked about needing to buy parts online from Amazon (an allusion to Zappos’ recent purchase by Amazon.com).

But the strongest theme running through the comments: The need for greater transparency in auto repair.  I’ll run through some of the comments, and then talk a little about what Lowell’s does (and what we could do based on your comments).  On Twitter, Jupiter said he’d like to prevent that “being had” feeling, perhaps by getting greater detail on what was being repaired and why it was needed.  Ace Weekly chimed in “They would spoon you before giving you the bill?”  Here on the blog, Letha (a Zappos employee) shared a friend’s experience with a body shop which sent her daily text messages about the status of her car after a wreck, including a countdown to when it would be ready.  Jim added this comment:

“The thing the frustrates me about car repair is the unexpected nature
and size of the expense. It would be nice to provide as part of the
service an educational piece that says here are the expected life
cycles for key systems for your car and what you might expect to pay.
And here are indicators of failure so we can start to diagnose these
issues BEFORE they happen. At some point, owners need to start
BUDGETING for system replacement and failure and that takes planning
and information.”

What’s clear from this last batch of comments is that automotive service is all-too-frequently a kind of mysterious ‘black box’ where a car goes in one side and nasty, unpleasant surprises emerge from the other. 

At Lowell’s we try to prevent such surprises in the following ways:

  • On each invoice, we print a list of factory-recommended maintenance given vehicle mileage, including a rating of the severity or urgency of each one, and pricing.  We try to review that list with our customers when they pick up or drop off their vehicle.  We sometimes fail to discuss maintenance needs during busy pick-up and drop-off times.
  • We always get customer approval before doing work on a vehicle, providing customers with estimates of the costs before we do the work.  If they are available, we’ll also offer less-expensive alternatives, like fixing or cleaning a part instead of replacing it.  (Ace, we try to reduce the need for ‘spooning’ whenever possible.)
  • When we call a customer to get approval, we tell them what a technician found and explain why action might be needed.

Based on your comments to us, here are some ideas of what we could do:

  • Explainers.  For frequently-done maintenance and repair service items, we could provide detailed “explainer” sheets, including text and pictures regarding what the service is, why it is needed, and what a part might look like when it needs replacement. 
  • Schedules.  With ongoing maintenance, it is easier to implement Jim’s suggestion
    that we provide more of a roadmap of service.  And we do that, to some extent,
    with our list of factory-recommended maintenance.  But it is very
    difficult to predict with accuracy when something will break and
    require repair, and for many repairs there are few warning signs until
    something breaks.  When visible, we’ll tell customers about signs like
    brake or belt wear or engine leaks.  One idea: We could take pictures of the actual parts that are wearing or of the places that are leaking, to show the thing that needs service.
  • Convenience.  Not sure yet how we might do something like this, but Jim’s other suggestion of working on vehicles overnight is interesting.  Perhaps we could pick a car up and have it back in the morning for very basic items, but a big part of our process is communicating back to customers about what we find (and they probably won’t welcome updates at 2 in the morning).  But Jim’s suggestion got us thinking: Are there other ways we could make getting auto service easier?
  • Updates.  As a mechanical shop, most of our repairs are completed same-day, so we almost never have the 20-day delay in getting completed that Letha’s friend had at the body shop.  But Letha’s post got us thinking: Are there other ways you’d prefer to be contacted?  While the phone is our usual way of updating customers, we do frequently find ourselves in a kind of phone tag during the service approval process.  We could provide more contact alternatives: text messages, Twitter DM’s (direct messages), etc. 

Which of these things would matter to you?  What other things would create an astounding car repair experience for you?

We really appreciate your thoughts, and please, keep giving us ideas on how to improve.

LowellsSquare

Chaos: South Limestone Closure Lawsuit Details

Rob Morris 1 Comment Business, Community, Neighborhood, Predictions, Rants

When we initiated LexMobs to help businesses on South Limestone on Wednesday, we noted that the closure of the street seemed hasty and poorly-planned.  Well, now we’ve obtained the Fayette Circuit Court filing from a lawsuit intended to stop the work on South Limestone (first reported by Jake at Page One Kentucky).

And that filing reveals just how chaotic the closure process actually was.

Filed by the owners of several businesses and properties lining the route, the lawsuit seeks an immediate injunction to halt the roadwork and to reopen South Limestone to traffic.  It also seeks damages for the interruptions to business operations along the street.  The suit names the Mayor, LFUCG Urban County Council, and ATS Construction (the firm contracted to renovate SoLime) as defendants. 

