How much money is your auto repair shop making? Do you know the answer?
When you break down your numbers, you should be able to figure out your average repair order, or ARO. Paying close attention to each automotive repair order in your shop is critical. Your ARO will become the benchmark for your auto repair shop’s success.
Once you crunch the numbers and figure out your ARO, you might not be happy with the number. Thankfully, there are strategies you can implement to improve your ARO.
What Is ARO?
ARO refers to average repair order. This is the average amount you charge per order in your auto repair shop. Your ARO is an incredibly important number for the success of your business.
When you have an efficiently-run auto repair shop, and your parts and labor are roughly equal from one RO to the next, each auto repair should increase in value. When your auto repair shop measures your ARO, you will gain insights into your operation and begin to run a more consistent business. This will also help you maximize efficiency and profits.
Rather than depending on churning more vehicles through your bays, you can run a smarter operation. You’ll find the sweet spot to maximize time, efficiency, and profit. When you can increase the work performed on each vehicle, you’ll boost your ARO and bring in more revenue.
It’s not too good to be true. Here are three ways your auto repair shop can boost your ARO.
1. Use Digital Vehicle Inspections
You have to inspect every vehicle that comes into your auto repair shop. A digital vehicle inspection makes the process much easier for your service techs and also offers much more transparency for your customers.
Look at it this way — the majority of your customers aren’t “car people” and have to trust your auto repair shop to give them the repairs they actually need and not just scam them for profit. You can walk them through an inspection and it will go right over their head. Since they don’t know the language, they’ll turn to the internet which will give them terrible advice.
This likely doesn’t lead to them approving your recommended repairs.
However, if you have digital vehicle inspection software, your service techs will be able to use pictures and video to show your customers exactly what they’re talking about. They can show cracks, rust, wear, and parts that need to be serviced. This helps build trust and transparency with your customers and will lead to higher approval rates and less deferred work. Of course, this boosts your auto repair shop’s ARO.
2. Attract The Right Types Of Customers
You probably already know that there are discount customers and quality customers.
The discount customers are those who typically wouldn’t even approve a full inspection, negating the entire purpose of coming in for an oil change. They just want to get in and get out as soon as possible and operate under the assumption and deep hope that their car is never going to break down. Clearly, they won’t be willing to approve any kind of additional repairs.
Your quality customers, on the other hand, are those who understand the importance of fixing a problem before it inevitably happens. They know that this is how you keep your car running smoothly for years to come. When you have a tool like digital vehicle inspection software , you’ll be able to show these quality customers what kinds of repairs they really do need before things go wrong.
Attract quality customers and they’ll say yes more often, thereby improving your ARO.
3. Focus On Increased Productivity, Not More Cars
It might seem counterintuitive, but bringing more cars into your bays is not the answer to improving your ARO. Instead, focus on increasing the productivity of your auto repair shop.
When your auto repair shop has automotive shop management software to run your shop efficiently, you’ll be in a position to maximize your profitability and productivity.
So instead of filling your day with scheduled repairs every 15 minutes, spread repairs out a bit further and focus on providing quality service to high-quality customers. When you spend more time with each customer, you’ll find more upsell opportunities thanks to improved trust.
Improving your average repair order is perhaps the single best way to improve the efficiency and profitability of your auto repair shop. To do so, you’ll need the help of automotive shop management software, like Omnique.
See what Omnique can do for your auto repair shop and schedule a demo today!