Auto Service World
Feature   January 1, 2008   by Auto Service World

Digging Out

With the passing of the so-called festive season comes the arrival of the consumer credit crunch season.

As crisp and cold as a winter’s night, this season is characterized by a tightening of belts, a tightness in the throat, and possibly in the chest, depending on the severity of the gift giving.

Fittingly, it is greeted by the taking down and packing up of holiday decorations, extinguishing of the pretty decorative lights–although removal for many comes some time in June–and the putting away of the company china; the party is indeed over.

Automotive service providers also know this season as among the slowest of the year. While the assembled wisdom on what makes cars break down would put January and February as among the busiest, this is seldom the case. Only when there is absolutely no alternative, and even then only if there’s some limit left on the card, will households find themselves in the waiting rooms of repair outlets across the country.

This is not a large statistics-driven trend. For Canadians have seen a great deal of on-paper improvement in their financial situation–ratio of debt to net worth increased to17.9%, while overall household debt amounted to115.7% of personal disposable income. (As a comparison, the ratio of debt to net worth has been on a bumpy decline since 2003 when it was 18.5%, but up from 17.5% early in 2007.) What happens this time of year is a reminder of the fact that, culturally anyway, December is still a time of gift-giving.

And then, about a month later, the cost of those gifts comes home to roost. What it brings home to your business, if experience is anything to go by, is increased pressure on your pricing. It is easy to understand why.

Service Provider A, whose business has been pretty slow, has Customer B in front of him with a sickly expression after having been presented with an estimate of how much it will cost to get his wheels back on the road.

You could, and should, provide much in the way of sympathy for that situation. What you should not do is provide an additional discount, for a number of reasons– not the least of which is the fact that the few dollars you could offer the service provider off the part or parts will do little to alleviate the customer’s pain. In addition, there is ample evidence that this discount may never make it to the consumer anyway. Thirdly, and I guess fourthly, you already have plenty of value line products on your shelf and enough discounts on your books.

I am not saying that you should be arrogant about your pricing and value, but you should be aware of what you have to offer and remind the customer that he is calling you, you are answering the phone, you can send him what he needs right now, and that has to be worth something.

In any case, it’s not Christmas any more, you’re not Santa Claus, and the time for unbridled giving doesn’t come around for another eleven months.

If your customer needs to dig himself out from a hole, offer him a shovel. If your customer is crying poverty, suggest a call to your financial advisor.

It’s the only way he’ll learn. –Andrew Ross, Publisher and Editor

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