By Bob Cooper

Most shop owners and dealerships provide their service advisors with some flexibility in pricing. The objective is to give them the ability to adjust prices in order to ensure customer satisfaction, close sales that would otherwise be lost, and reward loyal customers. All good reasons. The problem is … it becomes easy for your employees to give away money when it’s not theirs, and these discounts can become sales crutches. To make matters worse, those discounts and refunds come right off of the bottom line. So here is what you need to do …

Take a look at the discounts that you have provided over the past year, and come to a conclusion as to what you feel a reasonable discount total should be. For example, you may discover that you gave away an average of $300 per month, but that with a little extra effort from your advisors, they would have only given $200 in discounts per month. If this were the case, you would need to tell your advisors that you are setting up a monthly budget of $200 that they can use, at their discretion, for discounts and refunds. At the end of the month, you’ll then give them 50% of whatever is remaining in the budget.

By taking this approach, your advisors will still have the ability to use discounts as sales tools, but they’ll also realize that it’s now their money to lose. If they decide to give a customer a $50 discount in order to save the job, they’ll quickly realize that it’s going to cost them $25.

There is no question: If you use this technique, not only will your advisors think twice before they offer discounts or refunds, but since you would be spending the money anyway, this gives them a chance to help you save a good amount of money. If they are able to effectively limit the discounts, then they have earned their reward, while helping you put more money on your bottom line at the same time.

For the last 20 years, Bob Cooper has been the president of Elite Worldwide, Inc. offering automotive professionals sales, marketing and employee management solutions. To learn more about how Elite can help you build your auto repair business, visit www.EliteWorldwideStore.com.