Pick up one of the flyers from your local newspaper.
Find an item that looks like a great deal. Compare its sale price with the small-print retail price at the bottom of the ad. Now imagine going to the store, selecting the item, and telling the cashier, “I’d like to pay full price please.” Not only would you get a very funny look, but it’s never going to happen.
Here’s why: it’s because the item is now only worth the sale price to you. Long after the flyer sale is over, you’ll remember that you could’ve bought that special item for much less than retail. It’s your new benchmark for its value, not the retail price.
That’s exactly what happens when a service advisor gives a discount in the service drive. It might seem like the service advisor is doing the guest a solid, but it’s detrimental. Here it is in service terminology: the guest needs a vehicle alignment and tire rotation, which retails at $200, and the guest waffles at the price. The service advisor offers a 20-percent discount, dropping the price by $40, and the guest takes the deal. To the guest, the complete service is now only worth $160, not $200.
Discounts Ding You Today and Damage Your Tomorrow
Next time the guest needs a vehicle alignment and tire rotation, can you guess how much they are willing to spend? You can do the math. It’s why discounting should never be permitted in the service drive to add value, it does exactly the opposite.
A healthy alternative to discounting in the service drive is offering a gift card on a future visit or adding bonus points to a customer loyalty program.
In that way, the invoice still shows the full retail pricing on it while your guest feels that they’ve been given special treatment. As an added bonus, they must come back to your shop to spend their gift card or loyalty points, meaning you get the promise of a repeat visit!
It all starts with one key item: turn off discounting abilities in the service drive. Your DMS can help you with the settings if you need.
From Inner Circle News