Have you ever presented an estimate to a customer and had them say it was too expensive? Next it seems the only way to make the sale is to offer them a discount. In this article, I will show you how giving discounts is actually hurting your bottom line and how to get approvals on work without discounts.
1. It projects a lack of confidence.
Discounts give the impression that you do not have confidence in the work that you are trying to sell. That what you are offering may not fix their problem. The customer also perceives you as not having confidence in yourself.
2. It sets a bad precedent.
If the customer returns for work or service they will be expecting another discount and will not like paying full price. Now you have an unhappy customer, not just someone who thought you were too expensive last time.
3. It establishes a lower perceived value for your product or service.
Think of the products you have seen on discount. If it’s a food item it may be near or past its expiry date. If it’s clothing they are out of style.
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4. You can come off as untrustworthy.
The automotive profession has one of the worst reputations for dishonesty. I know the majority of us are honest people and there are a few bad apples that spoil the bunch. This is something I teach my clients. 1 of the reasons customers think we are dishonest is our use of discounts. When we give them our best price than discount for some reason it makes the customer wonder what else we are hiding.
5. It cuts into your profits and can exhaust your sales team.
This may seem obvious but a lot of people don’t consider how it affects the bottom line.
Many Technicians are on flat rate and get paid per job. A lot of Service Advisors and Managers have bonus structures. Not all owners are money hungry maniacs, they need to support their families.
It’s no secret that people in the Automotive industry are getting burnt out and working too many hours. It’s one of the biggest complaints I see on Facebook. By giving out discounts we need to work harder and longer for the same amount of pay.
I know giving discounts may seem like the only way to make sales, but that is not true. When maintenance and repairs are explained to the customer in a way they understand, they will not feel like you are “ripping them off” and give you the go ahead for work.
One key way in preventing customers asking for discounts is to gather all the relevant information up front.
That's why my VEHICLE SYMPTOM QUESTIONNAIRE can be help you succeed in your business. It's similar to one a doctor would give to patients. It will get all the relevant information like what exactly is happening and when.
You can email it to customers ahead of time or hand it to them when they arrive for their appointment.
I hope this article can help you make more sales wisely.
Please feel free to send me any questions to: connect@CoraleeZueff.com
Cheers!
Coralee Zueff