You hear about labor rates, rising costs, and a ceiling for how high labor rates will reach. It’s all fine and dandy…unless you’re the front-line person, the service advisor, who has to sell it. And that’s the position I’m coming from.

I spent more than a decade at the service desk, selling maintenance and repairs to customers. I get the challenges – I faced them every day. And one of those challenges was dealing with pricing that I had a hard time justifying to myself, let alone the customer.

How It Started

When I started in the automotive industry in 1999, we sold oil changes for $29.99. That’s Canadian dollars, so approximately 25-30 percent higher than American pricing would be. Pricing steadily crept up, two or three dollars at a time, until it reached $40 for an oil and filter change in just a couple years. And that’s probably fine, but it’s not the only price increase that happened.

The labor rate jumped in the same period from $68 to $80, and that felt like it was overnight.

But time passed, and rates continued to climb. More than a decade later, working the service desk at a domestic store, the rate increased to $130, then higher yet. The same customers were paying nearly double the labor amount in just over 10 years, and it was nibbling away at my conscience.

That’s when I began to prequalify the estimates I’d get from technicians, and prequalify the customers before selling their maintenance at check-in.

• An older, assumedly fixed-income senior might not get a wholehearted effort to sell an oil pan leak.
• A fleet customer might not be recommended everything from the maintenance menu.
• A young mom with two kids in tow may not get the full effort to sell a brake fluid flush along with the brake job, or the leaking shocks might be soft-sold for the next visit instead of right now.

At times, I couldn’t justify the cost of the repairs and service. It’s not that I didn’t believe in the products, just the price tags associated with them. I couldn’t perceive their value. If you ask your staff, you’ll probably find at least one in the same position.

But It’s Not Up to You

It’s one thing that helped me get back my ability to sell. My perception doesn’t matter. It’s the customer’s perception that counts. And on that point, you don’t need to justify your labor rate to yourself. And not even to the customers.

Whatever your labor rate is, that’s what it is. It’s bound to climb higher yet. So here are three points that can help your front-line staff with their sales approach when labor rates and service pricing feel too high.

The Customer Won’t Do It If YOU Don’t Sell It

98 percent of your customers don’t know what they need to keep their vehicles properly maintained and in good repair. It’s your job to tell them. It’s an informative position as much as it is sales. You must ask for the sale because a customer won’t wave cash in your face and demand you spend it for them.

Whether it’s maintenance or repairs, dutifully explain a customer’s needs in full, not stopping short of asking for the sale. Give them the opportunity to say yes, even if you think the answer will be no.

Understand and Explain the Value in Your Service

Another shop might be a little cheaper but the customer is at your store. Part of the value is a time savings – is it worth it to your customer to drive home, make another appointment elsewhere and be without a vehicle again?

You can also explain that your warranty is better, the staff are reliable, the manufacturer stands behind their product… these are of perceived value with the customer sees them.

You Can Pay for the Best Staff to Stick Around

Anyone in the industry has seen the high rate of turnover. Good advisors and technicians are like nomads, going wherever the work happens to be. But when they’re paid well, they don’t look around; they stay put. And the gross profit from labor rates allows for employee retention.

Whether you use it to personally justify the rates or you explain it to customers, slightly higher labor rates mean the best possible staff and repairs can be hired and kept. And that means your own position. When you sell the labor rate, you’re selling your own value.

Notice one thing: there’s no contingency for discounting based on labor rates or high pricing in general. It shouldn’t be the reason for discounts – ever! We’ll get into discounting next time…