What constitutes a big ticket sale today and how do successful shops sell it? Considering that costs and wages, with benefits, have gone up significantly across the United States, the answers fascinate us.
Vehicle repairs can include anything from suspensions to engine or transmission exchanges. We elected to use the $1,000 mark as a baseline for defining big ticket jobs. We talked with service shops that generate at least 60% of their business volume from service to find out how they sell the services.
We found that some service shops don't feel a $1,000 ticket is "big" anymore. They told us there will be cooling system jobs, tune-ups, OEM-scheduled maintenance and electrical repairs all in the $1,000 job range, depending upon the brand of parts used. A simple heater core replacement on some vehicles requires removing the entire dash to get to the part; a 10-hour job. Pricey.
Repair on a twin-turbo Porsche engine can run between $6,000 and $12,000, without exchanging the short block. Spark plugs for a Chevy Malibu cost $36 each. And, for that twin-turbo Porsche plug, try $56 each! It is easy to see how job tickets get big, fast.
Selling these jobs requires more than just telling the customer they need it. It requires a whole lot more, including sales skills. To get the "How to sell it" questions answered, we sent a questionnaire to 10 service shops. All responded with good information, but some were not interested in having their names used.
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Each job starts with the visual inspection, the shops all said, and because of labor costs, free inspections are fine as long as they do not take more than 15 minutes. All but one made it a point to tell us the results from their inspections were written on the repair estimates regardless of whether the customer had them do the repair work or not.
The shops we contacted ranged from those servicing high-end and German brands to "best price guaranteed" shops. Interestingly, not one deviates from the hourly estimate of the flat rate book. Parts estimates come from Mitchell's, local jobbers, car dealers (when original equipment parts are required or considered best) or specialty shops that repair components like radiators. (Most engine and transmission remanufacturers are willing to deal direct with repair shops and are offering great value for their goods.)
What we learned is that a successful shop is selling the job, not taking the order.
How common are big ticket jobs, those costing more than $1,000? A lot more common than five years ago, according to those interviewed. Parts and labor are more expensive, but there are other reasons, too.
Each shop said people do not have the disposable income they did a few years ago and because of that, they are far less likely to get their cars fixed. They no longer consider preventive maintenance as important, and that causes repairs to be more expensive when they are done. Oil and filter change intervals have gone from 3,000 miles to 5,000 miles and beyond during this same timeframe.
The service providers walked us through their selling methods. Although some are not as calculated or structured as others, they all cover the same basic things. Each talked about reputation and honesty, as well as how to deal with difficult customers who shop around.
Q&A
We asked the 10 dealers the following seven questions. We also include some of their responses.
1. Are your prices for the most common jobs posted in your customer service area?
The answers went both ways just about equally. They all post their labor rate and diagnostic minimum charge. Those who post prices do so only for tire mounting and repair, oil change, alignment, suspensions, brakes, "tune-up" service and other common services in customer areas and at the counter. Not one tries to list prices for time-consuming, big jobs that come into the store.
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2. When you find "big" problems, such as major replacement of suspension components, broken parts or chassis deformation, how do you show the customer?
Once a big problem is found, they tell the vehicle owner about it and show them a written estimate. They explain the job to the customer, and if the vehicle owner seems unsure or in doubt, most are willing to point out the situation on a chart or actually show the problem to them on their vehicle.
One shop measures wear of parts according to manufacturers' specifications compared to new or acceptable wear dimensions. They find that real numbers close sales.
If the customer dropped off his vehicle and left, the dealers require a verbal authorization and then show the customer the broken or worn part when he comes to pick it up. If the authorization isn't given, they leave it outside until the customer shows up for a face-to-face discussion. They all tell us that they get permission over the phone to go ahead with the repairs 60% or more of the time.
One told us: "If they do not trust you, they should go elsewhere. If they do, they should just sign the work order authorizing you to do the job and sit back down."
3. Using $1,000 and above for the definition of a big ticket repair, how do you sell the customer?
Every shop told us that the best practice is to exude confidence in all aspects of their business, people and work.
Others expressed it as "educating" customers -- not just talking about the repairs to be made, but giving them reasons why their shop is the best choice for getting the job done. Some show off ASE certifications, factory OEM training certificates and diplomas from recognized technical schools.
Others present the high level of equipment in the shop, show why it is state-of-the-art and why it should be important to them and their car.
