Advertising Special Discounts- ie Military, Teacher, Police

13 hours ago, AndersonAuto said:

To your first point, I'm not losing money at 29.95. Unless you know my costs, you can't say whether I'm losing money or not.
 

I pay $2.29 a qt for house brand synthetic oil from Keltners. add a $2 filter and you have $13.45 in raw materials for a 5 qt oil change. Your lube dude I suppose can be had for as little as $8 an hour although in my neck of the woods he/she would cost several dollars per hour more. Add in cost of employment at 20% and we are at $10 an hour. Oil change with inspection takes 30 minutes so that's another $5. They say when you take a tech off task he looses .2 plus the time he's off task. To do a quick look over even without accounting for the .2 to get back on task you have .2 and a master tech @$30 an hour $6. If the mast tech does not look over the car then you lose the value statement made above.

You belong or used to belong to a 20 group. They all cut up the pie differently but it's still all a pie. My training tells me benchmark for expenses is 40%. @ 2 mil @40% is 800k. 11 hours a day 6 days a week is roughly 3377 hours. 800k divided by 3377 is $236.89 per hour. 236.89 divided by 7 bodies is $33.84 per hour per body. While you may be making gross profit I doubt you are making net.

General repair shops do not make money on oil changes. The point I was making is a lot of people understand that you are at best breaking even on an oil change. In order to make a profit you MUST find something wrong with their car.

I think this is a poor way of initiating a relationship with a new customer. It can lead to resistance.

I also believe your facility is gorgeous and will overcome a lot of that resistance in itself. (but it does not change the psychology of my argument)

13 hours ago, AndersonAuto said:

What differentiates me from anyone else offering the cheap oil change is the full inspection on the vehicle, and knowing that the service was done correctly by qualified technicians. Most of my oil changes are done by my lube dude (to keep costs down) but 4 of my 6 techs are ASE masters. You don't get that at Jiffy Lube.
? 

I get this. I also run a facility that makes these claims.

Jiffy lube states they are vehicle maintenance experts. Pretty impressive.

Your lube dude may be more qualified than the kid a JL but really how much more? And do you have a valid measuring stick?

All that being said, I am saying when you introduce price to the offer the rest looses the limelight. Everyone says they have ASE certified techs, great warranties blah blah blah. The people are responding to the price. See above Psychology thoughts.

13 hours ago, AndersonAuto said:

I also track all my new customers, and I track my existing customers. They're not cheap. My average RO last year was $428. That's every single repair order including oil changes, and even including $0 tickets. Everything.

I agree with you that there's value in washing a customer's car after a big repair, and we do that on big jobs like engines and transmissions. I would do it more if I had a wash bay in house. But the premise is bringing in new customers. Potential new customers can't feel good about a car wash until after they've been to your shop.
 

Excellent numbers, I was not comparing you numbers or your results. I was stating one can measure successful marketing campaigns without coupons by tracking those metrics as well as others.

The value in washing a car is immeasurable. When  someone gets an oil change there is absolutely no difference in how the car operates. The owner is much happier when it's clean. The warm fuzzies created when asking a customer if they have time for a wash when the service is completed is a reward in itself. Many people state they come in for the car wash and the oil change...meh...no one gets exited for auto repair.

You are correct, the car wash may not bring them in, it does bring them back without training them to wait for a coupon. (next post)

13 hours ago, AndersonAuto said:

I agree that I've trained my customers to look for the discounted oil change. I'm happy about it too. They look for my LOF coupon, act on it, and spend $428 on average. So I make a very small profit on the LOF, and since the average car we see is 10 years old with 150K on the clock, we sell them an average of $400 in additional repairs at 62% GP.
 

This is my point. You've trained you customers to wait for service until they've gotten their coupon. You also are training them to pay attention to price by focusing on it. Studies show people choose auto repair providers do so for top 3 reasons, trust, expertise and convenience. Price is always 4th or 5th on the list. All I am saying is I think we should focus on the strengths we have and bring in new as well as retain customers on those top 3 things. If we bring price to the forefront aren't we telling them it should be more important than it is?

And if so how long until your competition does it cheaper because they cant to the top 3 right? If all they have to offer of value is cheap they reap what they sow. And this is the whole point of my argument. I am not saying what works for you does not work, I am saying it does not work for me and letting others know there are other ways.

Imagine if we raise the bar for the whole industry how much higher we can raise our own bar?

