THE LOW ROAD MYTHS PART III-HOW TO TAKE THE HIGH ROAD
Now that we have discussed the reality facing shops that ignore their average repair order and dissected the myth that repair shops can price themselves as low as chain stores and still survive. The truth is, pricing yourself too low puts you, your shop, your employees and your customers on the fast track to ruin!
Let’s dig into this third and final part of the Low Road Myth and find out how shops can stay on the High Road to long-term success.
Reality #2 – Rise Above the Low-Price Game
Bad branding and poor reputation make it nearly impossible to rise above the low-price game. Shops that haven’t paid attention to the important issues in Reality #1 can become complacent or discouraged. I have seen shops that hadn’t increased their pricing for over 5 years because they didn’t believe their service was worth it.
Negative feedback from a couple of “bottom feeder” customers had convinced these owners that they could not charge more. This can feel like a boat anchor around your neck. To hear an industry trainer tell you that “it’s OK” to avoid raising prices should be a crime.
Reality #3 – Advertise to Your Best Customers
The wrong advertising can become a “bear-trap” that is very difficult to escape from ALIVE. If you do not know how to advertise to the best customers and bring them in — and then deliver on what you promise — the only thing you can do is drop your prices to bring in a response.
The problem is that low value customers won’t spend any money with you…they only come in for the deal. They aren’t loyal, and they resent you for making any kind of profit on their transaction! You’ve experienced this! It doesn’t work!
But when nothing works that the “experts” have suggested, it’s no wonder that shop owners are willing to resort to the LOW ROAD. It proves that they really don’t know what to do about this one!
Solution
There is only one way to survive in the coming years of much higher costs. Just because someone has postured themselves as being someone who “knows” doesn’t automatically mean they do. You could say the same about me except I have proven it in my own shop and in many, many shops around the country.
The steps are simple to list, but not easy to do. The HIGH road requires hard work, the right resources and some investment. The steps are:
- Hire the best people and pay them well
- Do excellent repairs
- Provide over-the-top customer service and convenience
- Advertise to and bring in higher-end new customers (no coupon-loving bottom feeders) through the internet and direct mail, and
- Keep prices and profits high enough to pay for these things plus produce a good net profit
Conclusion
It’s easy for someone to tell you to “keep your prices low or you are going to go broke.” It’s not their money! The one thing I know for sure is that what works for one isolated shop may not work for others.
It’s YOUR money and YOUR profits. You must make the decision on what kind of shop you want. I don’t know about each of you, but I plan to be in business for years to come! I picked my HIGH ROAD horse a decade ago and shot the old broken-down one.
Holding on to cheap pricing (or changing directions and heading that way) is dead…but you are not – YET!