Selling Advanced Diagnostic Services for Maximum Profit
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I think we all know that diagnostics is the most costly service we provide in the automotive repair business today. In today's automotive repair environment, you need to be selling diagnostics, and getting paid for it. I'm looking for feedback on when things don't go exactly as planned.
Let's say a car comes in and you sell some diagnostics, by the hour, or from a menu. After you complete that work, and you still don't have an answer, do you go back to the customer and sell some more? Do you continue at your expense? If you do go back to the customer, and you have nothing conclusive after that, then what? Do you keep going back and selling more diagnostic work until you solve the problem? If you continue to go back and sell more, how many times can you do that? We've all had that car that we've worked on for weeks to find some strange problem. I doubt many customers are willing to pay for the 40 hours you spent on the car.
Now lets say after 5 hours of work that the customer agreed to, you are no closer to finding the issue than when the car came in. Do you charge them for the 5 hours and send them down the road even though you have not provided them with a diagnoses? Do you start spending your time trying to solve the issue because you have a hard time charging for 5 hours and are unable to provide any answers?
I'm asking these questions as I am rethinking my business strategy on diagnostics a little. Our shop is known for its abilities to diagnose problems. We have other shops bringing cars to us on a regular basis because of these abilities. I actually get several calls and emails weekly from across the county for help diagnosing problems. There are times, a lot of times, when I think this is more of a curse, than a blessing. I know we are in the business of fixing cars, and we need to be able to find problems if customers are going to keep coming back. But after my lead tech and I spent a considerable amount of time over the last 15 days diagnosing the strangest intermittent no start issue on an Audi, and watching his frustration grow everyday, not because of the difficulty of the issue as we both love the challenge, but because it held him back from addressing the other work that was coming in the shop.
So, as rewarding as it was to solve that mystery, I can't help but look back at what it cost me financially, and the frustration to the technician, and realize we have to come up with a way to try to avoid going down those rabbit holes. Right now my idea is to give it 1 hour. If after an hour, we are not relatively certain that we will find the issue, with another hour or two, then let the car go. Let the customer know that it's not that we can't fix the car, but that we cannot fix it efficiently. If I lose that customer, it would probably still be cheaper that working on his car for 2 weeks.
Love to hear your thoughts.
My shop is in a very rural area in South Carolina. We are mainly a new tire dealer and we have been here for over 40 years. We repair and replace everything from hand truck tires all the way up to large radial rear tractor tires. We do alignments, brakes, front end suspension work, batteries, and oil changes. We have been successful at what we do, but I see the effects of the internet and additional competition from car dealers, big box, etc. on tires and rims.
I took over from my dad about 3 years ago and I added oil changes and focused more on the alignment and front end suspension work, which has been great. I have a great alignment and suspension guy. My background is more finance and the business side of things as opposed to the mechanical side of things.
I would like to get into doing more for our customers. I want to get some opinions on what types of services we should offer, and how I can find a decent general maintenance tech. I don't think that we should jump full on into engine and transmission work, but I could see doing things like master cylinders, ac work, fuel filters, general maintenance, etc.
I am going to have a pretty steep learning curve on this, so any pointers you guys could provide will be appreciated.
This is an article I wrote several years ago for a trade magazine.... I think it's still true today... Love to hear your comments.
Diagnostics fee or not
This has been an issue since day one. Should we charge to diagnose the car or should the estimate be free. Let’s define an estimate first.
What is an estimate?
An estimate is a list of all the parts and labor involved in making a repair. With the possibilities of adding supplements to the original estimate if other work is deemed necessary after the initial work has started.
Ok that’s an estimate, or is it…? Let’s try this again.
What is an estimate?
It’s a guess……. With the chance that I might get it right but more than likely the final bill will be different than what was original “estimated” at.
Hmm, the two definitions are different but at the same time mean the same thing… What about the diagnostic side? Ok, how about that… that diagnostic thing.
What is a diagnostic?
It is the process in which a technician is able to determine the cause or failure of a piece of equipment, vehicle, or appliance.
Did ya get that? … One more time …
What is a diagnostic?
It is the process used to determine the root cause of a given mechanical or electrical problem that has become an issue with a vehicle, appliance or piece of equipment.
Sounds the same doesn’t it…. hmm, maybe we are getting to the real issue… MONEY
The diagnostics may take some time, may even require a few sophisticated scanners, wiring diagrams, and tools. Time is money as we all know, of course, knowledge, expertise and experience is a commodity that should always be respected no matter what field you are in. A service charge for such “diagnostics” is essential in the continuing financial stability of a shop or for that matter… any service oriented business.
Once the diagnostics has been completed an “estimate” can then be given to the customer for their approval. This should also be noted that if a “diagnostics” is preformed and the problem turns out to be “intermittent” or none exciting a fee still applies. The time has already been spent to figure out that there was nothing wrong. That brings up another touchy issue. For some reason the customer feels cheated if you charge for nothing found… now wait a minute, how was it determined that nothing was wrong… ah…the diagnostics lead to that result. Then the problem isn’t the problem anymore, it’s the time spent looking for the problem that is the problem. To ease the customer’s woes you could always give them a time table for future re-evaluations. (30 days is a good round number) Note; It wouldn’t be the first time I have diagnosed a car for a customer only to find out that their complaint is from lack of understanding of their vehicle or dare I say… their just another fruit basket behind the wheel.
