By Joe Marconi
From as far back as I can remember, labor has always been an issue. As and industry, we have struggled to get paid properly for the work we do. And those shops that understand how critical labor is, are the shops that have done quite well.
In today's auto repair shop world; Getting the right labor dollars is no longer a buzz topic or debate- Labor dollars will be the salvation of your business. Labor translates into profit, and will also allow you to build for the future and to attract the quality people we need in our industry.
If you don't know what your labor should be, you need to find out. Don't call ABC Auto, down the street to ask him. The odds are he did not do the math. Plus his expenses are not the same as yours.
Depending on what you pay your techs, your overhead, and knowing your numbers will determine your labor rate. I can tell you that there are shops that are paying techs a very good wage and those shops are getting $135 to $150 per hour, and more. That is not a typo. And there are shops that have multi-tier rates. So, for Diag and labor jobs that have no parts associated with the repair, their labor is much higher than their standard labor. It's fair, it's honest and it's time we all raise the bar.
Please, do the math, get help and make sure your labor is right for your shop.
By Elite Worldwide Inc.
Keep Your Shop's Summer Momentum Going!
Elite's Supercharge Your Shop, a series of 4 live online courses for shop owners, starts Sept 14th!
Learn to master your shop's numbers, recruit the top techs & advisors, maximize employee productivity, fill up your bays with your ideal customers and more!
These live online courses will be taught by industry superstars Joe Marconi and Kevin Vaught, who have both experienced extraordinary success as shop owners, so everything you'll learn has been proven to generate extraordinary real world results!
You have the option to either enroll in the whole Supercharge Your Shop course series, or pick and choose the individual courses that will help your shop the most. Here's the course schedule:
Sept 14-15 - Mastering Your Shop's Numbers and Cost Control
Sept 16-17 - Hiring America's Top Techs & Advisors
Sept 21-22 - Maximizing Employee Morale, Productivity and Profits
Sept 23-24 - Filling Up Your Service Bays with the Ideal Customers
To enroll in the complete series of these 4 live online courses, just visit our Supercharge Your Shop Page to reserve one of our last openings!
By Joe Marconi
We, automotive shop owners of America, must take the opportunity of a lifetime and turn it into a bunch of success stories. What opportunity? Look around you. The world is in turmoil. COVID-19, social unrest, uncertainty about the presidential election, the economy, how are we going to get out kids back to school, on and on and on.
While the world is spiraling out of control, we have the power to make big changes to our auto repair shops. And it can all be positive!
First, the average age of a car in the U.S. is about 12 years old, attaining well over 200k on the clock.
Second, Uber, taxis and limo companies are suffering. Guess why?
Third, the motoring public in the foreseeable future will be traveling by car, taking road trips like they have never did before.
Fourth, the roads are packed with motor vehicles, as more and more people prefer their own car as their primary means of transportation.
Fifth, as the cars get older and older, more of them will be out of factory warranty.
Sixth, independent auto repair shops have a vast amount of training, resources and replacement parts.
Seventh, the overwhelming majority of cars being build and sold today are still internal combustion engine powered cars. If you factor in the expected average age of car these days, we can safely bet that those gas engine cars being sold today will still be on the road in 2033 and beyond!
Eight, You need more? That's not enough!
Get your plan in place. Get your prices in line with making a profit. Don't give anything away anymore (I am mostly referring to checking, testing, diags of any sort!) Offer world class customer service. Be a leader of your employees. Show the world what you are made of!
By Joe Marconi
Most of you probably already know what I am about to say: The Service Advisor position is the most crucial position in the shop. I know, I know, what about the mechanical work done by the techs? Well, that's important too, of course.
For the most part, customers spend their hard-earned money and most of time don't really know or see what was done to their car. Let's face it, the customer can't see the water pump or T-belt. And most of the time, the customer does not feel any difference with the car as they drive out of your parking lot.
What the customer does see (or experience) is how she was treated. And that makes all the difference in the world.
Plus, great service advisors also motivate the technicians, because great advisors are also great leaders of people.
Think about this...Six months from now, your customer will not remember the fuel injection relay or the mass air sensor that was replaced....but she WILL remember how she was treated.
And trust me, that OE-quality fuel injection relay install by a certified A-level Master tech using Snap On tools and a Launch Scanner IS NOT the reason WHY your customers return to you....She returns because of the level of service your provide.
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We now have a nice tool available to all premium and platinum members under the tools menu, where you can view labor rates entered by our members on an easy to use map, similar to our member map. This is designed to give you an idea of where you are vs the market in your area. As you zoom in, the circle averages open up to more specific areas.
If you aren't currently a subscribed premium or platinum member, you can upgrade here.
For those with bodyshops, here is some interesting reading:
bodyshopsolutions.com/WordPress/ John Shortell I’ve taken a part time job working at an independent body shop close to my home writing estimates and supplements and harassing insurance companies. I’ve been at it for a few months now and up until recently I haven’t seen or heard from a Progressive appraiser. Finally, several weeks ago, I had a customer who was hit by one of Progressive’s insureds. Because I’m in a different area of the state now, I’m unfamiliar with the local appraisers. More importantly, they are unfamiliar with me.Â What fun!
First let me admit that I was spoiled working at a high line dealership body shop. Those evil rich drove nice new cars that demanded nice new OEM parts. Now all I see are Honda’s and Hyundai’s. Old ones at that. I’ve never seen so many junk cars in my life. But I guess the poor have to drive too.
