Leveraging AI Within The Automotive Service Industry
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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
The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. If you want to take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.
Click here to learn more about Top Tier Marketing by Shop Marketing Pros and schedule a demo:https://shopmarketingpros.com/chris/
Check out their podcast here: https://autorepairmarketing.captivate.fm/
If you would like to join their private facebook group go here: https://www.facebook.com/groups/autorepairmarketingmastermind
In this podcast episode, Coach Chris Cotton provides advice to a San Diego auto repair shop owner looking to grow their business. The shop owner currently makes around $200,000 a year, mostly from custom jobs, and wants to increase profitability without working seven days a week. Coach Cotton suggests using a cloud-based SMS system for tracking numbers, advertising as a larger shop to attract more customers, and following California's hourly pay laws. He also advises focusing on oil services, brake, steering, and suspension work for consistent revenue, and charging separately for parts and labor. The shop owner admits to lacking proper income statements and running their business in an unstructured manner.
The shop owner's challenges (00:02:17) The shop owner discusses their challenges in scaling their business, working long hours, and the need for more employees.
The issue with custom work (00:05:15) Coach Chris explains the common misconception of making money from custom work and advises focusing on regular retail customers.
Assessing the shop's financials (00:07:28) Coach Chris questions the shop owner's income statement, advertising budget, and advises tracking numbers and moving to a cloud-based SMS system.
The shop owner's financial situation (00:09:23) Discussion on expenses, rent, employee pay, and the potential legal consequences of not following labor laws.
The importance of proper advertising and marketing (00:12:15) Emphasis on the value of effective advertising and the difference between low-cost and high-quality marketing strategies.
Challenges with pricing, warranty, and business operations (00:15:13) Exploration of pricing strategies, the need for clear warranties, and the shop owner's lack of financial and operational management.
Oil services and alignment machines (00:17:55) Discussion about the importance of oil services and the misconception of alignment machines bringing in a lot of business.
Charging for parts and labor (00:20:42) Conversation about the necessity of marking up parts and the importance of charging for both parts and labor to run a profitable auto repair business.
Coaching package and growth potential (00:22:42) Discussion about the coaching package and the potential for the shop to double its revenue next year through improved processes, procedures, and technician work.
Shop owner wants to scale their auto repair business and improve profitability
Current revenue and net income of the shop owner
Coach Chris advises against custom jobs and suggests focusing on regular retail work
Importance of tracking profits regularly and using a cloud-based SMS system
Advertising strategies on Facebook, Instagram, and Google
Concerns about employee payment and legal issues in California
Suggestions for raising labor rates and providing clear warranties
Lack of proper income statements and structured business practices
Disappointment with the performance of the alignment machine
Focus on oil services, brake, steering, and suspension work for consistent revenue
Coach Chris Cotton, 00:12:15, "If we don't have a legitimate business, we don't have anything at all."
Connect with Chris:
[email protected]
Phone: 940.400.1008
www.autoshopcoaching.com
Facebook: https://www.facebook.com/
AutoFixAutoShopCoachingYoutube: https://bit.ly/3ClX0ae
#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #serviceadvisor #serviceadvisorefficiency #autorepairshopmarketing #theweeklyblitz #autofix
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
The Weekly Blitz is brought to you by our friends over at Shop Marketing Pros. If you want to take your shop to the next level, you need great marketing. Shop Marketing Pros does top-tier marketing for top-tier shops.
Click here to learn more about Top Tier Marketing by Shop Marketing Pros and schedule a demo:
https://shopmarketingpros.com/chris/
Check out their podcast here:
https://autorepairmarketing.captivate.fm/
If you would like to join their private facebook group go here:
https://www.facebook.com/groups/autorepairmarketingmastermind
In this podcast episode, Coach Chris Cotton introduces the show as a valuable resource for auto repair businesses. He is joined by Coach Brent, Coach Brent discusses a case study of a successful small-town auto repair shop and shares strategies for improving productivity and setting goals. They emphasize the importance of proactive business management and marketing. They also discuss reducing accounts receivable and hiring new technicians. The episode concludes with a reminder to subscribe and collaborate in the auto repair industry.
Billed hours improvement [00:02:25] Discussion on how a shop improved their technicians' build hours by recording and displaying them, leading to increased productivity.
Internet presence enhancement [00:07:55] Efforts to improve the online presence of a shop, including getting a website, updating Google Maps listing, and starting a Facebook page.
