Deferred Work: A Sales Growth Tactic [THA 354]
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By Joe Marconi in Joe's BlogAuto 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 Hands On
I keep getting a request now and then to go to someones house. I am starting to wonder, is it because they think it would be cheaper, or is it like in that show billions, where the guy has so much money, he can afford to pay chef ryan to come to his house to cook dinner.
How much would it take to get each of you to come to my house to work on my car? Honest answers, and you have to give an amount.
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By Transmission Repair
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By Joe Marconi
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By carmcapriotto
Recorded Live at AAPEX 2023, Bob Heipp discusses personal health issues, the importance of open communication and vulnerability, and the subsequent lifestyle changes he made. The conversation further delves into the significance of honesty in relationships, mindfulness, and overcoming addictive behaviors.
Show Notes
The Heart Attack Scare (00:02:05) Bob shares his experience of having a heart attack scare and undergoing a double bypass surgery. The Importance of Early Detection (00:08:19) The discussion highlights the fact that many people's first heart attack is their last, emphasizing the need for early detection and lifestyle changes. The baseline test (00:09:53) Discussion about the benefits of taking a calcium test to determine the need for cholesterol medicine. The importance of vulnerability in relationships (00:13:28) Conversation about the significance of being open and vulnerable in maintaining sustainable relationships. The Vulnerability of Leadership (00:19:40) Discussion on the shift in outlook towards vulnerability in managing businesses and people. The Power of Meditation and Silence (00:20:58) Exploration of incorporating meditation and prayer, including the benefits of silence and introspection. Rewriting Programming and Dehumanizing (00:26:15) Conversation on the process of rewiring the brain and the dangers of dehumanizing people, including discussion on neuroplasticity and the impact of social media and pornography. The Health Focus (00:29:27) Discussion about Bob's focus on health, including surgery and depression after major heart surgery. Experiences at Apex 2023 (00:32:49) Conversation about attending AAPEX 2023 in Las Vegas for the first time, experiencing Halloween on Fremont Street. Evolution and Journey after Open Heart Surgery (00:35:08) Reflection on the personal growth and emotional transformation after open heart surgery, discussing the ongoing journey of self-discovery and figuring things out.
Thanks to our Partner, NAPA Autotech https://napaautotech.com
Email Matt: [email protected]
Diagnosing the Aftermarket A - Z YouTube Channel HERE
Aftermarket Radio Network: https://aftermarketradionetwork.com/
Click to go to the Podcast on Remarkable Results Radio
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