Is Your Warranty Labor Rate Dragging You Down?

brenda trackwell newsletterWhen was the last time you reviewed your warranty labor rate? Is it representative of your retail rate? Many manufacturers give an annual labor rate increase to support market trends. There are some very important steps to be successful with a labor rate increase. Before you begin the long complicated process of requesting an increase it’s important to consider what you’re charging for retail repairs. Is your retail pricing menu structured effectively? Will your staff follow a retail pricing plan once it’s been established?

If you aren’t charging accurately for retail repairs you won’t have a strong effective labor rate to complete a first-rate application. If your effective labor rate is below your warranty rate it’s quite possible you’ll end up with a labor rate decrease from the manufacturer. With that in mind, effective menus along with a consistent pricing structure will increase your customer retention. Buy-in from your team earns trust which builds customer loyalty. The return from effective menus and customer pay pricing structure will pay off year after year.


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