When Selling on Price Backfires

by Ryan M. Healy on September 14, 2010

A salesman representing a brand name car shop knocked on our door to sell us discounted oil changes.

The offer was fairly good as far as offers go. You pay for a certain number of oil changes up front and the cost of each one is substantially below retail.

All good and fine.

But I said no. Not really interested. I told him I plan to keep taking my Honda Odyssey to Ralph Schomp, the dealer I bought it from.

Why I Turned Down a “Good” Deal

A few years ago, my father-in-law started up an auto repair shop with a couple partners.

Dishonesty and all kinds of fraud plague the auto repair business, so their goal was to create a shop where everybody was totally honest — no shenanigans.

And yet in spite of this stated goal, my father-in-law struggled to find honest mechanics.

One of his mechanics kept telling every single customer they needed a new ball joint. Obviously, my father-in-law became suspicious. How could every customer need a new ball joint?

One night he closed up shop and told his best mechanic to come back to work an hour after closing. He didn’t give his mechanic any prior information. All he said was, “Give this car a check and tell me if it needs any work.”

Turns out, everything was fine with the car. It didn’t need a new ball joint at all.

But what “ball joint guy” had figured out is that most people have no idea how cars work, so they’ll believe anything you tell them. If you tell them they need a new ball joint, they almost have no choice but to believe you.

“Ball joint guy” had also figured out that replacing ball joints was quite lucrative. High labor cost, low material cost, so he got to keep a bigger piece of the profit.

Needless to say, they fired “ball joint guy” pronto.

It’s Not Just Mechanics Who Are Dishonest

Unfortunately, that wasn’t the end of the problems my father-in-law ran into while trying to run an honest shop.

Later on, he discovered that one of his partners (who was also the operations manager) had been intentionally overcharging customers and pocketing the difference.

So if the cost of the repair was $100, he’d charge $110 and keep the $10 difference for himself. Over a period of a year or two, he stole around $20K from the till.

Figuring the whole thing out was an accounting nightmare. It took a couple months of secret monitoring to collect enough records and evidence. They literally had to let the partner keep stealing until they had built their case!

Long story short, they arrested the dishonest partner, brought their case against him, and he was found guilty. He went to jail, and he’s still there.

Trust Trumps Price

Based on my father-in-law’s “insider experience,” I’m personally very hesitant to try any auto repair shop. I figure most mechanics are like “ball joint guy” — making up imaginary repairs that put more money in the mechanic’s pocket.

But I feel good about Ralph Schomp. They’re not the cheapest, but they’ve provided consistent quality service. They honor their price quotes. They always throw in a complimentary car wash. And they treat everybody with respect.

It’s one of the best dealerships I’ve ever done business with (or even visited).

So the brand name company wants me to buy cheap oil changes from a door-to-door salesman? It just seems like a gimmick to get me into the repair shop where they’ll try to get me to pay for expensive, imaginary repairs.

-Ryan M. Healy

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About Ryan M. Healy

is a direct response copywriter. Since 2002, he has worked with scores of clients, including BoostCTR, Alex Mandossian, Terry Dean, and Pulte Homes. He writes a popular blog about copywriting, advertising, and business growth, has been featured in publications like Feed Front magazine, and is a regular contributor to WordStream.com, BoostCTR.com, and MarketingForSuccess.com.


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{ 13 comments }

Markus Allen September 14, 2010 at 4:21 pm

It kills my wife, mom and dad every time I take my car to Lancaster Toyota/Mazda.

They charge us over $60.00 for an oil change that would cost half the price locally.

But you know what. I trust them. I like making an appointment at 2 p.m… taking their shuttle (no extra charge) to the mall to eat Qdoba for lunch, and returning to find my car ready to go at 3:30 p.m. sharp.

On average, I’m probably paying 15% more at this dealer than any local independent. But it’s my pleasure to pay more for the trust factor.

Great post once again, Ryan.

Ryan Healy September 14, 2010 at 4:42 pm

Good story. Thanks for sharing that, Mark.

Another thing I like about Ralph Schomp… they take care of any warranty issues immediately. Last time I took it in, they replaced my battery free of charge because it failed the battery test — and this was only about 2 months before my warranty expired.

It’s those kind of thoughtful things — when they take the initiative to make sure my car is running tip-top — that make me happy to pay a little extra.

Ryan Healy September 14, 2010 at 4:39 pm

You’re welcome, Joe. I bet you’ve seen a lot during all your years in the auto parts business — more than my father-in-law has ever seen! :-)

Sounds like Oscar is a good mechanic. There’s usually at least one in every town… just takes some trial and error to find your “Oscar.”

