AKRON (March 29, 2004) - The expression, “We make it up in volume,” may apply to selling some products, but not automotive repairs and maintenance.
Tire dealers who offer automotive services ultimately will earn more income per bay just by attracting and retaining higher-caliber customers, a service shop owner told Tire Business.
In my last two columns, I've discussed the advantages of using shop management software that conveniently monitors actual monthly vehicle service expenditures. My colleague David Benbow, who has 25 years experience as a service shop owner-operator in suburban Philadelphia, brought this idea and several others to my attention recently.
What's more, Mr. Benbow is yet another in a growing segment of savvy bosses who don't crave quantity for quantity's sake. Their argument is that, ultimately, quality will trump quantity.
“To me, you can only 'make it up in volume' by selling more merchandise without increasing your other costs, he said. “You can't do that when you're selling labor as well as merchandise. In our business—selling automotive services—associated costs like labor always increase when you increase volume.”
According to Mr. Benbow, the only way to actually “increase volume” is to either work longer hours or to hire more technicians. But how long can you push your techs to work substantially longer hours? Plus, adding technicians often requires disproportionate extra expenses such as additional bays, new lifts, etc.
The real road to long-term prosperity is increased efficiency. For one thing, that means attracting and retaining higher-quality customers who are willing to spend money on maintaining their vehicles. For another, it means culling more work from each and every vehicle that rolls into your bays, he said.
There's an old expression among marketing people that the greatest opportunities for growth may come from your existing customer base. To the David Benbows of our industry, that translates into identifying and then selling more legitimate maintenance and repairs on vehicles your shop has already touched.
Convince—or, in the words of some shop owners, condition—motorists to bring vehicles in for regularly scheduled maintenance. Don't be afraid to create your own recommended maintenance schedule, either.
Every time a vehicle is in for its regular maintenance, inspect it very closely for everything from worn wiper blades to a perforated tailpipe. Then sell those repairs now, before a competitor has the opportunity to nab them. What's more, there's no rule book mandating that you have to needlessly discount these repair and maintenance jobs.
Mr. Benbow argues that experience shows this approach increases the bottom line and does it without the undue stress of pushing employees to get more cars through the bays. In other words, don't worship the false idol of increased volume for volume's sake.
The corollary to this philosophy is to promote your service business based on value instead of cheap prices. In my last column, I cited Mr. Benbow's example of how the lowest price ends up costing the consumer more per month because the repair doesn't hold up as well as a quality repair job does. This invites comebacks and needless stress and dissension among both motorists and your own technicians.
What's more, promoting cheap prices in your advertising only attracts cheapskates and tightwads. These types never become regular customers because they're only loyal to whichever business offers the lowest price, he added.
If you low-ball the price just to get the job, you lose. If the low-ball price fails to earn you a regular customer, you lose twice. Failing to create regular customers runs counter to the entire philosophy of working more efficiently.
Last but not least, give every potential customer the benefit of the doubt. Approach each one as if he or she is going to be a regular, long-term customer. If you fail to sell them on your value-oriented service concept, move on to the next prospect. The knee-jerk reaction of lowering your prices ultimately will not solve your problems.