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Managing the Customer’s Budget should not be taken lightly

 

If anything good came out of the recent recession, it’s that many people have learned to budget their finances better. We are all well aware that there are times when the customer cannot afford all the services and/or repairs that we are recommending. For example, a customer comes in for a 60k service and you discover that the car needs brakes on all 4 wheels and tires. The customer, due to budgeting reasons, declines the 60k service but authorizes the brake work and tires.

 

If it comes down to prioritizing work, then we must advise the customer accordingly. Safety will always take precedent over service work. Please bear in mind that preventive maintenance is always in the customer’s best interest, and this must be conveyed to your customer.

 

I do not take any declined work lightly. If I recommend something today, it’s because it needs to be done. If the customer is on a strict budget and you opt to select certain service to be put off, you must set up a schedule and timeline for the customer to return. If you merely accept the declined work without any thought to getting the customer back, you have just told the customer that what you have just recommended was nothing more than a suggestion.

 

One of biggest reasons for lost future sales is not properly setting up a timeline for the customer to return for the services recommended. Communicate with the customer; ask when they can return to complete the services. See if there are any options you can offer that will make the customer feel more comfortable. Find out how long the customer is planning to keep the car, who drives the car, and what the car is primarily used for.

 

Asking questions is a great way to keep open the lines of communication. It allows the customer to be part of the decision-making process. This alone will improve your sales ratio.

 

So remember, if you and the customer decide to hold off on some of the work you recommend, emphasize the importance of your recommendations, work with the customer to set up a timeline for the customer and book the next appointment. Do not leave it chance that the customer will return for those declined services.

 

 

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  • Have you checked out Joe's Latest Blog?

         13 comments
      Most shop owners would agree that the independent auto repair industry has been too cheap for too long regarding its pricing and labor rates. However, can we keep raising our labor rates and prices until we achieve the profit we desire and need? Is it that simple?
      The first step in achieving your required gross and net profit is understanding your numbers and establishing the correct labor and part margins. The next step is to find your business's inefficiencies that impact high production levels.
      Here are a few things to consider. First, do you have the workflow processes in place that is conducive to high production? What about your shop layout? Do you have all the right tools and equipment? Do you have a continuous training program in place? Are technicians waiting to use a particular scanner or waiting to access information from the shop's workstation computer?
      And lastly, are all the estimates written correctly? Is the labor correct for each job? Are you allowing extra time for rust, older vehicles, labor jobs with no parts included, and the fact that many published labor times are wrong? Let's not forget that perhaps the most significant labor loss is not charging enough labor time for testing, electrical work, and other complicated repairs.  
      Once you have determined the correct labor rate and pricing, review your entire operation. Then, tighten up on all those labor leaks and inefficiencies. Improving production and paying close attention to the labor on each job will add much-needed dollars to your bottom line.
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