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When you match price, do you also match value?


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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?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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