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By Joe Marconi in Joe's Blog0 commentsAuto shop owners are always looking for ways to improve production levels. They focus their attention on their technicians and require certain expectations of performance in billable labor hours. While technicians must know what is expected of them, they have a limited amount of control over production levels. When all factors are considered, the only thing a well-trained technician has control over is his or her actual efficiency.
As a review, technician efficiency is the amount of labor time it takes a technician to complete a job compared to the labor time being billed to the customer. Productivity is the time the technician is billing labor hours compared to the time the technician is physically at the shop. The reality is that a technician can be very efficient, but not productive if the technician has a lot of downtime waiting for parts, waiting too long between jobs, or poor workflow systems.
But let’s go deeper into what affects production in the typical auto repair shop. As a business coach, one of the biggest reasons for low shop production is not charging the correct labor time. Labor for extensive jobs is often not being billed accurately. Rust, seized bolts, and wrong published labor times are just a few reasons for lost labor dollars.
Another common problem is not understanding how to bill for jobs that require extensive diagnostic testing, and complicated procedures to arrive at the root cause for an onboard computer problem, electrical issue, or drivability issue. These jobs usually take time to analyze, using sophisticated tools, and by the shop’s top technician. Typically, these jobs are billed at a standard menu labor charge, instead of at a higher labor rate. This results in less billed labor hours than the actual labor time spent. The amount of lost labor hours here can cripple a shop’s overall profit.
Many shop owners do a great job at calculating their labor rate but may not understand what their true effective labor is, which is their labor sales divided by the total labor hours sold. In many cases, I have seen a shop that has a shop labor rate of over $150.00 per hour, but the actual effective labor rate is around $100. Not good.
Lastly, technician production can suffer when the service advisors are too busy or not motivated to build relationships with customers, which results in a low sales closing ratio. And let’s not forget that to be productive, a shop needs to have the right systems, the right tools and equipment, an extensive information system, and of course, great leadership.
The bottom line is this; many factors need to be considered when looking to increase production levels. While it does start with the technician, it doesn’t end there. Consider all the factors above when looking for ways to improve your shop’s labor production.
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By carmcapriotto
Recorded Live at AAPEX 2023, Greg Bunch and Matt Fanslow discuss the impact of the current economy on the automotive aftermarket industry. They explore various aspects of business such as margins, marketing, training, hiring, labor rates. The conversation also covers the potential loss of independent repair shops, and the need for better communication with customers. Greg Bunch, Aspen Auto Clinic, Transformers Institute. Listen to Greg’s previous episodes HERE. Matt Fanslow, Riverside Automotive, Red Wing, MN, Diagnosing the Aftermarket A to Z Podcast
Show Notes:
The state of the economy and its impact on the automotive aftermarket industry (00:00:01) Discussion about the current state of the economy, including worldwide conflicts, division, interest rates, and inflation, and how it may affect the automotive aftermarket industry. The importance of customer loyalty and salesmanship (00:03:51) Exploration of the significance of customer loyalty and salesmanship in retaining customers and attracting new ones, with a focus on providing a frictionless experience. Improving business operations and paying attention to every area (00:05:52) Discussion on the need to run automotive businesses more efficiently, including honing sales skills, improving phone skills, enhancing customer service, and reducing friction in customer interactions. The customer journey (00:09:50) Discussion about the concept of a customer journey and its importance in the automotive repair industry. Engineering touchpoints (00:11:41) The importance of considering and engineering each touchpoint of the customer journey to create positive feelings and experiences for the customer. The Bear TV show (00:16:07) A discussion about the TV show "The Bear" and its relevance to the automotive repair industry, particularly in relation to providing the best customer experience. The importance of customer experience and communication (00:19:25) Discussion on the significance of providing a frictionless experience for customers and improving communication in auto repair shops. The impact on 'mom and pop' shops (00:33:17) Discussion about the challenges faced by smaller independent repair shops in keeping up with technology and training. The misconception about dealerships and independent shops (00:35:46) Exploration of the false narrative that dealerships are better equipped to handle newer cars, while independent shops are only suitable for older vehicles. The future of shops and the role of technology (00:39:45) Debate on the potential impact of technology, such as remote programming and diagnostic tools, on the survival and success of automotive repair shops. The challenges of the current economy (00:42:20) Discussion about the impact of the economy on the automotive aftermarket industry and the challenges faced by businesses. Thanks to our Partners Shop-Ware and Delphi Technologies Shop-Ware: More Time. More Profit. Shop-Ware Shop Management https://getshopware.com/ Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. http://DelphiAftermarket.com Connect with the Podcast -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter: https://twitter.com/RResultsBiz -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
Click to go to the Podcast on Remarkable Results Radio
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By Joe Marconi
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By carmcapriotto
Thanks to our partners, NAPA TRACS and Promotive
Did you know that NAPA TRACS has onsite training plus six days a week support?
