Fixed Ops Journal - December 2017 - 23

FIXED OPS JOURNAL

Price is right - or not

Capitol Hyundai of
Sacramento, Calif.,
like other
dealerships in the
Del Grande group,
tailors online service
menus - including
prices - to individual
customers.

PRICES
continued from Page 22

advertising cheaper offers.
"The Jiffy Lubes and Walmarts will be out
there forever," Williams says. "I don't want to
be the cheapest.
"I just want to make sure that our pricing is
market pricing, and I want to make sure I'm
doing what the factory recommends, which
nobody else can do," he adds.
The same maintenance menus that Del
Grande posts online are available to service
advisers to call up on their tablets. Because
the menus match the schedules recommended by automakers and published in owner
manuals, Williams says, customers know that
the services performed are legitimate.
Moreover, he says, the prices quoted in the service lane are the same as the ones listed online.

Hybrid approach
Like Del Grande dealerships, Tom Gill
Chevrolet in the Cincinnati suburb of Florence, Ky., shows online service menus that are
applicable to a specific vehicle and mileage.
But it does not post prices.
Mark Farney, the dealership's parts and service director, says customers may think the
wrong price applies to their vehicle. The cost
of an oil change for a Silverado, he notes, varies by whether it has a gasoline or diesel engine and whether it uses synthetic or conventional motor oil.
"If somebody picks something online that
they think is their price, and when they show
up it's different, you're in trouble," Farney says.
He says he doesn't worry about losing customers because his prices aren't online: "Your
regular customers aren't out there price-shopping you."
Dealer software provider CDK Global sells a
service pricing guide among its dealership

management tools. It does not make specific
recommendations about whether a dealership should post service prices online.
But Kim Saylor, a fixed operations product
marketing manager for CDK, warns that prices advertised online must be the same that
customers pay.
"If [dealers] have any doubts in their ability
to price correctly," Saylor says, "then they are
better off not including pricing" for service on
their website.

One-price policy
Shaheen Chevrolet in Lansing, Mich., seeks
to avoid service pricing confusion among specific models with a one-price policy for routine parts and maintenance such as oil changes, air filters and wiper blades. The dealership
posts these prices on its website.
It charges $34.95 for a cabin air filter for any
model, including installation. An oil change,
tire rotation and multipoint inspection that
includes an alignment check and car wash
costs $39.95 with conventional oil, $49.95 with
synthetic oil.
Trucks that require eight quarts of oil instead of six are charged $59.95.
Dave Wright, the dealership's fixed operations director, says Shaheen installs about
3,000 oil filters each month. Because the cost
difference among filters averages out to a couple of pennies, he sees no need for model-specific pricing.
"Our cost is our problem, not the customer's," Wright says. "When someone asks how
much for an air filter, it's always the same
price, car or truck."
That policy also prevents service advisers from
having to look up a price, potentially appearing
poorly informed to a customer, he adds.
Wright says he doesn't worry that his prices
are too high. "I want more than just the oil
change," he says. "If someone is strictly shop-

Arguments for and against dealerships
posting service prices on their websites
For
 Consumers expect to see prices of
products and services - that's why
they're shopping online.
 Posting prices online means fewer
customers will phone or email the
dealership to ask about them.
 Comprehensive maintenance menus
let consumers see the value of the
services provided.
 Transparent prices put service
customers at ease because they
"know before they go."
Against

 Aftermarket competitors can undercut
dealership prices by using cheaper
parts and materials and performing
fewer services.
 Online shoppers often focus on price
and fail to notice the full value of
dealership services.
 Service prices vary based on such
factors as a vehicle's engine; trying to
price for every variable makes a
website confusing.
 Posting average prices means some
customers will pay more than they
expected, making them feel they were
lowballed.

ping price, typically they're not going to be a
very loyal consumer anyhow."
But Wright says it's essential to post maintenance and service prices online because consumers expect that.
Otherwise, he says, "They might think that
you're charging so much that you're embarrassed about it."
A 2016 survey by Xtime, a subsidiary of Cox
Automotive, found that 71 percent of consumers said that seeing a price estimate was
"extremely important" or "very important"
when they schedule service appointments.
Parnell, the Westside Lexus parts and service director who has resisted posting maintenance prices online, concedes he eventually
will have to do so. He is mulling how to do that
without resorting to what he calls misleading
price gimmicks that he sees some repair
shops use.
"At some point we're going to have to do it,
whether we like it or not," he says. "I just
haven't figured out how to do it where it would
really give us a fair analysis." 

DECEMBER 2017

PAGE 23

Table of Contents for the Digital Edition of Fixed Ops Journal - December 2017