I’m sure you’ve all heard this one line thousands of times at fast food counters, and that’s because McDonald’s doesn’t make their money on the burgers.
See the burger at McDonald’s isn’t how they make their “profit margins”, just like the oil change in your shop isn’t how you’re going to improve your shops profit margins.
Just like McDonald’s your shop have services with small margins, so you need to be prepared to see the oil change as an opportunity to sell your customer additional high margin services.
The mix of services your shop delivers is a key to ensuring you achieve a minimum gross profit margin of 60% (recall labour expense is not part of cost of goods sold and it is at 100%, so if your labour expense sits in cost of goods sold your likely aiming closer to 40%).
In my previous article “if you treat customers special, they become special customers” I discussed the importance of oil change options, you may want to go back to read that article as well (Click Here)
I know many shops have a mandate to perform inspections on every vehicle, but they’re not telling customers about it first and I have a few issues with this.
- Some people may actually be upset they didn’t authorize the inspection
- Your shops misses an opportunity to demonstrate the added value and benefits of the service
- You do this sometimes (slow season), but when you’re slammed in October and November you don’t and your customer thinks that you did!
If you have expert skilled technicians and mechanics in your shop, when the oil and lube shop down the street doesn’t, now is your chance to tell the customer about that.
Informing customers about the expertise of your technician team demonstrates how professional your shop really is.
And explaining the benefits of preventive maintenance and how a 10-point inspection can catch a problem before it causes damage to the vehicle and ultimately protects your customer from the risk of having to schedule and “emergency” service and potentially being stranded with a vehicle they can’t drive.
Providing great service means educating the customer, ensuring they learn all the potential issues with their vehicle and have the opportunity to have it taken care of right away or scheduled later while waiting for appropriate parts before it breaks down.
Systemizing your process to ensure brakes are inspected on every tire change/rotation and that a 10pt inspection is performed for every oil change is crucial; but so is the service writers ability to sell the value of that additional work that your experts provide for them.
Really your service writers are your best marketers, they have opportunities everyday both on the phone and in person to deliver targeted marketing to the customer based on their needs.
Ensuring the front counter team consistently sells on value and promotes higher margin services will develop your team into a selling machine and prove to your customers that you’re a professional and knowledgeable shop that values the customer relationship and delivers high quality of service every time!
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