It’s Your Business
- Subject: Being successful in a changing market
- Essential Reading: Shop Owner, Center Manager
- Author: Terry Greenhut, Transmission Digest Business Editor
Many of the shop owners I’ve interviewed lately have indicated that they’ve had a tough time coping with all that’s taken place over the past couple of years in their businesses and the economy in general. Many remember the days of “easy business” when you could rely on doing certain basic functions like advertising, marketing and selling the same way over and over again because they always yielded a good result.
Some owners are upset with the price of everything around them going up while they feel powerless to control any of it and are often afraid to raise their own prices to get back to profitability. Some are concerned that the quickly changing technology could leave their businesses in the dust.
Funny, but all of that sounds just like the scenario in which I opened my first shop back in 1975. We were in the middle of one of the worst recessions this country had ever seen. Nobody was hiring, people were being laid off by the thousands and there didn’t seem to be anything on the horizon that would pull us out of it. I opened my shop only because I had been laid off from the elevator-construction industry and needed work so I thought I’d create my own job.
As I was opening, lots of others were closing. I guess that should have scared me but I didn’t know enough about business to be scared, and looking back, I guess that was a good thing. I bought most of my equipment at auctions held on behalf of dealers and shops that couldn’t make it or whose owners were so beaten down by circumstances that they just didn’t want to try anymore.
I remember one shop owner telling me that we were all doomed because the high-energy ignition system had recently come out and without having to replace points, plugs and a condenser every 10,000 miles how was the industry supposed to survive; but it did! New technologies led to new problems and different diagnostic techniques. Many of the fixes became more complicated, meaning more time spent to repair and higher labor prices. Even a tune-up went from being a $50 proposition to one of often $500 or more.
Although it took some time for shop owners to adapt to the necessary changes to stay profitable, most eventually did. The others dropped out and thinned the herd.
Today one of our main issues is dealing with hybrids and electric cars. Before you condemn them or shy away from them, how much do you know about them? Do you know how to fix them, where to get parts, what’s covered under warranty and what isn’t, what’s safe to touch and what will light you up or make you glow in the dark? How do you get rid of their waste byproducts safely? What can be recycled?
Obviously, these vehicles are our future. The oil companies know it. It’s one of the reasons they’re getting as much as they can for their commodity now, knowing that sometime in the not-too-distant future there will be little or no need for it.
We should not fear or fight this technology, but embrace it. Be the first kid on your block to learn it. Make yourself the expert to whom everyone comes for help, including other shops. Fortunately, there are already several trainers giving seminars on these new vehicles. You just need to invest a little time and money to learn them. Then once you have, you need to market your shop as the local expert.
“But they’re different,” you might say. Sure, in some ways they are, but the main automotive principle still applies. No matter what’s powering the vehicle, that force still needs to get to the wheels, to turn and to steer them until you don’t want them to turn anymore. Then something needs to stop them. So tires, wheel and axle bearings, axle shafts, CV joints, brakes, steering components, computers, batteries, charging systems, motor bearings and windings, windshields and, yes, some form of transmission will still come into play.
“But they’re under warranty,” you might think. Not forever. At some point everything goes out of warranty and becomes fair game. One factor that should bring you hope is that we all know that any vehicle that’s driven by people will be damaged or broken by them eventually. They’ll neglect maintenance, drive them past their limits, crash them or try to install aftermarket stuff that fries computers and/or batteries. You name it, they’ll do it, and all of it will create your opportunities.
Consumers will always need and buy the basics of life. One of them happens to be transportation. They will always need it to be economical and reliable, which is where you come in – still providing the best of whatever it takes to keep that customer’s vehicles on the road.
It may be time to compete in a slightly different manner. Many of us have adopted the concept of trying to sell customers everything that needs attention on their first visit to the shop whether it’s a bunch of services or some necessary repairs. The concern was always that if we didn’t do so when we had the chance they might never come back for the rest of what they need.
After studying customer reactions to such sales tactics over the past year I’ve come to realize that a good number of them won’t accept the idea of paying a large bill to a total stranger on their first visit. They need to be brought along, to be courted for a while, before they are asked to lay out a small fortune, meaning they need to be sold some smaller trust-building services the first couple of times they come in. Once they see that you are not looking just to take their money you can sell them the big job if they need it. The trust will have already been built.
A case in point: One of the guys I know from the local golf course was telling me that he was about to take his car in to get the transmission fluid changed because it was black. I tried to explain to him that black fluid indicates that a problem is developing in the transmission. His “mechanic,” he told me, had convinced him that a $199 flush service would handle his problem. He said he trusted this guy and would let him do the service because the mechanic had saved him money on a pair of tires he bought last week and didn’t try to sell him the entire set of four. This made him think the mechanic would be fair with him in all instances.
Of course, for this type of selling to work a considerable amount of follow-up must be done. Customers would need to receive service reminders galore, and each one would need to be planned out before it was sent to make certain the amount of work to sell wouldn’t make the customer run away. Also understand that the whole plan can backfire on you if the customer thinks you are trying to sell something every time you are in contact with him.
I still believe it’s better to report everything they need on the first visit and, if you detect any hesitation to going along with the entire plan, break it down to three levels of priority: selling what they absolutely need now, making an appointment for the next-most-important group when they come to pick up the car after the first round of repairs and services, and leaving the least-important repairs and services to be handled with service reminders and follow-up phone calls or e-mails.
There are times, of course, when nothing but a really major repair like an engine or transmission overhaul will take care of a new customer’s problem. In that case you will still need to be able to work the sales magic you’ve been doing with transmission customers for years. The only difference may be that you’ll need to invest more time and go into deeper explanation than normal to show exactly why you are trying to sell this repair and especially how the customer will benefit from it. It’s a more-time-consuming process than what you might be used to but it must be done.
People are very edgy today. They’re worried about their jobs and the cost of everything they consume. So where you used to have to prove yourself only to certain types of skeptical customers, you will now need to do it with many more of them. You might be better served to just assume that they are all that way and be ready to back up anything you say to anyone.
So business has changed a little, but people haven’t; they still don’t want to spend much if anything on automotive services and repairs, so look at the way you are dealing with customers. If you’ve shortened your sales pitch over the years you may want to lengthen it again so that you can establish the trust you need. Be sure to put on the entire “dog and pony show” for them when they call or come in. Do everything you can for your customers except for lowering your prices. That wouldn’t do either of you any good.
The main thing is that you never get discouraged. You know what you have to do. You’ve done it many times before. Get yourself back to the basics of doing business. Provide quality work at fair prices. Concentrate your efforts on the people responsible for all your revenue – your customers. Then you can skip the trip to the shrink’s office; you won’t need it.
Terry Greenhut, Transmission Digest Business Editor. Visit www.TerryGreenhut.com.