Your auto repair labor revenue and parts margins are critical for enhancing your shop’s profitability. Adjusting your pricing on parts to make a profit is pretty straightforward.
But when it comes to labor times for auto repair shops…that’s where things can get a bit tricky.
Yes, you need competitive labor rates, but you also need to keep those rates reasonable so you don’t scare off your customers with sky-high prices.
3 ways your shop can make more money on labor:
By using a labor matrix
By creating custom labor rates
By applying a labor guide markup
Before we dive into the differences between these three methods for setting the best labor times at your shop, here’s a quick refresher on the one thing these methods have in common: the labor guide.
What is a Labor Guide?
A labor guide is like the gospel of labor times for auto repair shops. It tells you how long, on average, it takes to complete different types of repair work.
Remember that the times listed in auto repair labor guides are averages, so it’s best to treat them as a starting point.
Factors That Can Affect Labor Times for Auto Repair Shops
Let’s take a look at some of the factors to consider when determining how much to mark up (or mark down) your shop’s labor rates.
1. Age of Vehicle
Older vehicles are often trickier to fix, especially because finding parts for them can require a time-consuming hunt across parts suppliers. You can make up for the time spent hunting down uncommon parts by charging more for all repairs involving vehicles over a certain age.
2. Geographic Location
Some areas lead to different types of repair challenges that can affect the time it takes for repairs.
For example, shops in Syracuse, New York—the snowiest city in America—might find themselves working with cars that have rust, which can significantly add to the time it takes to remove or even clean certain parts.
3. Experience of Technician
Chances are, you’re already paying experienced technicians a higher base salary or hourly rate.
However, certain situations might call for cranking up those numbers, like if you really need to put their skills to the test for a tricky repair for a client who wants it done ASAP.
4. Customer Needs
You can offer customers who need their cars back fast a “Pro Tech” rate, where your tech wraps up the job in record time.
When you’re asking techs to complete a job faster than the time on the labor guide, and still do a good job, the customer is getting special service. Be sure to let customers know that speediness comes with a surcharge.
5. Relationship with Customers
It’s a good idea to consider giving loyal customers a special rate as a token of appreciation.
With that said, industry leaders advise sticking to your labor rates as much as possible, because if it becomes a habit, you risk financially harming your business.
How to Choose a Reliable Labor Guide
A reliable auto repair labor guide is foundational for your shop when you’re setting labor rates, so you’ll want to use a labor guide that stays up-to-date with the latest labor times in the industry.
Just like many people use online directories instead of the Yellow Pages, many auto repair shops use digital labor guides that are constantly updated with the latest labor times.
When seeking out a digital labor guide, look for one that:
Offers consistent, comprehensive data on labor times from industry leaders, so you can set accurate labor rates that will keep your shop profitable
Adds labor times for new vehicles and jobs periodically, so your shop’s pricing can stay competitive
Integrates with your auto repair shop management software, so you don’t have to dig through multiple systems
If you take away anything this month, it's that the Tekmetric Mobile app is now yours! We’re thrilled to have launched this across iOS and Android to make your techs’ lives easier, cutting their inspection time in half. As well, it delivers increased customer trust, ultimately driving up your bottom line.
Other top release highlights include improving the efficiency of Smart Jobs, adding fresh permission settings for increased financial control, speeding up the process of finding parts across your inventory, and making the 10DLC registration process simpler.
If you’re using Tekmessage, please complete your 10DLC registration ASAP.
Starting December 1st, this requirement will be enforced.
Save Time and Drive More Revenue With The Tekmetric Mobile App
Perform inspections from any mobile device, complete with photos and videos, building customer trust and increasing job approval. Tekmetric customers using it today have seen their inspection times cut in half. As well, shops that share digital vehicle inspections (DVIs) with their customers, see an average increase of $15k in revenue per month. With real-time synchronization your team stays coordinated, whether they're under a vehicle or discussing repairs with customers at the front desk.
Minimize the impact of time consuming tasks with these enhancements to our Smart Jobs feature.
