Silverstein: Maximizing Yield: The 300% Rule

Feb. 8, 2024
Does this popular industry-wide method of doing business need reconsideration?

There have been many impassioned discussions about the 300% rule on online forums lately. For those who may be unfamiliar, the 300% rule in its simplest form is:

1) 100% of those vehicles presented for service/repair are to have a multi-point inspection performed with an emphasis on those items critical to safety, reliability, and efficient operation. Some shops also include cosmetic repairs as well that they sublet out. This rule has its genesis in two ideas:

A) We as automotive experts have a moral and professional obligation to perform a multi-point inspection because it's generally accepted that most consumers do not have the expertise, experience, or ability to evaluate the condition of their vehicle in those areas. This is the public face of the multi-point inspection.

B) There’s a  private face that is seldom discussed with the public and for good reason, it reeks of conflict of interest. We operate a business and that multi-point inspection is a profit center.  It’s no secret that one of the most frequently heard complaints from vehicle owners is that shops are “finding things to upsell.” If you’ve ever been to a family gathering, you’ve most certainly heard someone complain “I went to the shop for an oil change, and they came out with a list for thousands of dollars worth of work. All I wanted was a damn oil change.”

2) 100% of the results of the multi-point inspection, as well as the steps necessary to remedy the customer's initial complaint(s), are used to create an estimate to be discussed with the customer. 

3) 100% of the estimated items are to be presented to the customer with the remedy to the original complaint being presented first, followed by safety, reliability, efficiency, and in some cases, cosmetic issues. 

The 300% rule is often paired with a DVI (Digital Vehicle Inspection). The technician may take photos and videos which are then annotated with explanatory notes to help the customer understand what they are seeing. It’s an effective sales strategy. Research has shown that approximately 65% of the general population may accurately be classified as “visual learners.” This means seeing information helps them to understand and retain what is being presented. The estimate usually accompanies the DVI results as well and is usually sent via text. The concept isn’t new. Older shop owners have been doing this for years by attaching photos and videos to email. The difference now is instead of emailing, texting is frequently used. 

In principle, I have no objections to performing a multi-point inspection and then presenting the results of that inspection to my clients. I think it important that they are apprised of the condition of what is typically their second or third most expensive expenditure following the purchase of their home and college education for their children.

What troubles me about the 300% rule is the execution and rigid adherence to a procedure without context. Exceptions to the rule must be made in the best interest of efficiency and productivity, but to speak of such things is considered to be heresy among some of its most devoted advocates. Such exceptions include but are not limited to:

1) Sublet work for a body shop on an insurance claim. Anything not related to the accident will generally not be covered.

2) If work is subcontracted  to your shop from another shop for a different issue and you call the vehicle owner to make recommendations And if you call the shop that sublet the work out to you and tell them, it's almost a sure bet that they will want to perform the work themselves.

3) If the customer returns within days or a short period of time as defined by the shop since the last visit. Performing anything other than a visual inspection of the tires to ensure that they haven't been punctured or damaged since the last visit can negatively affect productivity and shop efficiency.

4) Presenting an estimate on numerous occasions of non safety related items when that customer has repeatedly declined that work can be rightly perceived as pestering them and may damage the trust that owners work so diligently to earn. 

Lastly, Performing a courtesy inspection or creating a DVI must happen only with the vehicle owner's explicit approval. Just because they brought the car to you does not automatically grant you the right to perform that inspection. It's their property to do with or not do with as they see fit. Whether you want to perform their requested work, or even have them as your customer if they refuse, is a different discussion for another time.

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