By Andy Fiffick, Chairman and CEO, MACS Worldwide, Owner, Rad-Air Complete Car Care , Cleveland, Ohio
This economy has driven every player into a price war. Pricing is on our minds every hour of every day. Foremost, what is wrong with the vehicle, and what kind of diagnostic time is involved to correctly find the root of a given problem? What do the parts cost us; how much should we mark them up? How long will it actually take to install the needed parts (real time, not book time), and what can go wrong to delay the installation? Will we need more diagnostic time once the initial repairs are made? Is the vehicle worth repairing; are we charging too little or too much? What should we charge?
Price is involved with everything we do in our shops every day and it is the key to being able to just survive or make enough money to pay your employees and yourself a respectable wage. Price will also determine your ability to buy new equipment, hire the best people, continue training, and grow your business, and hopefully, some day retire.
Talking to many of you during conventions and around the industry, it appears that our industry is afraid to make price changes and charge full fare for our services. Many of you tell me “we just can’t raise our prices” however none of you can give me solid evidence why we can’t. We want to be the good old shop down the street that always gives the customer a good deal. We would rather make less money than have the reputation of being pricey.
I think many of us got into the business because we love to work on vehicles. We never intended to manage a business and never had any business training. What we fail to realize is the real cost of doing business in today’s high-tech environment and the need to incorporate the costs into our price structure.
I believe the real answer to the problem is that we as an industry must change our image and demand more respect. We must start charging more for our services and paying our technicians a wage that is competitive in today’s market place. It’s no wonder we can’t attract bright and intelligent people into our industry. If we don’t make changes soon, we will all be out of business when the current generation of technicians retires.
The good news is that there is training available to us. Training is available at your local community colleges and in the aftermarket, often through advertisers in this magazine. You can also check with your own accountant and see what he recommends. I do know that we must charge a shop labor rate and appropriate parts markup according to our (your) own internal costs and needs, not $2.00 less per hour than your competition. Chances are, your competitor doesn’t know what to charge for their services either.
I believe that we in the industry must stop trying to beat each other up on price and start charging for our services according to what the market will bear and what our true internal costs are. We could learn a lot from car dealerships, doctors, lawyers and dentists. Additionally we must treat each other with respect and raise the bar for all!
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When having your mobile A/C system professionally serviced, insist on proper repair procedures and quality replacement parts. Insist on recovery and recycling so that refrigerant can be reused and not released into the atmosphere.
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The 33rd annual Mobile Air Conditioning Society (MACS) Worldwide Training Conference and Trade Show, Be the Best of the Best will take place February 7-9, 2013 at the Caribe Royale, Orlando, FL.