Charging for the use of diagnostic equipment may be easier than some bosses realize. Here's one service shop owner's approach on a particular piece of shop gear.
For years, I have argued that tire dealers and service shop owners should charge for using modern test equipment during a diagnosis.
Regardless of how many times I stress the point, owners and managers I meet claim that they cannot afford to do it.
These bosses are locked into the mindset that their labor charges must be something less than — but never equal to — those of the nearest new-car dealerships.
Sadly, they avoid discussing the actual cost of doing business at their particular facilities or the labor fees they should charge to cover that cost.
Remember that your business' ultimate goal is meeting or exceeding customers' expectations. The vast majority of prospects among the motoring public expect that your technicians will fix their cars correctly the first time — period. This is the very minimum they demand from you.
Meeting this expectation requires an accurate diagnosis of a vehicle's problem(s). More and more often, solving these problems requires modern test gear of one kind or another — not to mention competent technicians to operate it.
So, manpower and equipment are legitimate, unavoidable costs of doing business and meeting motorists' expectations.
Oftentimes, the clearest examples are the simplest ones. My pal Tip's approach to an equipment investment may be just such an example.
Tip is owner/operator of a traditional auto repair shop in the Rust Belt region of the country. This shop, which has been operating for more than 30 years, features modern equipment, epoxy-coated shop floors and central air conditioning.
By the later 1990s, Tip decided to invest in a smoke-generating machine. This device creates smoke with which technicians can pinpoint otherwise-elusive leaks in a variety of automotive components and systems.
After injecting the smoke into the system, the tech scans the work area with an inspection light, watching for telltale trails of smoke caused by a leak.
At that time, some owners and managers teased Tip about spending $1,900 for a smoke-generating machine.
For one thing, they underestimated his overall approach to equipment investments: Maximize the utility of each tester or machine by using it as often as practically possible. After all, practice is the way to learn the true range of a device's capabilities.
Their experiments quickly confirmed that the smoke could reveal a variety of leaks inside the engine's air intake system as well as the exhaust system.
It flagged cracked vacuum hoses and fittings and even located the source of various oil leaks. So, smoke checks became routine procedures at Tip's shop.
Before long, Tip instituted a $20 fee for use of his new smoke generator. In other words, $20 was built into customer's bill every time a tech used the machine. Later, he increased this fee to $25.
Colleagues, competitors and pals all joked about blowing smoke. Meantime, Tip found that the smoke machine was a potent, consistent profit-generator for two reasons.
First, it earned its own fee. Second, it boosted the techs' efficiency at pinpointing a wider range of automotive leaks — including those his competitors could not pinpoint.
Furthermore, no one ever complained about Tip's charge for fixing a vehicle correctly the first time.
Instead, they complimented him and his staff for effective, stress-free repairs. Simply put, blowing smoke helped Tip meet and exceed customers' expectations time and again.
Mind you, Tip's case is just one aspect or element of a much-larger topic: Calculating and covering the cost of doing business.
At the very least, his experience demonstrates how charging for equipment usages makes dollars and sense. Try it, you'll like it.