1) Price Competitively

Understand your market; know what your competitors are charging for similar services.  Simple research techniques that are easy to put in place – look at competitors’ ads on a weekly basis; do some mystery shopping once a month to get an idea of what types of services and promotions they offer.

2) Maintenance Bundles

Use oil changes and basic maintenance services as “loss leaders” to bring customers in and increase your service department efficiency.  Utilize maintenance bundles – don’t just rely on manufacturer recommendations, but provide your customers with dealer-recommended options as well.

3) Shop Supplies and Taxes

Depending on what state you operate in, you may be able to pass along certain fees to the customer.  When appropriate, be sure to include shop supplies charges, hazardous waste fees, miscellaneous fees and all applicable taxes.  These items often are overlooked and can eat away at your profit.

4) Variable Labor Rates

Simpler repairs and maintenance services must be priced in line with your competition.  More advanced repairs such as engine, transmission and electrical work can be priced differently.  Most “Quick Lube” establishments will not be able to complete these types of repairs as they require a different level of expertise or specialized equipment that often is only available at franchised dealerships. Also, evaluate the makes and models of cars you are servicing.  For instance, repairs on a Chevy Malibu are less intricate than those on a Corvette.  Set you service pricing accordingly for models that require more highly skilled technicians.

5) Grid Pricing

Use grid / matrix pricing and be sure to test escalation rates.  Verify that all cent amounts will be “.88” or “.99” – with exception of the 1.0 hour rate.  These additional cents really add up.  Try to avoid using too many grids as they become cumbersome to manage.