You've likely heard the term ARO, or Average Repair Order, often, but what exactly does it mean? In this blog, you'll learn what ARO is, how to calculate it, and proven strategies to increase your shop's ARO. Understanding and improving your ARO can lead to higher revenue, better customer satisfaction, and a more efficient shop operation. 

• What is ARO?
• Why is ARO Important?
• How to Increase Your ARO
• Conclusion

What is ARO?

ARO (Average Repair Order) is a key performance metric that measures the average dollar amount a customer spends per visit at your shop. It is one of the most critical indicators of business health.

Why is ARO Important?

1. Revenue Growth: A higher ARO means your shop is maximizing the value of each service visit, leading to higher overall revenue.
2. Operational Efficiency: Increasing ARO allows your shop to generate more profit without increasing car count
3. Customer Satisfaction & Retention: When customers receive comprehensive service recommendations, their vehicles are properly maintained, which increases trust, safety and encourages repeat visits. 
4. Profitability: A higher ARO allows for better profit margins, enabling you to invest in better tools, training, and technology for your shop.

In short, improving your ARO helps your shop generate more revenue without increasing the number of customers. 

How to Increase Your ARO

Increasing your ARO doesn't require pushing unnecessary repairs on customers. Instead, it's about offering valuable services and educating customers on their vehicles' health. Here are some proven strategies to boost your ARO:

1. Perform Comprehensive Digital Vehicle Inspections (DVI)

Using  Digital Vehicle Inspections (DVI) with photos and videos helps customers visually understand the condition of their vehicles and increases the likelihood of approving additional repairs.

2. Improve Service Advisor Training

Your service advisors play a crucial role in increasing ARO. Ensure they are well-trained in:

• Educating customers on necessary repairs: Your service advisors should be viewed by the customer as trusted, professional advisors not as pushy sales people. Ensure your Service Advisors focus on educating the customer on the pros and cons of performing each recommended repair and that they enable the customer to make the final decision on what work to approve. 
• Communicating the value of preventive maintenance: Some of the most commonly declined jobs include air filter replacement and shocks/struts. Ensure that your service team understands the importance of recommending these necessary maintenance items so that the value is communicated effectively to the customer.  
• Building customer trust through transparency: Encourage your Service Advisors to engage in open, honest dialogue with customers. This can be facilitated by using digital vehicle inspections with photos and videos to clearly explain each repair recommendation and provide detailed, upfront estimates that break down costs. 

3. Bundle Services for Added Value

Offer service packages such as:

• Brake Service Package (pads, rotors, fluid flush)
• Oil Change + Tire Rotation + Inspection
• Fluid Flush Packages

Bundling services can increase ARO while providing customers with better vehicle maintenance.

4. Optimize Your Pricing Strategy

Review your labor rates and parts pricing regularly to ensure they align with industry standards. Small price adjustments on high-volume services can significantly boost ARO.

5. Educate Customers About Preventive Maintenance

Many customers delay repairs due to a lack of understanding. Educate them on how preventive maintenance saves money in the long run. Use visuals, brochures, and digital reminders to highlight recommended services.

6. Streamline Scheduling for Higher-Ticket Jobs

If your schedule is filled with low-revenue services, it may be time to prioritize higher-ticket repairs. Use  workflow automation tools to balance your workload by allocating time for more profitable jobs, such as timing belt replacements, suspension work, and diagnostics.

7. Offer Financing Options

Many customers hesitate to approve expensive repairs due to budget constraints. Offering  financing solutions or buy-now-pay-later options can increase service approvals. 

8. Leverage Technology & Automation

Use a  Complete Shop Success Solution to track key metrics, send automated service reminders, and improve workflow efficiency. A streamlined process ensures that more repair opportunities are captured.

9. Enhance Customer Experience

Happy customers spend more. Provide excellent service, offer shuttle services or loaner cars, and follow up with  personalized messages. A great experience leads to repeat business and higher repair approvals.

Conclusion

You can increase your shop's ARO by implementing Digital Vehicle Inspections, service advisor training, bundling services, financing options, and technology automation while maintaining customer trust and providing outstanding service.  Schedule a demo to learn how a Complete Shop Success Solution will take your shop to the next level.