When to be Flexible With Pricing
In Brock Temple’s experience, looks can, in fact, kill.
The longtime parts and service director knows that, these days, if a knowledgeable customer sees an unusually high quote for brake work, two things are likely to happen: their eyes will grow wide, and then they’ll go elsewhere.
In 2018, Temple explains, most customers “have already priced the job out. If their brake light is on, they’re on a website, looking to [compare maintenance prices].
“Sticker shock, you know, that kills people,” says Temple, who helps run fixed operations at Audi Pacific in Torrance, Calif.
Temple, whose service department has an annual revenue of $5.5 million, takes several steps to avoid losing price-conscious customers. He frequently compares his shop’s prices to those of competitors, for example. And, when customers ask if Audi Pacific is giving them a good deal, Temple makes sure to thoroughly explain all the certifications his facility has.
“My experience has been to break down to them the quality of the brake pad, and who’s
manufacturing it,” he says. “I go back to the value of what’s going on here at the dealership, and what it is they’re paying for.”
Millennials seem to be especially price-conscious consumers, which is one reason Temple has thought of countless ways to handle such frugal clients. Below, he lists several suggestions.
As told to Kelly Beaton
Explain the value of your certifications. You know, the cost of prevention is a very small percentage of what the end results could be if that vehicle isn’t maintained. You need to have the vehicle maintained to promote its longevity—the health of the engine, the health of the overall vehicle. Technicians’ eyes are looking at the tires, the brakes, everything. Also, when customers go to re-sell that vehicle, it holds better value. Because, if you go online to sell a car on Craigslist, the first thing you’ll be asked is, “Where did you get your car fixed?” If it’s at Audi Pacific, that’s fine because we have a service record to go with that.
Don’t start out by offering a discount. Don’t say, “The brakes are $500, but I can give them to you for $450.” Because the customer might be thinking, “Wait a minute, you just gave me $50—is that the best you can do?” Instead, say to them, “The brakes are $500; would you like me to get them done for you today?” So, we try role playing and cross training. Then, if an advisor has a specific instance they’re struggling with, they can watch how I negotiate with a customer.
Don’t have anything set in stone on a menu. A lot of dealers menu price their service packages. What we do is this: Say we’re going to lose a customer that claims, “Hey, my engine smoked on me, and you guys want $10,000 to replace the motor, but the place down the street could put one in for $5,000.” If that’s the case, we’ll get ahold of our parts department and have them call places like local salvage yards to see if we can get that motor, and we’ll be as competitive to them as we possibly can. But then we’ll limit the warranty.
If it’s comparing apples to apples, price match. We’ll price match, within reason, but not from an independent shop—unless a customer wants us installing some aftermarket parts. We’ll try to figure out a small discount for the customer, or maybe we’ll throw in a minor detail, or maybe we’ll top off their tank of gas. There has to be something of value to the customer.
Remember the lead-to-sale strategy. And that’s about coaching your staff, so they understand what it is exactly that they’re selling, so they can explain that to the customer. Because the customer doesn’t usually know what a water pump pulley does. Tell a customer, “You’re in for your 40,000-mile maintenance, and last time you were in, your brake pads were at 6 millimeters, and now they’re at 3. So, the light’s going to come on soon. So, I want to get that taken care of today before you leave, so you don’t have to make another trip back to the dealership.” You have to lead customers to what they want to buy.