Now I’m not in favor of a free diagnostics (if you couldn’t tell already) and I’m not too fond of the free estimate. If there is any “man hours” that are part of any job a “man” wants paid. If that “man” is working on a commission basis, I can assure you that he is going to rush through the “estimate” in order to get to the real money end of the job.
However a diagnostic is a totally different thing, I don’t think I could have made a living without charging for the time it takes to figure out some of the strange pr oblems I’ve encountered over the years. Some things were easy to diagnose, some took hours. But I believe it’s the standardization of a diagnostic charge that would make things a lot easier for the customers to understand the complexities of today’s problem evaluations.
If a tech couldn’t figure out a problem in a reasonable length of time … say an hour… then it’s quite possible the shop is going to be losing money if they kept him on that job. The next best thing would be to move him off that job. Put another tech on who might be able to figure out the problem in a reasonable amount of time. Of course, the shop is already behind the 8 ball, since the first tech didn’t get the job done, but in the long run… it will get done, there will be an estimate for the customer explaining the repairs needed.
I don’t know which is more of a problem, the shops out there not willing to charge for estimating… Oops I mean diagnostic time… or the customer who doesn’t feel that it’s a necessary part of the process. Then again, these are not yesterday’s cars.
It’s about time there were some standards that everyone in the industry had to go by, be it from the independent side or the dealer side. Regulation or self imposed limits as to how much can be charged across the board for various levels of diagnostics. Not to say diagnosing a bad ball joint is easier than a battery drain, no, not at all. Each field in the industry would have to come up with a balanced set of standards that those involved could agree was a fair price for that type of service. If all the independent shops charge the same fees in a demographic area it would lead to a more even playing field for the customer. Maybe, we should think about using a different term rather than “independent”… we can be independent in ownership, style, quality, etc… but put the customer’s concerns up front. If I wasn’t in the business and didn’t know where to take my car I would really would like to know that I’m getting quality work done at a fair price at any shop I went to. If there was a way to put an end to the “I can get it done cheaper down the street” escapades… my drive home would be a whole lot more pleasant than in the past. .
If that didn’t happen it then only comes down to a question of where to have the vehicle repaired at. Everyone has their favorite doctor, dentist, or restaurant. Which is probably based on location, atmosphere, or “ya just like that particular place”. Price is always an issue, and probably always will be. If you’re not getting the job done right at the shop of your choice… choose another one. How many times a day does your phone ring because you have some “price shopper” who is never coming to your shop because your price is higher than the last shop they called… even though they were referred by a friend to call you.
Maybe we should focus on better instructional classes, more information, and true manufacturer level scanners available to the independent side of the business. Sometimes too much effort is put on the “Be nice to the customer”, or the preverbal “Customer is always right” routine. The old saying; “If the customer knew what was wrong they would have fixed it themselves” still holds true today. But I’m talking about telling them what’s wrong with the vehicle, not how to fix it. With the advent of the computer age upon us the car has become a rolling updateable, flash reprogramming software jungle of information. The cost of these specialized scanners puts them out of the range of most consumers, and a lot of small shops, which, in some ways, also places the shade tree mechanic on the endangered species list.
I can’t tell you how many times I’ve heard the same line from a customer’s after I have diagnosed a problem. “Well, I could have done that myself, I would have looked there for the problem if I had the time, and I don’t know why you’re charging me for something so simple. You should give a break on the price because it was so simple. “Hey, I’m a regular customer I should be getting a discount.” My usual answer is… “So if you knew what was wrong, why did you bring it to me to figure it out?” And, I’m not sure that other professional people you deal with such as a doctor, dentist, or the grocer…etc… is going to give you a discount just because you shop with them on a regular basis.
Common sense, the largest lacking component in all of these situations… In my opinion, once common sense is removed from the conversation “stupid” takes its place. I wonder if I could estimate how many times this has happened… maybe so… but I better think about diagnosing it first…
By Joe Marconi
Not every shop pays flat rat; for many reasons. So, many techs are on hourly pay. There is nothing wrong with hourly pay, as long as you have an incentive program in place that promotes high production levels to avoid complacency. For hourly paid employees I strongly urge you to have a pay plan that rewards production levels on a sliding scale.
As a business coach, I have seen too many times shops with low production levels and high tech payroll due to overtime pay. Overtime pay must not be used to get the jobs done with no regard to labor production. Limit overtime and create a strategy that increases production and rewards techs with production bonuses. By the way, there are many ways to incentivize techs, it's not all about money.
Overtime without high levels of production will eat into profits and if not controlled, with kill your business.
If your shop is an hourly paid shop, what incentives do you have in place to maintain production levels?
