The Internet Has Changed the Way We Do Business

[Joe Marconi]

The Internet Has Changed the Way We Do Business

 

The other day, Mike, one of my service advisors, gave a customer a price on tires. She then reached into her pocketbook, pulled out her Ipad, and said, “Give me a minute”. After a few minutes of surfing, she said to Mike, “Well, the price you gave me is ok; there is one tire shop in Danbury that has those same tires for $15.00 less per tire. Can you match the price?”

 

Sound familiar? You bet. We have all been down this road, and that road has no end to it. Look at your new car dealers. The days of the traditional car sales are over. Many new car dealers no longer pay commissions to sales people. Why? The margins have shrunk due to competing dealers giving prices online, and so many car dealers competing for a share of the same pie.

 

While, I don’t think the internet will have the same impact on our industry, it has impacted us to a degree. And we must learn to deal with, not fight it. You need to bring value to your customers. Don’t enter the price game, you will lose. You need to be competitive, but you need to be profitable too. Making a sale for the sake of a sale, without turning a profit is financial suicide.

 

Promote benefits, not price. Create your unique value proposition: Ask yourself, "Why the customer should buy from you." Let those shops that don’t understand this engage in a price war. As they fail, it will only make us stronger.

 

How did Mike handle the question about “Matching the price?” He simply said, “Well Miss Smith, let’s review some of the benefits. Our tires come with a road hazard warranty, road side assistance, lifetime tire rotation and flats fixed free. Plus, Danbury is 45 minutes away, if you ever have a problem with the tires, do you really want to travel to 40 minutes to shop where they don’t know who you are?

 

She looked down at her Ipad, looked back up at Mike, and said, “Ok, makes sense, put the tires on."

[mspecperformance]

This is a great thread! I have also wrestled with how to sell tires as there is usually very little to differentiate where is best to buy a tire, because a tire is a tire right? I am still unsure if I am going to go heavy into the tire business however it is a great value proposition when I do sell tires. My customers generally like to come back to me for everything since I am a specialist. My customers that tend to go somewhere close to their house for the "simple" stuff learn the hard way and have to come back to me for extra repairs.

[mmotley]

Absolutely great story! Being a new shop myself, I often find myself wanting just to make the sale, only to realize I sometimes end up barely making enough to profit to justify the work. Then you find out late that you just price matched 'John Shade-tree' down the road!

 

This is a great thread! I have also wrestled with how to sell tires as there is usually very little to differentiate where is best to buy a tire, because a tire is a tire right? I am still unsure if I am going to go heavy into the tire business however it is a great value proposition when I do sell tires. My customers generally like to come back to me for everything since I am a specialist. My customers that tend to go somewhere close to their house for the "simple" stuff learn the hard way and have to come back to me for extra repairs.

 

Couldn't agree more. I'm in a similar boat, specializing in certain vehicles. I find some of my customer's would rather get everything done in one place, at one time, instead of price shopping and driving all around for the lowest prices. Also, the peace of mind they get from having someone who knows their make/model of vehicle like the back of their hand is an added bonus.

[Joe Marconi]

Let me make one thing clear. If we reduce what we sell to commodities, we will find it very hard to compete. Let me explain, for the most part if you need a gallon of milk, or a dozen eggs, we really don't care what brand we buy. A gallon of milk is a gallon of milk. There is very little to differentiate it from other brands (for the most part).

 

Now, tire as just a tire, you are right in one respect. But is it???? If you sell "only" the tire, you are selling a commodity. And that means you better be the best price in town or near the best price. But if you package in value added benefits, then you begin to remove price from the equation.

 

This strategy works on your better clientele. The segment of consumer market that only look for price...well...all I can say is that I rather sell value, not a commodity

 

Makes sense? Let me know your thoughts.

[Jeff]

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