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Found 6 results

  1. It was a busy Friday morning when Tom called me for an update on his vehicle. I let Tom know that his car would be ready at the end of the day. There was a pause, and then he blindsided me with this, “You know, Joe, I did a little research on that water pump you’re replacing on my car. I can get that same part for $30 less. Why does your part cost so much?” I fired back at him by saying, “That’s impossible; it can’t be.” I went on and on attempting to defend myself, but I could tell I wasn’t getting through to him. After a few more words back and forth, Tom finally said, “Look, you started the job, so you might as well just finish it.” You’re probably thinking Tom went online to check the part. Well, this happened in 1980, my first year in business, and years before the Internet, as we know it today, even existed. Tom simply called a local part store. The parts store gave him a discounted price and then figured he would challenge me. Consumers checking your prices is nothing new—it just got a whole lot easier these days with the world wide web. Now, let’s clarify one thing: I am not going to tell in this article that there is a foolproof way to train consumers not to go online to check your prices. However, what I can tell you with certainty is that if you continue to feature products and not the customer experience, you are telling people to please check your prices. Consider this: You’re out to dinner and you ask the waiter for the wine list. As you scan the list, you recognize a brand and then look to the right at the price. Do you Google the bottle of wine to check what you could buy it in the store? We all know that a $10 bottle of wine in the store can cost well over $40 at the restaurant. Here’s the bottom line: The restaurant is selling more than wine and food—it’s selling the customer experience. And if all goes the way it should, we pay for the meal and the bottle of wine, even when we know the wine is priced higher than we could purchase it at the store. And, we are OK with it. Our business is no different. We need to focus on the experience, not the products. Yes, we install water pumps, control arms and radiators. But, that’s not our main focus. Our focus is on the value and the benefits of doing business with us. Now, with that said, there’s a delicate balance between being competitive and being profitable. But, as value goes up, price becomes less of an issue. Here’s the difference between our business and a product-driven business. When you buy a product—let’s say a watch or a cell phone—the experience lives on long after the sale. Every time you put on the watch, or use your cell phone, you are continuing the experience. And if the product is high quality, the experience gets reinforced over and over every time you use it. With auto repair, in most cases, what we do, does not live on after the sale. Once a customer leaves with a new timing belt and water pump, there’s not much about that repair that lives on in the eyes of the consumer, except the customer experience. Your entire sales process—your marketing, the look of your shop, the people you employee and every aspect of your business that the customer sees—must tell the customer that what you sell is worth the price. Let’s remember one thing: Your prices will be challenged from time to time. So, here are a few more tips. Get the right training for your service advisors, especially in the area of customer service. Make sure your marketing and advertising communicates your brand and your culture, and please be careful with discounting. Claims that you have the best price on tires or brakes only results in consumers checking online to see if that’s true. Highlight your warranty, which has a lasting impression on the customer. Above all, communicate the benefits of doing business with your company. Let’s get back to Tom. After 39 years, Tom and his family are still customers. I have to believe it’s because Tom appreciates the level of service we have given him throughout the years and the relationship we’ve built. Tom has learned what Warren Buffet has often said, “Price is what you pay; value is what you get.” This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019
  2. It was a busy Friday morning when Tom called me for an update on his vehicle. I let Tom know that his car would be ready at the end of the day. There was a pause, and then he blindsided me with this, “You know, Joe, I did a little research on that water pump you’re replacing on my car. I can get that same part for $30 less. Why does your part cost so much?” I fired back at him by saying, “That’s impossible; it can’t be.” I went on and on attempting to defend myself, but I could tell I wasn’t getting through to him. After a few more words back and forth, Tom finally said, “Look, you started the job, so you might as well just finish it.” You’re probably thinking Tom went online to check the part. Well, this happened in 1980, my first year in business, and years before the Internet, as we know it today, even existed. Tom simply called a local part store. The parts store gave him a discounted price and then figured he would challenge me. Consumers checking your prices is nothing new—it just got a whole lot easier these days with the world wide web. Now, let’s clarify one thing: I am not going to tell in this article that there is a foolproof way to train consumers not to go online to check your prices. However, what I can tell you with certainty is that if you continue to feature products and not the customer experience, you are telling people to please check your prices. Consider this: You’re out to dinner and you ask the waiter for the wine list. As you scan the list, you recognize a brand and then look to the right at the price. Do you Google the bottle of wine to check what you could buy it in the store? We all know that a $10 bottle of wine in the store can cost well over $40 at the restaurant. Here’s the bottom line: The restaurant is selling more than wine and food—it’s selling the