Like most of your fellow Mechanic.com.au community members, when a new potential customer enters your workshop, you try and do everything you can to make them happy, whilst also making a fair profit.
However, as we all would have experienced at some stage, some customers will put us to the test when it comes to the prices that we charge.
They will tell us that they can get the same job done at another workshop for less or that they can't afford the work and need a few dollars knocked off of the price.
Sometimes this occurs on a drop-in or phone call where we have not necessarily invested much time. In other cases we have gone to great lengths to inspect the vehicle, chased around for parts and prices and built a quote. In these instances, some of us might be more inclined to concede in order to win the job. Unfortunately although you may have secured a job, you have compromised the integrity of your pricing.
We need to remember there are many reasons our customers might ask us for a discount.
Maybe they are genuinely tight on funds or maybe they believe it is culturally appropriate to haggle. Neither of these factors should necessarily impose on your business or pricing, but there is one valid reason that most of us overlook; often customers are testing our pricing integrity.
Take this example: Let's say you need to get an electrician out to install a couple of powerpoints in your house. The electrician quotes you $400 and you follow up by asking if that’s their best price. They come back and tell you they can knock $50 off of the price. Whether or not you go ahead with the quote, you know that if you had never have asked that you would have paid $50 too much for the job.
Now if you went ahead with the job, would you hire the same electrician again? If so, wouldn’t you again ask if it was their best price and if they could offer you a discount?
It goes without saying that the integrity of this electrician and his pricing have gone out the window.
When it comes to customers that insist on discounts, we think it’s important to consider these things:
Buying Signals
Remember that when a customer is asking for a discount, it is often a ‘buying signal’. They’re probably over the line with regards to choosing your business and the services you have recommended. This means 1 of 2 things, they are either testing the integrity of your pricing or as previously mentioned or are after a deal. Instead of discounting your price, see this as an opportunity to raise more interest and add value into the services you have recommended.
Add Value
Instead of reducing your price, offer the potential customer something that adds value to the quote for recommended services. Maybe you can provide them with a voucher that offers a discount on their next service or another type of promotion such as a complimentary car wash. Whatever you choose to do, don’t lessen the value of the recommendations you have already made, instead, add value.
If you do for any reason feel that you need to reduce the price of your quote, ensure you are removing something from the services that represents the reduction in price. Again, we need to make sure we are not compromising our price integrity.
The 3 Musts
Remember the 3 most important things that need to occur when selling to a new customer. They have to like you, they have to trust you and they have to view you as a credible expert. Make sure your service advisors are ticking these boxes at every customer interaction.
Phone Shoppers
Contrary to what a lot of us often believe, phone shoppers aren’t only interested in the cheapest price. The reason people generally ask for your price (especially labour rate) is because they don't know what questions they should REALLY be asking.
Remember that our trade is complex and confusing to Average Joe and therefor people gravitate to what they know and are used to. They try to compare apples with apples, unwittingly often comparing apples with oranges.
Your service advisors need to play a role in educating potential customers about value by thinking of points of difference that make your workshop stand out. What certifications or training have your technicians carried out? Are you a specialist in a certain type of vehicle? Do you offer any extras or special warranties?
Know your Customer
Most of us generally want to try and take on any job and help as many people as we can, however this is often a fool's errand.
The most effective businesses realise that there will always be a portion of customers that want the cheapest prices, discounts and to supply their own parts. Sometimes we just need to accept that these people are not our customers and that our efforts are better focused elsewhere.
What are your tips for managing these situations?
We’d love to hear what you think in the Mechanic.com.au Private Facebook Community
