Decreasing prices to make more sales?

[Joe Marconi]

I went to lunch the other day with one of my parts suppliers and he was telling me that more and more shop owners are concerned about price. It seems that many shops are lowering prices because they perceive that their customers are more demanding and are looking for deals these days.

 

Low price and value are two totally different things and if we position ourselves on price alone, we are headed down the path of no return. Are our customers really asking for lower prices? Maybe some are, but what about our truly loyal customers?

 

I think people today are bombarded with media blasts about deals and giveaways and price reduction to a point where it may be top of mind, but not the customer’s main concern.

 

What about you, what do you see in your market area?

[FROGFINDER]

In our market the basic services that vehicles have needed in the past are being "given away". I read in one pole that dealerships are satisfying consumers better than independents for scheduled services. I stopped by the local Acura dealership one saturday morning a few weeks ago and saw at least 40 people sitting/milling around the free entertainment/coffee bar area. I went to a tire store and saw 28 people plus with no more parking left. The Stand alone quik lube/car wash was packed selling synthetic Mobil one oil changes for $29.95. When was the last time your shop had more that twenty people waiting for your help? . I remember when working at the auto parts store in 1973 we would have twenty people waiting for us to open. Many of them had rotors and drums that needed turning, tune up parts to match up, starter and alternators that needed testing, etc.

 

Sometimes i think there is more money to be made collecting the rent and franchise fees from the auto repair shop owner/sweat equity invester than servicing the plastic appliances on wheels that pass for cars today. The mass public expects an oil change For $1x.xx and a four wheel brake job for $9x.xx while they wait or they must have a loaner car. It's getting harder to spend time and effort to provide those services and still pay the bills.

 

That being said Map out the turf around your shop and locate the vehicles that you want to work on. Contact as many people within the map and let them know about your shop. Make an impact for your shop in your area every day.

 

ps Thanks to all the veterans that have protect us so we can have a auto repair shop.

[xrac]

.....Sometimes i think there is more money to be made collecting the rent and franchise fees from the auto repair shop owner/sweat equity invester than servicing the plastic appliances on wheels that pass for cars today. The mass public expects an oil change For $1x.xx and a four wheel brake job for $9x.xx while they wait or they must have a loaner car. It's getting harder to spend time and effort to provide those services and still pay the bills......

 

That is so true. The problem is I have trouble paying the bills now. If I lower prices it would be harder. The problem with the places selling lower priced services is they are making up for it somewhere. We frequently get cars where the dealer told them they needed brakes NOW only to find they had 50% or more brake pad remaining. It happened just last week.

[Mario]

I noticed some shops here get customers in with a low ball over the phone quote, then the price climbs up during the repair.

 

I rarely ever have an issue selling a fair priced repair to a customer in person, what I don't have any luck with is selling over the phone. Seems people just call every shop and take the lowest price. Unfortunately I am not always the lowest price, never the highest price, but a fair price (although I am one of the LOWER prices).

[FROGFINDER]

I noticed some shops here get customers in with a low ball over the phone quote, then the price climbs up during the repair.

 

I rarely ever have an issue selling a fair priced repair to a customer in person, what I don't have any luck with is selling over the phone. Seems people just call every shop and take the lowest price. Unfortunately I am not always the lowest price, never the highest price, but a fair price (although I am one of the LOWER prices).

 

The voice contact is the most important contact with another human being that we have. Phone quotes are people reaching out to us. Impact the caller and they will refer others to your shop. Ask how they heard of your shop. Ask them for the vehicles vin number,get callers name, phone number and address. Ask them to come by for a free visual inspection Tell them you will call them back. Make sure they understand where your shop's location is and your hours of operation. Call them back with your fair gue$$, are the parts avail?, time to completion and offer them a courtesy ride/pick up when done. Call them back within 24 hours asking how they and the vehicle is. They should praise you for calling back and thinking of them. Remind them that you need thier referrals and prayers more than thier money.

[TheTrustedMechanic]

I noticed some shops here get customers in with a low ball over the phone quote, then the price climbs up during the repair.

 

I rarely ever have an issue selling a fair priced repair to a customer in person, what I don't have any luck with is selling over the phone. Seems people just call every shop and take the lowest price. Unfortunately I am not always the lowest price, never the highest price, but a fair price (although I am one of the LOWER prices).

