It’s the Friday just before the Fourth of July weekend. As I stand at my bench putting the finishing touches on a 4R55E transmission I come to an interesting realization. Two customers called to tell me they weren’t going to pick up the cars we worked so hard to finish for the long weekend. They both said they were leaving for vacation and couldn’t find the time to come get their cars. This in and of itself shouldn’t bother me. I’ve been through it a hundred times. What bothered me was the realization that this happens every holiday. The scenario is, “The customers need their cars for the holiday because they are going somewhere. We work hard to get them done. The customers decide not to pick up their cars but apparently find some alternate means of transportation that earlier they swore they didn’t have, and we stand there working while everyone else runs off to play.”
Sound familiar? It’s one of the perks of being in a service business. You get to serve everyone so they can have fun while you work. It goes along with all the other late nights and early mornings you work to try to keep your customers happy.
But what about you? Are you happy? I am. I get to console myself in the knowledge that I’m getting paid really well for those jobs. So while the customers are sitting in the sun, I know that the day they come back they’re going to have to yank out those credit cards and pay me a good bunch of money for fixing their cars.
Good. Now I feel better. Can you imagine how I’d feel, given the same scenario, if I wasn’t being well compensated for my work? It would be really tough watching people have fun while I wasn’t being well paid to fix their cars.
What about you? Are you giving up your nights, weekends, and holidays trying to keep your customers happy? Are you being paid well for your efforts? If you’re not it may be time to find out why.
I know why it happens in most cases. The shop owner has no understanding of his or her cost of doing business and therefore does not know the right price to charge. Their prices are based solely on what everyone else in town is charging. This leaves the owner without much confidence in the price they quote. When you don’t have confidence three things can happen. One is you start to feel that your price might be too high. Two is that you’ll be wishy-washy when you quote it to the customer, causing them to want to fight it. And three, you’ll easily back down from it when challenged.
As much as I dislike the concept of working while others are playing, at least I know that my prices are based on real costs and reflect the profit I deserve for my efforts. That softens the blow considerably. In fact, while they are back at work next week I’ll be out making my semi-annual luxury car purchase and I’ll be feeling pretty darn good about it.
My customers are very well taken care of but so am I, and my employees. That’s the result of being honest with myself about what I should be charging. I don’t rely on what the guy down the street gets. I don’t even know what he gets and I don’t care. His cost of doing business and the profit he thinks he deserves are completely different than mine. So why would I ever think I could set my prices off him?
In the past I’ve always held my seminars in big cities. This year I’ve had the opportunity to travel the countryside putting on the seminars at rural trade schools in little towns that you have to have a navigation system in your car to find. I’ve been working for a company that wants to bring the training right to the people. A good idea when you consider that most people won’t go out of their way to get any. This tour has allowed me to take some time and see what’s going on in small town America.
Some of what I found was great. Some wasn’t. The great part was the confirmation of my suspicion that people in the auto repair business really care about their customers. They treat them like family and can’t do enough to make them happy. The not so great part was when I realized that in every town I visited labor rates in all the shops, except for dealerships, were within five dollars of each other. When I asked how their rates were achieved I received the answer I didn’t want to hear. Almost every shop owner said they didn’t want to charge more because they didn’t want to stand out from the rest. All that means to me is that when they go under from not charging enough, several will go out instead of just one or two who are lagging behind.
And what about the concept of the dealer being higher priced? I can tell you that in some towns the dealers were so much higher I didn’t think the repair shops were even in the same business. Could it be that the dealerships know their real costs and set their prices accordingly? Could it be that repair and transmission shops try to set themselves up as the alternative to the dealer by being so much lower in price?
Don’t they know that they are already the alternative to the dealer and that it has nothing to do with price? They only exist because many customers don’t want to go to the dealer. The dealer, we know, can fix anything on the car. They really can. So why is it then that when the car comes off warranty the customer is seeking us out to fix it? Could it be that they don’t feel they were treated well when the car was under warranty? Do you think they like the idea of doing business with the neighborhood shop where they actually get to know the owner of the business? (When was the last time you were in a dealership and actually saw the owner? Next time you go to one check out where the owner’s office is situated. Is it near the service department where he or she can do a good job of taking care of customers or is it near or in the showroom? Pretty much tells you what their focus is, doesn’t it?) Do you think maybe customers like the idea of not having to wait two weeks for an appointment? And just maybe they like that when they come to pick up the car at the end of the day there is actually someone there who can answer their questions; not just a cashier to take their money.
Auto repair and transmission shops are and always have been the alternative to the dealer. So why in the world would they want to be lower in price? The two things they can learn from the dealer is to figure out their cost so they really do know what to charge and to have an impressive looking facility so that the customers will feel it’s worth what they ask.
I keep mentioning the concept of figuring out your cost so you know what to charge. Of course, many of you don’t know how or you would already be doing it. The answer is your accountant. That person you pay to do your taxes and such. That’s who can help you. First of all they know exactly how to do it. Secondly, they can tell you, based on information you give them as to the kind of profit you want to make, how high to set both your labor rate and your mark-up on parts. You may be wondering why they haven’t already told you. Because you didn’t ask. Figuring this out takes time, and time is money. Offer to pay the accountant for his or her time to either do it or teach you how. It would be better if you learned how.
Once you know the numbers the next question is, will you have the nerve to ask for them? You might if you’re getting tired of watching everyone else play while you’re working so hard to keep them happy.
Just remember that no one will ever give you what you want unless you ask for it. Then you need to have the sales techniques to handle their price objections so you can profitably close the sale and keep them coming back and bringing their friends.
About the Author: Terry Greenhut is a highly sought after Automotive Aftermarket Sales Trainer and Key Note Speaker. He has authored numerous Automotive Aftermarket Sales Training Articles in many of the major automotive trade journals over the years. His best selling Automotive Aftermarket Sales Training Course is recognized as the industry standard. You can learn more about Terry by visiting his website at www.terrygreenhut.com