Auto Service World
Feature   May 1, 2003   by Paula Ellis

Pour-In Profits

Chemicals additives are one of the easiest upsells in auto repair. Don't neglect the good margins to be had in a few extra minutes.

Let’s face it. Not every component of your bottom line comes from the big-ticket repairs and major overhauls. But add-on sales of chemicals can bring in a steady, weekly flow of profit with very little effort. Oil and fuel additives, injector cleaners, even vision products can make a tidy margin over a month. It starts with a simple suggestion.

“It’s a no brainer,” says Wynn’s Canada national sales manager, Ross Ayrhart. “A fuel system product-you pour it in the gas tank. That’s minutes, literally. They should be making 30-50 points on that and it’s a one-minute operation. And an engine treatment, they’re doing an oil change anyway, they’re going to make the same kind of margin. I’m not suggesting here that they use an engine stop-leak because they will want to replace the gasket on the oil pan. So I’m not taking that part of the business away. These are maintenance add-ons.”

Most of these products are about prevention. The customer who cares enough about his or her vehicle to bring it in for regular oil changes and tune-ups will be receptive to an additional service that won’t cost much, but will enhance their regular maintenance regime. They’ve probably never heard of a fuel injector cleaner or an oil treatment, so a one-minute explanation of the benefits is time well spent.

Says Sean Martell, market manager, Auto and Specialty Products, First Brands/STP, “People understand the need for an oil change-from Henry Ford back people have been changing their oil. But the fuel system they probably don’t think about as much. So saying, ‘hey, you know your fuel system gets dirty just like your oil does’, for ten dollars more they can put in some STP and clean their fuel system at the same time. It’s easy for the consumer to make the link, and if you’re doing it at the same time it’s no effort for the technician.”

If the customer is spending 20 bucks or so on an oil change, or maybe $100 on a tune-up, another ten or twenty dollars for a chemical conditioner is not a big stretch. The technician has to be able to explain in simple terms exactly what the product does for the customer to perceive its value. And nothing beats something in writing for educating the consumer.

“If you have paper work on your chemical, customers love it,” says Jim Karas, owner of Automotive Experts in Scarborough, Ont. “If you just show them a bottle they say, ‘yeah, well, I can get that at Canadian Tire, thank-you’. But if you give them a brochure and tell them to take it home and read-up on it, nine times out of ten they come back a week later to say, go-ahead, do it.”

Ask your supplier for promotional material that will help you sell the chemicals. Posters, counter mats, and especially pamphlets the customer can take away, can generate future business. People like to feel informed about their spending.

There’s a wide range of chemical services garages can promote, from pop-and-pour additives to engine flushes. If your business has a gas bar, it’s worth stocking the pour-in products at the pump and having the cashier ask the customer if they want to purchase a gas treatment. Once they are in the office discussing maintenance or repairs, you can suggest a more comprehensive service, like a fuel injector cleaning. If you offer services that range from something they can do at every oil change, to a once-a year treatment, you have the basis for ongoing add-on sales and a nice, steady cash flow on your chemicals.

People will pay a reasonable premium for the convenience of having someone else get their hands dirty. “What people should remember is they don’t need to be the same price as Canadian Tire or Wal-Mart in order to be successful selling it. They can be higher priced because they’re right there at the time the person’s thinking about it. And if it’s something they are selling as a service, they can really make some margin on it,” says Martell.

If you take it beyond a casual suggestion, chemical additives can become a significant part of your business, as Ayrhart explains: “In Quebec, they’re using this kind of add-on quite successfully as a package, not just the garages, but also the car dealerships. They are adding on about ten to fifteen dollars to the price of an oil change with an oil system cleaner, then they may or may not put an engine additive in there. That type of service is really a once or twice a year service, it’s not an every oil change service. But they’re probably driving from a $24 oil change up to a $49 oil change and they’re making very good margin on that upsell. Some of them have it on their menu board, but it’s really an upsell.”

Another area worth considering is seasonal chemical products. In cottage country, for instance, it’s worthwhile offering fuel stabilizer for boats and jet skiis and even lawn mowers in the fall, and all terrain vehicles and snowmobiles that are going into storage in the spring. There are lots of opportunities to capitalize on chemical sales.

Chemical add-on sales are about offering a legitimate service at a reasonable price. That’s something the average car owner can understand. Even late model cars can benefit from a preventative chemical additive. “In 20-30,000 kms, you’ve already seen varnishes starting to form on the injectors, etc., so these are legitimate services,” says Ayrhart.

Repeat customers are an excellent opportunity to promote chemical treatments. Says Ayrhart: “Now that the technicians and the owners are much more aware of the history on their repeat customers, they can say, ‘well, you’ve had the car 30,000 kms, this has happened over that period of time and this is what we recommend to fully clean the engine during an oil change’. They’re going to do three or four oil changes a year, and we’re just saying, on one of those, use this product.”

Karas has built a loyal customer base based on trust, so he promotes the chemical treatments he can rely on. “I only try to sell the stuff that works, stuff that I’ve tried out on my own vehicle and I’ve noticed a big difference with. My fuel injection service really, really works. I’ve had customers call me back and say, ‘what did you do to my car, it’s never run this good’. Customers don’t mind spending the money because they realize the difference.”

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