customer experience. And if all goes the way it should, we pay for the meal and the bottle of wine, even when we know the wine is priced higher than we could purchase it at the store. And, we are OK with it. Our business is no different. We need to focus on the experience, not the products. Yes, we install water pumps, control arms and radiators. But, that’s not our main focus. Our focus is on the value and the benefits of doing business with us. Now, with that said, there’s a delicate balance between being competitive and being profitable. But, as value goes up, price becomes less of an issue. Here’s the difference between our business and a product-driven business. When you buy a product—let’s say a watch or a cell phone—the experience lives on long after the sale. Every time you put on the watch, or use your cell phone, you are continuing the experience. And if the product is high quality, the experience gets reinforced over and over every time you use it. With auto repair, in most cases, what we do, does not live on after the sale. Once a customer leaves with a new timing belt and water pump, there’s not much about that repair that lives on in the eyes of the consumer, except the customer experience. Your entire sales process—your marketing, the look of your shop, the people you employee and every aspect of your business that the customer sees—must tell the customer that what you sell is worth the price. Let’s remember one thing: Your prices will be challenged from time to time. So, here are a few more tips. Get the right training for your service advisors, especially in the area of customer service. Make sure your marketing and advertising communicates your brand and your culture, and please be careful with discounting. Claims that you have the best price on tires or brakes only results in consumers checking online to see if that’s true. Highlight your warranty, which has a lasting impression on the customer. Above all, communicate the benefits of doing business with your company. Let’s get back to Tom. After 39 years, Tom and his family are still customers. I have to believe it’s because Tom appreciates the level of service we have given him throughout the years and the relationship we’ve built. Tom has learned what Warren Buffet has often said, “Price is what you pay; value is what you get.” This story was originally published by Joe Marconi in Ratchet+Wrench on May 1st, 2019 View full article
  3. OK. Not to start another parts markup thread but I would like to look at this from another angle. What percentages do you aim when marking up parts when you look at the part categories? Just an example below: Brakes 70% Struts 30% Shocks 50% Tires 15-30% Maintenance, etc ,etc The reason I ask is because even a standard parts pricing matrix can blow certain items out of reasonable sale price. I am aware that less expensive items can net larger profits, which also makes up for more expensive items but I am trying to see a base line of what parts markup looks like with these categories. Thanks
  4. There are quite a few threads about pricing but I think it might be better to shift that discussion to value. How do you add value for your customers? For example, we have a very clean waiting room with coffee, wifi, nice music etc... We also, answer the phone in the happiest way possible, we use tablets for inspections, we vacuum the front footwells for all oil changes, we have demo parts to help educate customers and we have a 3yr 36k warranty. Recently I've been trying to dream up ways to add even more value so I can compete hard on what I deliver. For example, I just added a 20 year master tech, I thought I could vacuum every car and leave a thank you note on the dash. What are you doing to add value? What additional value are you adding that I'm not doing? I would love to borrow some ideas if you are willing to share.
  5. Hi everyone, New blog post on this very important topic here: http://www.autoshopowner.com/blog/16/entry-190-did-you-see-the-latest-goodyear-tire-rubber-announcement/ All major pricing changes like this one, affects everyone in the auto repair industry.
  6. The Internet Has Changed the Way We Do Business The other day, Mike, one of my service advisors, gave a customer a price on tires. She then reached into her pocketbook, pulled out her Ipad, and said, “Give me a minute”. After a few minutes of surfing, she said to Mike, “Well, the price you gave me is ok; there is one tire shop in Danbury that has those same tires for $15.00 less per tire. Can you match the price?” Sound familiar? You bet. We have all been down this road, and that road has no end to it. Look at your new car dealers. The days of the traditional car sales are over. Many new car dealers no longer pay commissions to sales people. Why? The margins have shrunk due to competing dealers giving prices online, and so many car dealers competing for a share of the same pie. While, I don’t think the internet will have the same impact on our industry, it has impacted us to a degree. And we must learn to deal with, not fight it. You need to bring value to your customers. Don’t enter the price game, you will lose. You need to be competitive, but you need to be profitable too. Making a sale for the sake of a sale, without turning a profit is financial suicide. Promote benefits, not price. Create your unique value proposition: Ask yourself, "Why the customer should buy from you." Let those shops that don’t understand this engage in a price war. As they fail, it will only make us stronger. How did Mike handle the question about “Matching the price?” He simply said, “Well Miss Smith, let’s review some of the benefits. Our tires come with a road hazard warranty, road side assistance, lifetime tire rotation and flats fixed free. Plus, Danbury is 45 minutes away, if you ever have a problem with the tires, do you really want to travel to 40 minutes to shop where they don’t know who you are? She looked down at her Ipad, looked back up at Mike, and said, “Ok, makes sense, put the tires on."


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