Chris Collins and Chris Jones explain why percentage-based labor matrices backfire on long jobs. They recommend building a matrix from actual job data instead, targeting the sweet spot where you keep your most common repairs competitive without leaving money on the table.
Welcome everybody to your Friday drive by on Service Drive Revolution where we answer your questions. I'm Chris Collins and this is Chris Jones.
Hello, everyone.
Funny guy, funny guy.
Chris Jones had some good jokes lately.
So here's how it works. You call in, you ask your question, and then we answer your question. And if we do answer your question, because we don't answer every question, sometimes they're a little weird or a little.
Off topic or not questions, statements.
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Coffee cup is my favorite mug or cup mug. It's a mug. I call it a cup. That's probably a Midwest thing.
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Open up notes on your phone, whatever it is. No, you can write on your hand or whatever.
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Yes, my question is we are a used car lot that has two service departments and realize it uses dealer management system similar to a new car dealership. Because at one time we did have a new car dealership and lost it in 09. Thank you, GM. So anyways, I've since discovered that there is a labor matrix built into this system and wanted to know what would be a fair way to set that up as far as in what increments, up to what total labor time would you increase the labor through the matrix? Thank you. Taking time to listen to this and answer my question.
So I think I've fallen out of love with labor matrixes that just go up by percentage.
Let's call that the escalator matrix.
Fallen out of love with escalators because.
In a given month.
Most of the time you don't have a ton of jobs that are 12 or 15 hours. But at 12 or 15 hours, your labor rate, like let's say, let's say your posted labor, it's 150. You might be at 210 or whatever on an escalator.
Right.
And so then what happens? Or what I've seen happen is those jobs that you don't do a ton of get shopped. Yeah.
You go so high that it almost seems silly.
Yeah.
Yeah.
So in our trading, we have a system where you do an audit and you strategically build a matrix. But we prefer to strategically do it. So we have an Excel spreadsheet in there and we kind of teach you how to go in and take data. You can do it manually and then fill it in.
Can we call that the sweet spot matrix?
Yeah, we like to find the sweet spot and then do it. So I'm not a fan of an escalator. If you do do the escalator, be conservative because you know, most of your, your labor jobs are in an hour and a half or two, two and a half. But you're not selling a ton of stuff at 12, even if you're doing a lot of heavy duty work.
You know what that reminds me of? Like, this isn't a joke. This is actually an analogy. It's like the escalator matrix reminds me of like if you max out on your bench press really high versus if you do a lot of reps at a decent weight.
Are you catching my analogy?
Good analogy.
Like, if you're proud of that one 15 hour job you sold in a month at $210 an hour versus you missed a whole bunch of stuff that you could have sold at 2.2 hours at a sweet spotted matrix. You end up being dollar wise and penny poor instead of pennywise and dollar poor.
Great. Okay, I think what should happen now is we should end on a joke. So you're going to tell the joke for the audience, the beautiful audience, best looking audience probably out there for any big show like ours. You tell the joke and then we're off.
Holy cow. So the only joke that I have, Total cutting room floor joke.
No dirty jokes, Christian.
Yeah, that's the problem. And this, this one's so funny they'll.
Have to wait until next time.
Yeah. But just know that they're out there.
We appreciate you tuning in and we will see you next time on your Friday Drive by for service. Drive revolution. Thanks for watching this week's drive by. I hope we g you something to think about over the weekend. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 Ask SDR and we'll answer your question on the show. That's 8333. Ask SDR for special deals on our books and training, head over to offers chris collinsinc.com now that's offers.chriscollinsinc.com I'm Chris Collins, and I'll see you in the next video.
