Add-on Sales, Add-on Profits

If you’re like most shop owners, you’re not in the auto service business just because you have a never-ending love affair with cars — you’re in business to make money. It can literally be the little things that cumulatively count the most towards incremental revenue building. Little things such as wiper blades, additives, and lighting products — if you think out of the box and don’t get trapped in repair mode.

Don’t feel bad — there’s general agreement that most shops aren’t sales oriented … but they can be.

“The smart owners/managers are the ones that are teaching their counter people the importance of upselling,” says Brad Shaddick, Director of Sales for Federal Mogul Canada.

“They do the multiple-point checks when a car’s in for an oil change. They do the necessary things that lead to an add-on sale,” says Shaddick. Being sales-oriented is “absolutely so important” for increased profitability, he affirms.

Ask and ye shall make more money

Making big money with small-dollar items can come down to asking questions like these when a car comes in for service:

* How much mileage is on the car?

* When is the last time the wiper blades were changed?

* When was the last transmission or fuel injector service done?

* Have you thought about replacing lighting?

If, for example, there’s high mileage, the customer could probably be sold a premium oil or engine additive. If you educate the customer about how headlights dim over time, there’s a big opportunity to sell a premium after-market headlight. Be proactive.

“Installers need to do an inspection of the vehicle lighting system. It only takes a second,” says JoAnn McKeown, National Sales Manager at Osram Sylvania.

“With a lightbulb, they (shops) would only think of lightbulbs if one was burned out. If you wait for it to burn out, it’s going to be a declining market. The OEs are using longer-life products. Get people to change that bulb before it burns out.”

The same goes for wiper blades — those things that are supposed to be replaced twice a year, but most drivers don’t get in the habit of replacing regularly. All you have to do is ask customers when they last replaced their wiper blades. But, “Generally, they (shops) don’t so that’s why it’s such an opportunity for them,” says Rick Adams, AC Delco Product Manager — Electrical and Battery.

“It’s always a chance to do some upselling. If they offer a polymer blade as part of a free wiper blade replacement service, then they can upsell to a premium blade. I don’t know too many people who’d really want the polymer blade nowadays.”

In addition to asking the right questions, you need to take advantage of supplier programs with point-of-purchase materials such as posters and counter displays.

“The good shops understand the importance of having a POP piece that helps them explain to the customer the features and benefits of the product,” says Federal Mogul’s Shaddick.

Do the math

Dennis Favaro, Canadian Marketing Manager at Valvoline Canada, explains that his company focuses on a “solutions-based selling platform” that gives shops the knowledge, products and selling tools they need to make those add-on sales, and make staff comfortable selling.

Valvoline provides shops with worksheets that lets them do the math and see the potential in add-ons. “When you start to talk to people about dollars, they start to listen,” says Favaro. And when shop owners do the math, “Their eyes usually widen and they start to drool.”

Suppose, for example, that you ask 10 customers for add-ons. Think about the cumulative “hit-rate”, don’t worry about the immediate hit.

“If you get nine no’s and one yes, that’s 10 per cent. You know what that means in increase for additional services if you get 10 per cent? Even if it’s one in 20, that’s 5 per cent,” points out Favaro. And it all adds up over the course of a year.

He points out that if you do 250 vehicle services and add $40 to each service, “That’s $10,000 and if your margin is 40 per cent, that’s $4,000 in their pocket that wouldn’t have been there before.”

Adds Brad Shaddick, things like wiper blades, headlights and additives are “small-dollar items in the big scope of repairs, but cumulatively they add up to more business.”

It’s important to have the right product mix in stock, too. You don’t want to invest too heavily in inventory, but you need to make sure you have enough range of the small-dollar items for both customers who’ll settle for a standard replacement wiper, and those who want the latest high-output headlamp.

“It’s important to have something in the store, so the consumer will ask for it,” says JoAnn McKeown of Osram Sylvania.

She says independent shops can take a lesson from retailers like Canadian Tire or Wal-Mart, where drivers can go to get most any replacement product, including premium parts. “There’s no reason why the installer can’t learn from that and do better with those products,” she says.

“What you need to do is sell them things they can’t necessarily get somewhere else,” adds Dennis Favaro. That means taking advantage of the products sold by manufacturers that are in many cases premium items not available in retail stores, and educating customers about value.

Think like a retailer

Whatever you do, don’t get caught up in getting repairs done and out the door.

“Installers are pressed for time when they have a full day of repairs lined up. I think that’s where and why, when an installer gets busy, in many cases the peripheral sales opportunity falls off the table,” says Brad Shaddick.

There needs to be a process in place for add-on sales in your shop — doing multiple-point inspections, asking a series of questions, having a checklist to follow, good communication between your service advisor and technicians. “The service manager, the counter person, or the greeter or the owner/operator has to be educated on the process,” says Favaro.

He points out one example in a quick-lube shop: “I watched one ticket where a lady came in for a $24.95 oil change and it went up to $190.00. You know how many times I’ve seen that? And it’s because they ask.”

Use all the collective resources at your disposal: Ask questions, stock and offer the right products, take advantage of product and incentive programs offered by your suppliers. Making an add-on sale doesn’t mean you’re jamming products down the customer’s throat, or trying to scare the customer into thinking they need something they don’t need.

“Most customers won’t look at it as you’re trying to take money out of their pocket. Most will appreciate that it was brought to their attention and go ahead with the purchase,” says Federal Mogul Canada’s Brad Shaddick.

“It’s about appealing to people’s sense of ownership in the vehicle, and sense of keeping that vehicle running,” says Dennis Favaro.

And if they leave satisified with the service and the product, they’ll be back. And that will build your business and your bottom line.