Harry I'll be the devil's advocate here. As a primer I have always been against cheap oil change promotions. I never saw them work for me and I always thought they brought the wrong type of customers.
Kind of what AndersonAuto was alluding to, you have to have the space for volume and the processes in place to handle it, it can actually be a great model. I've recently changed my tune after attending some sales training from Aspen Auto Clinic. They have grown to a 5 shop operation with a ARO of $400 while still offering a "cheap oil change" special.
Essentially the idea is to drive high car count and use a specific process to upsell a paid inspection at reception. That is what it is in a nutshell, there are more steps to it but that's the key part. For those who don't purchase the paid inspection they still get a free inspection so you still have upsell opportunities. Another strategy is to sell them on a VIP card or a 5 pack oil change package at check out so you can see them again. The idea is to get as many "at bats" as possible.
Now when you have one of these folks that come in for oil change after oil change and get nothing done with you OR have the work done elsewhere you have to have a serious conversation with them. It would go something like this, "Mr. Customer we notice that you have come to us for several oil changes and have not acted on any of the recommendations we have made for service and maintenance of your vehicle. We love performing your oil service however these other items are rather important. The reason I am bringing this up is I want to make sure I am doing my job communicating properly about the severity of some of these items. Have I conveyed that information properly?"
If the customer tells you something negative or that he has his family shop that does his work then you have to drop them a serious line like, "Mr. Customer we offer our oil change special to give potential customers a low risk opportunity to experience our service and value. We literally lose money on every oil change at this price. What we really want is to become your shop/mechanic. Are we in the running at all? Do we have a chance?"
If the answer is no or I have a shop then its time to shut them down and tell them that you would really love to continue to service their oil change at your regular price.
I am summarizing the process tremendously and butchering parts of it along the way but that's the gist. This model definitely can work but it MUST be a whole process.
The biggest turning point for me to see this type of strategy work is the detailed process in upselling the PAID inspection (which effectively makes your oil change a regular priced oil change or better) and also explaining to the oil change customer that this a special promotion to give people a "low risk opportunity to experience our customer service and value". You need a specific sales process to turn those oil change customers into repair customers.
Another trick is to not advertise the low oil change on a consistent basis. every quarter or 6 months with a big blast.
I am going to pilot this strategy with my upcoming general repair shop. I'll report my findings