Selling diagnostic work successfully requires ongoing communication with customers. Meanwhile, selling it profitably demands very aggressive pricing, smart service managers said. Successful diagnostic work is the classic two-edge sword. It can build your service department's reputation like nothing else. But it can also bankrupt you if you aren't careful.
Sooner or later, a tire dealer who performs automotive repairs encounters this dilemma: Pinpointing a vehicle's problem consumes considerably more time than anyone in the service department imagined.
It takes a diligent technician half a day to locate the frayed wire or loose connection causing the customer's complaint. But it only takes a few moments of labor and possibly pennies' worth of parts to correct the problem.
On the one hand, the service manager is thrilled his tech pinpointed a problem several competitors could not since he's very sensitive to the fact some motorists in his market area think tire dealer personnel are ignorant, parts-swapping jokers.
Fixing these tough problems will help grow the business by proving the service department's mettle. Gradually, motorists nearby will hear that they are serious diagnosticians after all.
On the other hand, the service department loses its proverbial shirt on this job. After the fact, none of the service personnel realizes what the customer was willing or expected to spend on this job. The conscientious service manager, embarrassed by the time needed to find the problem, convinces himself the car owner would never pay four hours' labor, so he charges a minimal fee and chalks the job up to experience.
Recently, I had a spirited discussion about diagnostic time with some colleagues near Sacramento, Calif. The points these winners emphasized are well worth restating.
First, don't be afraid to charge for your knowledge and skill—even when it takes hours to track down the problem. One working service manager, an ace automotive electrician, stressed charging whatever the market will bear for troubleshooting time.
``Doctors don't give away diagnostic time and we shouldn't, either. Deep down inside, people understand—but won't admit to us—that their cars are complicated machines that can be very time-consuming to fix,'' he said.
This manager stressed that after he or his techs have diagnosed the problem, customers often sigh in relief, admitting that other shops couldn't diagnose it. Some confess that although new car prices are high, they considered trading their existing vehicle for fear that no one could solve its problem, he noted.
``If they admit that they were frustrated enough to incur the cost of a new vehicle, what's that tell you about the value of what we do? It tells me the value of our diagnostic time is really greater than we ever thought!'' he said.
Selling diagnostic time in stages is prudent for two reasons. First, most consumers already accept the strategy because they've seen doctors do it and doctors enjoy higher credibility than auto repair personnel do. Second, selling diagnostic labor an hour at a time provides structured checkpoints for stubborn and/or egotistical techs.
``We have to rein in some techs because they just don't know when to stop. Or they won't pause to assess their progress,'' he added. ``These guys know certain basic checks must be completed within the first time block we sell the customer. It's just good discipline.''
Ongoing communication is crucial. Reassure the customer up front that you'll update him or her hourly on the progress of the diagnosis. Be sure the customer leaves a pager number, facsimile number, e-mail address, etc. to speed up communication, he said.
As I have suggested before, some progressive managers loan out pagers so customers can respond quicker to these update calls.
The most successful auto repair shops try to maintain a one-to-one ratio between parts and labor sales—a buck's worth of labor for every buck's worth of parts sold. Some bosses jack up their charges for straight diagnostic time because they realize they may end up with zero or nearly zero parts sales on that work order!
Some managers think high diagnostic fees will scare people away. But others argue that high diagnostic fees pre-qualify the folks who really want to fix their cars.