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What
is Your Effective Labor Rate?
This
is The Most POWERFULL Number For A
Service Manager To Understand &Control Daily!
WHY?
BECAUSE
IT HAS NO ADDITIONAL COST OF SALE!!
EVERY
EFFECTIVE LABOR RATE DOLLAR FOUND IS
"PURE
NET PROFIT!!"
A
Customer Pay ELR improvement of Just $3.00 Is Worth
$1000's EVERY MONTH,
Because it is multiplied by EVERY CP- HOUR SOLD THAT
MONTH,
Let
Me Repeat That,
Because
It Is Multiplied By EVERY CP-HOUR SOLD THAT MONTH!!!
Stop
And Think For Just A Minute What A $5.00 Increase In
CP Effective Labor Rate Would Mean To Your NET PROFITS
Over The Next 12 Months or Over The Next 3 YEARS!!!
Simply
Put, Effective Labor Rate Is A Measure Of How Effective
Your Service Department Is At Selling Labor Hours VS
The Posted Or Stated Labor Rate. ELR Can Be Calculated
On Warranty, Internal or Customer Pay Labor, or all
three. It Can Represent 1 Repair Order or A Years worth,
Really Any Time Frame Or Batch Of RO's You Choose.
The Formula
is :
LABOR SALES
DOLLARS ($) ÷ FLAT RATE HOURS PAID TO TECHNICIANS
EXAMPLE FOR A WHEEL BEARING REPAIR THAT PAY'S 1.5 HRS
AND SELLS FOR $112.50 (LABOR ONLY)
$112.50 ÷
1.5 = $75.00 EFFECTIVE LABOR RATE
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