gandgautorepair

Very interesting read. I also have been doing inexpensive oil changes, and I consider it to be successful. My shop is in it's 6th year (brand new shop), and we have grown in gross sales an average of 30% a year for the last 4 years. We currently do a semi-synthetic oil change for 29.99, which is 5 qts and filter, including inspection and battery test. Full synthetic is 59.99, 5 qts with a premium filter. Most European is a separate price on an individual basis. Our car count is 250-300, and we've been averaging 100-120 oil changes a month. We average 15% of oil changes are new customers. So far this year we average 17 new customers a week, and the ARO on new customers is higher than the ARO on existing customers. Overall ARO for the last quarter is $454. We have struggled with ARO and GP% but with training, solid goals, and pay plans we seem to have gotten over the hump.

I've had interesting discussions about this subject, and seem to be going somewhat against the grain, but I haven't been able to convince myself to change strategy. My goal was to get my existing customers to come to us for routine service, not just try to remember us if they have a problem. Since only 15% of oil changes are new customers I think we've accomplished what was intended. The low oil change price has also attracted new customers, but since most of our new customers come for more than that, it isn't currently a big new acquisition strategy. One thing the oil change price is a part of, and that is developing a good value reputation. We watch closely those things we consider comparables, like oil change, brake job, trans service, and make sure our prices are at or below market average in our area, then charge a good price for everything else. I know we're one of the highest priced shops in town, yet we regularly get good reviews about how reasonable our prices are.

Still open to ideas about this, but I'm not currently convinced to change, and it's encouraging to read Anderson's experience.

When we have the occasional customer come in and ask if we will install their own part, we don't argue, we just quote them 150% of our normal labor rate for that part and we tell them that the repair won't come with a warranty. If we provide the part, they will have our Lifetime Warranty on that part, then we quote the job with our normal margins. We don't win them all, but we've had a surprising number of customers let us do the whole job and they return their part for a refund, or we do the job for more labor. Additionally, if any conversation regarding parts pricing gets that far, we explain that our cost to be in business to be there for them is based on margin per hour, and it doesn't matter if that margin comes from parts, labor, or both.