Uploaded July 2026 | Updated September 2026, 1 week ago
Chris Collins addresses the big gap between posted labor rate and effective labor rate. The team pulls back the curtain on why so many shops posting a $200 door rate end up collecting an effective rate of barely $99 to $101—and why your effective labor rate should actually be higher than your posted door rate.
The guys break down the silent revenue killers, including hyper-busy, heavily discounted quick lubes that drag down your entire mix, treating all labor like "competitive" labor, and letting service advisors discount repair orders willy-nilly just to cash out a customer. We also expose the danger of unbuilt op codes, inconsistent labor times, and giving away cheap labor on fleet accounts when those fleet managers actually care far more about turnaround time than price.
Plus: The crew introduces "Robo-Hogi"—a hilarious, high-tech studio experiment to put Hogi in the room while he's remote—and discusses how shifting from struggle to strategy brings the fun back into running a dealership without destroying your personal life.
(Note: While this episode is pre-recorded due to the team traveling to Indiana, Hogi is heading straight into the SDR Live Academy on Zoom immediately after this broadcast to teach mindset and leadership!)
🔥 KEY TAKEAWAYS
- ELR Mastery: Why your effective labor rate can and should exceed your posted door rate, and the exact mindset shift needed to achieve it.
- The Quick Lube Trap: How high-volume oil change lanes at a zero or near-zero effective labor rate dilute your department's overall profitability.
- Desking Their Own Deals: The shocking reality of letting service advisors freely adjust ticket prices without fixed op codes—and why no General Manager would ever let salespeople desk their own car sales.
- The 4 Types of Labor: How mispricing competitive labor, maintenance, diagnosis, and repair labor forces your department to bleed gross profit.
- The Fleet Relationship Myth: Why fleet accounts value rapid turnaround time and reliable communication far more than cheap, discounted labor rates.
- Life Beyond the Drive: Overcoming the industry's high divorce rate and burnout by bringing strategy, systems, and shared family goals into your personal life.
FAQ:
What is Effective Labor Rate?
Effective labor rate (ELR) is the average amount a dealership actually collects for each labor hour it sells. It is calculated by dividing total labor sales by total labor hours sold.
ELR = Total Labor Sales ÷ Total Labor Hours Sold
Why is ELR lower than the posted labor rate?
The posted labor rate is the dealership’s stated or “door” rate. ELR reflects what the dealership actually collects after all pricing decisions, discounts, and adjustments.
How can dealerships improve ELR?
Improving ELR begins with identifying exactly where labor revenue is leaking. Dealerships should measure ELR by advisor, repair order, operation code, and pay type—not just as one department-wide monthly number.
0:00 Robo Hogy Joins the Show
1:50 Posted Labor Rate vs. Effective Labor Rate
3:10 Why Fixing Service Departments Can Be Fun
5:00 The Personal Cost of Service Department Stress
7:00 When Work Problems Follow You Home
8:15 Sharing Goals With Your Team and Family
10:00 How Strong Relationships Help Leaders
13:50 Communicating Stress Before It Becomes a Problem
16:40 Why Written Goals Make Everything Easier
17:40 Should Your Effective Labor Rate Exceed Your Door Rate?
19:30 The Industry’s 85% Labor-Rate Mindset
20:40 How Quick Lube Can Destroy Your Effective Labor Rate
21:40 The Four Types of Service Labor
23:15 The Hidden Problem With Maintenance Pricing
24:00 Why Advisors Shouldn’t Control Pricing
25:10 What If Salespeople Desked Their Own Deals?
26:40 How to Remove Advisor Discounting Permissions
28:00 Why Labor Gets Discounted Before Parts
29:00 Inconsistent Labor Times and Fleet Discounts
30:00 Fleet Customers Care More About Time Than Price
31:20 Closing the Labor-Rate Gap
32:00 Leadership and Mindset Training
32:40 Service Drive Revolution Academy
📞 GOT A QUESTION OF YOUR OWN? Call 833-3-ASK-SDR — we answer on the show!
Get special deals on our books and training at offers.chriscollinsinc.com!
#ServiceDriveRevolution #FixedOps #AutomotiveLeadership #ServiceManager #ServiceAdvisor #DealershipLife #CarBusiness #ChrisCollins #AutoIndustry #DealershipTraining #ServiceDirector #FixedOperations #BusinessStrategy #SDRAcademy #EffectiveLaborRate #LaborRates #RoboHogi
🛑 SDR Live Academy Online Training For Huge Results:
chriscollinsinc.com/op/sdr-live-weekly
🛑 Book your Profit Gap Analysis Now:
calendly.com/byron-webster/30min
🛑 Best Selling books on making Fixed Ops a money printer: chriscollinsinc.com/shop
🛑 Got a question?
