This month's article was written with the help of Coach Eric Twiggs.
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By now, there is a good chance you have indirectly experienced life and/or death — the new life of a child or the death of a family member or friend. It certainly has a lasting effect on us and many times it actually changes the way we look at things in our life. The worst experience I have personally faced was the slow death of my mom. It tore me into little pieces and even though it only lasted six months, it felt like an eternity to me. Many of you have experienced much worse, haven’t you?
In my 40 years plus in the automotive business, the one thing that still tears me apart is the slow death of an automotive repair shop. I still take it personally when it happens on my watch or even when I was not involved in helping that owner with their business. Raising prices to stabilize margins to enable you to operate successfully in whatever type of business model you have chosen can be life or death.
This month I am proud to bring you one of the best explanations of this life or death experience from Coach Eric Twiggs. I have heard every argument and witnessed every possible scenario on this subject; but I have never in all my years seen any more common sense written on the subject than this article by Eric. So I am proud to offer you our latest parts pricing matrix for those of you who were never sold on its implementation.
“I’m losing business because of your parts pricing matrix!” This is what a shop owner named Rich told me during our weekly coaching call. Both his car count and average repair order (ARO) were down from the previous year.
The shop is located in a rural section of the country with a high unemployment rate and low median income. The most expensive dealerships in Rich’s area had a labor rate of $73 per hour.
These factors led Rich to believe he couldn’t implement the parts matrix that he learned about while attending his ATI classes. When I would remind him of what he was taught on the topic, his response was always the same: “My shop is different!”