THA 110: Charging What We Are Worth

Your Learning Curve Never Sounded So Good

The Panel:

Mark Colaw has a passion for the automotive industry. He started working for the shop’s namesakes, Hastings, and Ida Seymour, as one of three people that knew how to run one of the new diagnostic machines. Mark eventually purchased Seymour’s Garage in 1985 and opened the current location in 1988. Mark is the founder of CarFest an important community program that brings the aftermarket and the consumer into a unified program to support the needs of the community. Find Mark’s other episodes HERE.

David Justice has been an auto care professional for over 30 years. He grew up in the family business working for his father. At, a young age David purchased his father’s business and went on his own. Over the years David had multiple Shell Gas stations. Find David’s other episodes HERE.

Tom Palermo is General Manager of Preferred Automotive Specialties in Jenkintown, PA. Tom is a world class Master Technician and a Certified ASE Advanced Level Technician, is certified from ASE including Master Auto, MasterTruck, Master Truck Equipment, Master School Bus, Master Collision, Master Transit Bus, L1, L2, C1, X1, P2, F1 Besides the 2015 NAPA/ASE Technician of the Year, Tom also earned the 2011 AAIA-ASE World Class Technician Award from the Automotive Aftermarket Industry Association, National Institute for Automotive Service Excellence, and the Best Tech of the Year award sponsored by WIX Filters. The majority of Tom’s business is fleets. Listen to Tom’s previous episodes HERE.

Key Talking Points:

• Are we charging enough for diagnostics?
  • What is your equipment and training worth?
  • You need to get paid for the skills you have.
  • You can’t compare yourself to the ‘free diagnostics’ places. You are a professional.
  • Find the confidence in your skills and abilities and charge for that.
  • Free advice is worth what you paid for it.
  • Discover your worth.  
  • Mark Colaw put an end to big box stores scan issue. He scans for free, however, he charges for diagnostics.
• We are educators and we need to tell people that so they see the value in what we charge. Have conversations with your customers.
• David offers a 10-minute preliminary inspection and would scan and pull the code and moves into a Level 1, Level 2, or Level 3 diag depending on the results.
  • This qualifies the customer.
• The labor rate spread in markets is too big.
  • Increasing labor rates can make huge improvements to a business.
    • Better pay and benefits
      • Attract a higher quality technician
    • Paid training for all
    • Stronger better systems
    • Improve equipment
    • Improve marketing
    • ASE certification
    • Plus many more…….
  • Labor rates are geographical and demographic driven.
    • Labor rates are too low in the industry.
• Shops cannot bad mouth each other. Fairness must rule.
  • Doctors or lawyers do not bad mouth each other. It is called professional courtesy.
• We need unity in the industry. We all benefit. Create a community.
  • Support each other with an idea exchange. Collaborate!
  • To help with any issues inside their business!
  • Tool exchange!
• Knowing your numbers, P & L and Cash Flow will help you understand what you need to charge and why.
  • Key performance indicators are important, however, how to improve them is the vital part of knowing your numbers.
  • Systems, Operations, and Procedures should drive your numbers that have the biggest effect on your business.  
• Educate your customer on the complete transaction and what they should expect from the warranty for the repair. There may be more to the repair then they authorized, so educating them will prevent any follow-up issue that may arise.
  • You could be dealing with a moving target at times.
• DVI
  • A picture is worth 1,000 words and can be worth $1,000. “David Justice”
  • Education and trust regarding safety and reliability.
  • You can eliminate comebacks or secondary issues when you use DVI’s for a complete review of your customer’s vehicle
  • It is an important system and process.
• Mark Colaw will not use canned follow-up language.
  • He requires his people to write down, on the work order, what he talks to his customer at the invoice delivery. No canned wording. Clear and concise not about deferred work. It is typed and in the digital version of the invoice.
• The perception of your business makes it ‘worth it’ to them.
• Don’t be afraid to charge what you are worth. You’ve invested a lot in your business and need to be paid for this.
• Mark Colaw’s core value:
  • Community
  • Education
  • Excellence
  • Integrity
    • Base everything on and off of this value.
    • You will realize what your worth is and will charge appropriately.

Resources:

• A special thanks to Mark Colaw, David Justice, and Tom Palermo for their contribution to the aftermarket.
• Books Page HERE
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