As a Service Advisor or Manager, you’re the vital link between customers and Technicians. Your ability to handle pricing, communicate effectively, and manage expectations can make or break the customer experience. Let’s explore some key strategies shared in a recent Service Drive Revolution discussion to help you succeed and boost your service department’s performance.

1. Setting the Standard for Parts Markups

“How much should we mark up parts?” is a question that frequently arises in the service world. The best-performing shops aim for a 50% gross margin. This means if you buy a part for $100, you sell it for $200.

Why 50%? This margin ensures profitability while covering the added value your dealership provides, like warranties and guaranteed quality. While dealer parts might require a slightly nuanced approach, sticking to a clear and consistent strategy simplifies the pricing conversation and strengthens customer trust.

2. Turning Diagnostic Fees into a Conversation, Not a Conflict

Addressing diagnostic fees can feel awkward, but it doesn’t have to be. Here’s how to navigate it with confidence:

• Shift the Focus to Solutions: Instead of leading with, “There’s a diagnostic fee,” emphasize the value. Say, “To figure out what’s causing the issue and fix it properly, we’ll start with a diagnostic evaluation. It’s $150 per hour, and we’ll keep you updated throughout.”
  
• Offer a Repair Authorization Instead: Many advisors find success framing diagnostics as part of a larger repair authorization. For example:
  “Let’s authorize up to $500 for this repair. If it’s going to be more, I’ll call you first.”
  This approach reduces resistance by focusing on the solution, not just the upfront cost.
  Learn more about using repair authorizations to simplify customer conversations and build trust
  
• Highlight Technicians Expertise: Position your Technicians as experts, similar to doctors diagnosing a patient. Their time and skill are valuable, and framing it this way helps customers see diagnostics as an essential service, not a hassle.

3. Elevating Your Technicians’ Value

Your Technicians are highly skilled professionals who invest years in training and thousands of dollars in tools. Customers need to see them that way too. Here’s how you can help:

• Make Their Expertise Tangible: Explain that your Technicians have specialized training and access to tools and resources that most independent shops don’t.
  “Our Technicians are factory-trained, and we have manufacturer-specific tools that ensure your car gets the best care possible.”
  
  
• Project Confidence: Customers pick up on your confidence (or lack of it). If you trust and value your Technicians’ abilities, customers will too. This confidence can be a game-changer when discussing costs or addressing concerns.
  

4. Turn “No” Into Commitment

When a customer hesitates about diagnostic costs, involve them in the decision-making process. For example:
“Our diagnostic rate is $150 per hour. How much time would you like us to spend identifying the issue?”

If they suggest something unrealistic, like five minutes, guide them with:
“That’s probably not enough time to find the root cause. An hour is typically enough to get us started, and we’ll keep you informed.”

This approach gets the customer to actively engage and agree, reducing objections later.

5. Respecting the Time, Tools, and Expertise Behind the Work

It’s easy to overlook all that goes into solving a customer’s problem. Share these insights to reinforce the value of your services:

• Factory-trained Technicians and specialized tools.
• The significant investment in maintaining a modern shop.
• The reality that most people lack the skills or equipment to fix these issues themselves.

Help customers understand: solving their problem requires expertise and resources, and that’s what they’re paying for. Respect for your Technicians’ time and resources creates a ripple effect that builds trust and loyalty.

The Secret Sauce: Confidence

Ultimately, your confidence is contagious. When you present diagnostic fees or repair authorizations as logical and necessary steps, customers are far more likely to accept them. Positioning your Technicians as the experts they are helps your entire team shine and builds trust with every interaction.

Achieving and exceeding your goals is possible—when you have the right systems in place! With Service Drive Revolution OnDemand, you’ll gain access to the proven systems that have made thousands of SERVICE MANAGERS IRREPLACEABLE. Start transforming your department today!

If you want to implement these strategies in your Service Department, let’s talk. Book a 15-minute strategy session with our team. We’ll explore how to unlock your Dealership’s real value.