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A Lesson in Pricing Your Auto Repair Services
I was proud that I had never broken a cell phone until a few days ago when I dropped my 7 Edge face down on a tile floor (new screen only $431 installed).
But here is the fun part. While my wife is picking it up a couple in front of her are in need of a minor service of some kind. Time is about 2:30 PM.
Option # 1: Done by 5:00 PM today – $39
Option # 2: Done now while they wait – $59
Dynamic pricing – hotels have done this since the beginning of time. I wonder if any auto shops do the same. Should they? Why or why not?
#autoshopmanagement
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5 Replies
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Interesting thought. A hotel room is a perishable item. Auto repair not so much. What does the extra $20 get the customer? A faster repair or maintenance? Done while you wait may still take til 5 pm. What if you find addition work that’s needed? Does the $20 come off the board and you keep the car until the next day? Does the customer think you are rushing their car through the shop for the extra $20 and quality goes down? I’m playing devil’s advocate here. I like the concept of making more money.
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Quick oil change business has been doing premium or tiered pricing like this for a long time. They are almost always much higher priced than independent service shops. The attraction for vehicle owners is convenience of no appointment and short wait times. Many auto owners are willing to pay a premium for the time savings. But not all. Making it an optional service is good business. But you must deliver what you promise!
Maybe premium pricing could be charged for “canned jobs” that have tightly specified service and drop in service. An even higher rate for set appointments and guaranteed time delivery.
I used to charge higher rate (overtime or rush-rate) for customers who wanted “rush” jobs, remote break-down service, over-night service, etc. Also premium for expedited parts delivery such as air freight, courier, and even cabs sent to get parts…
Average vehicle owner would rarely make time an issue when it would cost more. They always wanted faster service for free. Offering expedited service as an option often ended their complaints. Businesses and fleet owners would often gladly pay extra to get money making equipment back in operation.
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ASA Automotive- Our software offers a an Epicor integration for parts and average job time. With the average time provided to our automotive shops, it helps them with consistency, projections and gives them a base line.
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I don’t know why this isn’t more accepted practice. You go to dry cleaner and pay extra to get express service. You pay the plumber for express service. I recently took a radio in for repair and they offered $20 extra to diagnose within 8 hours. Seems very reasonable.
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