Becki September 14, 2010 at 5:14 pm

Like auto mechanics I guess, my business is something of a ‘commodity’ and can certainly be found cheaper elsewhere. But like Markus said, factors of trust, service, convenience, and I would add quality, can take any commodity business to a boutique sort of status. When your clients refer people to you with, “They’re a little bit more, but really worth it,” I think that’s a very okay place to be.

Becki

Ryan Healy September 14, 2010 at 8:00 pm

That’s a GREAT place to be! :-)

PerryD September 14, 2010 at 6:27 pm

Ryan,

I’ve always changed my own oil or gone to the local oil change place. Until we bought 2 Toyotas and a Scion in 3 days from our local dealer, Valley Toyota.

My son takes his Scion to various places including the local oil change place when he’s in town.

My daughter and my wife take their cars to the dealer. I’ll always do business with this dealer because they do the same thing your dealer does. They find and fix little things while the car is in for the oil change. They’re honest and want to keep us coming back.

My local Ford dealer where I take my F250 Diesel is fairly honest. I have to watch one of the service writers pretty closely. He’ll try to add things on that aren’t necessary.

I have to remind him I was an auto mechanic at one time and he backs off. It’s not ideal, but in this case, I don’t know any other shops in my town that specialize in diesels.

I do know one other honest mechanic in town. He gets my highest recommendation and I use him for all my smog checks.

This is such an important issue in these economic times. If you get a bad reputation, you might as well close the doors now.

Good luck to your father-in-law. It’s a tough business, but word will spread if he’s honest. People will figure it out.

Ryan Healy September 14, 2010 at 8:06 pm

That’s tough when there’s a local monopoly and there really aren’t any other choices. But at least you’re knowledgeable about cars and trucks — I’m sure that’s a big help in getting fair service.

P.S. My father-in-law and the other partner ended up selling to another repair shop that re-branded the store. So he’s out of that business now. :-)

PerryD September 14, 2010 at 8:50 pm

Indeed. Having intimate knowledge of automobiles and how they work helps a great deal. I only bring it up when I need to, and it always seems to keep the service writers in line.

(I try to avoid working on cars any more. I only do it when I’m forced to.)

Hopefully your father-in-law made money on the deal. It may have been tough to get past the criminal activity of the partner and the reputation it would have brought.

My wife just came home for a short lunch and we were talking about shady marketing practices.

Macy’s advertised a sale on Coach purses. My daughter really wanted one. She and my wife drove the 40 miles to the store. The clerk talked my daughter into opening a Macy’s credit card account so she could get an additional 10% off. After my daughter bought the purse, the clerk put in a bag with my daughter’s name on it and told her it was really a pre-sale and she needed to come back in 3 days (Saturday) to pick it up.

We figured it’s just a shady way of getting people back into the store during the main sale so they’ll hopefully spend more money. My daughter is only 21 and yet she told my wife she felt it was just a way to manipulate people. She came away with a bad taste in her mouth regarding Macy’s.

The clerk made sure not to tell my daughter ahead of time that she’d have to pick the purse up in 3 days until after the sale was consummated.

It’s amazing what businesses will do to try to generate a little more business these days.

Ryan Healy September 14, 2010 at 8:59 pm

Talk about a bait-and-switch… that’s crazy!

Ryan Healy September 14, 2010 at 8:03 pm

Whew! I could never stomach that many visits to get my car worked on. :-)

In case it helps you with your next car purchase, you should check out the Consumer Reports annual car buyer’s guide. They publish independent reliability ratings on all vehicles so you have better chances of getting a really good car (and avoiding a lemon).

There are always some surprises, too. For instance, Toyota has overall good reliability ratings, except the Tundra. The Tundra is rated horrible for reliability.

And vice versa… the Buick LaCrosse is rated super reliable, even though most Buicks are average to poor reliability. Anyway, maybe that buyer’s guide will be a help to you. :-)

SamRX September 15, 2010 at 4:56 am

Hi Ryan

i like your sales tips i also try that tips on my business and its really works thanks for share your sales tips.

Peter Brissette September 15, 2010 at 9:40 pm

I know an auto repair shop here in Westminster, CO called Lake Arbor. The owner opened the shop a number of years ago and like your relative realized what a dirty business the auto repair business was and he didn’t like it. So one day he decided that it had to change. He fired all his staff and mechanics and rebuilt his business totally on ethics and sound business practices.

Now he has another problem because when you want to get your vehicle worked on you have to schedule it out a week or two because they are so busy. His shop is even in an out of the way place that is not on any main street where he picks up drive by traffic.

It really is a very cool story of what he has done and he has an amazing reputation in the community. He was even named small business person of the year by the local chamber.

http://www.lakearborauto.com/index.php

Peter

Ryan Healy September 15, 2010 at 10:46 pm

Thanks for sharing that story, Pete! Just shows how far good, honest service can take you.

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