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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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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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  • Have you checked out Joe's Latest Blog?

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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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