If you’re looking to grow your automotive repair business, there’s one KPI that you must be tracking closely: Average Repair Order (ARO). It’s more than just a number—it’s a window into your shop’s profitability, efficiency, and customer trust.
At Repair Shop of Tomorrow, we help shop owners go beyond the basics, and ARO is one of the most important indicators of success.
What Is ARO and Why Does It Matter?
Average Repair Order (ARO) is the average dollar amount a customer spends per visit. But don’t be fooled by its simplicity—this one metric tells you a lot:
- Profitability: A higher ARO means you’re performing more services per vehicle, increasing both revenue and margins without needing to see more cars.
- Operational Efficiency: Increasing ARO helps you make the most of each visit, allowing you to reduce car count while still meeting revenue goals.
- Customer Value & Trust: A solid ARO indicates customers trust your team to perform necessary and preventative services, leading to greater loyalty and retention.
What Can Your ARO Reveal?
By tracking and analyzing ARO, you can uncover deeper insights into your shop’s performance:
- Dollars Estimated vs. Dollars Sold: Are your techs recommending work that never gets approved?
- Close Ratios: Is your service team successfully educating clients on the importance of the work?
- Process Utilization: Is your team following your shop’s process from inspection to presentation?
- Target Market Fit: Are you attracting customers who value long-term vehicle care?
How to Improve Your ARO: Follow the 300% Rule
One of the most effective methods for boosting ARO is adopting the 300% Rule:
- 100% of vehicles are inspected using a Digital Vehicle Inspection (DVI).
- 100% of recommended services are estimated and priced out in your shop management system.
- 100% of those services are presented to the customer in three categories:
- What they came in for
- Safety-related issues
- Preventative maintenance needs
This approach helps shift your shop from reactive to proactive. Instead of just fixing what’s broken, you’re educating customers about safety concerns and long-term care, all while building lasting trust.
Why It Works
Implementing a process like the 300% Rule leads to full transparency—and that builds value in your inspections and recommendations. When customers see the bigger picture, they’re more likely to approve work that improves their vehicle’s performance and safety.
Real-World Results: Shops that have adopted this mindset have seen up to 66% growth in ARO—meaning more dollars per vehicle, and fewer cars needed to hit revenue goals.
Ready to Grow?
Improving ARO isn’t just about numbers—it’s about mindset, process, and communication. To get started:
- Analyze your current ARO and compare dollars estimated vs. dollars sold
- Review your marketing strategy to attract ideal clients
- Implement a DVI process and follow the 300% Rule
At Repair Shop of Tomorrow, we help automotive shops nationwide improve KPIs like ARO, driving profitability through proven systems and coaching. Let us help you take your shop to the next level.