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Multiple Labor Rates [THA 364]

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Explore: Strategies for pricing diagnostics and labor based on vehicle type, customer segment, and job complexity. Discover: The importance of understanding financial metrics, collaborating with service advisors and technicians, and providing exceptional customer experiences to justify premium labor rates. Matt Lachowitzer, Matt’s Automotive Service Center, Fargo-Moorhead, North Dakota and Minnesota. Listen to Matt’s previous episodes HERE Tom Schearer, Schearer’s Sales and Service, Allentown, PA. Tom’s previous episodes HERE Brent Fleischman, Yocum Automotive, Republic, MO. AutoFix Auto Shop Coaching. Listen to Brent’s previous episodes HERE

Show Notes:
  • The importance of labor rates (00:00:01) Discussion on the significance of intelligent labor rates for profitability and success in the automotive service industry.
  • Differentiated labor rates for specific vehicles (00:03:02) Approach to having higher labor rates for certain foreign car makes and models, and the customer acceptance of these rates.
  • Multiple labor rates for different customers (00:04:54) Explanation of having various labor rates for retail, wholesale, and aftermarket warranty customers, and the strategic approach to setting these rates.
  • Diverse labor rates based on vehicle type (00:05:54) Insight into having subtle changes in labor rates for diesel, euro, older vehicles, and different skill sets, and the correlation of labor rates with menu pricing.
  • Determining diagnostic labor rates (00:10:22) Discussion on the determination of diagnostic labor rates at the front counter, potential modification of approaches based on insights from other panel members, and the significance of communication within the team.
  • The meeting to implement new labor rate levels (00:17:48) Implementing new labor rate levels with input from service advisors and technicians.
  • Setting diagnostic labor rates based on testing levels (00:19:55) Technicians use a system with 16 different testing levels to determine diagnostic labor rates.
  • Labor rates for maintenance items (00:22:16) Discussion on lower labor rates for maintenance items like oil changes, tire rotations, and transmission flushes.
  • Competing on maintenance item prices (00:23:20) The panel discusses pricing maintenance items competitively based on market demand and customer perception.
  • Client experience and pricing (00:29:38) The importance of providing a great customer experience and its impact on pricing and customer loyalty.
  • Knowing your numbers for effective labor rates (00:33:18) Advice to shop owners to evaluate labor rates based on their business needs and to know their numbers for profitability.
  • Pride in charging premium rates (00:34:20) The importance of being proud of charging premium rates for the talent, tools, and facilities provided.

Thanks to our Partner, NAPA TRACS NAPA TRACS will move your shop into the SMS fast lane with onsite training and six days a week of support and local representation. Find NAPA TRACS on the Web at http://napatracs.com/

Connect with the Podcast -Follow on Facebook: https://www.facebook.com/RemarkableResultsRadioPodcast/ -Join Our Private Facebook Community: https://www.facebook.com/groups/1734687266778976 -Subscribe on YouTube: https://www.youtube.com/carmcapriotto -Follow on LinkedIn: https://www.linkedin.com/in/carmcapriotto/ -Follow on Instagram: https://www.instagram.com/remarkableresultsradiopodcast/ -Follow on Twitter (X): 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         ARN-Website-Banner-July-2022-1200x400-1.

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  • Have you checked out Joe's Latest Blog?

    • Joe Marconi
      The Toolbox is Last to Leave, First is the Heart
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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.

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