A common scenario for shops: The service advisor breaks down the cost of the job to the customer. They say the labour will cost a certain amount per hour and the part is X number of dollars.
The customer is incredulous at the price of the part. Of course, they looked online to do some price comparisons. They see that they can get it from another retailer for much less. They express their frustration.
This is where the old ‘bring your own steak to the restaurant’ story is often told. But Bryan Stasch, vice president of product and content development at the Automotive Training Institute, doesn’t want you to go down that road.
“I’m sure that butcher couldn’t care less what Ruth’s Chris sells their steaks for,” he told an audience at NAPA Expo 2022.
It starts by removing the challenge in front of you, Stasch explained during his session, Finding Money by Understanding your Financial Numbers.
He advised starting by telling the customer that you understand where they’re coming from and that you’ve also seen those prices online. “We’ve all seen the catalogues — Rock Auto, all of that stuff.”
“But what that [price] doesn’t tell you is, and what they don’t tell you is, that’s a do-it-yourself price,” Stasch continued. “And a do-it-yourself price assumes you have the time, the knowledge and skill and desire to do that service — and the willingness to do it again if it fails.”
Furthermore, that’s the parts side of the business. What you as shops do is the service business, he added.
“And with the service business comes highly skilled technicians [who require more skills] every day. It requires the right tools and equipment to make sure the right parts are replaced and the right parts are working together,” Stasch said.
He further emphasized the importance of differentiating the DIY part and the service side. What the customer is paying for is the service of doing the job correctly.
Then, he would close it out like this: “And I’m going to back it with one of the best warranties in the business. And if you count on me the way that you’re going to, this will be a win for both of us.”
And that’s the truth of it all, Stasch emphasized. The customer isn’t being fooled or persuaded wrongly. And the shop is keeping its bottom line strong.
Maybe there’s something like an air filter that a handy customer can do themselves and there’s some wiggle room there. “But everything else? I’m holding my profit margins,” he said.