Have you ever built a job using Smart Jobs, only to realize you accidentally selected the wrong part? Now you can instantly search PartsTech again without leaving your current job screen - ensuring you always quote the right part at the right price for your customer.
Oil changes are a necessary maintenance to keep any car running. So, it’s no wonder that repair shops offer oil change promotions to get new customers in the door. These promotions are usually for the standard 5 quarts, but what happens when a customer’s car requires extra oil? Smart Jobs will automatically calculate the adjusted price for the extra oil and add it to the estimate. This means no more hassling with a calculator to calculate the additional price tag. Smart jobs will simply provide clear and accurate estimates every time.
Starting December 1st, 10DLC registration will be required for all businesses using 10 digit phone numbers for application-to-person (A2P) messaging. This requirement will impact all customers using Tekmessage. So, we’ve made it easy for you to complete this registration in-platform. This process should take no more than 10 minutes and can be done from the Tekmessage Integration Card on the integrations page.
To ensure your service is not interrupted, please be sure to check your status and complete your enrollment ASAP. The approval process typically takes 2 to 3 weeks. Learn more about 10DLC and how to do this here.
Ensuring shop fees are consistent across all of your locations is critical, especially for maintaining customer trust. This process is now easier than ever to manage using the Multi-Shop dashboard. You can create new fees, edit existing fees, and delete fees across all of your locations. Need to maintain shop-specific pricing? No problem. Individual shops can manage their unique pricing details without impacting universal pricing.
Who’s this for?: All customers with the Multi-Shop add-on.
We heard you when it comes to wanting more control over your finances in Tekmetric, especially for those with lots of employees accessing the platform. Within the payments permission, there’s a new sub-permission for engaging with accounts receivable. By checking this box, the employee will have the ability to send repair orders to accounts receivable.
Tip: This will default to “on” for newly created shop owners and shop admins. If you had employees with the payments permission “on” at the time of the release (10/28/24), this sub-permission was defaulted to “on”.
View Inventory Across All Your Locations From One Place
Locating parts across your network can be extremely cumbersome, especially if you have to hop in and out of shop views. Your Multi-Shop account now brings inventory from all your locations into a single view, saving you time & getting your team back to work quickly. Filter by shop, status, and part type to find what you need in a snap.
Who’s this for?: All customers who have the Multi-Shop add on.
The checkered flag is in sight, moving to the last stretch of the race at a good pace! As Tekmetric kicked off Q3, we focused on two main priorities: streamlining the customer experience and enhancing our relationships within the auto repair industry. With a customer-obsessed approach, Tekmetric is committed to driving product innovation through these two avenues, as we continue to evolve and better serve you – our partner shops.
Streamlining the Customer Experience from Beginning to End
This quarter, we made it our goal to continue helping shops improve the customer experience from start to finish. The customer experience involves streamlining operations at every level, so the vehicle can be safely repaired and back on the road as soon as possible. From estimate to the final payment, our end goal is to help you be as efficient as possible.
As part of our efforts this quarter, we sought to identify and eliminate bottlenecks to enhance shop efficiency while meeting customers where they want to be. We also implemented updates that many of you, our partner shops, have recommended to keep Tekmetric relevant to the entire shop experience. Together, these updates combine to create a stronger shop management system that helps your shop run smoothly and ultimately supports growth over time:
Simpler Day-to-Day With Enhanced Data Integrations: With ALLDATAandTireFitment, service advisors can now get labor and tire data directly from these integrations within the Tekmetric platform.
Tire Purchasing Made Easy: With Tire Suite you can manage all tire operations directly from the platform including compliance, regulatory standard adherence, inventory management, and even purchasing via our integration with PartsTech.
Increased Transparency in Inspections: Through our integrations with Advance’s MotoVisuals, you can now more easily educate your customers with repair animations. iCustomer Comms Simplified: We added template messages and the ability to adjust text verbiage for estimate, inspection and invoice links, which limits redundancy and streamlines communication.
