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Dealer price slashing


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I always look through ads to see what other shops are charging for their services. Here is something I've been running into. The dealer in our area is now charging $52.95 for a minor service, $119.95 for an intermediate service and $179.95 for a major service. Now, I know that normally we should be too concerned with dealer pricing, but what I've noticed lately is that we've been getting quite a bit of "but the dealer is charging so much less."

 

Under normal circumstances, I wouldn't worry too much about the price difference. But, the reality is under these financially difficult times our customers that wouldn't usually question our pricing are starting to look for better deals that the dealers are offering. If we were to offer these prices, quite frankly we would be making hardly if any profit.

 

What is your take on this?

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I always look through ads to see what other shops are charging for their services. Here is something I've been running into. The dealer in our area is now charging $52.95 for a minor service, $119.95 for an intermediate service and $179.95 for a major service. Now, I know that normally we should be too concerned with dealer pricing, but what I've noticed lately is that we've been getting quite a bit of "but the dealer is charging so much less."

 

Under normal circumstances, I wouldn't worry too much about the price difference. But, the reality is under these financially difficult times our customers that wouldn't usually question our pricing are starting to look for better deals that the dealers are offering. If we were to offer these prices, quite frankly we would be making hardly if any profit.

 

What is your take on this?

 

Dealers are cutting their prices to make money in service, for the lack of selling cars. I would honor the dealer price just to secure the customer. It's getting tough out there, but I feel that we cannot loose ANY customers.

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Dealers are cutting their prices to make money in service, for the lack of selling cars. I would honor the dealer price just to secure the customer. It's getting tough out there, but I feel that we cannot loose ANY customers.

 

 

That's exactly what I'm thinking. I would rather not make as much profit off of the services but at least have them walking through the door and keeping them as a customer. Just wanted to know someone else's opinion and see if they are on the same page as I am.

 

Thanks for the input.

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It is getting touch out there. Just be careful and not get into a price war. Also, it may hard to raise prices once the economy comes around. Instead of heavy discounting we are giving customers options. Talk with your customer; see what their budget is.

 

I had a customer the other tell me that my 90k service was $100 more than the dealer. When we compared the dealer 90k to mine, the dealer wasn’t going to do all the things we were going to. But, I listened and gave the customer the option to do those service items only, so as not to loose the job.

 

Also offer value packages instead of discounting. We have a mid-winter promo for $69.95, which includes an oil change, tire rotation, BG fuel and oil additive and a safety check. It works well, the customer gets a lot of benefit, feels good and we maintain our profit margins.

 

My fear is that we will feed into the fear of the consumers.

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  • 2 months later...

In prior conversation about dealer price slashing, it sounds like everyone is on board in keeping up with dealer specials in order to keep the customers from going there. We came up with what we hope is a good solution and we'll keep you posted as to how it goes.

 

We send out a newsletter to all of our existing customer base every month. In the newsletter there are always two coupons in it with two specials for that month. Rather than looking on the internet and trying to keep up with all the dealer specials going on, one of our coupons will simply be a "Dealership coupon meet or beat-athon" with a picture of a fish trying to lure in a shark (tried to add a little humor to it). This way any dealership coupon the customers gets in the mail or internet they now know that they can bring it in to us and we will honor it.

 

We figured this would be the easiest way to keep up with the dealerships trying to take away our business with all their price slashing deals.

 

We'll run it for a couple of month and again we'll keep you posted as to how it turns out.

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In prior conversation about dealer price slashing, it sounds like everyone is on board in keeping up with dealer specials in order to keep the customers from going there. We came up with what we hope is a good solution and we'll keep you posted as to how it goes.

 

We send out a newsletter to all of our existing customer base every month. In the newsletter there are always two coupons in it with two specials for that month. Rather than looking on the internet and trying to keep up with all the dealer specials going on, one of our coupons will simply be a "Dealership coupon meet or beat-athon" with a picture of a fish trying to lure in a shark (tried to add a little humor to it). This way any dealership coupon the customers gets in the mail or internet they now know that they can bring it in to us and we will honor it.

 

We figured this would be the easiest way to keep up with the dealerships trying to take away our business with all their price slashing deals.

 

We'll run it for a couple of month and again we'll keep you posted as to how it turns out.

 

It's also pretty simple to add text to all of your marketing that states: "We will price match all dealer specials and estimates".

Edited by Tom Ham AutoMN.info
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It is getting touch out there. Just be careful and not get into a price war. Also, it may hard to raise prices once the economy comes around. Instead of heavy discounting we are giving customers options. Talk with your customer; see what their budget is.

 

I had a customer the other tell me that my 90k service was $100 more than the dealer. When we compared the dealer 90k to mine, the dealer wasn’t going to do all the things we were going to. But, I listened and gave the customer the option to do those service items only, so as not to loose the job.

 

Also offer value packages instead of discounting. We have a mid-winter promo for $69.95, which includes an oil change, tire rotation, BG fuel and oil additive and a safety check. It works well, the customer gets a lot of benefit, feels good and we maintain our profit margins.

 

My fear is that we will feed into the fear of the consumers.

 

Were you cheaper than the dealer when you went with option #2?

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