13 hours ago, AndersonAuto said:

My sales have grown from 770K six years ago to 2 Million last year. How's your growth doing? 

And finally.....

I cant tell you how awesome this is. I love to see shops reach their potential. Imagine if every discussion you had made you think as much as this one. And you still have another half of a facility to grow!

My business is really good, but I've been at it a long time. Thanks for asking.

31 minutes ago, Wheelingauto said:

......

General repair shops do not make money on oil changes. The point I was making is a lot of people understand that you are at best breaking even on an oil change. In order to make a profit you MUST find something wrong with their car.

I think this is a poor way of initiating a relationship with a new customer. It can lead to resistance.

I also believe your facility is gorgeous and will overcome a lot of that resistance in itself. (but it does not change the psychology of my argument)

Again, I apologize for my tone yesterday. Phones going up and down for hours and sitting at my computer while tech support does little to nothing about it made me more than a little irritable. I probably shouldn't have been on a forum of any kind.

No, I don't intend to make money on the oil change. You're right, it's a very small GP on the coupon oil change, and no net. But that's not the point of the discount coupon. The point is to get people in my door, and to make sure that I'm the facility that takes care of ALL their automotive needs. I never want them to have a reason to go elsewhere. Not even for an oil change.

Giving the new customer a list of needed service on their car when they come in for a coupon oil change can be a negative or a positive. It's all about setting their expectations. Consider these two scenarios:

1. The new customer comes in for an oil change, coupon in hand. You tell them you'll get right on it. You write the repair order and move the car in to your lube dude. You either have a competent lube dude do a good inspection, or have one of your techs do it. 30 minutes later, the RO makes it's way back to the service desk with a $1000 list of needed repairs. You bid the jobs, taking another 15 minutes, and present them to the customer. The customer is shocked, and feels like it was all a bait and switch. He's also impatient because he believes you should be done by now. The customer declines all repairs and you never see that customer again.

2. The new customer comes in for an oil change, coupon in hand. You tell them you'll get right on it, and "while your car is here, I'll have my technician look the car over and make sure everything else is OK for you." The customer replies "Thank you, that would be great."

The next few pieces of scenario 2 plays out exactly like scenario 1, except that you've now set the expectation with the customer that you're going to inspect the vehicle, and present your findings to them. In other words, you have permission from the customer. Also, by using the words "... make sure everything else is OK for you" you've set yourself up as their assistant, not just someone looking for a sale. Now instead of the customer being irritated that it's taking so long, they know you're doing more than just the LOF. They all know there are things wrong with their car, and aren't surprised when you find them. It's getting permission to find them that makes all the difference.

To conclude scenario 2, the customer approves 50-60% of the recommended repairs. You tell him the car will be done this afternoon, and offer him a ride home.

Try using those exact words (I can't stress this enough) for a week or so, and do great inspections. I bet you'll change your mind about oil changes in general, and maybe see why I like giving them away for no net.


Psychology is important, but it's as easy to make it work for you as against you.

55 minutes ago, Wheelingauto said:

And finally.....

I cant tell you how awesome this is. I love to see shops reach their potential. Imagine if every discussion you had made you think as much as this one. And you still have another half of a facility to grow!

My business is really good, but I've been at it a long time. Thanks for asking.

 

I can't begin to tell you how much better my life is than it was 6 years ago.

6 years ago I had been in business almost 15 years. I was very much in the same school of thought as you are regarding oil changes and discounts. The shop was working for me well enough to be able to buy my new building (I did own my old building too). With the new building came a lot of expenses, and I had a lot of bays I needed to fill FAST. I tried a few things that were not too successful. I was growing, but not nearly fast enough. Money got tight really fast. A year after moving into my new building, I bit the bullet and actually went into a little debt to launch my mailer campaign. I joined my 20 group 3 months later, and my facilitator tried to get me to lease a portion of my building to reduce my rent factor, and told me to cut down on the marketing expense. I said no, and no. He also said I should consider removing current customers from my mailer list. Again, no. I got bitched at constantly because my expenses were too high. I don't think my facilitator or other members could see how I was going to become profitable. I told them I was going to sell my way out of it. Impossible they said. Challenge accepted.

My biggest regret in business is not marketing my old location as much as I'm marketing now. It was something I thought I couldn't afford. Now I see that I can't afford not to. For every dollar I spend on my mailers, which is my lowest ROI piece, my customers give me $6.80. I'll take that all day long, and I'm not going to judge the people handing me money as being "cheap" for using a coupon.