Why Price Doesn't Matter: The Truth About Labor Rates
March 27, 2018
At the 2017 Ratchet+Wrench Management Conference, Ron Haugen led a session called “Why Price Doesn’t Matter: The Truth About Labor Rates,” which aimed to give attendees a better understanding of the labor rates on which the industry focuses.
Ron Haugen has owned and operated Westside Auto Pros in Des Moines, Iowa, for 20 years, having grown the operation from a humble, four-bay shop into a 14-bay model of efficiency that has garnered numerous industry and local business accolades. Haugen, an Automotive Management Institute-certified trainer, also works with fellow shop operators on workflow, customer management, and leadership issues as a consultant.
At the 2017 RWMC, Haugen led a session called “Why Price Doesn’t Matter: The Truth About Labor Rates,” which aimed to give attendees a better understanding of the labor rates on which the industry focuses. He explained that small increases in labor rate ($15 per hour) have no impact on a customers decision to agree to a sale, but have a major impact on shop profitability over time. A labor increase of $15 per hour on services other than oil changes and diagnostics can earn your shop more than $43,000 of additional profit each year.
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