By Bob Cooper
Most shop owners and dealerships provide
their service advisors with some flexibility in pricing. The objective is to
give them the ability to adjust prices in order to ensure customer
satisfaction, close sales that would otherwise be lost, and reward loyal
customers. All good reasons. The problem is … it becomes easy for your employees
to give away money when it’s not theirs, and these discounts can become sales
crutches. To make matters worse, those discounts and refunds come right off of
the bottom line. So here is what you need to do ...
Take a look at the discounts that you have
provided over the past year, and come to a conclusion as to what you feel a
reasonable discount total should be. For example, you may discover that you
gave away an average of $300 per month, but that with a little extra effort
from your advisors, they would have only given $200 in discounts per month.
If this were the case, you would need to tell your advisors that you are
setting up a monthly budget of $200 that they can use, at their discretion,
for discounts and refunds. At the end of the month, you’ll then give them 50%
of whatever is remaining in the budget.
By taking this approach, your advisors will
still have the ability to use discounts as sales tools, but they’ll also
realize that it’s now their money to lose. If they decide to give a customer a
$50 discount in order to save the job, they’ll quickly realize that it’s
going to cost them $25.
There is no question: If you use this
technique, not only will your advisors think twice before they offer discounts
or refunds, but since you would be spending the money anyway, this gives them a
chance to help you save a good amount of money. If they are able to effectively
limit the discounts, then they have earned their reward, while helping you put
more money on your bottom line at the same time.
For the last 20 years, Bob Cooper has been the president of Elite Worldwide,
Inc. offering automotive professionals sales, marketing and employee management
solutions. To learn more about how Elite can help you build your auto repair
business, visit www.EliteWorldwideStore.com.
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