What Is The Latest Pricing? (Lesson 12)
Another area where we constantly find auto workshop owners leaking profits is within the sales price for parts, as some clients have access to discounted pricing, while others will pay the standard retail rates.
Retail clients will generally be charged standard recommended retail pricing, while trade clients will often be entitled for discounted pricing on some parts and services. For example, those trade clients who have a fleet of vehicles will be charged differently to the retail client who has one car.
This can be an area where expensive errors are made within the auto workshop environment. The breakdown of accuracy in customer pricing often occurs when customer information is not stored in one central system, but rather, it is in scattered files, or, much like the information regarding the status of jobs in the workshop, which was discussed in an earlier article, the important information may be stored securely inside the head of various employees.
This means that not every staff member has access to the same information, and this break in the information chain is where pricing errors can happen. Often, in a busy auto workshop, they go unnoticed.
Below is an example of how important this information is, and how, by not having a system that manages pricing information, the revenue of the business can be compromised and profit maximisation becomes impossible.
Ben is an auto workshop owner. He has been in business a long time and all of the information about his customers is stored in filing cabinets. He has one cabinet for retail customers, and another filing cabinet to store the information about his trade clients. Some of the files are very up to date, while others lack even the basic information regarding trade client discount rates and which parts those discounts apply to.
Jason had been working for Ben for more than a year, and he was still struggling to understand the discounts and how they were to be applied to the different trade clients. Mark was a trade client who always got a 25% discount on brake pads. Jason had served Mark a couple of times and because he was familiar with his account, he was confident when selling him parts.
On this particular visit, Mark didn’t buy brake pads; instead, he bought oil filters, oil, and air filters, which he did three times a year. Jason, because he was familiar with this customer, applied the 25% discount as he believed he was supposed to do. What Jason didn’t know – there was no way he could know – was that Mark was not entitled to 25% discount on anything except brake pads. He was actually expected to pay standard retail rates on these parts.
A lack of accurate and easily accessible information regarding correct sale pricing can compromise the profits of your workshop. The mistake is an honest one where the staff member simply didn’t have access to the correct pricing information and the result was a loss in profit.
A system that provides correct information regarding part sales prices at the push of a button is one of the most crucial components that will enable you to run a successful and profitable business.
Accurate and immediate access to pricing information allows staff members to feel confident and secure when serving customers because they know they have the correct information and, as a business owner, it provides you with priceless peace of mind.
When you know that your profits are not being compromised, and that your customers are not being short-changed by basic errors arising from the lack of information access, then you know you are on track for profit maximisation.
A streamlined system that automatically calculates correct customer pricing can provide your auto workshop with an invaluable time and money saving tool that will pay for itself many times over.
In your experience, is accessing information for the right pricing an issue in your workshop? Please leave your thoughts below…
To your success,
Australia’s #1 Automotive Business Growth Expert
