| What about Competitive Pricing? |
percent - while providing a value that exceeds customer’s expectations. |
Copyright© 2008-2010 Automotive Dealers Network. All rights reserved.
| Jim Bernardi has held such positions as; Dealer, General Manager, Director of Operations, District Operations Manager, Parts & Service Director, Service Director, Service Manager, Service Advisor and is President of AutoPro Training & Marketing Solutions. A National Fixed Operations Training Company which guarantees increased GP or their training is free. 812-325-5651 |
Jim Bernardi
Publisher/CEO Automotive Dealers Network
President/CEO AutoPro Training Solutions
email: jbernardi@automotivedealersnetwork.com
and visit
Publisher/CEO Automotive Dealers Network
President/CEO AutoPro Training Solutions
email: jbernardi@automotivedealersnetwork.com
and visit
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SM
Guidelines:
Until my next article, stay competitive, stay focused and hire the right candidates to get the job done right
the first time.
- • Work mix: Competitive and maintenance should be 60 percent of the total.
• Model-year mix: New-vehicles should represent 50 percent of the total.
• One-item ROs: No more than 10-15 percent of the total. There are many methods of creating
variable price structures that will work for your shop according to your work mix and the skill levels of
your technicians. They all begin with a thorough, and continuing, departmental analysis.
Until my next article, stay competitive, stay focused and hire the right candidates to get the job done right
the first time.
Value is more than quality work at fair prices. It is the customer's perception of the work and price as good
value. To achieve that perception, you should establish customer-pay pricing policies that compete with
locally available prices and still retain profits. You need to learn what your customers will pay for the
different service operations performed in your marketplace.
value. To achieve that perception, you should establish customer-pay pricing policies that compete with
locally available prices and still retain profits. You need to learn what your customers will pay for the
different service operations performed in your marketplace.
Competitive labor comprises those services (charged at your lowest hourly rate) in which you
choose to be competitive. Shop your competition to learn the latest rates in your market place.
Examples are:
Maintenance labor is work that the manufacturer recommends or requires priced at a moderate
hourly rate that usually averages at or above your target or posted rate. Maintenance labor includes
such common but less competitive services as:
Repair labor, which includes all other services, is priced at your most expensive hourly rate. Repair
labor involves the least competitive, most specialized operations, such as:
Most customers who turn to non-dealer service (your competition) outlets do so for the competitive
and maintenance work that they perceive costs more at dealerships. Often, it doesn't. You need to let
customers know about your prices that are the same or lower than your competition's. You need to
educate customers about the added value of dealership service:
This bulletin contains tools to analyze your customer-pay work with an eye to pricing labor at its
realistic worth, devising a practicable variable rate schedule for your marketplace and, ultimately,
achieving your labor sales potential.
Analyze at least 100 ROs a month - 100 ROs per service advisor per month is ideal - over several
months to fine-tune your service rates. Small changes - fewer one-item ROs, slightly higher rates,
slightly lower costs - can make a big difference.
choose to be competitive. Shop your competition to learn the latest rates in your market place.
Examples are:
- Lube-oil and filter change
- Alignment
- Wheel balance
- Tire rotation
Maintenance labor is work that the manufacturer recommends or requires priced at a moderate
hourly rate that usually averages at or above your target or posted rate. Maintenance labor includes
such common but less competitive services as:
- Manufacturer’s required and or recommended maintenance
- Automatic transmission services
- A/C service
- Emission control services
- Injection fuel services
Repair labor, which includes all other services, is priced at your most expensive hourly rate. Repair
labor involves the least competitive, most specialized operations, such as:
- Electronic engine control diagnosis and adjustments
- Electrical malfunctions and other wiring related concerns
- Accessory repairs and replacements
- A/C compressor overhaul
- Engine overhaul and other internal engine work
- Fuel injection services and or calibration
Most customers who turn to non-dealer service (your competition) outlets do so for the competitive
and maintenance work that they perceive costs more at dealerships. Often, it doesn't. You need to let
customers know about your prices that are the same or lower than your competition's. You need to
educate customers about the added value of dealership service:
- Factory-trained technicians
- Original equipment parts, etc.
This bulletin contains tools to analyze your customer-pay work with an eye to pricing labor at its
realistic worth, devising a practicable variable rate schedule for your marketplace and, ultimately,
achieving your labor sales potential.
Analyze at least 100 ROs a month - 100 ROs per service advisor per month is ideal - over several
months to fine-tune your service rates. Small changes - fewer one-item ROs, slightly higher rates,
slightly lower costs - can make a big difference.
Service Maintenance will always fall into one of three categories:
- 1) Repair
2) Maintenance
3) Competitive
TM