Is It a Craze or Crazy?

Competitive price boards — showing what you charge for service compared with what the competition charges — have become a craze.

But why give free advertising to the competition? That is what you are doing when you post their prices.

Typically, a dealership will select local competitors, call them posing as a customer and ask for their prices.

That information will then be placed on a board in the service lane. The board lists competitors and the prices they charge. The dealership posts its own price alongside to convince customers that the dealership prices are competitive.

Does the average retail consumer really pick up the phone and call for prices? No. Go to an Internet search engine and enter “auto maintenance prices” and your city. See what comes up. I did, and over a million site names came back. When I can do that, why would I call? There are exceptions, but most consumers aren't calling.

These boards have served our industry. But, as with all techniques, the competition adapts. Competitors now counter the price-board marketing by offering coupons for oil changes and brake services and handing out discount coupons when the retail consumer arrives. With these coupons, the prices really are lower than the dealership's and the consumer thinks they are getting a deal.

Does your competitive pricing board cause customer defection? Consider this. You have five competitors' prices listed on your board. Your customer sees the prices and thinks:

“XYZ Tire Center charges $23.95 for an oil and filter change. That's only $2 more than the dealership and they are a half-mile from my house. The dealership is farther. I will just go to XYZ if all I need is an oil and filter change.”

When customers arrive there, they don't need to be sold on the fact that XYZ Tire is convenient and credible. And then they are handed a $5 coupon, giving the customer an unexpected “wow” factor.

A competitive market board gives your competition credibility. It says they are just as good as you because you are comparing yourself to them. We need to re-examine that approach.

Your dealership can kick their butts every time, because you have more expertise and product knowledge.

Why not proudly and prominently display your prices but not your competitors'? You still need to know the market's prices so you can be competitive. But you don't have to provide free advertising for XYZ Tire and the like.

Your service must be done with a high level of perceived value. We can do this by focusing our efforts on effective communications. “Active delivery” is a must.

The advisors must spend time with the customer to show that his or her decision was a good one in selecting your dealership operation to perform this particular service.

Have your service advisors build relationships with customers. They need to trust that the advisor is looking out for them, not just trying to make a sale. We need to review the repair-order and maintenance details with each customer.

Usually an oil and filter change includes a lot more than just that. Tell customers everything you did. Like this:

“We inspected 13 components, along with the inspection of your brakes, tires, and battery (give the measurements of each) and your car is in great shape! We added washer solvent, inspected the fluid levels of your brake system, your differential and transmission. All are at the proper levels. We installed the next service reminder sticker in the windshield and we look forward to seeing you again.”

Let customers know your technicians undergo hundreds of hours of training to understand their models. Let them know the parts were manufactured specifically for their vehicles' top performance.

That's your competitive advantage. Keep your advisors focused on selling relationships with each customer. It's not always about the lowest price.

Lee Harkins, president of ATcon in Birmingham, AL, is a dealership management consultant and industry speaker. He is at 800-692-2719 and [email protected]

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