It all starts when a local representative meets with you to learn about your business and how you run it. After all, it's your shop, so it's your choice.
Let us prove to you that Tracs is the single best shop management system in the business. Find NAPA TRACS on the Web at NAPATRACS.com
It’s time to hire a superstar for your business; what a grind you have in front of you. Great news, you don’t have to go it alone. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit www.gopromotive.com.
Paar Melis and Associates – Accountants Specializing in Automotive Repair
Visit us Online: www.paarmelis.com
Email Hunt: [email protected]
Get a copy of my Book: Download Here
Aftermarket Radio Network
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
"76% of people have glossophobia, the fear of public speaking. They fear it more than death. And it's a little bit scary that someone might fear dying more than they fear getting up in front of a group of people. But that's why you go in this safe group, you overcome, and they're all there to see you become successful." Recorded Live at ASTE 2023, Carm Capriotto welcomes Chris Cloutier, Craig O'Neill, Sara Fraser, and Tracy Capriotto, who are all Remarkable Results Toastmasters group members. They discuss the importance of effective communication, the value of joining Toastmasters to improve speaking skills, the benefits of feedback and evaluation in Toastmasters, the significance of timing in public speaking, and the need for better communication in the automotive industry. They also discuss generational differences and the challenges of relating and connecting with others. Discover how improving your speaking abilities can help you build relationships, lead with impact, and leave a lasting impression. Craig O’Neill, VP of Training, AutoFlow. Listen to Craig’s previous episodes HERE Chris Cloutier is co-owner of Golden Rule Auto Care in Dallas Texas and CEO of Autoflow. Chris’s previous episodes HERE Sara Fraser, Haas Performance Consulting, Sara’s previous episodes HERE. Show Notes: Communication and Toastmasters (00:01:41) Discussion about the relevance of communication skills and the creation of a virtual Toastmasters group called Remarkable Results Toastmasters. AI and its impact (00:02:07) Conversation about the potential benefits and concerns regarding AI technology and its effect on various industries, including the automotive industry. The importance of in-person communication (00:08:13) Discussion on the significance of maintaining personal connections despite advancements in technology. The value of communication in relationships (00:09:03) Highlighting the significance of phone calls and personal interactions in maintaining relationships and connections. Toastmasters Feedback and Learning (00:16:30) Discussion about the benefits of receiving feedback and coaching in Toastmasters, and how it helps members grow and learn. Maximizing Profit without Sacrificing Service (00:17:15) Exploration of how to increase profitability in an auto repair business while maintaining quality service. The Importance of Timing in Public Speaking (00:23:44) Conversation about the discipline of speaking within a designated time frame, with examples from Toastmasters. The importance of timing in presentations (00:24:52) Discussion on the significance of timing in presentations and the discipline it requires to effectively manage time during a class or training session. The role of effective communication in improving the industry's image (00:26:23) Exploration of how effective communication can help improve the reputation and image of the industry. The importance of connecting and relating (00:32:39) Discussion on the significance of better relating and connecting in the industry, particularly in terms of communication and mastering people skills. Challenges in connecting with the next generation (00:33:43) Exploration of the difficulties in connecting with the next generation in the industry and the need for relationship building and authentic experiences. Overview of Toastmasters meetings (00:37:08) Explanation of the structure and format of Toastmasters meetings, including introductions, planned speeches, evaluations, and the fun and beneficial table topics segment. The importance of effective communication during crisis (00:47:33) Discussion on the need for leaders to connect with people and ease tensions during times of crisis. The value of Toastmasters in improving speaking skills (00:48:33) Exploration of how Toastmasters can help individuals eliminate filler words like "ums" and "uhs" in their speech. The importance of practicing and learning to become a good speaker (00:49:52) Insights into the fact that great speakers, including lawyers, are not naturally born but have put in time and practice to improve their skills. Thanks to our Partners Shop-Ware and Delphi Technologies Shop-Ware: More Time. More Profit. Shop-Ware Shop Management https://getshopware.com/ Delphi Technologies: Keeping current on the latest vehicle systems and how to repair them is a must for today’s technicians. http://DelphiAftermarket.com Connect with the Podcast -Join our Insider List: https://remarkableresults.biz/insider -All books mentioned on our podcasts: https://remarkableresults.biz/books -Our Classroom page for personal or team learning: https://remarkableresults.biz/classroom -Buy Me a Coffee: https://www.buymeacoffee.com/carm -The Aftermarket Radio Network: https://aftermarketradionetwork.com -Special episode collections: https://remarkableresults.biz/collections
Click to go to the Podcast on Remarkable Results Radio
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