They all talk about their years in business and/or their customer satisfaction levels. Some shops or their tire manufacturers pay for customer follow-up interviews from independent companies and use the positive data as a sales tool.
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4. Do you tell them you will give them a break on costs to get the job?
A couple shop owners said they will not give work away or drop their prices, but they will add things like free oil changes/filters. Others talked about putting packages together for other less serious problems that make the total more attractive.
Only one said he would drop the price, but only for a new customer, "to get them to come back the next time."
Here is where the tire company credit cards were mentioned. Some tire companies are giving customers "three months, same as cash." That is a powerful sales tool when the customer is going through hard times and is cash- or credit-poor. An independent shop usually cannot afford to finance this type of program, but some store chains can and do.
5. What do you do if the customer is going to shop around for the lowest price?
Most said they give their best price up front and know they are in the ballpark on their pricing. As one stated, "If customers are shopping around for prices, you have done something wrong. Either they do not trust you, lack confidence in your work, or you thought they were a real prospect when they were not." Two said they encourage the customers to shop around.
6. Do you sell the danger of driving the vehicle out of your store or any distance prior to getting the vehicle repaired?
All abhorred the idea of trying to scare a customer into doing the work. They made it clear that if the customer wouldn't get the work done and the car was unsafe to drive, they would have it towed to the customer's home if it was close. If it wasn't, they would tow it to the area where the customer requested.
Some do this free of charge and others do it at a cost well below what the customer could find on his own.
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7. What is one final tip you would give someone having problems selling big ticket jobs?
Honesty, knowledge, confidence and selling the shop's reputation were their keys. They all feel it is their responsibility to educate customers on why "they should have it done in our shop."
Several mentioned that knowing their customer's position regarding cash or income is also a help. "We must ask the right questions and deal with money-tight families. Listening is key."
At your service
Following are direct responses from the shops that allowed us to use their names.
CIM Motorsports Inc., Central Valley, N.Y.
Rick Modlinski is the owner of this busy shop. He estimates 80% of his work is performed on import luxury and German cars; vehicles that find their way into his shop via referrals.
Modlinski is recognized for both his European technical training and in-depth diagnostic skills. He also does work for other automotive shops in the area.
"What can I tell a customer when his engine blows up and I've done all the service on it since it was new?" he asked. Here's what he does.
1. Get the car in the shop. In that way, he can diagnose the problem and find out if it is a warranty item for the dealer, or his responsibility if it hasn't been abused and is out of warranty.
2. Take responsibility. If he feels responsible, he will fix it at no cost to the customer. (He does it in off-hours, not shop hours, so some patience is required by the customer; he says they never complain.)
3. Charge for parts. If the damage wasn't caused by anything he had or had not done, he will repair it for the cost of parts and eat the labor if it is a good customer.
"Be honest," he said. "The dishonest shops will send you a lot of business."
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West Coast Muffler and Brake Inc., Concord, Calif.
Steve Elstins explained that he has gone from being just a muffler and suspension shop (also selling tires) to a full service repair shop in the last eight years. "There are very few $800 to $1,000 suspension and muffler jobs like there were in the 1990s and up to 2001. Today, the economy is tight; people bring home less money, have more expenses and cars are very expensive."
To keep his business profitable, he expanded his shop and started performing all vehicle repairs, including engine and transmission replacement, electronic diagnostics and repair -- "everything but body repair, although that may be next." Repair work represents about 80% of his business.
Elstins, the store owner, is willing to show a customer a broken part, but he keeps customers out of the service bays. "If they don't trust us, we don't want the job.
"Since we are in a warm part of the country, we will let some problems slide a bit, as long as it isn't the rainy season and they are not beyond maximum wear limits. We will also break out the needed repairs into three appointments, 30 days apart, if it is safe. In every case, we explain this to the customer, and those comments are shown on my estimate."
He laughed about "fear selling," saying, "never without just cause." He does pay for the tow to a customer's home or another shop if it is too dangerous to drive and the owner doesn't want it done there.
When asked about customers shopping his pricing he said, "If they do that, get another customer. My price is my price. I give the best price I can the first time."
When asked for a final sales tip, Elstins stated this is critical; "Listen with your ears, not your mouth."
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Tire World Inc., La Verne, Tenn.
Bruce Walther is the owner of Tire World Inc., a small shop competing against some large chain stores. He says the path to growth is treating customers right, every time.
"We teach our people to know what they are talking about; exactly what is wrong and how to present it to the vehicle owner. In that way, they are confident and we will be successful.
