Auto iQ’s John Batten puts forward the case for thinking twice about customers’ whose first question is ‘how much?’…
Last weekend, the Auto iQ team headed to Birmingham for their annual presentation at Garage Hive’s The Blend.
Andy Hamilton from LKQ presented some important points, with all the LKQ data readily at his fingertips. There was some great insight.
Among the other speaker’s talks, one point in particular struck a real chord with me. Andy Hamilton, armed with a plethora of LKQ data, argued that car drivers are shopping around when it comes to choosing a garage. This was mainly driven by 6% inflation, sitting on top of the double-digit inflation we saw in 2023. All of this ultimately meant sluggish growth for the industry and some challenging times with ‘price shoppers’. But it’s not all doom and gloom.
I’ve found that you can often capitalise where there are challenges in the marketplace, but only if you’re prepared to think differently and be ready to act swiftly. And this is one such time!
Are price shoppers bad?
It’s not unusual for a garage owner to tell me that they’re a little hacked off by the number of new enquiries that ask “how much?”. And if you’re not tuned into this, then you may even agree with them. But you’d be missing a BIG trick! I’m not doubting that amongst the sea of enquiries asking the same question, some are looking for ‘cheap’. There’s gold in them thar hills though, and it simply comes down to this…
If they’re asking, “how much” then they’re ready to buy!
And you better be ready to capitalise on that! If you’re not and you lose out to your competition, then that much-needed profit required to keep your garage thriving will be swiftly removed from your till and deposited into the bank account of your competitor.
“But I don’t want price shoppers” is the normal retort. And I get why you wouldn’t want enquiries from people who don’t value the professionalism, skill and care that garage owners like you bring to our industry. But many of the ‘how muchers’ aren’t looking for the cheapest deal. They just don’t want a surprise when they come to pay the bill.
Are you sure?
I completely get why you’d be sceptical. Who wouldn’t? After all, you’ve heard “how much” so many times and not made the booking that you’ve conditioned yourself into your current thought process. Your theory is also supported by thousands of other garage owners with similar programming, and the thought process has become the norm. But it’s not always right.
Part of the Auto iQ ecosystem is to create enquiries for garages, train their Front of House teams to convert these enquiries into highly profitable happy customers, and have some natty software to track the success of each enquiry.
So here’s what we found:
You’re leaving money on the table
Our team collects a lot of data. After all, if you ain’t measuring it, then you can’t improve it.
We tracked 1,559 enquiries over eight weeks to assess the performance of our client’s Front of House team as they joined our programme. The information was heartbreaking and exciting in equal measure!
We discovered that only 24% of enquiries were converted into sales. If you’ve read that and are in disbelief, imagine how the garage owners felt when they found out. Had you asked them how their Front of House performed though, they’d certainly not have said that they’re letting 75% of the enquiries get away!.
Not everyone who asks “how much?” wants cheap, so you’re leaving money on the table. Many of the enquiries were asking for quotes on servicing, and many were premium brand customers who were comparing against the dealer. Letting them walk away is a big problem. But there is a solution!
Here are Auto iQ’s top three tips to fix the problem
Strategy – Decide who your ideal customers are. What vehicles do they drive? What and how often will they buy from you? This will allow you to look at your competition and decide what added value you can offer clients that they won’t find anywhere else. This will help your team understand who the important enquiries are, and allow you to set your pricing structure for profitability.
Train the team – Give your team the tools required to convert the profitable work slipping through their fingers. Having standard operating procedures for Front of House is the difference between leaving tens of thousands of pounds on the table a month or not!
Metrics – If you want to effect change, then you need a yardstick in order to measure the right data points, keeping your team focused on what counts rather than getting caught up in the hurly burly of the day. Reflecting on these regularly and changing your actions until the desired outcome (increased profitability) is achieved, is a proven tactic used by many successful garage owners.
