Auto Service World
Feature   June 1, 2006   by Andrew Ross

CounterTalk: Knowledge Building: Consumer Sales for Machine Shops

With the dramatic decline in production engine rebuilding demand of recent years, many machine shops are faced with an increasing need to seek custom rebuild business.

In both cases, it can tax the patience of machinists and shop personnel who may not be accustomed to dealing with the general consumer.

While this is not necessarily a brand new development, there are a number of considerations that are even more critical in today’s business climate. The following information, compiled from various conversations and presentations with industry members, should help the uninitiated understand what they might be facing, and the more experienced shops perform better in the retail market.

One of the key issues that many shops are faced with is the informed customer, or at least the customer who thinks he is informed. The Internet, for all its wonderful characteristics, does have a downside or two–one of which is that there is no filter determining which information on the Internet is expert, and which is little more than backyard boasting.

Consequently, any machine shop offering its services to the consumer can count on attracting at least a few customers demanding the kind of rebuild they’ve read about and the kind of results they have been led to expect, regardless of how far off the mark that might be.

Facing such a situation requires patience on the part of the staff member, but it also requires a strong knowledge of what is (and is not) possible. In cases such as this, it is important to communicate in a clear and friendly way just exactly what the situation is. And that communication might include the fact that while the scenario offered up by the consumer may be achievable, it is not something that your shop is prepared to embark on.

Take the 800 hp Honda for example. The blown, nitrous-guzzling four-banger may be all the rage at the local drag strip, but if you don’t have experience with it, or aren’t convinced that the customer understands how high the disintegration factor is, your business may opt to take a pass on the job.

At this point, it is important to remember that no single customer is more important than the entire enterprise.

Another situation you may be faced with is also often Internet-related, though it does not have to be: customer-supplied parts.

For the professional engine builder, few things cause the blood pressure to rise faster than a customer showing up with a box full of connecting rods, pistons, lifters, valves, and bearings, and a twinkle of possibility in his eye. Most machinists will understand that the problem with this is twofold: you cannot be sure at a glance that these customers are supplying parts that fit and work with the engine they are considering, and even if they do, there can be concerns over the quality of the parts. These are two big unknowns.

In a case such as this, there are two ways for you to handle the customer. You can explain that it is the shop’s policy to only use parts that it has obtained through its trusted suppliers, in order to be confident of the fit and quality of the parts to be used in the engine. As an alternative, some shops charge a parts verification fee to ensure that the parts are the right size for the job, and the right parts for the job. The issue of quality is a concern when you don’t know where the parts are coming from, but it is also important to be reasonable.

If the parts are clearly good quality, from a high-profile brand you know, you should consider this in your conversation.

It is also important to realize that while some customers are obviously neophytes and think they know a lot more than they do, you may also be faced with situations where the customer is knowledgeable, has a strong understanding of what he wants to accomplish, and is willing to work with you to meet those goals.

These relationships can be highly rewarding; they can build your knowledge in specialized areas, and can effectively give you an R&D budget for which you previously might not have had the means.

Which brings us to money. Although trade sales can often mean waiting to get paid for a couple of months, there are additional considerations with the consumer sale. You may, for example, have a customer who wants you to tear an engine down and find out what is wrong before committing to the job.

In such cases, it is wise to have a flat disassembly and diagnostic fee. A charge of $200 to $500 is not unreasonable, considering the labour and supplies required. If you wish, you can always credit this against the bill should you get the job.

If you get the job, consumer sales don’t mean that you can take the full fee up front; however, you don’t want to leave it all to be paid upon completion either.

You’ll want to balance the risk: arrange for a deposit up front, the balance upon completion, and perhaps a few payments in the interim if the job is a particularly involved one.

Shops used to dealing with consumers insist on a deposit of 30% to 50%, especially where parts may have to be sourced from various locations or where the job might take several months to complete.

You should also set time limits for payment and pickup. For a disassembly operation, for example, a decision on whether to proceed with the job or pick up the cores could be within 14 or 30 days of the final analysis. For an engine rebuild, perhaps payment and pickup within 30 days is reasonable, after which it becomes your property. You need to check if there are any regulations on this in your jurisdiction, but whatever the case, make sure customers understand their obligation up front and consider having them sign an agreement to that effect.

Regardless of the specific situation you may be faced with, the key is having the right person on the counter–someone who is a strong communicator–and taking the time to walk the customer through the transaction, so that there are no surprises at the end.

The goal is to end up with a satisfied customer who will tell his friends about your operation, and the best way to ensure that is to make sure that you handle him the right way, right from the start.