Community involvement promotion [00:09:54] Highlighting the importance of promoting community involvement and showcasing the shop's support for local events and initiatives.
The importance of self-promotion [00:10:31] Discussing the significance of promoting one's own business and deepening community ties.
Fixing broken fundamentals before marketing [00:11:28] Explaining the process of addressing and improving the basic aspects of a shop before implementing marketing strategies.
Managing accounts receivable [00:14:47] Sharing the experience of reducing accounts receivable and the impact it has on cash flow and business profitability.
The online hiring process [00:21:05] Discussion on hiring a new full-time technician and the resources available for setting up an account and finding an A-level technician.
Concentrating on billed hours and shop efficiency [00:22:20] Focus on improving billed hours and sharing ideas on making the internals of the shop more efficient.
Growing and maximizing the potential of your shop [00:26:10] Encouragement to grow and maximize the potential of the current shop, utilizing the full capacity of the shop and increasing performance.
Connect with Chris:
[email protected]
940.400.1008
www.autoshopcoaching.com
Facebook: https://www.facebook.com/AutoFixAutoShopCoaching
Youtube: https://bit.ly/3ClX0ae
#autofixautoshopcoaching #autofixbeautofixing #autoshopprofits #autoshopprofit #autoshopprofitsfirst #autoshopleadership #autoshopmanagement #autorepairshopcoaching #autorepairshopconsulting #autorepairshoptraining #autorepairshop #autorepair #autoops #onlinebooking #serviceadvisor #serviceadvisorefficiency #autorepairshopmarketing #theweeklyblitz
Click to go to the Podcast on Remarkable Results Radio
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By carmcapriotto
Dr. David Weiman discusses the emotional attachment people have to their cars and how the repair industry can empathize with customers during the process of saying goodbye to a beloved vehicle. This case study was prompted by Dr. David's own experience with saying goodbye to his car unexpectedly. He discusses the parallel between the automotive industry and the medical field in terms of diagnosis and repair, and the importance of trust and the role of service professionals in providing certainty and safety to customers. Dr. David Weiman is the president of Weiman Consulting, a leadership consulting firm in Philadelphia PA. Listen to David’s previous episodes HERE
Show Notes
The emotional attachment to cars (00:01:09) The emotional attachment people have to their cars and the importance of empathy in dealing with the loss of a favorite vehicle. The connection between memory and cars (00:02:04) How memory is connected to cars and how the brain creates memories through touch and experience. The parallel between the automotive and medical industries (00:07:20) The parallel between the automotive industry and the medical field in terms of diagnosis, repair, and the interaction between professionals and customers. The psychology of decision making (00:08:25) Explains the importance of presenting options to customers in a way that they can understand and make a decision. Using visuals to aid understanding (00:10:10) Discusses the use of photographs and videos to help customers understand technical explanations and repairs. The dilemma of repairing an old car (00:13:01) Explores the decision-making process when faced with costly repairs on an old car with corrosion issues. The decision-making process (00:16:36) The three decisions customers have to make regarding their car: what to do with the old car, how to get around without a car, and finding a reliable used car. The importance of trust in service industries (00:17:41) The value of trust in service industries, and how it extends beyond the core service to ancillary areas like advice on purchasing a new car. Creating a deeper connection with customers (00:20:02) The impact of sharing personal experiences with customers, creating a stronger bond and deeper connection with them. Finding a gem of a car (00:26:27) Dr. David describes the serendipitous discovery of a well-maintained 2011 Lexus with low mileage and impeccable condition. The training of service advisors (00:33:40) Discussion about the training provided to service advisors in the automotive industry, focusing on helping them deal with customer emotions and uncertainties. The psychology of the automotive service counter (00:33:40) Suggestion to have courses or workshops on the psychology of the automotive service counter, highlighting the need for understanding and empathizing with customers. Similar situations faced by customers (00:34:38) Acknowledgment of the many customers who come into shops with similar situations, emphasizing the importance of learning from Dr. Dave Weiman's story.
Thanks to our Partner, NAPA Auto Care
Learn more about NAPA Auto Care and the benefits of being part of the NAPA family by visiting https://www.napaonline.com/en/auto-care
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Click to go to the Podcast on Remarkable Results Radio
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By Changing The Industry
Episode 129 - Can Good Technicians Be Matched With Great Shops? With Joelle Pollack & Amy Gerardi
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By Transmission Repair
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