How to Increase Profits by Raising Prices & Quality of Care
According to Rolling with the Numbers, over 90% of tire dealers have increased their rates within the past 3 years. Raising service prices can not only enable you to increase technician compensation to help increase retention, but also increase your business’s profitability. Regardless of inflation, remember there is always room to expand the added quality to your services such as educating customers and committing to the customer’s experience when they step into your waiting room.
The most popular and profitable rate increases were seen on tire sales, alignments, brake pad replacements, and tire rotations. On the other end of the spectrum, price increases were not widely seen on products and services such as wiper blades, oil changes, and battery and belt replacements. Some mainstream ways that dealers introduce a raised price is by adding in free lifetime air and tire rotations, along with free flat repairs, mounting, and even oil changes.
Relationships are the key to success in this business, so take care of your employees, customers, and suppliers. Commitment and follow through earns respect. As John Boyle, head of ETD Discount Tire Centers, puts it: “It’s amazing how much customers want to give you, employees want to work for you, and suppliers want to do business with you. And we all have fun doing it.”
On average, about 70% of any dealer’s sales revenue are from repeat customers. So before your customer leaves your shop, ensure that you educate them with basic required maintenance knowledge - pair that with the services and discounts your shop offers. Keep in mind that educating your customers also increases the likelihood of them authorizing a service they would otherwise neglect.
Become not only a successful business, but a memorable experience for your customers. Many service shops have created a comfortable environment by building new spacious and beautiful waiting rooms with TV, music, coffee, snacks, and more. Those that stand out include a kids area and even a dog area (we love our pets!). Go above and beyond by sending out a personalized and signed Thank You card to your customers after their service.
Consider the above, and set your sights on goals for the new year if you haven’t already. Price increases may initially seem unattractive, but by showing your commitment to your shop’s employees and customers, you build a sustainable community of trust, quality, and respect.