A few times a year, auto repairer slash diagnostics guru James Dillon, opens his workshop in Somerset to a small group of like-minded repairers for a training lock-in. But what goes on after the roller door shuts? In this series of articles, we bring you the secrets of one of the UK’s top automotive repairers, in his own words. First up, how to profit from diagnostics…
One of the biggest issues we all face is getting paid for this diagnostic stuff. While charging out the labour time for mechanical repairs is fairly easy, charging out your time for diagnostic repairs is actually quite difficult. There is a link between these two tasks – an intrinsic link – and I’ll try and explain what that is.
If we look at the two very pretty pie charts, the one on the left indicates the bulk of a mechanical repairer’s workshop process. So, for instance, if you have a customer come to the door with a car that has a problem, maybe the clutch has gone, he will say the car doesn’t seem to be pulling like it used to. In technician mode, we will get our diagnostics hat on. We’ll go out to the car, pull the hand brake up so it touches the windscreen. We will leap in, we’ll let the clutch come up and when it touches the dash board, OK yes, there’s definitely a lot of travel on the clutch. It’s not biting and it looks like the clutch has gone. So, from your diagnostic process – because that is diagnostics, you are looking at some data and evaluating it critically to come up with a conclusion – you have concluded that the clutch has worn. Proportionally you have probably spent a very small amount of time doing the diagnosis and now you have a whole heap of time doing the mechanical repair, probably four or five hours. Do you ever charge the customer for your diagnosis of the worn clutch? Of course not, because you have sold a ton of labour, so they can have the diagnostics for free. We are going to make some money on the mechanical job.
Imagine the same customer comes back six months later. They say that every once in a while my car does this, it’s really, really annoying and I want you to have a look at it as you did such a good job on that clutch. The customer thinks you’ll give your diagnostics for free, because you did last time. However, the proportion of diagnostics versus mechanical repair is now completely reversed. With a difficult intermittent and drivability job, your diagnostics represents the bulk of the work. As much as 80% of the time you spend doing this new job will be working out what’s wrong, yet you have a very small percentage required of your mechanical time to fix it. After you spend 10 hours on that job and you find the little wire that’s gone under the battery tray chaffed through that, every once in a while on a wet Wednesday touches through the battery case giving it the stutter, well the fix is going to cost you about £3 and a bit of insulation and repaired wire. But the diagnosis time? Four days of pain and anguish spent finding the fault.
So now we have a challenge in our mind, because we go back through that and try to justify how we are going to charge the customer that money for the diagnosis. I can guarantee, most technicians will look back and decide that they can’t charge four days on that job, it was only a wire that was run through. So they end up discounting the time they spent and end up not making any money on the diagnosis. Am I right? Well there are a couple of things we can do to avoid that.
Fixed price assessments
Understanding and setting some expectations with the customer is important. The problem with diagnostics is, when a customer comes to your workshop they only want answers to two questions, how long and how much? The rest of it may as well be up to the fairies, as the customer isn’t interested. The problem we have as a technician is, the two answers you cannot give at the start are the ones they want answered, so straight away we have a clash. The second answer depends on the first answer and we don’t know that yet.
Maybe a different way of thinking about it is to set some parameters. The customer is only asking how much because they are worried about you spending a ton of money on their car. One technique is to set an informal budget with the customer. We in the workshop do this with a basic charge, so to get their car into our workshop costs the customer £72. The customer may say that the garage down the road only charges £35 but surely they’ve already been there to know that, so presumably that garage couldn’t or wouldn’t do it.
This agreement of £72 gives me enough time to have a proper look at the car. I can establish what’s likely to be wrong. However, there are two further benefits for me. Firstly, it gets rid of all the jokers. The people who don’t want to spend any money or who reckon they can’t leave the car with you for more than two minutes. Secondly, having a price that’s realistic will filter out all of the jobs that you would never want to do. Some of those jobs that come into the workshop, you’d have been better sticking £50 down the toilet and it would have been more fun to do! So actually, the £72 sounds expensive but it is a useful filter.
Is diagnostic work difficult? Yes. Does it involve lots of resources? Yes. Is it therefore expensive to execute? Yes. So when the customer says they want it cheap, it’s not possible because you can’t do a good job with complicated equipment and components cheaply.
Tools for change
- Offer a fixed price assessment for a given time slot
- Do the initial investigation
- Report back to the customer
- Agree a cost not to be exceeded for further work
- Be brave enough to turn a customer away if the relationship isn’t ‘win win’
In the April issue of autotechnician (request your free printed copy here), James helps you to bust the myth of the magic box… and explains how a quick game of ‘win-win or no deal’ could help you and your customer get along better.
If you can’t wait until then, take a look at www.techtopics.co.uk where you can find out more about the following courses:
March 2016 Sat 5th Can and In-vehicle Networking Mon 14th to Fri 18th Diagnostic Bootcamp (5 days)
April 2016 Fri 8th and Sat 9th Petrol Diagnostics and Diesel Diagnostics (2 days)