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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.
By Joe Marconi
By Joe Marconi
By Changing The Industry
Should You Use A Scope Or A Multimeter #autotechnician
Thank you to our friends at RepairPal for providing this episode. RepairPal’s Certified Network of shops are trusted by millions of customers each month. Learn more at RepairPal.com/shops.
In this podcast episode, Brian and Kim discuss the benefits of auto repair shops having a podcast. They emphasize the importance of creating a podcast that focuses on topics related to the local community rather than solely on auto repair. They suggest discussing local events, leaders, and interesting stories to engage with the community and attract new customers. They also discuss the idea of featuring guests on the show, including influential people in the community. Brian and Kim highlight the value of planning and preparation for podcast episodes and recommend specific resources on how to start a podcast.
Show Notes with Timestamps
The importance of consistency in podcasting (00:01:02) Discusses the need for discipline and consistency in producing podcast episodes regularly. Choosing the right topic for your podcast (00:05:38) Suggests that an auto repair shop's podcast should focus on local community events and topics rather than solely on auto repair. Promoting local events on the podcast (00:06:55) Highlights the example of promoting a local event called "Hot August Stroll" and how it can engage the local community. The importance of community-focused podcasts (00:07:09) Discussion on the need for podcasts in local communities and the potential topics that can be covered. Events and community topics (00:08:03) Exploration of the types of events and community happenings that can be discussed on a podcast. Interviewing local influencers and political candidates (00:10:02) Suggestion to invite influential individuals in the community, including political candidates, for interviews on the podcast. The sponsorship opportunity (00:14:11) Discussion on how a repair shop can sponsor their own podcast and promote their business during the sponsorship segment. The importance of a simple podcast name (00:15:19) Advice on not using cute or clever names for podcasts and businesses, and the example of a successful podcast with a simple name. Starting a podcast and equipment options (00:18:14) Recommendation to check out a free guide by Pat Flynn on how to start a podcast and a discussion on different equipment options, including a simple setup with lav mics and an iPhone interface. The downsizing of podcast equipment (00:21:21) Discussion about the decision to downsize podcast equipment for travel purposes. Advice on starting a podcast (00:24:24) Discussion on the factors to consider when starting a podcast, including the importance of enjoying the topic and its potential effectiveness for marketing. Promoting the podcast and closing remarks (00:26:14) Discussion on promoting the podcast, directing listeners to the website for episodes, and encouraging subscriptions, reviews, and sharing.
Lagniappe (Books, Links, Other Podcasts, etc)
Smart Passive Income - How to Start a Podcast 2023 Simple Podcast Setup - Video Rode AI-Micro Rode smartLav+ Rode SC1 Extension Cable
How To Get In Touch
Group - Auto Repair Marketing Mastermind
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