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Has Gas Prices and Other Costs forced You to Raise Prices?


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Well, I believe that everything should get raised annually, but keep your lost leaders (oil changes, etc) at the same price points, if you can. Adjust your pricing to reflect your cost of doing business. Labor and parts increases on larger jobs. Maintenance increases where needed, after doing a market survey in your area.

 

Common service prices should be set according to a competition survey.

 

Other prices should be set according to overall GP.

 

Price marketing should be used effectively as needed (yes, I will beat you on that timing belt job if I have stuck techs).

 

Many shops will get behind the curve during the rapid inflation which is not underway....and it will kill many of them.

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The biggest thing anyone can do is trend tracking/graphing of all key numbers to see which direction they are headed to prevent getting behind.

 

Also, constant monitoring of GP and expense figures.

 

Keeping your costs down and not losing any customers is key. I'd rather drop the price than have them walk out the door!

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I fear price wars. Has this become a trend in our industry to stay alive?

 

Almost all types of businesses almost always have price wars. It's the intensity that varies. The intensity in our industry is picking up and will likely grow significantly soon.

 

A few shops will be able to stay out of it. Most will not if they want to be a player. Many who ignore it may get run over.

 

The trick is, if you need to get into the battle, is to maintain decent GP. There are many ways to be price competitive without simply lowering the price. One just needs to be creative in what they offer.

 

Different levels of parts, service, what is included, and warranty are some examples. Adjust to what the customer wants while remaining profitable instead of focusing on what you think they should want.

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  • Have you checked out Joe's Latest Blog?

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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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