Call us at 1-833-3-ASK-SDR
🛑 Want to work with the best?
chriscollinsinc.com/careers
🛑 Grab Chris' New Leadership Book I AM LEADER:
iamleader.com
Chris Collins addresses the big gap between posted labor rate and effective labor rate. The team pulls back the curtain on why so many shops posting a $200 door rate end up collecting an effective rate of barely $99 to $101—and why your effective labor rate should actually be higher than your posted door rate.
The guys break down the silent revenue killers, including hyper-busy, heavily discounted quick lubes that drag down your entire mix, treating all labor like "competitive" labor, and letting service advisors discount repair orders willy-nilly just to cash out a customer. We also expose the danger of unbuilt op codes, inconsistent labor times, and giving away cheap labor on fleet accounts when those fleet managers actually care far more about turnaround time than price.
Plus: The crew introduces "Robo-Hogi"—a hilarious, high-tech studio experiment to put Hogi in the room while he's remote—and discusses how shifting from struggle to strategy brings the fun back into running a dealership without destroying your personal life.
(Note: While this episode is pre-recorded due to the team traveling to Indiana, Hogi is heading straight into the SDR Live Academy on Zoom immediately after this broadcast to teach mindset and leadership!)
🔥 KEY TAKEAWAYS
- ELR Mastery: Why your effective labor rate can and should exceed your posted door rate, and the exact mindset shift needed to achieve it.
- The Quick Lube Trap: How high-volume oil change lanes at a zero or near-zero effective labor rate dilute your department's overall profitability.
- Desking Their Own Deals: The shocking reality of letting service advisors freely adjust ticket prices without fixed op codes—and why no General Manager would ever let salespeople desk their own car sales.
- The 4 Types of Labor: How mispricing competitive labor, maintenance, diagnosis, and repair labor forces your department to bleed gross profit.
- The Fleet Relationship Myth: Why fleet accounts value rapid turnaround time and reliable communication far more than cheap, discounted labor rates.
- Life Beyond the Drive: Overcoming the industry's high divorce rate and burnout by bringing strategy, systems, and shared family goals into your personal life.
FAQ:
What is Effective Labor Rate?
Effective labor rate (ELR) is the average amount a dealership actually collects for each labor hour it sells. It is calculated by dividing total labor sales by total labor hours sold.
ELR = Total Labor Sales ÷ Total Labor Hours Sold
Why is ELR lower than the posted labor rate?
The posted labor rate is the dealership’s stated or “door” rate. ELR reflects what the dealership actually collects after all pricing decisions, discounts, and adjustments.
How can dealerships improve ELR?
Improving ELR begins with identifying exactly where labor revenue is leaking. Dealerships should measure ELR by advisor, repair order, operation code, and pay type—not just as one department-wide monthly number.
0:00 Robo Hogy Joins the Show
1:50 Posted Labor Rate vs. Effective Labor Rate
3:10 Why Fixing Service Departments Can Be Fun
5:00 The Personal Cost of Service Department Stress
7:00 When Work Problems Follow You Home
8:15 Sharing Goals With Your Team and Family
10:00 How Strong Relationships Help Leaders
13:50 Communicating Stress Before It Becomes a Problem
16:40 Why Written Goals Make Everything Easier
17:40 Should Your Effective Labor Rate Exceed Your Door Rate?
19:30 The Industry’s 85% Labor-Rate Mindset
20:40 How Quick Lube Can Destroy Your Effective Labor Rate
21:40 The Four Types of Service Labor
23:15 The Hidden Problem With Maintenance Pricing
24:00 Why Advisors Shouldn’t Control Pricing
25:10 What If Salespeople Desked Their Own Deals?
26:40 How to Remove Advisor Discounting Permissions
28:00 Why Labor Gets Discounted Before Parts
29:00 Inconsistent Labor Times and Fleet Discounts
30:00 Fleet Customers Care More About Time Than Price
31:20 Closing the Labor-Rate Gap
32:00 Leadership and Mindset Training
32:40 Service Drive Revolution Academy
📞 GOT A QUESTION OF YOUR OWN? Call 833-3-ASK-SDR — we answer on the show!
Get special deals on our books and training at offers.chriscollinsinc.com!
#ServiceDriveRevolution #FixedOps #AutomotiveLeadership #ServiceManager #ServiceAdvisor #DealershipLife #CarBusiness #ChrisCollins #AutoIndustry #DealershipTraining #ServiceDirector #FixedOperations #BusinessStrategy #SDRAcademy #EffectiveLaborRate #LaborRates #RoboHogi
🛑 SDR Live Academy Online Training For Huge Results:
chriscollinsinc.com/op/sdr-live-weekly
🛑 Book your Profit Gap Analysis Now:
calendly.com/byron-webster/30min
🛑 Best Selling books on making Fixed Ops a money printer: chriscollinsinc.com/shop
🛑 Got a question?
Call us at 1-833-3-ASK-SDR
🛑 Want to work with the best?
chriscollinsinc.com/careers
🛑 Grab Chris' New Leadership Book I AM LEADER:
iamleader.com