Article: Ouija Board Diagnostics - You're doing it wrong if your Ouija board is your go to diagnostic toolBy Gonzo
Ouija Board Diagnostics
I’ve often wondered why a lot of the driving public believes auto repair is something for non-thinking Neanderthals that have no ambition to do anything else in life. For all I know they think we (us mechanics that is) diagnose every problem by breaking out a Ouija board, while humming some ancient automotive chant. It could also be that a good mechanic just makes things look easy to the unaware and uniformed layman. With the right mechanic the whole thing can seem effortless, easy, and somewhat second nature when it comes to diagnosing a problem. To the armchair mechanic sitting at home watching the next new automotive reality show, it’s either – “Repairs are a no-brainer, I can do that”, or it must be some sort of Ouija board magic.
Mind you, the number of individuals who still believe anyone can be a mechanic is dwindling ever so slowly. Mainly because the car itself has gone past the point of parts swapping and a shade tree mechanic’s ability to repair the modern car. It’s no secret good old dad with the typical box of tools from a discount chain store can hardly change a spark plug anymore, let alone find them. Oh sure, you can still do a pad slap at home, and you can probably toss on a set of shocks, replace a bulb or two, but diagnosing a problem, especially one that involves some form of electronics… well… that’s a whole new issue to deal with.
It could be they need to master the Ouija board diagnostic scenario, or they need another round of You Tube videos. Every mechanic has undoubtedly heard the same thing from a well-seasoned You Tuber, “Oh I could have done that.” This usually leads to an even longer explanation of how you’ve done the entire repair wrong, but put the tools in their hands, and the results are pretty consistent. The car is either incorrectly put together, or they’ve lost some parts between point A and point B. Videos are great, but you still need to have some mechanical dexterity.
A good example of this scenario is when I was teaching a brake shoe replacement class the other day. After explaining the type of brake system we were working on, I removed the brake shoes from the car. Next, I reinstalled the same shoes, slowing down just enough so they could see how to use the brake tools. It probably took all of 20 minutes to explain it in detail and install the shoes. All the heads were bobbing and the usual consensus was they all had this repair procedure down pat, because, as we all know, anybody can do brakes. Well, as if it was no surprise, when the students got their hands into the job all I heard was one cuss word after another and the occasional student chasing a bouncing spring or clip across the shop floor. So much for easy, aye?
So, where do most of these unprofessional type mechanics and couch connoisseurs of the automotive world go for any information? Where else, the internet. The one place that doesn’t check the credentials of the person making the video, and the one place where anyone with a box of tools can be a superstar with a wrench. In their video they’re the automotive expert, camera man, sound man, director of content, and editor all at the same time. No need in researching the facts, looking up the proper methods, or any other various procedures, service bulletins, or the latest tools related to that particular job. I wouldn’t be surprised if there’s a video out there with a couple of guys surrounding one of those Ouija boards asking why the short fuel trim is higher on one of side than the other.
Ouija board or not, there are a few draw backs to internet information, but there really are a lot of super fantastic guys and gals putting out some very helpful videos on car repair. It’s just the few home brewed videos that make me cringe. Some of these back yard magicians seem to consult their Ouija board way too often. As if they conjured up some miracle answer right on the spot. Honestly, some of these videos are about as reliable as fake news. But, then again… that’s what some people think the professional mechanic does every day.
As there has always been, and there will always be, a shortage of trained technicians out there able to handle the job of repairing the modern car. I’m very sure we will never see the day when there is an overabundance of good mechanics who have to change careers because there is no room for them under the hood. It’s never going to happen. What does need to happen is the one thing consumers don’t want, and that’s cost of repairs most certainly need to rise, as well as the mechanics’ wages to keep up with all of these technical advancements. It’s not a maybe, it’s a must or the technology will run right past you. Ask any mechanic what they learned on a vehicle from 10 years ago vs. today’s cars, and you’ll find that nearly half of what they did back then isn’t applicable in today’s diagnostic procedures.
To be a good technician these days takes a lot of training, a lot of time spent reading, and understanding the latest technologies. New information comes from the manufacturers’ engineering departments just as fast as the cars come off the assembly lines, and to stay on top of things you need to study. I’ve heard people tell me, “Yea, I went to an automotive tech school to be a mechanic, but I didn’t learn anything.” Seriously? I’m sure you learned a whole lot. The problem isn’t the school training, the problem is you. Training doesn’t stop with your diploma, it stops when you stop wanting to advance your knowledge in the repair industry. School is a starting point, but to be a modern mechanic means you need to stay focused on the technology, take advanced training classes in your field of choice, and not expect answers from a You Tube video or your Ouija board.
There’s a lot to learn and retain. It’s not a trade where you learn one method and expect that skill to last you throughout your career. It’s an ever changing industry with ever changing technology. Learn the basics, then learn to diagnose the modern car. You can’t guess at a solution or consult that old Ouija board for the answers. It takes practice and a lot of hands on from a dedicated individual willing to get their hands dirty and diagnose an automotive problem. Then solve it correctly. Sorry, no Ouija board diagnostics allowed.
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