By Jason Unrau

The Cox Automotive Maintenance and Repair Study emphasizes that less than 1 in 3 service visits are done at the dealership. Customers are taking their vehicles to aftermarket shops and those mom-and-pop service centers down the street. By the numbers, that means there’s a 70% defection rate, since all cars are originally purchased new from dealers, right?

As an industry, there’s a struggle to retain that service business, and it doesn’t come easy. Customers need to learn that they can trust the dealership to service their cars without getting ripped off. And high prices are one of the customer’s biggest complaints.

Knowing the Market

Fixed ops directors and service managers, one of the tenets of improving your customer retention rates must be positioning your service shop competitively with other local providers. The Meineke or Pep Boys, the muffler guy two blocks over, and the specialty shop nearby all take your business because customers have decided you charge too much.

Competitive price comparisons can offer two things for you: a clear picture of your market, and the opportunity to do something about it.

- Shopping local service providers helps you know your competition. You can figure out who is baiting your customers and what they’re charging for similar services and repairs.

- Mystery shopping your competitors can reveal your OEM parts advantages. If the competition is using white box parts for the same repair to lower pricing, you can use that to your advantage in advertising.

- Dealership amenities show up as an obvious benefit. It can be the comfy customer lounge and complimentary coffee, the free courtesy car or shuttle service, or the easy access to warranty.

Compare Apples to Apples

With information from competitive price comparisons, you have a wealth of knowledge at your fingertips. Now you can present a complete picture to your customers, and it’s best before they defect.

In service advertising, spell out your advantages over the competition. Do you offer complimentary transportation? Most non-franchise repair shops don’t. Do you have OEM-certified technicians? That’s a claim independent shops can’t make. Refreshments and a play area in the waiting area? You’ll catch a parent’s eye with that type of detail.

Adjust Your Prices

Customers aren’t as fickle as you think. It’s a pain in their backside to try to find a repair shop they can trust and that has the ability to service and repair their car start to finish.

What you may not know is that car owners prefer the expertise they get at the dealership. But when pricing factors into the decision, they go elsewhere when they believe the dealership is charging way too much.

The sweet spot for a customer is within 20 percent. If your service menu pricing is within 20 percent of other local providers, most car owners will make the choice to visit the dealership. It’s a smart decision.

Armed with local market knowledge, adjust your menu items to within 15 to 20 percent of your competitors. Include that information on service advertising and on the website.

Tools like InteliChek’s service pricing widget show your local competitors’ pricing alongside your own, displaying your advantages. When you’re open about your pricing as it compares locally, it offers the transparency customers need to begin rebuilding their trust.

Originally published @ https://www.drivingsales.com/jason-unrau/blog/smart-service-pricing-decisions-start-with-competitive-price-comparisons