Anyway, I had a customer who was hit by a Progressive insured. I wrote an estimate and asked the customer to make arrangements to meet the Progressive appraiser here at my shop. Progressive people hate that. They’d rather look at the vehicle somewhere else. Any where I am not. When the Progressive appraiser showed up I knew there would be trouble. He looked to be about 12 years old. He fit Progressive’s archetype for their ideal appraiser: young, naive and no experience in the collision repair industry.
His estimate was several hundred dollars less than mine. No surprise there. But it was a small repair, and that several hundred dollars amounted to about 30% of my estimate. Of course, the labor rate was an issue, but what really got me wound up with this moronic “blend within the panel” crap. I basically told the kid he could take his “blend within the panel” and have his first sexual experience with it. I wasn’t going to accept it. There were some other issues too, and itÂ all added up to the 30% deficiency. I was beginning to lose my cool because this prepubescent putz couldn’t figure out how to meet my bottom line, so I told him to do what a lot of other appraisers do: make something up and put it on the estimate. Of course, I was being sarcastic, but being so young, this kid didn’t understand the sarcasm and took offense to my suggesting he commit fraud. Well at least the kid is honest.
I asked the kid for his appraiser’s license number and the name of his supervisor and explained that I would be filing a complaint with the insurance department, which I did immediately after he left (And don’t we all know how effective that was). I told the customer not to worry about the difference–I would take care of it. I had her sign a repair authorization, a direction to pay and a power of attorney in case I had to sue the bastards. Working at a dealership I never had the opportunity to sue an insurance company because the owner didn’t want the trouble, but now that I’m working at a small independent shop, the owner is willing to go after insurers who don’t play nice.
I spoke with the kid’s supervisor over the phone about the situation. For the record, she was very pleasant, just like talking to sweet high school girl. I didn’t meet her in person, but by the sound of her voice she was another Progressive clone–too young and inexperienced in anything to be dealing with these issues. But she promised to look into it. I knew I was wasting my time, and I was. After three days of haggling, the young girl managed to come up with another hundred dollars. She was still a couple of hundred short. I explained to her that I was going to sue her insured for the balance.Â She responded with a perkyÂ “OK” like I had just asked her if she wanted to go hang out at the mall. She was trained to perfection. Great job Progressive behavior modification department!
With little effort I was able to locate the guy who hit my customer and promptly mailed him the following letter:
A few days later I received a phone call from Mr. XXXX. He wanted to discuss the matter. I explained the situation to him in more detail, and he agreed to pay the balance owed and then deal with his insurance company. I again offered to help him in any way I could with filing a complaint with the insurance department or recovering the money from Progressive. He didn’t take me up on the offer, but he did send a check the next day. I’ve yet to hear from him or Progressive so I have no idea if he was reimbursed or not. I do know the gentleman was not too happy about having pay for repairs to someone else’s car after he had been paying premiums for liability insurance. Something tells me Mr. XXXX will be finding someone else to send his hard earned money to for insurance in the near future.
I fully expected to have to go to small claims court. I knew Progressive would not give in, and I never expected the insured to cough up the money so easily. I feel sorry for the poor bastard. But I’ll be damned if I will become a cheap whore just because Progressive is too profit driven to treat my customers fairly. It’s ironic. Progressive was started by a left wing socialist. The name Progressive is not a coincidence. This nut job and his dope smoking kid, who recently stepped down from running the company, preached the progressive movements dogma, and heavily funded many of its whacked out causes. Progressives are supposed to be more fair than the evil rich. They are supposed to care about the little guy and scorn the evil corporations, yet here they are now acting as bad as any corporation ever did. They only care about their profit and share holders. Kind of makes them big time hypocrites. Just my humble opinion.
Lesson learned? Never sell yourself short. If you’re going to be a whore, at least be a high priced whore. Stand up for yourself. Had I gone to court, I most certainly would have won. It is astonishingly easy to demonstrate to a judge how labor rates are artificially suppressed by insurers, how they manipulate the system for their corporate financial gain, and that they will do just about anything to save a buck. To be fair, I would probably do the same if I worked for Progressive or another insurance company. It is all part of their survival. When your cat eats a cute little bird, you may think it horrific, but it is only natural. And it is only natural for collision repairers to fight to survive. What is not natural is when collision repairers give up and play nice at the risk of losing everything. That’s agonizing suicide.
If you’re thinking that I spend a lot of time talking about Progressive, there’s good reason. First, they deserve it. Second, I know my audience–and it’s Progressive. For this past year, Progressive Insurance has been my number one visitor to this website. State Farm has been catching up lately. They are the top visitor this month. Way ahead of everyone else. The only other entities that generate more traffic to this site are the large ISP’s like Road Runner and AOL. I’m flattered. Hopefully some of what I talk about is subliminally sinking in.
Oh yeah, remember my prediction about CCC’s announcement that it would get rid of the prompts for bumper covers? I said it would be slow in coming. Well here we are a couple of months and updates later and it’s still there. Your complaints forced them to make a public acquiescence, but now that the hell raising has died down, no need to rush things. We’re still waiting CCC. Wassup?
One more thing. Apparently there is a lawsuit going on in Arizona against Progressive. The plaintiffs have deposed a former Progressive employee. The deposition is interesting reading. For an inside look on the pressure and incentives to steer vehicles to network shops give it a read.Â It is only a partial transcript. If anyone has the entire document or a link, please send it to me or link to it in the comments section.