The Product-Driven Difference

[Joe Marconi]

It was a busy Friday morning when Tom called me for an update on his vehicle. I let Tom know that his car would be ready at the end of the day. There was a pause, and then he blindsided me with this, “You know, Joe, I did a little research on that water pump you’re replacing on my car. I can get that same part for $30 less. Why does your part cost so much?” I fired back at him by saying, “That’s impossible; it can’t be.” I went on and on attempting to defend myself, but I could tell I wasn’t getting through to him. After a few more words back and forth, Tom finally said, “Look, you started the job, so you might as well just finish it.”

You’re probably thinking Tom went online to check the part. Well, this happened in 1980, my first year in business, and years before the Internet, as we know it today, even existed. Tom simply called a local part store. The parts store gave him a discounted price and then figured he would challenge me.

Consumers checking your prices is nothing new—it just got a whole lot easier these days with the world wide web. Now, let’s clarify one thing: I am not going to tell in this article that there is a foolproof way to train consumers not to go online to check your prices. However, what I can tell you with certainty is that if you continue to feature products and not the customer experience, you are telling people to please check your prices.

Consider this: You’re out to dinner and you ask the waiter for the wine list. As you scan the list, you recognize a brand and then look to the right at the price. Do you Google the bottle of wine to check what you could buy it in the store? We all know that a $10 bottle of wine in the store can cost well over $40 at the restaurant.

Here’s the bottom line: The restaurant is selling more than wine and food—it’s selling the customer experience. And if all goes the way it should, we pay for the meal and the bottle of wine, even when we know the wine is priced higher than we could purchase it at the store. And, we are OK with it.

Our business is no different. We need to focus on the experience, not the products. Yes, we install water pumps, control arms and radiators. But, that’s not our main focus. Our focus is on the value and the benefits of doing business with us. Now, with that said, there’s a delicate balance between being competitive and being profitable. But, as value goes up, price becomes less of an issue.

Here’s the difference between our business and a product-driven business. When you buy a product—let’s say a watch or a cell phone—the experience lives on long after the sale. Every time you put on the watch, or use your cell phone, you are continuing the experience. And if the product is high quality, the experience gets reinforced over and over every time you use it. With auto repair, in most cases, what we do, does not live on after the sale. Once a customer leaves with a new timing belt and water pump, there’s not much about that repair that lives on in the eyes of the consumer, except the customer experience. Your entire sales process—your marketing, the look of your shop, the people you employee and every aspect of your business that the customer sees—must tell the customer that what you sell is worth the price.

Let’s remember one thing: Your prices will be challenged from time to time. So, here are a few more tips. Get the right training for your service advisors, especially in the area of customer service. Make sure your marketing and advertising communicates your brand and your culture, and please be careful with discounting. Claims that you have the best price on tires or brakes only results in consumers checking online to see if that’s true. Highlight your warranty, which has a lasting impression on the customer. Above all, communicate the benefits of doing business with your company.

Let’s get back to Tom. After 39 years, Tom and his family are still customers. I have to believe it’s because Tom appreciates the level of service we have given him throughout the years and the relationship we’ve built. Tom has learned what Warren Buffet has often said, “Price is what you pay; value is what you get.”

This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019

View full article