Sounds like my experiences. I think Froffinder didn't understand your reply. Frog is right that how you treat the customer on the phone is important, but I have experience to tell you that nothing you do or say will change the mind of the folks looking for the cheapest price, and the easiest way for them to do that is on the phone. Ten minutes and they've wasted the time of a 12 shops working up quotes. At this point they are not your customer, they are a consumer, consuming your time and energy. At this point they deserve respect and to be treated kindly and honestly. They deserve no more than that until they become your customer and show they value your skill, expertise and integrity by spending their money with you. I routinely ask phone shoppers if they are looking for quality repairs or the lowest price. Invariably they claim they want quality repairs but when I call them with the price all I get is either, "Well I've got to talk to my husband/wife about it, I'll [never] call you back," or "Well, Shop XYZ will do it for $$$ less," when $$ is all the mark-up I have on the parts. I will not give away my work for cheap or free. If it comes down to that I'll close up shop and work at McDonald's where at least I'll get an hourly wage. Example, 2001 GMC G2500 van, needs a fuel pump. I quoted a price and the guy complained that he just got one put in his other van, identical MMYE, for less than half my price. I am still trying to figure out where and how he got it done for $300.00. I find the customers who call on the phone, if they are serious about wanting me to do the work for them, they will almost immediately tell me how they found me, who referred them or why they chose me above the others in the phone book. Otherwise I can explain to them what goes into the proper repair and what I do that most shops do not in order for them to meet the cheap price, but I rarely close the deal with the price shopper. I can also give them the advice to make sure they are getting quoted for the same complete job because there are a few shops in town who give the low-ball price to get the car in only to get it torn apart and then hit the customer with the real price, often higher than mine. But it doesn't sink in, that low-ball shop is still, "Better because they were cheaper, I just needed more than they expected." When in reality all the customer needed was what was realistic and typical for the repair.

[TheTrustedMechanic]

It makes sense to lower your prices to drive more sales to your door. We do it everyday in this business when we run a special. But to unilaterally or universally lower prices, you by necessity have to lower your standards too. Like xrac wrote, the shops that run the low prices make it up somewhere. I'd just like to know where, and how. Because I can't seem to do it. but then again I have honor, ethics and morals. But if you are lowering your prices to try and drive more sales at the lower price and you are losing money, you certainly can't make it up in volume. It just comes back to you have to determine your actual, factual, realistic costs and set your prices accordingly. if you are fair and reasonable and still can't make a profit, then maybe your costs are out of line, or your market just won't support a professional, competent repair shop and the residents will get exactly what they deserve, poor quality, short lived repairs at the low value prices they demand.

[CARMandP]

I have really struggled with is concept myself. Do I give a low price just to get them as a customer or do I just give my "normal" price, the one where I make the margins I need and let the "price shoppers" go down the street. I personally decided that I will give the price I need to make money and if I lose that customer, most of the time, it wasn't a customer that I wanted coming through my door anyway. I don't really want a shop full of cars from customers that will only fix things that are broken, when they are broken. I want customers that are willing to bring me their cars for everything.

[GENUINE]

I too struggle with this issue. My customers either truly don't understand the difference between price and value, or truly can't afford value and must for financial reasons decide based on price alone and cross fingers and hope for the best.

This is always a dilema for me. Even if you explain why your price might be higher than the bait and switch shop down the street, if the customer truly cannot affor a quality repair, you have given them the impression that "You're too high" and that's the reputation that you will develop within their circle of friends. And while their circle may not truly be the customers that you want, their circle may overlap, and/or be related to, the circle that you DO want, and that image of "They're really high" is being conveyed to them. Maybe they're bright enough to understand, but maybe not. If they've never used you and have a need, and what they remember is Aunt Sue saying how she called you and you were really high....well...

On the other hand, if I refuse to give a phone quote and insist (politely and with explanation) that for me to give an accurate and fair estimate of their needs I'll need to see their car and will give them a written estimate that they can hold me to....well then I'm arrogant and unreasonable because the last 6 shops she called gave her a price!

I once was taught that "you can't make fix a car over the phone. You can only make a sale once the car is at your door!" So all you can do on the phone call is sell YOURSELF, and sometimes that can be really hard! As someone said, the impression you present on the phone is so important.

Business is tough. And getting tougher I think.

[Jeff]

It is true that most callers are asking for "price". I offer them alternatives. Recycled (read used) parts, variations on warrenty, as well as the regular stuff. Most consumers dont know what else to ask than for price. I try to get them in for the inspection and estimate but many feel it is a waste of "THEIR TIME". I also will try to build a rapoire (?) with them while on the phone. Get a little backround on the car. Has it become a problem car? Who has been taking care of it? Miles driven a day, etc. And when I get the " Let me shop around" I ask them to please be sure to compare apples to apples, ie Warrenty, quality, experinece, etc. Ya cant get em all but if they go elsewhere and get burned maybe they will remember you in the future!

[TheTrustedMechanic]

It is true that most callers are asking for "price". I offer them alternatives. Recycled (read used) parts, variations on warrenty, as well as the regular stuff. Most consumers dont know what else to ask than for price. I try to get them in for the inspection and estimate but many feel it is a waste of "THEIR TIME". I also will try to build a rapoire (?) with them while on the phone. Get a little backround on the car. Has it become a problem car? Who has been taking care of it? Miles driven a day, etc. And when I get the " Let me shop around" I ask them to please be sure to compare apples to apples, ie Warrenty, quality, experinece, etc. Ya cant get em all but if they go elsewhere and get burned maybe they will remember you in the future!

 

I too ask price shoppers to make sure they are comparing apples to apples but few seem to care. All else is the same except for the price. We all know that is a fallacy but the price shopper takes it as gospel. You are right though, it is the ones who truly don't know what else to ask that you are looking to serve by building a rapport with. And there is a shop in town here that seems to belie your adage of, "if they go elsewhere and get burned..." Oh, well I will keep serving those who want value and understand that it is not solely a cheap price, it is quality work that will last, done ethically and honestly.