Raise your rates, coaches urge shop owners

With a severe shortage of automotive technicians, there’s one good way to attract more to the industry and to your shop, according to a pair of coaches: Pay them more.

And you can pay them more by charging your customers more.

“The whole industry, we’re short a couple hundred thousand technicians and we’re not attracting them,” lamented Cecil Bullard, CEO of The Institute for Automotive Business Excellence.

He was speaking at AAPEX 2021 alongside Vik Tarasik, managing partner of Shop Owner Coach, as part of the Shop Coach AMA (Ask Me Anything) panel.

How do shops pay someone as little as possible and expect them to want to stay in the industry, Bullard wondered. He recalled a shop paying someone out of high school $8.50 an hour — which may have been below legal requirements at the time — and there would be an expectation that they would become a technician. Then some shops will pay a master technician $25 an hour, which he called too little. Many master technicians are asking for $60 an hour.

“And, frankly, they should be paid $60 an hour,” Bullard said on the AAPEX Stage at the Sands Expo in Las Vegas. “But most shops can’t afford that. They can’t make that work because our prices aren’t high enough. As an industry, we needed to go up 30%, five years ago.”

“The top-performing shops have no problem charging what they’re worth because they value themselves.”

Shops can raise their rates $10-$20 an hour and few customers would notice. Even for those who do, it’s unlikely it would be enough for them to walk away from your shop, Bullard emphasized.

“Other than the cheapest customer you have that won’t ever let you make money, who you don’t want to be talking to anyway,” he added.

Tarasik agreed. Too many shops are hesitant to even raise their rates $5. But you just need to look at high-performing shops that charge higher rates and don’t face backlash from customers.

“The top-performing shops have no problem charging what they’re worth because they value themselves,” Tarasik said.

The customer trusts you to do the work. That trust isn’t predicated on the dollar amount you charge, he added.

“What we have to break down is: [The shop owner] want to be the customer’s friend. That’s where that $5 comes in,” Tarasik said.