Who or what is your competition?

A business textbook definition of competition would probably say the shop down the street from you or the big box store or the new car dealer or the fast lube shop is your competition. There is a perception by many shops that all of us are competing for a limited pool of customers with a limited amount of money, so we end up like so many industries, competing on price only and racing to the bottom.

What we need to realize is that our real competition is WestJet, Air Canada, golf and hunting stores, furniture, clothing and jewelry stores. I believe that many people in business think of most of their customers as having static amounts of money, some people have a lot and some people have little. The reality is that even with the high level of consumer debt in Canada, the average consumer has cash flow. Every couple of weeks they get a paycheck, they pay their mortgage or rent, food and clothes, the minimum payment on their credit cards and the rest of their bills. If they are lucky or good with their money, they will usually have a small amount of money left over for discretionary spending. If we are lucky or have attracted the right customers, some of them may have already set money aside for the repairs and maintenance of their vehicles. These folks understand the value looking after their vehicles and are fairly easy to deal with. But that is not usually the case.

Competing for Customer Dollars

It is not so much that we are competing with WestJet or Cabela’s, but we are competing with them for our client’s money. Once a Canadian family has spent the majority of their money on necessities, or perceived necessities, they will choose to spend the discretionary money where they feel they want to or where they see the most value. So the question I have for you: is it more important for a consumer to look after their car or to buy a new set of golf clubs?

Their car is what takes them to and from work; it is what takes them to and from their children’s school, their parent old folk’s home. If it is not safe and reliable, they won’t be able to lead the lives they want. The real question is how affordable is reliable and safe transportation? In my last article, I mentioned how you can save the consumer thousands of dollars a year by maintaining their car for 10 years past their car payments. But I need to give you more details on how this is carried out well.

Many shop owners and service advisors, when presented with a report from a technician on the recommendation of a particular service or repair, only make a note in the comment box of the customers invoice. 

I don’t have any statistics on this, but I think we all know that most customers don’t read the comment box. Why are we uncomfortable with telling a client that their vehicle needs a particular service? Is it that we don’t want to be perceived as pushy sales people? Do we not truly believe that the service is required? It is important to realize at this moment, that if we focus on maintenance as a way for us to make money, most customers will sense that and ignore you.

If we truly believe that maintenance is important and will save the client money in the long run, they will sense your concern for their well being and say yes. We should be able to explain in clear terms what the features and benefits of a particular service are and when it is needed. When we communicate to the client with conviction and confidence about the needs of their car, they will figure out the money they need, especially if we practice booking their next appointment in the future in such a way that they can be in control of their time and money.

Going Beyond the Comment Box

So here is how we compete for our client’s money. Imagine a customer in your shop on June 27th. They are in for a routine maintenance service and an exhaust repair. Your technician identifies that the vehicle is due for a transmission service, and that service will cost approximately $200. If it is not brought to the customer’s attention in a professional fashion and is only noted on the bottom of the invoice, chances are that service will not get done. A week later, the customer goes on holidays for a golfing trip. During their first golf game they break their driver and it’s off to the golf store to buy the latest “Big Bertha” driver. There goes the $200 dollars. Now if the customer had understood how important that transmission service was, he would have probably had it done before he went on holidays. If the club had broken later on, he would have probably made due with buying a used one and would not have held that against you because he understands that he has a transmission that will last a lot longer. After his holidays the customer goes on a long road trip for his sales job, he puts a lot of kilometers on his car and decides to pull into a fast lube shop for an oil change. The fast lube shop sells him the transmission flush as well and your opportunity for that service is lost forever.

We cannot force anyone to spend money at our shop. But I believe we can have them want to because of how well we inform them of the condition of their vehicle and of the value of keeping this vehicle for a long time. In 2009, J.D. Power and Associates reported that 88 per cent of vehicle owners want to know everything their car needs at the time of service. That does not mean that they want to get all the work done that day, but they want to know. Our challenge is that we don’t know how to inform them about the complete condition of their car today without feeling and sounding like a high-pressure sales person.

What to Focus On

The first step is for you whole team to have a focus on saving the customer time and money, your goal should be to provide safe, reliable and economical transportation. Approaching things with that attitude means that you have the customer’s best interest at heart and they will sense that. When you tell them about the complete condition of their car today, they will understand that it is information, not a sale, and that you will help them plan these expenses.

The second step is to have a good inspection process in place. They should range from small complimentary inspections, inspections that are packaged with maintenance services, and full comprehensive inspections. When a customer drops off their vehicle you should show them the actual inspection form that you will be using that day. That way they are connected to the process. You will tell that you are inspecting the vehicle, but that unless it is a safety concern, you will work with them to book their next appointment in order that they can budget their finances and when they can be without the car again. Once you call them back during the day to inform them of the progress of the vehicle you will let them know the results of the inspection. In this case you will have estimates ready for the most urgent work required, but if it is not a safety item, you again will assure them that this can be booked down the road. At the end of the day when you are reviewing their final invoice you will review the inspection results with them and create a plan to get the work done. At that point it becomes deferred work, not declined.

The third step is to have a system in place to track this deferred work and always keep the client informed as to the most urgent services that need to be performed. Eventually as the vehicle is “caught up” their annual expenses to run this vehicle actually go down, on top of the fact that they don’t have car payments anymore. I believe
that this process is the best way to become a shop that informs and educates their clients rather than sells car parts. This way the client gets a complete picture of their vehicle every time with out feeling like they have to spend all the money.

And most importantly they will feel like they have a safe and reliable vehicle and not be thinking about whether they need to replace it or not. They know that what needs to be done is done and what needs to be done in the future is planned for. Talk about peace of mind. If you sell anything, that is what you should be selling.