I know we all want to build our businesses to be successful and profitable, but I have never been one who supports trying to win a price war.
Why? Let we cite an example. As long as I can remember, the purpose of advertising is to build traffic, make the phone ring and get more cars into your shop. While proper advertising can accomplish this, if the advertising is focused too much on price, it might attract "the price shopper." The price shopper is often a customer that most businesses don't want.
About a week ago, on a busy Monday morning, a customer showed up for his 10 o'clock appointment for an oil change. The sales manager waited on him and found it odd that the customer was unwilling to give us his phone number. After his work order was printed, the customer inquired about the price. When we quoted the price, he mentioned an online ad for $19.95.
The customer had not printed anything to support the ad, and—based on our review of the ad later—had failed to view the entire offer that dealt with who the participants were and all the fine print and pricing exceptions. It was obvious that the customer was becoming perturbed, so I attempted to intervene. I was certain we had no ad displaying such a low price, and when I attempted to discuss the matter with the customer he basically stormed out of the store while I was in mid-sentence.
Shortly after his departure, the customer phoned the store and the sales manager answered. The customer gave him an earful with no opportunity to respond and hung up. A few hours later, our tire manufacturer's customer assistance center called and told me that we had a complaint. It was the same customer, and during my discussion the customer care associate explained that he had done the same thing to her—aired his complaint and then hung up without giving her a chance to respond.
A few days later, we received a letter from the Better Business Bureau. The customer is asking us to send him $25 for wasting his time and gasoline. The almost funny thing about this is, it wasn't even an ad that we had signed on to.
Thankfully, most customers don't have a demeanor like this customer. If they did, I think I would retire or get into another line of work. Over the years, I have come to realize that, more so today than ever, it is difficult to advertise a price for a service that would apply to most vehicles. There are just too many variables, special oils, filters, covers and shields. And if you would read the fine print (which nobody does), there are so many exceptions and add-ons, such as oil disposal, shop fees, etc.
I find it better to offer a discount than an actual price. Most responding to these low price ads tend to be more price sensitive, and all the add-ons tend to water down the offer in their eyes. Then you end up getting what we got—a lot of time involved for nothing.
We all advertise in an attempt to build additional business, but I do not think that winning the price war is the way, or giving away the peanuts to sell the popcorn. I am a believer in fundamentals—provide quality repairs using quality parts and a high level of service at competitive prices. I also believe that advertising a low-ball price does not always attract the right customers, and therefore does not always achieve the desired results.
Bob Richey is owner-operator of Richey Inc./Goodyear Tire Center in Bellevue, Pa. This article, which first appeared in the Tire Dealers Association of Western Pennsylvania's newsletter, has been edited for length and clarity and is used by permission.