Slice or dice the issue any way you want: Cheap is still cheap. Long-term, cheap is not necessarily the best one-word description for any tire dealership performing low-ball-priced auto-motive repairs.
I explained this in two recent TIRE BUSINESS columns (July 11 and 25). Dealers reacted with some interesting comments and questions, some of which merit discussion here.
Basically, I said that too many service shops are struggling to make ends meet or have gone out of business trying to compete with competitors advertising the lowest prices in town. As long as I have been in this business, owners and managers have nagged me about the price issue. Anymore, I'm thrilled when the topic does not come up at meetings, seminars and other trade events!
Competition should bring out the best in every service shop, spurring each one to work smarter and more efficiently.
But the low-ball-price artists foster unfair competition and generate mistrust among consumers. That's because the price prostitutes try to convince motorists that the incomplete, inferior work they do and the substandard goods they install are equivalent to proper auto repairs and original equipment-equivalent parts.
So trusting consumers inevitably don't understand why good repairs may cost 50-100 percent more than what the low-ballers advertise.
To make matters worse, the low-ball-price artists market themselves as the motorist's friend, the shrewd low-cost provider smart consumers patronize. This magnifies our industry's credibility problem.
Unless we educate consumers, they won't understand the difference between cheap, short-cut work and proper auto repairs.
The bottom line is that price cutters hurt our credibility at a time when our industry desperately needs to bolster its image. Cheap-price artists lower the real, true value of proper auto repairs in the minds of consumers.
Cultivate own customers
To succeed in the future, tire dealers must actively attract the caliber of clientele they need or want to serve. Dealers who promote price too heavily will attract a higher concentration of price-conscious buyers instead of value-conscious customers.
In this context, ``buyer'' denotes the skinflint who skips from store to store solely to capitalize on the sale of the week. ``Customer'' denotes a motorist who trades with the same store on a regular basis.
I cannot repeat this advice often enough: Long-term, promoting and providing real value is the best way to attract value-conscious customers. Excellent work at competitive prices defines real value.
Those of us who have worked the service desk know the more value-conscious customers you pull in, the fewer ``antacid'' afternoons you endure. The more value-conscious customers you attract, the less time you spend arguing over price. The more value-conscious people you draw, the more time you spend actually serving customers.
This also means you can devote more time to closing other service or tire sales and selling people up to additional services.
Experience also shows this clientele offers the best prospects for repeat tire/service sales. Repeat customers should be the backbone of any service department's business.
The remarks I received related to tires more than automotive service per se. One reader stressed he sells very few of his loss-leader-priced tires. However, posting a dirt-cheap price out front helps him battle major discounters by getting motorists' attention and getting them in the door. In fact, the super-low price has drawn enough store traffic to increase this dealer's daily tire count four-fold!
The man said his store's vastly superior service whips the wholesale clubs, but until he entices prospects inside he's got no one to whom he can sell!
For some dealers, baiting prospects with a nine-buck, 12-inch tire is dirty pool. If we excel at service, we must trumpet our advantage with huge signs and posters: ``We install and support what we sell-PRICE CLUBS DON'T!''
More and more often, I see dealerships literally in the shadow of price clubs counterattacking with similar signage.
Beware, I've seen the low-ball tactic backfire in auto repair.
By the time a service writer prepares an accurate estimate, the price differential between the needed repairs and the ``bait'' price for the simplest service is suspiciously large.
Meanwhile, does the customer perceive an honest effort to sell work the car actually needs? No, he smells a bait-and-switch ploy-a perception that does anything but enhance the credibility of all service personnel.
Many service managers I know avoid this situation by shamelessly promoting free undercar and underhood inspections. But they also advise the motorist up front that he'll receive:
a detailed inspection report on his vehicle;
that service personnel will show him worn or failed parts;
that they will recommend and try to schedule needed repairs and maintenance.
The success of this approach depends upon good customer communication combined with effective show-and-tell.
Tires can be an entree into a store's stellar service department. But longer-lasting tires mean dealers see consumers less often. One reader said dealers must offer competitive pricing or risk losing seldom-seen consumers. True, but competitive pricing still is not low-ball pricing.
Plus, if you do repairs and learn to sell maintenance successfully, you build a foundation for drawing the customer back several times per year. Each return trip is another chance to check the vehicle for legitimate service sales. Think how many new sales opportunities this creates!
If you don't understand how selling maintenance helps you both retain as well as create more service work, contact TIRE BUSINESS and I'll devote another column to the topic.
Finally, a reader claimed that low-ball pricing enabled a major discounter selling tires only to capture a large market share in his city. He disputed my contention that low-ball-price artists don't make enough margin to survive.
Read those two July columns again and you'll find the focus was really on service rather than tires. The additional overhead an auto service operation incurs makes it extremely difficult for a shop doing proper repair work to survive on low-ball prices.