Increased Payment Flexibility With BNPL: Our partnership with Affirm allows shops to meet vehicle owners where they are with flexible payment plans for nearly any budget or repair need, including Buy Now, Pay Later (BNPL). Customers who introduce BNPL see a 3x increase in ARO.
Growing Relationships Within the Industry
As Tekmetric continues to streamline and enhance the customer experience, we are also focused on strengthening our relationships within the auto repair industry. As a customer-obsessed shop management system, we aim to support shops in providing the highest quality service to vehicle owners they can – and this wouldn’t be possible without valuable feedback and insights from you, our partner shops. This approach allows us to better understand the real challenges you face, so we can provide innovative solutions that help you accomplish your goals and succeed in a market where the consumer expects more from their repair shops.
You may have seen us at the Shop Hackers Conference in Murfreesboro, Tennessee, where Adam McInturff, VP of Sales and Phil Acree, Head of Payment Sales presented on our latest features and upcoming innovations. We also spoke to many of you about the trends you are seeing in the industry and how Tekmetric can support your needs – from hiring service writers to succession planning. We continued these conversations at ATE Spokane in Washington and ASCCA in California and gathered key insights as we look ahead to the end of 2024 and the beginning of a new year.
Thanks to you and your key feedback shared through these conversations, Tekmetric has been able to provide excellent service and innovative solutions throughout this quarter, resulting in recognition from the G2 Summer Awards in these categories: Overall Leader, Best Usability, Most Implementable and Momentum Leader. In addition, Tekmetric was named the best auto shop management software by G2. This recognition is a significant testament to the support of each of you, your teams and the valuable insights you provide.
Aspiring To Inspire with Thought Leadership
For Tekmetric, customer relationships aren’t confined to the walls of a conference room. We also aimed to share the knowledge through webinars and conversations with industry outlets that sparked important conversations about what’s changing in our industry.
With our webinars, our aim is to help you uncover actionable insights that you can apply to grow your shop. Some of these conversations included our webinar, “Innovate to Elevate,” led by John Phelps, Director of Channel and Partnerships, where he talked about transforming the customer journey with the end goal of streamlining operations and boosting customer satisfaction. Similarly in our payments webinar, Phil Acree, Head of Payments covered the current state of consumer financing and how shops can enhance the customer experience regarding the payment process.
We also shared this knowledge through key industry outlets, so you can share and discuss with your team, including:
Future proof your shop exit strategy. P.J. Leslie, Director of Business Development, along with Matthew Schwab, owner of Clutch Automotive, shared tips to prepare your shop for the future and retirement by building a well-crafted exit plan so exiting shop owners can confidently step into the next phase of their lives, knowing they have set up a legacy for their shop.
Strategic use of evergreen and real-time data. We also published an article with Vehicle Service Pros titled, “Using numbers to supercharge your shop’s performance, where we discussed how to use real-time and evergreen data to expand your shop.
As we leave an upbeat Q3, Tekmetric continues to keep its eye on the finish line for this year: helping shops enhance the customer experience through product innovation. We are very proud that our commitment to a two-way relationship with our customers has been the driving force behind every improvement and our collaborative approach with other leaders in the industry enables us to build a steady foundation for continuous innovation. We aim to continue measuring up as we enter the final quarter of 2024.
While it’s important to focus on customer service and providing reliable repair work, your shop’s entire repair process, from beginning to end, should be consistent. If your shop has stellar processes for greeting customers, writing estimates, selling work, and completing work, you can stick the landing with a solid check out process.
If done the right way, your shop’s invoicing process will enhance the efficiency in your shop while leaving a positive, lasting impression on customers.
The invoices your shop hands out are a representation of how transparent your shop is. Your customers will gain visibility into exactly what they’re paying for. And the more they can understand an invoice, the more they can answer the question we’ve all asked ourselves when we’re customers, “Okay, what am I paying for?”
So, why not end on a strong note? Make your shop’s customers feel more at ease with easy-to-understand invoices.
Here are four ways to simplify your shop's invoicing process.
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