I Found It on the Internet
The Internet is playing a big role when it comes to our customers these days. How many times a week do you have a customer tell you that they looked online and found what seems to be a diagnosis for their vehicle’s problem? It sounds exactly like their problem and they want a price to fix it, without having you properly diagnose it. What do you do? How about the customer that comes in and says he found the parts for his vehicle on the Internet for a lot cheaper, and wants those parts installed by you?
In years past, these situations would have never been acceptable, but with the ever-increasing amount of free information available at the click of a button, what is a shop owner to do? Work with the customer or stick to your guns? I believe it depends on the situation. I also think that in today’s business climate, we should not be so rigid in our thinking, as that could lead to lost customers and sales.
Our shop is in a rural military town where news travels fast, meaning word can spread like wildfire if someone finds that we are inflexible or not accommodating to their needs. A lot of these young recruits are on a very tight budget, they are tech savvy, and they use the Internet for almost everything. They also have access to a hobby shop on base to work on their vehicles.
Recently, a local Marine came in and asked us if we could replace his clutch. He had already bought the clutch online and found some information there that seemed to diagnose his problem exactly. At this point we started the interview and education process with the potential customer, explaining the benefits of using our parts and diagnosis versus self-diagnosis and him purchasing the parts. And we took a quick walk around his vehicle and looked under the hood.
We know that we must be profitable or we will be out of business, so after the interview and looking over the parts he purchased we decided to take the job. We have an adjusted labor rate to compensate for loss of profit on customer-supplied parts. An estimate was given along with the basic no-warranty terms, and he had us replace his clutch. Lucky for him, the old clutch was actually bad, so his Internet diagnosis worked out. Once we removed the clutch assembly we found his flywheel had cracked badly and needed replacement. We were able to sell the flywheel to him at our normal margins and get the car done the same day.
After the upsell on the flywheel and the adjusted labor rate, we profited the same amount as if we estimated the whole job, but with less liability, as we make clear and document that there is no warranty whatsoever on customer-supplied parts. We have customers sign a document acknowledging this.
This is just one example of many that can walk through your door. A few years ago, I would never have thought I would allow this situation to occur at my shop, but things do change, business changes, and because of our flexibility in a dire economy in a military town, we have increased sales and repair orders with exceptional margins. I don’t know if this model will fit everyone, everywhere, but I do know it is working for us. If you want to give it a try in your shop, here’s a brief recap of the steps: Be flexible, interview and educate the customer, adjust for loss of parts profit, be very clear, and document everything.
B.J. Lee has worked in the automotive repair industry for more than 30 years. He is an industry consultant and trainer for the Institute for Automotive Business Excellence and owner of Stellar Performance Inc. in 29 Palms, Calif. Contact him at email@example.com.