"They can see there is only one 'best way' to do the job. Then they understand why our way to fix their vehicle is also the best way.
"It's OK if a customer shops our price around. He might find some more expensive, some cheaper. But we will have already shown him a fair price and why our shop is the right one for him."
Raben Tire Inc., Jonesboro, Ark.
Clayton Reed, store manager, and his team provided us with some great answers. There are 33 locations of Raben Tire locations in six states.
"Our prices are in the customer waiting area in every retail location. We have no problem taking customers into the service area to demonstrate what a problem is. But as we do it, we also explain the cause-and-effect relationship of what the broken or worn part, or malfunction, has to do with the safe operation of their vehicle.
"Proving need is the key step to closing a sale," he said. "Without it there is no sale.
"Give the customer your best price up front. Otherwise someone else will. Honest answers to their questions will get you a sale quicker than trying to fast-talk the customer."
Reed also was a strong proponent of exuding confidence. "If you don't demonstrate you are confident, and can't explain every facet of the job and cost estimate, you will not close the sale.
“Customers want to be convinced and want someone working on their vehicle who knows what they are doing."
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Lakeport Tire Inc., Lakeport, Calif.
Bob Funderburg owns and operates this shop in Southern California. Although he is competing against some big chains, he has been in the business long enough to know that honesty and keeping it simple works. He does not post pricing on his walls, but doesn't think it is necessarily bad, either, just not right for his store.
Funderburg partners with Bridgestone Firestone North American Tire. "With this company, we have advantages that allow us to compete with the big chains and tire company stores. They back up a 12-month/12,000-mile warranty on all our service nationally, and their 90-days-same-as-cash credit card really closes a lot of sales," he said.
"We always try to explain the importance of getting the job now and not waiting. Generally, waiting will cost them more money or problems and that is easy to explain.
"If we are slow, I have no problem offering a discount or free LFO (lube, oil, filter) if the job is big enough."
His final tip is, "Be sincere, explain the need the best you can and know what you are talking about."
Tires Warehouse Inc., Fountain Valley, Calif.
Steve Ramirez, a Tire Warehouse store manager, is very aware of serving customers, knows his very diverse customer base and keeps employees and customers happy.
"We do post prices for most common services in the customer waiting area. Although we are not a full-service repair shop, we do a large enough volume of business... to give us accurate insights into selling large ticket jobs. We do suspensions, brakes and other under car repairs and a lot of it.
"We always show a customer on a chart, or on their car if needed, what is wrong with their car and how it affects safety and performance. This is important to getting the sale and making the customer happy. The last step in the sale is to show them the estimate and ask for their signature, or authorization if it is over the phone.
"We sell a $100 job the same way we sell a $1,000 job: honestly and with integrity.
"We educate the customer, with vehicle information, reasons why to do the repair and why Tires Warehouse is the best solution. We always prove the need before going forward to close the sale. Most customers are far more interested in the service/repair than the price, as long as it falls into what they expected. If it is far more, you must prove (the need)."
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You've got a friend: Empathy and understanding go a long way to earn service business
The store owners and managers surprised us with some of their comments concerning dealing with today's money-strapped consumers:
* It is necessary to understand the customer's situation, cash- or credit-wise.
* It is important to know the value of a customer's vehicle compared to his remaining payments versus repair costs.
* You need to have empathy and be a trusted guardian of the customer's vehicle as well as be a trusted friend.
* Understand your shop's responsibility in the maintenance of your customers' vehicles, especially if there are any unforeseen problems.
The more people trust you and your service crew, the more business you will have, they all said.
Best Practices Tips: Verbal warming
If a customer drops off his vehicle and leaves, the dealers with whom we talked require at least a verbal authorization to perform any service work. When the customer returns to pick up his car, they show him any broken or worn parts.
If the authorization isn't given, they leave it outside until the customer shows up for a face-to-face discussion. They all told us that they get permission over the phone to go ahead with the repairs 60% or more of the time.
"If they do not trust you, they should go elsewhere," said one dealer. "If they do, they should just sign the work order authorizing you to do the job and sit back down."
Best Practices Tips: Calculating value
It is critical to understand the value of the customer's car compared to the investment you are asking them to make. One dealer uses the following formula:
Wholesale Blue Book value + the remaining payments - two times the repair costs = go or no go.
If two times the repair costs are higher than the real value plus payments, he recommends they get another car.
