The industry is changing. It seems I write that almost every month. There are many areas of this industry in flux right now and it can be very frustrating. One of the “coming-up-more-and-more” topics is customer-installed parts.
This one ebbs and flows, many times in concert with recessions and unemployment rates. Thanks to the Internet, parts prices are so easily looked up — and so readily at hand — that the ability to save a buck by having the pros do the hard work, or the work that requires big machinery, seems like a no-brainer to some customers.
What’s at hand for us is a new phenomenon which merges two demographic that for years were worlds apart: the “do-it-yourself” and the “do-it-for-me” groups. Sure, sometimes a DIYer would come in and ask for a tip on how to proceed, or the occasional customer would look for a basic tutorial and ask, “Can I borrow your tools, too?”
Nowadays, this has become a daily question from customers: “If I buy it from NAPA/RockAuto and bring it to your store, can you install it?”
These customers aren’t evil. They aren’t trying to rip you off. They simply don’t understand what it takes to run a business and are just trying to save some money. Some aren’t open to the idea of hearing you explain your situation. They just want their situation fixed.
Confronted with this scenario, let’s break down our options:
Option 1: Agree to install customer-supplied parts. If you do this, without a doubt, you will have to do the following: a) charge 150% of your labor rate, no excuses; b) create and have blessed by a lawyer your as-much-as-can-be-reasonable absolution of liability — which is next to nothing, but get it anyway; c) a signed agreement from the customer that upon any dissatisfaction they will agree to pay racking and uninstall time; “wait time,” which is the amount of time the vehicle sits on a lift waiting for a part; and reinstall time, in addition to any time spent test driving the customer’s vehicle. Wait time charge should be the regular posted rate and install/uninstall should be 150% of posted labor rate. In my opinion, you are a fool if you do it for anything less.
Option 2: Do not agree to install customer-supplied parts, ever. It has nothing to do with the quality of the part. It has everything to do with your liability and your inability to pay your bills by engaging in such activity. In your first attempt to explain to customers that you do not install parts they supply, they will inevitably ask, “Why?” Don’t be fooled: They are looking for a reason to satisfy themselves, not your company’s policy.
This part of the plan needs to be well thought-out. You do not want customers to feel bad because they are trying to save money.
You also don’t have the time to educate them on P&Ls, amortization of tools and machines, productivity reports, matrixes and other factors that you face as a businessperson. So, explain it from their side of the story: “I understand you may be looking to save some money. And being told we don’t install customer parts is frustrating.” (Call it out: This is frustrating for them.)
Then, find agreement. “As you might imagine, it’s frustrating for us as well. In the past, we tried to accommodate customers but found from a business standpoint there were too many variables. We found there’s a reason there aren’t too many shops that just provide the labor.”
At this point, you will still get resistance from the customer. They will need to vent, so let them. They are trying to find the cheapest possible solution to their problem and can’t find it. Address this by saying, “At our shop, we provide a warranty with every part we sell. When something goes bad or breaks, we cover it — and not just the part but all the costs. This includes the time it takes to take the part off the vehicle; the time it takes to wait for the new part — when we could be working on another car — and the vehicle is tied up on a lift; installing the new part; test driving the car; and all the paperwork associated with a warranty.
“When you buy it from us, we cover all those costs, and sometimes more, much like a loaner vehicle. When you walk in with your own part, not only are you waiving all that coverage, but I am legally still bound to provide certain warranties, including if you get hurt. You can’t waive those rights no matter what you sign. The laws won’t allow it. So, while it is frustrating, I can’t put my business at that risk, and just as importantly, I don’t believe you are really saving any money.”At this point, if the customer is still adamant about wanting you to install their parts, you’ve done all you can do. You’ve calmly explained why the business loses and there is no viable business model for such activity, and you’ve explained while the desire to save $20 to $40 can be strong, there’s an awful lot that’s given up for that small sum.
If they are still bent on having someone else install that part, politely inform them that they could try another store, but you aren’t aware of one that installs customer parts. The liability you assume when installing customer parts can escalate to a catastrophic level in the blink of an eye.
After this point, any customer who engages in protest does not have your store’s best interests in mind. Remember, retail is a two-way street. The customer agrees to a price that is fair and the seller has set in order to cover the cost of goods, payroll, and expenses, with a tiny fraction in net profit to be saved for other business-specific expenses, including taxes, new equipment, renovations, or a disbursement.
Not every person who walks through the front door is a customer. Some are looking for tips and some are looking for guidance. Some are looking for a cup of coffee and conversation. But in order for business to take place, three components must always come together: The customer is happy, the employees are happy, and the company is happy. If only two of those happen, the company won’t be in business very long. ■