Comments

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  John Fairchild January 18, 2016 at 10:08am

  Ideally, the Service Director should empower each Advisor and the Service Manager with a certain percentage that they are allowed to discount on repair and maintenance items for the right reason. This will give the customer a level of confidence directly in their Advisor that THEY are in essence assistant service managers able to accommodate the customers’ needs. It can also expedite the situation and often be the very gesture that convinces the customer to proceed. For discount needs that arise that exceed the Advisors empowerment, the Service Director may want to review the situation before the customer is told an absolute NO in an attempt salvage high dollar or otherwise desirable jobs.

   

  The big picture is that the Dealer and Service Director have a target level of gross profit ratio to be retained versus the retail sales that are made in parts and labor. In an effort to ensure that customers aren’t going somewhere else because of price, but also not break the bank, the Dealer and Service Director should come up with a guideline of what is an acceptable level of discount.

   

  Now, the reason for an actual discounted Repair Order should be reserved ONLY as a gesture to keep a job from leaving. If the ticket pricing must be reduced for any other reason it should be handled differently so it can be monitored properly.

   

  Some examples of price reductions that are not actually “discounts” are;

  • Goodwill Policy for customers upset about a circumstance that occurred in your shop.
  • “Comebacks” due to poor workmanship or incorrect repair.
  • Price reductions to absorb inaccurate initial estimating.
  • Employee pricing to extend additional benefits to workers.

   

  In each of the above scenarios, reductions should be charged to the appropriate account rather than a simple price discount take place. Just as a certain level of discount is permissible, each of the categories that the require the adjustment for other reasons must be scrutinized. From this analysis additional training can be administered and policies further refined as needed.

   

  Remember, most customers simply want to see the value in your offerings, so initially take a price objection as a reason to explain why the job is priced the way it is rather than just arbitrarily offering a discount.