AKRON (Oct. 28, 2002)—Does your tire dealership perform automotive services? If so, service personnel must be prepared to do more straight diagnostic work and do it profitably. Here's why.
In my last column, I cited Robert L. O'Connor's argument that bosses should attract technicians to diagnostic work by paying them double the normal hourly rate. A former service shop owner, Mr. O'Connor, widely known as one of the sharpest automotive management consultants and specialists in the country, operates Seattle-based R.L. O'Connor & Associates.
Many of the owners and managers I respect the most are disciples of Mr. O'Connor and participants in his Bottom-Line Impact Groups. These bosses run consistently healthy businesses in which charging for diagnostic time is the norm rather than the exception.
What's more, visit these businesses and you learn that diagnosing and fixing vehicles correctly the first time is the foundation of their hard-earned reputations in their communities. In other words, they can do a great deal more than skim the gravy off the service market via menu-priced, quick-turn-around services.
Whereas some auto service facilities gamble that selling a “tune-up” or “underhood service” will solve a motorist's complaint, these reputable shops actually diagnose the root cause of the problem and fix it. And they do it profitably. They're attracting a loyal following of motorists who want their vehicles fixed correctly the first time. Amen to that!
To recap briefly, Mr. O'Connor asserts that when all elements are in place, a good service shop can charge enough for diagnosis to accomplish two vital goals: First, compensate for the fact that many diagnostic jobs don't generate legitimate parts sales and the accompanying profits. Second, attract good techs to diagnostic work by paying them handsomely to do it.
If nothing else, Mr. O'Connor is a pragmatist. Accomplishing these two goals, he explains, may mean charging in the range of $125 to $175 for fundamental diagnoses. The important thing is that experience shows there's a core of motorists who realize that ultimately, an accurate diagnosis is a bargain at that price. They realize that the real effort is spent identifying the problem and that means diagnostic time. Pay for valid diagnostic time up front or be penalized with needless parts replacement later.
Finally, these consumers realize that there are a relatively small number of service facilities out there that actually diagnose instead of just guess.
Furthermore, Mr. O'Connor maintains that a changing marketplace will force many owners and managers to update their outlook on diagnostic jobs. All my experiences out in the field also support this prediction. You see, factors such as longer factory warranties and more-sophisticated vehicle technologies are reducing the total number of repair and maintenance opportunities.
For example, service shops will be replacing timing belts and water pumps less frequently than in the past. They'll be replacing fewer ignition parts because much of the traditional ignition system is gradually disappearing. Even the old mainstay of maintenance, the spark plug, is lasting substantially longer than it used to last.
Another disappointing aspect of the marketplace is the fact that many competent technicians are leaving the industry because they can't find an employer who'll pay them what they're worth. These are the bright and eager techs who are tired of brake jobs and oil changes. They'd rather be diagnosing driveability, electrical and emissions problems because diagnostic work enables them to use their brains more than their backs.
The challenge of diagnostic work is what keeps these techs revved up and literally makes them look forward to coming to work in the morning. But if they can't make decent money diagnosing cars, why wouldn't they move to other, less-stressful service industry jobs?
I agree wholeheartedly with Mr. O'Connor that money talks. If you want to keep your best technicians and groom them into the diagnosticians of the future, you're going to have to pay them accordingly. To do that, you have to charge accordingly. The day of cheap-cheap is fading fast.
Straight diagnostic work is something that will only increase by leaps and bounds.