And the filing tells a story of a poorly-communicated, hastily-assembled, highly-inconsistent project with an escalating price tag:

  • Communication.  Initial letters from the LFUCG Public Works Commissioner to the affected businesses invited them to a open house to discuss “a streetscape design” and “utility needs”, but didn’t indicate a complete road closure was immanent. The actual details of the project (and of the changes to the project) were usually disclosed to owners through rumors or media accounts.
  • Timing.  Owners had six days’ notice before the first open house (May 18th), and there was no mention of a road closure.  A second “utility needs” meeting was held on June 3rd, and the full closure of South Limestone was disclosed.  But some owners didn’t learn of the possibility of closing SoLime until the day before; The letter announcing that meeting didn’t mention closing the street.
  • Consistency.  In June 3rd discussions, South Limestone was to be closed from Euclid to High.  After voicing opposition, property owners were told on July 10th that SoLime would initially be closed from Euclid to Maxwell, opening up a full block between Maxwell and High Streets.  On July 21st – the day before the project began – owners learned from media accounts that SoLime was now to be closed all the way to High Street again.  That day, owners met with the Mayor and others from LFUCG to learn that ATS and LFUCG won’t know what they’re dealing with until they dig up the street.
  • Price.  The “Downtown Streetscape Master Plan” proposed improvements to South Limestone costing more than $5.2 million.  The LFUCG council approved the streetscape plan in August 2008.  On July 7th, 2009, the council approved the $13.1 million contract with ATS.  Two weeks later, media accounts put the total at $17 million.

The patterns emerging from this (admittedly one-sided) account of the closure of South Limestone parallels with what we’ve seen recently from LFUCG on urban development projects:

  • Projects languish for years, then are suddenly initiated.
  • Decisionmakers seem to have little sense of the full scope or true impacts of their decisions.
  • The true impacts of the project are only understood, if ever, after it is long underway.
  • Communication with citizens is unclear, intermittent, and/or non-existent.
  • The project changes direction suddenly.
  • It is unclear who is accountable for the success or failure of such projects
  • Because they are so committed to the (frequently noble) idea of the project, decisionmakers accept a series of concessions which cause the project’s price to balloon to multiples of original estimates.

We’ve seen some or all of these elements in numerous recent urban development projects: CentrePointe, Tax Increment Financing (TIF), the Lyric Theatre, the Newtown Pike extension and, now, the South Limestone Streetscape.  

What results is chaos.

Business owners on South Limestone had 2 months to prepare to lose customers for 12 months.  Many owners had one day to figure out how to get customers and suppliers to their door.  The cost of the project is 3 times what was initially approved. 

And the results of the chaos are easy to predict.  Confused commuters and shoppers stay away from “the mess” downtown.  Downtown businesses die.  And, after fits and starts, Lexington ends up with a beautiful street.  To nowhere.

Chaos is no way to run a business.  And chaos is no way to run the business of our city.

LowellsSquare

LexMobs on South Limestone?

Rob Morris 1 Comment Business, Community, Fun Stuff, Ideas, LexMob, Lowell's, Neighborhood

The South Limestone streetscape project gets underway this morning.  Using Twitter, Lexington’s Mayor announced that the closure will result in traffic delays of up to 45 minutes. 

From a public point of view, the closure seems hastily and poorly planned, although the promised streetscapes look wonderful.  The project stems from a noble goal: to better connect the University of Kentucky campus with downtown Lexington. 

But businesses lining South Limestone (SoLime) had little time to adapt to the closure, and I wonder how many can survive being starved of traffic for so long.  When Lexingtonians realize that there is a “mess” surrounding SoLime, they will stay away in droves.  (With a business just off of North Limestone, I’m concerned about the disruptions to our southside Lexington customers making it in to Lowell’s.) 

There are a lot of great businesses along SoLime that would be a shame to lose: Sav’s, Pazzo’s, Tolly Ho, Failte, Sqecial Media, and many, many others.  Some (maybe all) of these are Lexington institutions.

How long could they operate without significant customer patronage?  How long could they retain employees?  How long can they make debt / rent payments?  How long can they pay bills?  How long can they survive?

So, here’s a challenge for our readers: Let’s go out of our way to demonstrate that we care about those businesses.

Beginning today, and continuing through the next month, let’s pick one or two businesses to “flash mob” each day.  Let’s get together to show, with our feet and our wallets, that we want those businesses to survive.  Let’s show up.  And eat.  Or buy.  Or drink.  Let’s refuse to let these businesses fail.

If our LexMobs get too big, that’s OK – I’m sure that the plentiful nearby businesses would also love some of our overflow business.

Will this effort be well-organized and well-thought-out in advance?  Not a chance.  Will it be messy?  Yes.  Will it be chaotic?  Absolutely.  Will it be inconvenient?  Certainly.  Will you be too busy to interrupt your day?  Undoubtedly.

But that is precisely the point: to go out of our way to demonstrate we care for these businesses.

So… Let’s LexMob South Limestone.  Look for more details on Twitter with the hashtags #LexMob and #SoLime.  See you there!

Update: The inaugural LexMob will be Wednesday, July 22nd @ Pazzo’s Pizza Pub at 11:30 AM near Euclid on SoLime.  Can’t make it?  We’ll try for other times and places with future LexMobs!

LowellsSquare