The balance between Being Competetive and Profitable

[Joe Marconi]

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[xrac]

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[Southeast Tire Co.]

In the balance between being competitive and profitable, I think it depends on the goals of the business. Profitability goals depend on the overall direction of the business as the owner sees it. While many owner's goal is to be as profitable as possible, it is not mine. My goal is growth. Growth at all costs. Being a fairly new business, I want to build a huge customer base first and make money later. As long as I am covering overhead, providing my employees with good pay and benefits, and am personally able to take a reasonable salary, I will cut prices to the bone to beat my competitors and gain their customers.

 

I can honestly say that I have never priced any service or product by a profitability projection. My prices are based on the market and I change my business to make sure it can operate under those margins. I feel that the most important thing in this economy is a strong customer base not maximizing the profit of each job/sale. While I think both can be done, I will never lose a reasonable customer to price. Never. I'll take a 15% overall profit on a tire sale if I know I gain a customer in the process.

 

I envision one day changing my business goals to maximize profit and when I do that, I will already have a strong and loyal customer base to support me. So again, I think that balance you are talking about depends on where you see your business in the future.

[Joe Marconi]

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[Evan Smith]

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[Joe Marconi]

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[xrac]

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[Joe Marconi]

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[xrac]

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[Joe Marconi]

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[xrac]

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[Brett_Duke]

My first post.................... . In response to desperation marketing, I've been in a shop where this has happened. Empty bays, techs sleeping on their work benches.......Here comes the manager with a "new idea". " Let's start selling any and every possible Flush available." This didn't work at all, especially because most cars coming in were still under warranty and had never heard of these flushes when they brought their last 5 cars in. This kind of marketing leads to unhappy customers and unhappy techs.

[Brett_Duke]

BTW, I'm not knocking all "flushes", just a good example that i've experienced.

[Brianp]

My first post.................... . In response to desperation marketing, I've been in a shop where this has happened. Empty bays, techs sleeping on their work benches.......Here comes the manager with a "new idea". " Let's start selling any and every possible Flush available." This didn't work at all, especially because most cars coming in were still under warranty and had never heard of these flushes when they brought their last 5 cars in. This kind of marketing leads to unhappy customers and unhappy techs.

 

 

First I would never "sell" any unneeded service. If its a preventative fluid replacement it better need it. Like 30K transflush or ph of coolant is low. etc. The fasted way to put you out of buisness is a bad reputation. If a vehicle is in your shop on a regular basis for the maintenance then you should rarely find anything that is needed unexpectidly. Like flushes, belts etc. Those items can be predicted at an previous stage and then even posibly split up so that the customer can do them in intervals that cost less each time but are still doen in a timely fashion. Like telling them they need a transmission flush at the next oil change. or tune up at 60k. etc. This keeps the workflow nice and easily scheduled. While keeping a customer loyal and satisfied.

[KMS]

I believe in telling all customers all issues with their vehicles I see. Then, I prioritize it. Even the small concerns that aren't really an issue yet. It earns their trust, and helps them save for their next visit. Also, many times they just tell me to take care of it all now. Always put the ball in their court. I agree with not selling un-needed services. This is one of the main reasons I get calls from customer's who have their vehicle at the dealer.