What do you think is harder to attain? High ARO or Car Count?

[mspecperformance]

Take the poll and also post feedback!

 

 

Higher ARO and High Car Count is obviously the goal, however lets just keep it specific as to what is more of a challenge for you and your shop!

[Framingham Auto Service]

Higher ARO!

Some times high car count with the wrong type of work will damage your ARO. The HARDEST part is getting the correct ratio.

[flacvabeach]

One of our shops is just about at capacity for car count, but ARO is subpar. Other shop, ARO is good but we could use more cars.

[KMS]

You don't need a high car count. I know a lot about this subject. Let me show some examples:

 

15 cars a week -------- 15

ARO $250.00 -------x $250.00

Equals ---------------- $3,750.00/wk

 

20 cars a week -------- 20

ARO $250.00 --------x $250.00 (Remember, for this scenerio you probably paid to advertise to get these customers at a rate of $350.00 per customer - $1,750.00)

Equals ------------------ $5,000.00 - $1,750.00 = $3,250.00/wk (You lost money!)

 

15 cars a week ------- 15

ARO $350.00 -------x $350.00 (No extra in advertising. You added only $100.00 to each RO.) HOMERUN!!!!!

Equals ---------------- $5,250.00/wk

 

Lets say, you find a simple and cheap way to advertise and you also bumped your labor rate slightly - again $100.00 per RO.

 

20 cars a week -------- 20

ARO $350.00 ---------x $350.00

Equals ---------------- $7,000.00 - $19.95(advertising) = $6980.05/wk (GRANDSLAM!!!!!)

 

ANY QUESTIONS WORK SMARTER, NOT HARDER!

Edited January 14, 2015 by KMS

[KMS]

One of our shops is just about at capacity for car count, but ARO is subpar. Other shop, ARO is good but we could use more cars.

What is the car count, ARO, and Hours per RO. If you don't mind me asking?

[mspecperformance]

KMS Thanks for your post. The question still lies what is harder to obtain. Higher ARO or higher car count. High ARO and a high enough car count is ideal however on a day to day struggle what is everyone's problem.

[KMS]

KMS Thanks for your post. The question still lies what is harder to obtain. Higher ARO or higher car count. High ARO and a high enough car count is ideal however on a day to day struggle what is everyone's problem.

I have seen that it is much harder and a lot more expensive to bring up the car count. There are many factors that all shops need to think about. ARO is simple to accomplish. Having a good service advisor is key. Even raising it $50.00 would be simple, here are some examples:

 

Simple thing you can do:

 

1.) Add a tyre rotation - $29.95

2.) Add shop charges - $5.05 (Base it off of a percentage of labor with a cap of $39.84 on big tickets)

3.) Add .5 labor to a repair order @ $100.00 - $50.00

4.) Raise labor rate by $10.00/hr

5.) Average 60% mark-up on parts

[APM]

A high car count is easy to attain. Any shop that has used bottom feeding coupons has probably seen just how many bad customers will show up to claim their free thing. Bad marketing means losing money on all of that increased car count, too. (Paying money to print and mail the ad, only to pay money to inspect vehicles that will never turn into paying customers, only to lose money from the coupon.)

A high ARO, on the other hand, is the culmination of good marketing, good inspections and write ups, and quality service writing. And there's no sustainable shortcut to improving those three things...improving them takes measurement, accountability, and training on a daily, weekly and monthly basis.

Years ago, our shop tried the first route. 40 cars a day, sub $200 ARO. Inverting those numbers (25 cars, $450 ARO) means less stress, less chaos, and more profits. A high ARO is harder to attain, but it's well worth the effort.

 

If you're interested in how to change this in your shop, feel free to email me: [email protected]

Edited January 15, 2015 by APM

[KMS]

A high car count is easy to attain. Any shop that has used bottom feeding coupons has probably seen just how many bad customers will show up to claim their free thing. Bad marketing means losing money on all of that increased car count, too. (Paying money to print and mail the ad, only to pay money to inspect vehicles that will never turn into paying customers, only to lose money from the coupon.)

