Negotiating to Make the Most of Each Auto Repair Transaction

Every day, you make small decisions that add up to big differences in your auto repair shop’s gross profit calculator at the end of the month. Each time you knock a few dollars off an RO, you create an expectation from a customer that you’ll do it again.

You may not even realize how many times you negotiate during a business day. As you talk with staff, customers and clients, you are continually using these skills. Each one of these interactions gives you a chance to earn the trust and loyalty of those parties. As a result, they pay off with financial implications for your auto repair business for the long term.

Most of us negotiate as a reaction to a situation. However, by looking at the process, we can put ourselves in a better position to build stronger a brand and reputation. Harvard Business School’s experts have broken the process down into these negotiations skills that every professional can benefit from.

Let’s see how each one can apply to your auto repair shop.

Communication

By producing a fair, detailed estimate, you show respect for the customer right away. Thanks to the detail offered in most shop management systems, you can provide far more transparency on pricing and the process compared to other shops. You reinforce this openness when you share updates throughout the auto repair or show worn parts to back up your position.

It also helps to explain terms in plain language so customers understand them. We use expressions like aftermarket parts and OEM without realizing how confusing or seemingly misleading they can sound.

Emotional intelligence

People who come in your door have a problem. And you’re the genius who is going to fix it. Start by empathizing with the person who is under stress or financial duress. Take the time for a test drive to literally sit in the driver’s seat to feel or hear what they do.

Keep in mind the pressures they are facing so you can collaborate to break repairs into incremental pieces or payments. That will go a long way to create a bond rather than turning them down in their hour of need. It also gives them a sense of control and allows you to retain them as a customer.

Happy customer

Planning/Strategy

With that said, you still need to know where to draw the line. It’s just not fair to your staff or yourself to undercharge for your services. Decide in advance how far you will bend and when you will stick with a binary (yes/no) decision.

Having the intelligence within a shop management system helps define the hours and expenses you will need for each job. With options like a GP Optimizer, you can easily gauge if you can offer a discount. This allows you to avoid emotional decisions as you build a rapport with customers who appreciate you and your skills.

Value Creation

This leads us to defending your prices and expertise, backed up by facts. You work in a skilled trade and need to help customers see what your expertise and solutions are worth. Using technology in a clear way makes it easy to speak the customer’s language and improves your image.

Reflection on What Worked

Now it’s time to go back to that gross profit calculator and other metrics in your shop management software to see where you are winning or losing money. Adjust your strategy as needed.

Ultimately, you need to know when to walk away from demands that take too much money out of your shop. As you quickly learn, a customer can seek a cheaper deal elsewhere but they will return to get work done right. When that happens, stay on the high moral ground and reinforce that you were the right choice all along. That draws on every skill listed above.

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