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The balance between Being Competetive and Profitable

Joe Marconi
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  • 2 years later...
Southeast Tire Co. Contributor

Southeast Tire Co.

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In the balance between being competitive and profitable, I think it depends on the goals of the business. Profitability goals depend on the overall direction of the business as the owner sees it. While many owner's goal is to be as profitable as possible, it is not mine. My goal is growth. Growth at all costs. Being a fairly new business, I want to build a huge customer base first and make money later. As long as I am covering overhead, providing my employees with good pay and benefits, and am personally able to take a reasonable salary, I will cut prices to the bone to beat my competitors and gain their customers.

 

I can honestly say that I have never priced any service or product by a profitability projection. My prices are based on the market and I change my business to make sure it can operate under those margins. I feel that the most important thing in this economy is a strong customer base not maximizing the profit of each job/sale. While I think both can be done, I will never lose a reasonable customer to price. Never. I'll take a 15% overall profit on a tire sale if I know I gain a customer in the process.

 

I envision one day changing my business goals to maximize profit and when I do that, I will already have a strong and loyal customer base to support me. So again, I think that balance you are talking about depends on where you see your business in the future.

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  • 3 months later...
Brett_Duke Newbie

Brett_Duke

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My first post.................... :D . In response to desperation marketing, I've been in a shop where this has happened. Empty bays, techs sleeping on their work benches.......Here comes the manager with a "new idea". " Let's start selling any and every possible Flush available." This didn't work at all, especially because most cars coming in were still under warranty and had never heard of these flushes when they brought their last 5 cars in. This kind of marketing leads to unhappy customers and unhappy techs.

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Brianp Enthusiast

Brianp

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My first post.................... :D . In response to desperation marketing, I've been in a shop where this has happened. Empty bays, techs sleeping on their work benches.......Here comes the manager with a "new idea". " Let's start selling any and every possible Flush available." This didn't work at all, especially because most cars coming in were still under warranty and had never heard of these flushes when they brought their last 5 cars in. This kind of marketing leads to unhappy customers and unhappy techs.

 

 

First I would never "sell" any unneeded service. If its a preventative fluid replacement it better need it. Like 30K transflush or ph of coolant is low. etc. The fasted way to put you out of buisness is a bad reputation. If a vehicle is in your shop on a regular basis for the maintenance then you should rarely find anything that is needed unexpectidly. Like flushes, belts etc. Those items can be predicted at an previous stage and then even posibly split up so that the customer can do them in intervals that cost less each time but are still doen in a timely fashion. Like telling them they need a transmission flush at the next oil change. or tune up at 60k. etc. This keeps the workflow nice and easily scheduled. While keeping a customer loyal and satisfied.

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  • 4 years later...
KMS Collaborator

KMS

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I believe in telling all customers all issues with their vehicles I see. Then, I prioritize it. Even the small concerns that aren't really an issue yet. It earns their trust, and helps them save for their next visit. Also, many times they just tell me to take care of it all now. Always put the ball in their court. I agree with not selling un-needed services. This is one of the main reasons I get calls from customer's who have their vehicle at the dealer.

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    • Joe Marconi
      The Toolbox is Last to Leave, First is the Heart
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      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.

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