January 2007 – Removing Price as #1 choice.

What people say vs. what they need.

It’s not (really) about price

An out of state customer dropped in at random and needed the hail on their VW GTi repaired in the next few days. There was a turn in deadline on their lease and they would have no time to get it repaired in Texas. Would I be willing to work over New Year’s to get it done? 

This is the biggest benefit to me of hail and large dents. They are slack adjusters. If you’re having an off week or even a slow month, one job can take up the slack. Many businesses are doomed to receive only the today money. Really, with a little creativity, any business can create slack adjusters by the way they package what they sell. 

This hail job story contained another lesson. The customer had already been to the local Dent Doctor franchise. He wasn’t willing to work over the holiday, but that’s not the story. 

As I’m writing the estimate, the customer blurts out, “Can you keep it as close to a thousand as possible?”

I put the pen away and postured myself to send them away. I had already crossed the $1000 mark and hadn’t bid the sides yet. I calmly but firmly told them it was going to be closer to 2000 and did they still want me to continue to write?

“Dent Doctor said they’d do it for $1300” he offered back. 

Years ago I would have adopted a “price matching” stance. This I picked up from Home Depot, a building and home improvement store here. Their policy is bring in a competitor ad and if our price is higher, we’ll match it and give a 10 percent discount on top of that. 

I can’t knock Home Depot, for they have done well. They also sell commodity items. My service is not a commodity. 

“Dent Doctor is notorious for not fixing every panel, only the easy ones. Do you want to turn it in on lease and still have to pay for the hail repair? I’m going to write it to fix every dent. The lease company will never even know it was in a hail storm.”

See, customer was not telling the whole truth. Dent Doctor wasn’t going to fix their car for any amount in the time frame they needed. In this case I had no competition. 

I got the job for $1600 which was a little light so I was affected some by his attempts at low price nonsense.

When I began to work on the car, I found the DD estimate and sure enough, he was only going to fix the tops. They would have been in big trouble at the lease inspection.

Upon delivery I mentioned this to them. “Yeah, that Dent Doctor guy was weird, he told us the metal might warp and just acted like he didn’t want to do it.”

See why you can’t build a business on low price?

Consider their presentation to me of what was important vs. what they really wanted.

Yes, it does help to know the competition and they are predictable. 

Key here is that really, no one has price at the top of their list for anything. Not even you. 

Of course we always present it this way in a negotiation. “I only care about price. I can get the same thing down the street.”

In nearly all cases it just ain’t so. My competitor could not deliver within the needed time frame so deliverability was tipped in my favor. So when someone tells you they can get the same thing down the street, usually they can’t.

You and your service are not a commodity. Though many will try to convince you otherwise. 

The internet has driven many hard goods to being a commodity. Web sites that “fish” for the best price and let you compare prices altogether on one page are popping up all over.  Again, what you see is not always the truth. I ordered something from one of these and got an email 2 days later telling me it wasn’t available. This company let me go through the ordering process and never had it in stock. Deliverability was an issue here, too. Plus, I was now penalized by the time crunch imposed on me for being cheap.  

Price is elastic

What really is a commodity? A loaf of bread? A head of lettuce?

Yet, consider the range of prices existing in these markets. Lettuce can be as low as 39 cents. Buy organic and it’s a multiple of that. Repackage and put it in a bag (hopefully minus the eColi bacteria) and now you’re talking several dollars. Same market spread exists in bread. Supermarket might sell for 99 cents, bakery 7 bucks or more. Did you ever think people would line up and pay 5 bucks for a cup of coffee?

There is concern in the PDR industry that price sheets turn our hail business into a commodity. Many prefer Dent Estimators as it uses a complicated matrix to determine price. The real key is in the “adds” or additional charges you levy on a repair for access problems, size of, or number of dents as well as aluminum vs. steel. 

So my estimate might differ from yours using the same price sheet on the exact same car. I will tell you that in a big storm any sheet gets stretched beyond recognition. The unspoken, intangible effect of supply and demand is at work here. When you have a line of 150 cars to estimate you tend to see a big demand for your services. 

I’ve mentioned Hank the hail broker who established the hail procedure for a large insurance company. They pressured him to commit his prices to paper and ink by means of a matrix or price chart. He dodged them for nearly a year after watching a competitor called to task for not sticking to theirs in a hail storm. 

Point of all this is there’s room to wriggle in even the tightest of markets. 

The key is to take price and set it aside. Assign it the place it deserves in your negotiation with your customer. Remember their decision is going to be an emotional one. I mean, what could be more irrational than paying 5 bucks for a cup of coffee? If you asked a patron as they leave Starbuck’s why they bought, they’ll tell you it was taste, or quality of the bean or some other nonsense. Real reason they paid today and will come back tomorrow is the way it made them feel.

Starbuck’s is the poor man’s luxury item of today. When you and I were kids it was (would ya believe?) McDonald’s. Eating out was once a luxury. A splurge. Something you did every once in a while, only for special occasions. Now it’s so common that people get Restaurant burn out, forcing the eateries to change their menu lest you get bored and go somewhere else.

People buy with emotion, justify with logic. You want to tickle them in both places. 

Logical reasons to use you? You were trained by a veteran tech (sounds self serving but think of the guy trained by the noob at the school). You don’t drill unless you have to, then you restore the rust inhibiting properties with self etch primer and a factory plug. You work for the (biggest, highest quality, most respected) company (body shop, dealership, etc) in your town. You have the longest guarantee. Mine’s for as long as they own the car. Never had to fulfill it. What could happen right? But they don’t know that. 

Now, what are the unspoken emotional reasons? First take your features above and turn them into benefits. “ I was trained by a guy who’s seen all the ins and outs of thousands of cars and I can get his help if I need it.” 

“You can rest easy knowing your car was restored to its original condition and no rust or faded or cracked paint will ever harm the value. We guarantee it for life.”

Now capture the intangible good feeling given to a Starbuck’s patron. It’s the furnishings, the constant cleaning of the sugar and cream area, the clean bathrooms, even the clothes worn by the other patrons. Now you might dismiss this last point but I promise you people go there to be around other beautiful people so they can feel like one of them.

This translates for you in the appearance of your clothes, uniform, vehicle, estimates even your business cards. The condition of the car upon delivery, washed and vacuumed? I will spend 30 bucks at a local car wash to let them wipe down and vac the inside plus wash it.

I’ll bet there’s more you could think of, here.

Ratio of hail to door dings

An insider at Dent Wizard shared this with me. Their revenue for hail last year was 40 million. Door dings brought in 120 million. If you live in a non hail region take note. You have more opportunity before you than you thought. DW gets a lot, but they don’t get it all. Plenty of room for little guys to profit well and earn a good living. 

This months video is “Speed Tips for Hail” but it could just as well have been speed tips for general dent repair.

• • How I create a success environment
• • Why you have to charge high prices
• • How my repair system saves time
• • How to take a hood off by yourself

Door dingers vs. Hail chasers

I try to be both and encourage you to do the same. If you live in an area where hail is rare, remember the auctions bring cars to your town from all over. Most door ding guys hate hail because they are not fast. Why not gain some proficiency and give yourself a boost by selling your services to the dealership as the guy to fix those hail cars they just bought. 

In the early days, my boss flew into an auction at a Nissan depot where all the cars got hail and they were selling them as is. He was able to tell the dealer what they would cost up front so he could make a good bid. 

Can you train your customers to spend more with you?

Till next time,

Tim