Creating Win-Win situations is the essence of good business. Unfortunately, diesel repair shops and their customers often fall into the trap of trying to benefit at each others’ expense.
When the customer finds a way to “stick it” to the shop, and does, it’s a Lose-Win. When the shop sticks it to the customer, it’s a Win-Lose. Ultimately, in these situations no one truly wins. They are all actually Lose-Lose deals.
When you align your business model with your customer’s needs, you will both benefit. By considering their needs and satisfying them, you earn a customer’s loyalty. That results in consistent work and better profits for you.
In our lab shop, we had an over the road customer who needed some major engine work. It ended up being around a $10,000 bill. We got him squared away and back on the road, and he paid with his Amex.
Nine months later he had some engine trouble and called up American Express to complain and ask for a refund under their purchase protection program. Amex proceeded to pull 10 grand from our bank account, despite our strong–and valid–arguments that we were getting scammed. We lost and the customer “won.” (After that we stopped accepting Amex in the shop.)
That customer was able to stick it to our shop. He got the benefit of an overhauled engine for nine months, and probably much longer. We ate the cost of parts and labor, plus the profit we would have made on a paying customer. It was a Lose-Win situation. We got burned.
It goes the other way too. For example, take over the road truck drivers. They are one of the three principal customers of a diesel repair shop, and are particularly vulnerable to being burned by shops–owner operators even more so.
A shop that has a desperate customer over a rail can easily gouge them on a repair because the shop has all the leverage. In the case of an owner-operator, he needs to get back on the road to make money to support himself and probably a family. He is at the mercy of the shop and has almost no choice but to pay what the shop demands for a repair.
That’s not to say that a shop isn’t entitled to a profit, and that it isn’t justified in charging more more for emergency calls, roadside assistance and after-hours work. There is certainly nothing wrong or unethical about this. But we all know that shops can cross the line with vulnerable customers. When a shop does abuse its position with a desperate customer, the shop “wins” and the customer gets burned. It is a Win-Lose situation. But is it really?
Win-Lose and Lose-Win Don’t Actually Exist
The reality is that when only one party wins, both sides lose. In the case of our shop, there is no way we’ll ever again serve that over the road trucker who burned us. In the case of a customer who is gouged by a shop, the chances are slim he’ll bring business back to the shop. And he’ll probably tell his friends, family–anyone who will listen to him. Over time the shop will pick up a bad reputation.
Bottom line, a Win-Lose transaction is actually Lose-Lose. It destroys trust, introduces suspicion, and overall kills the relationship. Do business like this for long and the chickens will eventually come home to roost and you won’t be able to escape your reputation. You know the toxic customers in your city you wouldn’t touch with a 10-foot pole; and customers know the shops they won’t go near.
Win-Win or No Deal
The answer is insisting on Win-Win arrangements, or refusing to do a deal at all. Win-Win or no deal.
In the heavy duty equipment and diesel repair business, there are so many opportunities where customer benefits and shop benefits overlap. This is the territory where Win-Win deals happen.
Repair work is the obvious one: when you repair a truck, the customer is able to make money with it again, and you make a reasonable profit on the job.
The key here is “reasonable” profit. When you cross into price gouging territory, you may be making a quick buck, but at the expense of your shop’s good name and future business from that customer.
The only limit to Win-Win opportunities comes from your own shop’s capabilities. Consider increasing your capabilities to capture some or all of these, which include:
- Basic repair (brakes, hoses, belts)
- Heavy repair (overhauls, rebuilds)
- Body work (detailing, painting, cosmetics)
- Preventive maintenance (wet and dry service, other PMs)
- Tracking preventive maintenance for the customer (maintain fleet listing, track last performed date/mileage, next scheduled date, service history, remind customer when due)
Is Your Shop Capable?
For example, is your shop only capable of doing basic repairs? Would you benefit from taking on heavier repairs? When you refer work out to other shops, you open the possibility the other shop could win the rest of the business too. It’s a little like lending out your girlfriend to another guy.
What about body work? What kind of standard would your customers like to keep their trucks at? If they see their trucks as part of their company’s marketing image, they may respond really well to keeping the body work to a higher standard.
Do you perform PMs? Some shops assume they can’t compete with the cheap PMs done at truck stops or PM-only mobile services. But the reality is that being the exclusive provider of all services on the trucks has tremendous advantages for you and for the customer. See our article on preventive maintenance.
Are you able to track PMs for the customer? In our experience, it’s not uncommon for customers with fleets of 40 or 50 trucks to have no formal PM tracking in place. Considering the millions of dollars invested in trucks and trailers, there is just no good reason for this. But it’s the reality. So why not track the PMs for the customer? This is where having Fullbay becomes INDISPENSABLE for a heavy duty shop.
Align your business plan with your customer’s needs, and you will both win. Consider their needs and satisfy them. You earn their loyalty, which means consistent work and better profits for you.
Where customer benefits and shop benefits overlap, it’s Win-Win territory. Make your shop capable of exploiting these opportunities, and you’ll develop a great relationship with your customers, and a solid reputation in your city.