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Would you price your services lower than the dealer?


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True story duplicated many times since 1969 . A person comes in and grills me about prices on the first visit so sometimes I play along. How much for a wheel alignment they ask $29.00 I respond. How much for a conventional oil change they ask, $9.99 I respond . They can't believe what they just heard, I ask them if they have been paying more elsewhere? :rolleyes:

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I agree that you should not enter a price war but sometimes it is difficult for a business owner to lose business because you are "higher" priced than the dealer or a competitive independent repair shop. I do also agree that you have to show value and offer something that other shops do not offer that sets your business apart from other repair shops. This is key when pricing becomes an issue with customers.

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We often take a customer’s car to the dealer when we discover the vehicle is under warranty. We prefer to take it ourselves, because the dealers are like vultures and too often my customers come back with a ton of service work done, much of which we already performed! Plus, it's no secret that the dealer wants my customer.

 

Yesterday I took a Subaru with a warranty reprogramming recall back to the dealer and as I pulled into the service drive, there was a big sign that stated: We’ve Lowered our prices! Under the headline listed these services:

  • Oil change service $19.95
  • Wheel Alignment $59.95
  • Tire rotation $9.95

These prices for my area are cheap. In fact, the average wheel alignment in my area is $89 to $129.

 

This is more proof that the dealers are trying everything they can to increase business in their service bays. My hope is that they price themselves out of business.

 

Now, will many shops lower their prices to match the dealer? I hope not. If the dealer wants to position their brand on price, let them. Do not enter in that "race to the bottom."

 

Remember, think of your best customers. You know, those people that never question price and throw the keys on the counter and say, "Call me when the car is done". These are the customers that you need to base your business on. These are also the customers that rarely question price.

 

I know that the last few years have been tough on everyone, but we still need to maintain who we are as a brand. Do the things that have made you a success.

 

And remember, your best customers don't continue to go to for your price. Recognize WHY they are loyal and build your business around that.

 

 

Thank you Joe & not surprising that dealer uses three most used "catchall" to bring the customer in.

I suspect we all know they will never make any money at these prices, nor will we. Nor, I am afraid, they will price themselves out of business because they will "upsell" a jibijibies (technical term) out all and any customer as soon as he comes in for $9.99. They also, unlike most of us, have multiple streams of income. So, even if they loose the service income for a few month, that I doubt they will, bust still, they have the used cars to "keep them afloat".

I also suspect that many shops will end up lowering their prices because people see something like that and in panic, the first "logical" thing that comes to mind is "Oh (*&%*&% I've got to follow the lead"

I'd be willing to put up a little comparison chart on my website (when I have one :wacko: ) to run a comparison what will it cost the customer "on the bottom line" after a simple repair (in addition to any one of those services) and compare the value they will get from me compare to the dealer.

Value selling is not easy, that's why they call it selling and not "giving away" services....

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  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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