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When you match price, do you also match value?

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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.

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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.

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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.

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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!!

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  • Have you checked out Joe's Latest Blog?

      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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