The following article is a guest post from Bob Cooper of Elite. It originally appeared in Elite’s Auto Shop Idea Center.
At Elite we know that once someone comes into your shop, you’ll do everything you can to generate a happy customer, and make a fair profit. Unfortunately, some customers will put you to the test when it comes to the prices you charge. They’ll tell you they can’t afford the recommended services, they’ll tell you they can get the same service done down the street for less, or they’ll just need you to knock a few bucks off the price. This is when you typically tell yourself that you’ve already invested a good amount of time and money to get the customer to this point in the sale, so rather than letting the customer walk, you drop your price a few bucks, and in your mind, you just saved a job. Unfortunately, what you just lost was your integrity, and the integrity of your pricing.
One of the things we teach in our sales courses is that there are a number of reasons a customer will ask you for a discount. They may very well be in a cash crunch, and as we all know, many cultures believe that you’re foolish if you don’t haggle over the price. But there’s yet another reason why people will ask you for a discount, and ironically it’s the one most shop owners, and service advisors, completely overlook. What those customers are doing, is testing your integrity. Look at it like this …You hire a plumber to do a job at your house, and they quote you at $800.00. You then ask them if that’s their best price, and within a few minutes they’re telling you they’ll knock $50.00 off the price. Regardless of whether or not you authorize the job, you’ll more than likely tell yourself that if you wouldn’t have asked, one thing is for certain: you would have paid $50.00 too much. You probably wouldn’t feel too good about that, would you?
And then ask yourself this question: would you call that same plumber again? And if you did, what thought would pass through your mind when he gave you a quote on the next job he did for you? I think it’s safe to say that your confidence in the plumber, and the integrity of his pricing, would be gone. We also know many shop owners will inflate their prices when knowing they are dealing with a negotiator, and then will provide those customers with a supposed “discount.” So do this…rather than playing a shell game with your customers that will put you out of business, apply these powerful tips:
#1. Embrace the fact that it’s perfectly ok to offer legitimate discounts, such as senior discounts, police and fire department discounts, military discounts and promotional discounts.
#2. When a customer asks for a discount, look at their request as a buying signal. They are already sold on you and the recommended services! They are now either simply testing you for price integrity, or they are negotiators looking to get the best deal. Since they’re already sold on you, rather than lowering your price, look at their request as an opportunity for you to build even more interest and value in your recommended service, and to resell yourself at the same time.
#3. Rather than reducing your price, offer your customer something that brings an added value. For example, rather than lowering your price from $800.00 to $750.00, tell the customer that if they authorize the service, you’ll provide them with a voucher they can use for a complimentary oil service during their next visit. This way you don’t cheapen the value of your existing recommendation.
#4. If you feel for whatever reason you have to provide a concession in price, you should always take something off the table in return for the price reduction. Examples would be reducing the warranty on the repair, having your tech work on the vehicle when you are not as busy, etc. In all cases, if the customer pays less, they should get less. It’s called ethics.
Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers coaching and training from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can contact Bob at contact@eliteworldwide.com, or at 800-204-3548.