competing with woodchucks

[alfredauto]

This topic has been fresh in my mind the last couple weeks, billy bob's backyard repair has been advertising absurdly low prices in my area. I rationalized every possible way to complete with him on price without ruining my reputation or my customers vehicles and came up short. This dude charges $20/hr you bring your own part. Theres a few guys working there too. I saw the same thing when I ran a towing service, bob's wrecker service $25 any tow any time up to 25 miles. They are like mosquitos at the BBQ one burns out and a new one takes its place.

 

I've tried to just not even think about it, but its frustrating to have to explain why I'm 5x this cowboy's price over and over again. Workers comp, liability ins, service manuals? Professional service equipment? No way unless the magic free fairy lives there.

 

What are your thoughts?

[Marksas]

I see this also and I don't get to wrapped up in thinking about them. We have a couple of mobile guys as well as craigslist mechanics. They will almost always have customers that I am not that interested in. I do always look at our operations and wonder how can we do what we do better for less while still making our desired margin? I don't want to say i just discount them and blow them off because you have to think about some of the things we do as being commoditized and what are we going to do to compete. I can't fix every car or every customer so I want to search for customers that meet the demographic profile of our target. Those shops never last, we have to sell the value of what we bring and we must also be able to articulate the value that we provide. There will always be price and bargain shoppers, but there are also those that appreciate value and are willing to pay for it, those are the ones I want and market to.

When it comes to mobile service this is something that we look at as telematics become more prevalent. I can see us in the future performing some repairs in the field because of the availability of having the vehicle data remotely. We may be able to perform most diagnostics from our desktop and dispatch a tech with the right tools, information and data needed to perform repairs at the customer home or business when it's most convenient for them. Of course there will be a charge for this.

 

I am involved in the electric utility business also and I see how we use technology to troubleshoot remotely then look at GPS to see which service trucks are in the area and then drill down to which trucks have the required tools and parts necessary to repair the outage and dispatch accordingly. Some of it is predictive, based upon past history and it's all software driven. Think about what's happening in the dealerships now and warranty work. 60% of most warranty work is software related. The manufactures are going to start pushing the software updates remotely at night or at times when the vehicle is not in use to correct the problem thereby eliminating the service visit and revenue to the dealership.

These are all things we must think about and plan for if we want to remain competitive.

[xrac]

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[Jeff]

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[KMS]

I have recently heard of this also. I don't think it is going to hurt us. These mechanics have been around for ages. Heck, we all have probably been there at some point early in our careers.

[coyotesoftware]

The problem with Billy having low prices because he has no overhead is that he's fly by night.

Most customers won't choose to go to a guy working out of his garage. Too scary.

Especially if you're a parent.

 

No need to run a race to the bottom on price. People know they get the quality they pay for.

 

That being said, and I've been there myself, sometimes there's just more money than month.

So, why not have a good relationship with a "Billy" you know and halfway respect. Send him the customers who need help and can't pay you.

Have him send you the work he can't do at your price.

 

Why not hire a guy like that to be your mobile service tech and incorporate his business with yours?

I'm a single mom with a kid who had medical problems during his school years. I was willing to pay people to come to my house when I couldn't go out.

Including SAFEWAY! The key to selling to moms is MAKE LIFE EASIER for us! If it costs a little more to get the work done in the schedules that have us flying all over town on deadline all day, we don't care about it as much as getting the kids to wherever on time.

 

So use Billy to your competitive advantage. Or just ignore Billy.

 

In a small town, chances are you know each other anyway. Your reputation as a stand up guy is worth more than anything else you can invest in.

Don't get caught badmouthing your competition because any negativity will reflect back on you.

 

The next time some customer tells you they can get work done by a Billy, start laughing. Break into a big smile and say "well, I'd never let anybody I cared about get service from a guy like that - too risky!"

And for a lot of reasons, you'll be exactly right.

[Andre R]

Call your local zoning department and report the shop.

[stowintegrity]

I agree completely with Marksas. As a professional service provider, it's actually part of my marketing & business plan to avoid the well-defined group of prospects that are likely to be romanced by an unreasonably low price by an amateur "Billy". I warmly tell my would-be patrons that although I understand their need to save money, that sometimes cutting corners in the qualitty of parts & service by seeking out the lowest bidder may very well NOT be in their family's best interest.

 

I don't get mad, hurt, disappointed, or otherwise affected. I give them the very best advice by telling them that if they want professional service, it can't be had by someone with a rusty, handheld toolbox and a bumper jack, and most reasonable people agree with this premise. The BEAUTIFUL thing is that the segment of your available prospects who would argue or try to negotiate price will be disappointed when they learn your price is a fair, PROFESSIONAL assessment of what it will take to repair their vehicle...but you'll only have to tell them ONCE...and they'll never darken your door again to waste your time. HEck...tell them that while there's nothing YOU can do about that $20 quote they got from Billy, that you heard that your competitot, XYZ Automotive, may very well entertain it.

 

Let them waste your competitor's time from now on...you can keep selling work profitabily without being interrupted by price shoppers. The minute that you drop your price or negotiate in this way with a price shopper, two things happen: 1) They walk away thinking you were just about to try overcharging them if they weren't smart enough to beat you up about it, and 2) You've just acquired another customer who will waste your time and try negotiating EVERY price they ask for in the future.

 

Happy wrenching!

[xrac]

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[Handson]

I like the idea about sending them to a competition. I had a customer once try to bring his own part. I said I think the guy down the street installs customer supplied parts. Customer called a week later complaining his car had been there all week and the price went up three times.