 

A high ARO, on the other hand, is the culmination of good marketing, good inspections and write ups, and quality service writing. And there's no sustainable shortcut to improving those three things...improving them takes measurement, accountability, and training on a daily, weekly and monthly basis.

 

Years ago, our shop tried the first route. 40 cars a day, sub $200 ARO. Inverting those numbers (25 cars, $450 ARO) means less stress, less chaos, and more profits. A high ARO is harder to attain, but it's well worth the effort.

 

I was talking about quality customers. KEEPERS! $250.00 ARO jump isn't unrealistic. It would depend on your location and if your service advisor/s ask for the sale. Also, they can't be afraid of high estimates. Remember, its not your car, you didn't build it, you didn't break it, but you can fix it.

Edited January 15, 2015 by KMS

[5 Star Auto Spa]

For us, higher ARO is definitely the harder of the two. When we advertise cheap oil changes through marketing (Valpak, Internet, etc.), our car counts increase but our ARO doesn't. Its been somewhat difficult for us to break out of the "quick lube" shadow and for customers to think of us as a full service repair shop.

[KMS]

I never send out cheap service. What I do is send out is $25.00 off any service visit, or $50.00 off $250.00 or more. I do not what the cheap shoppers coming in our door.

 

5 Star Auto Spa,

 

Why don't you stop advertising oil changes and start advertising other services. See what happens.

[mmotley]

I have seen that it is much harder and a lot more expensive to bring up the car count. There are many factors that all shops need to think about. ARO is simple to accomplish. Having a good service advisor is key. Even raising it $50.00 would be simple, here are some examples:

 

Simple thing you can do:

 

1.) Add a tyre rotation - $29.95

2.) Add shop charges - $5.05 (Base it off of a percentage of labor with a cap of $39.84 on big tickets)

3.) Add .5 labor to a repair order @ $100.00 - $50.00

4.) Raise labor rate by $10.00/hr

5.) Average 60% mark-up on parts

 

Yup.

[FROGFINDER]

raise car count- Even coupon chasers have friends. Treat them with respect and ask for their referrals. Pay your customers to do your marketing.

to raise aro - focus on safety first, things past due/needed asap second, upgrades third and don't be afraid to charge for your time. Even if sale is rejected thank them and ask for referrals. Send a reminder card/e-mail.

Prayer, Hard work and Kindness changes things.

 

People expect in and out while you wait service. Deal with it in a way that they feel that they are in control of doing the right thing for themselves.

Edited January 29, 2015 by FROGFINDER

[AZAUTO]

ARO was a challenge but after going from $350 avg and higher car count with the chaos I agree less car count higher ARO now we avg 500-$575. We did this by inspecting every car that comes in and taking time educating the customer. The other factor has been auto vitals. Taking pictures and showing your customers has been huge for us.

[KMS]

ARO was a challenge but after going from $350 avg and higher car count with the chaos I agree less car count higher ARO now we avg 500-$575. We did this by inspecting every car that comes in and taking time educating the customer. The other factor has been auto vitals. Taking pictures and showing your customers has been huge for us.

I completely agree. Work smarter not harder. Excellent job on the ARO!

[Shopcat]

KMS is right that great ARO is much better for business than the chaos of slamming cars in and out with car count. Inspect everything on every vehicle and prioritize the recommendations for your clients. To answer the question ARO is much tougher to achieve. It requires processes, policies, and leadership. Car count can be done in chaos with a cheap oil change and filter.

[alfredauto]

Profit is what matters most.

[mspecperformance]

Profit is what matters most.

 

Very true however car count and ARO are vital metrics to follow. To gain your desired net profit % you need to know all the numbers, ratios, percentages that need to be met to make your target net profit goal.