Motor Age: Schneider: The lowest common denominator
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August 1, 2011
By Mitch Schneider
I just finished writing a column for our sister publication, Aftermarket Business World. It centered on an incident that
occurred here at the shop just a few days ago. I try make it a point not to talk about the same subject in both
magazines if I can avoid it. Despite the fact we are one industry, these are two very different audiences with two
very different sets of beliefs, wants, needs and expectations.
Nevertheless, there are times something bubbles to the surface like sulfur from a stagnant creek bed with an odor so
strong you couldn't ignore it even if you wanted to.
I wanted to ignore it; I tried to ignore it! And, yet, here I sit trying to find the best possible way to approach what I
consider to be one of the worst and possibly most dangerous practices in our industry today.
It started with a simple sales call. One of our vendors with one of his manufacturer's reps standing at the front of the
counter to discuss a new product line – at least, new for them. The company was a name you would recognize, one
you and I grew up with. Yet when the rep started his pitch, the first thing he started talking about was his price line.
He started talking about his second line first without being pressured, without being challenged, without any
resistance!
When I challenged him and asked why he would do that, he said it's because that's all 80 percent of the people he
talks to want to hear about! So naturally, that's where he took them and everyone he talked to.
I thought about that for a while and I wrote about it in our sister publication. I thought about our industry and the state
of our repair community, and I started asking questions. A lot of questions of a lot of our sales reps and quite frankly,
I don't like what I'm hearing.
You see, it seems many shop owners who are pressuring our suppliers for second line parts at second line prices
are selling them at quality line prices.
In my world, that is misrepresentation at the very least, larceny at its very worst.
I understand the need to make a profit. I understand the need to have a decent margin on the parts we sell. It is an
integral component of our business model. What I don't understand is charging a motorist for diamonds and then
filling his bag with coal!
I believe this practice comes from our inability or unwillingness to charge what we need to charge for the labor we
invest in the services, maintenance and repairs we perform. I think it is the result of low margins, the 55 or 60
percent service bay productivity numbers we continually see all across the nation and effective labor rates far below
what is posted on a shop's wall. And, as a result, a number of these shop owners find themselves compelled to
8/3/2011 11:22 AM
Motor Age: Schneider: The lowest common denominator
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make up the difference between what they need and what they ask for by misrepresenting the parts they are selling
as first quality.
In a service-based business, the lowest common denominator always will be price. It is unavoidable. Successful
businesses find ways to overcome price objections with world-class service, incredible customer care and
increased operational efficiencies. Unfortunately, not everyone is willing to do the work involved in getting there.
If you are one of those people I will share with you what I shared with our Aftermarket Business World readers. The
only place this will prove to be the easy way out is if you are looking for the easy way out of business!
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