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How can this be good for a Dealership?

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#2
CliffC said:
Does anyone else think that the author of this article is suggesting that service advisors intentionally leave some needed parts out of a quote to make the cost for repairs appear lower up front?

Aggressive or Ambush?

Cliff
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That's what I'm reading. Though this is a common practice across the parts business and not solely practiced in the dealer world.

"The best technique for service advisors is to quote the labor and price of the main parts and inform the customer there may be some incidental costs. In the water-pump example, some of the incidental costs may include gaskets, seals, hose clamps, bolts and coolant."

Using a price Matrix and knowing what parts you can "hike" the price on can yield a nice advantage. Many times the the price hike goes unnoticed to the consumer - 3.00 gasket gets doubled to 6.00. 100% increase in profit but still only dollars to the customer. With that being said - I don't find it fair to quote a price plus "some incidental costs" unless they give a ball park on what these "some incidental costs" could cost. I know if I were the customer I would be asking.

Tricks.
 
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#3
Jeff Kershner said:

Using a price Matrix and knowing what parts you can "hike" the price on can yield a nice advantage. Many times the the price hike goes unnoticed to the consumer - 3.00 gasket gets doubled to 6.00. 100% increase in profit but still only dollars to the customer. With that being said - I don't find it fair to quote a price plus "some incidental costs" unless they give a ball park on what these "some incidental costs" could cost. I know if I were the customer I would be asking.

Tricks.
Click to expand...

I can't imagine the short-term gains from this sort of scheme would outweigh the long-term negatives. I love the idea that "Many times the the price hike goes unnoticed to the consumer". And when it doesn't go unnoticed, the consumer has Facebook Places and DealerRater handy on their smart phone to let the world know. No one with a background in sales would come up with a scheme that seems designed to destroy customer satisfaction, but I bet Bean Counters love the idea.

I stopped taking my TT to the Audi dealer for service soon after the warranty expired. Partly because they were an hour away. Partly because of what they charged for parts. And mostly because I found an independent that I really trust (Greenfield Imported Cars - they deserve the shout-out, I love these guys!).

The trust factor is huge. A dealer needs to ask, "is it worth destroying my customer's trust just to charge $1.85 on a part with a $1.00 list price?"

 
#4
Gentlemen,

Thanks for your comments. I read that article and it just didn't sit right. Using the matrix or escalation functions I totally get and although I personally don't like it when I have to pay double for some parts, a dealership could reasonably argue that the gasket and seals can take nearly as much labor to handle as the water pump itself and the 37 cents the dealership collects from those parts simply does not cover the real costs of holding, looking them up and retrieving them for the customer.

What really prompted my post here was the suggestion that is a good idea for advisors to intentionally leave needed parts out of a quote just to get the customers car in the shop and taken apart before adding back in the heavily escalated "incidentals".

From your comments above, I see that I am probably NOT alone in reading that the author is suggesting to some level, that service advisors intentionally mis-represent the costs of some repairs to get cars in the shop.

I do not see how can that be good for any dealership in the long run?

How many people will google the author to see that he works for a dealership? That may be a bigger problem for the dealer yet.

Thanks much for the "sanity" check.

Cliff
 
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