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Posted

After one of my service advisors (who is no longer with us, by the way) matched a price on a set of tires to a competitor, I felt the need to share with you my thoughts and the comments on pricing I sent to my manager to review with the service advisors. See below...

 

 

Would anyone walk into a Starbucks and ask to lower or match their price on a cup of coffee? We all know the answer to this. Starbucks doesnt just sell coffee. They sell something special; they sell the experience, the friendly service and the connection they make with you, the customer. The truth is, you can buy coffee anywhere, but you cant get a Starbucks anyway. You need to think of your brand in the same way.

 

There are basically three reasons why people compare price. One: they truly are price shoppers. These people we will never please and to be honest we dont need or want them.

Two: the person does not see the value in what you are selling. Thats why you need to promote the benefits of what you are selling to the compared item or service. For example, in the case of tire price matching, tires are often considered a commodity and are easily shopped with a phone call or Internet search. So, how do you position you price and stick by it? You do that with a series of questions that brings out the benefits and reasons why you are the best choice.

 

Ask the customer what the warranty is, does the competitor offer lifetime rotations, flats fixed free or road side assistance. Ask the customer. Wouldnt you want to come here for all you needs, rather than to jump around? Plus you have trusted us in the past with all your automotive needs. You know I am going to do the best for you. Plus, the dealer does not have what we have.and thats the people here at Osceola Garage. Also, ask the customer if that includes mount and balance, state recycle fees, wheel alignment and all other incidentals. Get the customer to understand that your price comes with value. And lets be honest, can we really trust the competitors price the customer gave us?

 

And the third reason why people ask and compare price is that they dont know what else to ask. Again, this is when you need to promote value over price.

 

I am not a fan of discounting and lowering my prices. We have spent countless hours doing the math. We understand that our price structure is in place to remain profitable. Are we competitive? Well that depends on your perspective. If you are strictly a price shopper, the answer is no. If you are someone that wants to build a solid relationship with a company that values people and has the right ethics, the right morals and offers benefits you cant get anywhere else; then YES, we are competitive because there are no other companies like us.

 

Remember, price is what you pay, value is what you get.

  • Like 3
Posted

Excellent post and definitely something we should all keep in mind. Especially on those days when all the phone calls and walk in customers tell us how much cheaper the shop down the street is.

 

You know, the one with the gravel lot, broken door windows and the cars sitting on jackstands (in the gravel lot) getting worked on. Not to mention getting Autozone parts and selling them at cost to the customer or letting the customer be the parts delivery driver.

 

I'm sorry I can't compete with them on price, nor would I want to. What I can offer you is a complimentary shuttle service, a comfortable waiting area, ASE Certified Technicians and an excellent nationwide warranty. Not to mention quality parts and no hassle service.

Posted

I have a guy who has opened up a shop up the street from me who is advertising brake pads and rotors installed for $129.95. If he buys a decent quality pad and rotors he will probably have a minimum of $90 in it and if cheap ones at least $70. This means he has his tools, overhead, insurance, and labor priced at $39.95-$59.95. He is a guy who probably knows how to work on cars but not how to run a business. I have found that if you buy customers you get what you pay for. This guy does not realize that that type of pricing creates a business model that cannot be sustained. The one man shop works himself to death being paid much less than what I pay my techs.

 

I lost a job for a long term customer to another shop a few months ago because the other shop is real cheap on labor. That was months ago and I had forgotten about it until today when that truck appeared in the shop with a running problem and the other shop had given up on it after messing with it for months. In 30 minutes my lead tech knew what was wrong with it. Now I personaly know the other shop owner and he is a great guy. However, when your price yourself as cheap as he is you cannot afford to hire higher skilled techs and this owner is like me as he never was a tech. He has 2-3 parts changers working for him but they cannot handle anything beyond basic stuff. This wasn't a difficult problem to solve if you have any driveability background. My point is you can't worry about being the cheap guy in town and have the tools, training, and people needed to face up to the modern shop work.

 

This was a 93 Dodge Dakota that stumped this shop couldn't handle whereas our shop is moving into working on BMW's, Mercedes, Jaguar, etc. We currently have a Subaru 2.5T boxer engine tore down as I write this doing a headgasket. This is common stuff to some of shops but our shop started as a muffler and brake franchise but had to get into full service to survive.

  • Like 1
Posted

A sales man at a local dealership bought a Jeep Wrangler that was traded in. We do a lot of aftermarket work for these guys so he comes looking for a deal on a lift kit. Not just any kit, but a high dollar long arm kit that require a lot of cutting and welding to the frame and axle.

 

Long story short he bought the kit on line to save tax but freight cost him more than purchasing from me. These are solid steel control arms front and rear. Plus the rest of the components.

 

He shows up yesterday looking for help. The kit was installed in his buddy's garage for half of what I would charge. "Something happened to the rear axle." he says " So we put a new one in and its doing the same thing. I've had it a few months now and can't really drive it" It was an obvious hack job and the pinion angle was way out. "Can you tell me what wrong?" he asked. "Yes, you went to the wrong place. But for $600 I can fix it."

 

We looked at some other custom work I had done. Now he could see a night and day difference in the quality of work. Between the freight cost, the axle he did not need, and the additional labor for me to fix it. Lets just say lesson learned. He's scheduled after Xmas.

  • Like 1
Posted

Great post, and a great reminder that this is a service business. We can not let the conversation devolve into a price war. Educate your clients and let them decide if they appreciate value, and the experience of having a go to shop. Quality is remembered LONG after price is forgotten. The experience cdhowell shared is typical of "saving money". The guy with the Jeep will have spent more by the time his vehicle is done correctly than he would have spent by simply having it done professionally. xrac's story is equally telling. Years ago I was managing a tire & repair shop having a similar problem with a few local "price cutter" shops in my area. I did a reader board sign that read "We fix $59.95 Brake Jobs". I got quite a few new clients that became loyal!!

  • 2 weeks later...

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  • Have you checked out Joe's Latest Blog?

         0 comments
      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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