-
Transmission Shop Business Model
I have been doing a lot of research into alternatives to the tried and true RDI method of pricing transmissions. What I was researching was the concept of having transmissions with up-front pricing, which would be the price to install a reman transmission. To take it a step further, change the shop’s website to where visitors could look up the price for a transmission in their vehicle.
Sure, there’s a lot of people that will be “sticker shocked” with the prices, but they aren’t our shop’s type of customer. There will always be cheap shops. Where else are cheap people going to go? My concept is no more or less than skim the cream off the top.
A few of the benefits:
Upfront pricing.
Quick turnaround.
Nationwide warranty.
No hassle transaction.
Free pickup and delivery.
There would effectively be no comparison because a customer could look up their price online, then call for a free pickup. When we are done, we would deliver the vehicle back to the customer. No muss, no fuss.My research has revealed that there are many people who would like that sort of service. Just look at what Amazon, Ebay, and Alibaba have done to the brick-and-mortar stores.
I recently read a Bob Cooper article that reinforced my business model.
============================== ================
There was a time in our industry when shop owners were the only ones who knew the cost of their parts. Additionally, the amount they charged for their repairs and services was typically not public knowledge. If customers wanted to know how much it would cost to perform a specific repair, they had limited options; they would have to either call for an estimate, or visit a repair facility. The service advisor would then page through a catalog, find the price, and then share that price with the customer. As we all know, times have changed, and after decades of confidentiality in pricing, technology has now done more than just change how we diagnose and fix automobiles; it’s actually made pricing transparent. The days of holding your prices close to your chest are not only gone, but if you continue to follow that age-old policy, you’ll more than likely struggle in the coming years.As we all know, the web has dramatically changed how you operate your business. It’s changed how you market, how you communicate with your customers, how you order parts, and how you diagnose and fix automobiles. Yet the one thing most repair shop owners are reluctant to accept is that unlike in the past, pricing on every conceivable repair and service is now available within moments online. Now we all know that those prices found online can be as incorrect as often as they are correct, but the reality is this: as we move forward, more people are going to be turning to the web, not just for finding the right repair facility, but for a range in pricing as well. It’s currently happening in every other industry, so there is no reason to believe that it won’t become even more commonplace in our industry as well. Here are the things I am going to encourage you to consider…
First of all, you should accept the fact that an increasing number of your first-time visitors will have either already searched the web for a range in pricing, or they will do so within minutes after you provide them with an estimate. In many cases, they will do their price comparisons with their Smartphones, and they’ll do it while they are still at your facility.
This brings me to the second point that I am going to hope you consider, which I refer to as integrity in pricing. With the ease of access that consumers now have to pricing information, in the coming years the top shops will be competitive in pricing, and they will be proud of the value delivered. Now before I go any further, I am not suggesting that a shop can’t charge more than its competitors do, but if the prices they charge are viewed as out of line with other well run facilities, there is no question: they’ll lose their customers, and their reputation, both at the same time. The proof is in every other industry, because history has shown us that no matter how good the hotel, airline or restaurant may be, if their customers don’t feel that the pricing is comparable to similar service providers, those companies never survive.
So here are my recommendations for those of you who want to grow more profitable, successful businesses in the coming years. Start doing what your potential customers are already doing, and survey your legitimate competitors. I’m referring to facilities that offer services and benefits that are comparable to yours. Secondly, ensure you are competitive with your prices. This doesn’t mean you can’t charge more, but you have to be comparable, and you have to believe in the value delivered.
Finally, I am not suggesting that you should quickly provide a price to every price shopper, or that you should provide a price before you have built value in the service. What I am suggesting is that you need to embrace the fact that your customers are no different than you and me. They have access to pricing info 24 hours a day, 7 days a week, and they not only expect transparency, but they demand it. There is no question: transparency in pricing is now a mandate, not an option, for every shop owner, worldwide.============================== ======================
I wish to thank Bob Cooper at Elite Worldwide for his insights.
-
1 Reply
-
“I have been doing a lot of research into alternatives to the tried and true RDI method of pricing transmissions. What I was researching was the concept of having transmissions with up-front pricing, which would be the price to install a reman transmission. To take it a step further, change the shop’s website to where visitors could look up the price for a transmission in their vehicle. Sure, there’s a lot of people that will be “sticker shocked” with the prices, but they aren’t our shop’s type of customer. There will always be cheap shops. Where else are cheap people going to go? My concept is no more or less than skim the cream off the top. A few of the benefits: Upfront pricing. Quick turnaround. Nationwide warranty. No hassle transaction. Free pickup and delivery. There would effectively be no comparison because a customer could look up their price online, then call for a free pickup.”
Having nearly two decades of perspective on this matter, I’ll speak to this issue happily.
In no way is listing the cost of a transmission for a vehicle on-line a good idea.
That should say to a smart client two things: 1. They sell transmissions. 2. If I go in there, the will sell me a transmission.
Look at it this way.
You sell solutions. This is why transmission shops have expanded their services.
Never forget, customers ask for the price only because they do not know what else to ask.
Transparency prior to an RDI is highly encouraged. However, until diagnosis is complete, the only cost a client should ask about is what it costs to identify the problem.
After all. The most expensive transmission… is the one you didn’t need!
Log in to reply.