January 25, 2024

Multiple Labor Rates [THA 364]

35 minutes

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:

Watch Full Video Episode

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/

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By Carm Capriotto, AAP

4.9

6969 ratings