How to combat deceptive advertising?

[DEotM]

We have a Dis*$&$ Tire coming to town. They are advertising tires starting at $19. Go on their website. Even in the size they advertise, the cheapest tire is $27 (a Kumho Power Star 758, the tire balancing machine's worst enemy). Even so, out DP want us to combat these prices. 1st, the tire size in the advert is 155/80/13...that fits...a Chevette? Next, the Ford dealer in town is advertising brakes for $99/axle (using Motorcraft). We're GM...how are you Ford guys doing this? Are Motorcraft pads that cheap? Are they not charging labor?

I'm just at my wits end about how to 'be competitive' when I am not comparing an Apple to an Apple.

[robc]

I wouldn't worry about Discount tire ... people might be a little thick - but not stupid. They know to look in the box and find their size and find the correct price. The nice thing about tires is you generally get what you pay for - so I never had a hard time explaining this to customers. $19/tires, unless you have a bunch of young customers buying their first set of tires, it shouldn't be an issue.

Your DP's perception might be a bigger problem than the actual competition. My response would be do you want to be busy or profitable, because I can match them tomorrow -- I'll buy my tires there too (or find a local distributor that can supply me at that price.) But to what end - to sell crap products to our customers? I'd rather sell them a good product at an honest price. Oh and those tires fit my '83 Subaru too - bought a set every 10,000 miles when I was a poor advisor

The Motorcraft $99.95 special I do not believe includes resurfacing the rotors. I think the pad cost was under $50 ... some shops I deal with went to the techs and said asked for a reduction in the pad installation time - I was happily shocked when one bunch guys said "heck yeah - everyone we get in is another chance to upsell - we'll do a pad install for .5"

[APM]

try honesty. two ideas one is a secret shopper sent out to these shops. The other is get a loudspeaker system and call in an order and ....Or submit an on line order and then post the replies..download product reviews on these substandard products and make sure they are very visisble to your drive so your customers see what the real story is.

[topshop1]

Match the prices.

Look carefully at what the $19 tire is and what the $99 brakes include. Tickets like that might make up 1% or less of all of your ROs. These are loss leaders. You make up the difference on the other 99% of your RO's. That's exactly how they do it.

Remember, you are looking at your GP at the end of the month, not on a few loss leader RO's.

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Tom Ham
AutomotiveManagementNetwork.com

[KA]

We have another place doing the old " BUY 3 GET ONE FREE " sales tactic this month. Early this month we had a relative of an employee price from them ,then get back with us. Well , we beat them by $30 on a set of four.Yes it is hard to beat the constant advertising by others. With the economy being the way it is and people using the internet more and more ,I believe it will and has caught up with some. We do not mark up tires a whole lot, we look at tires as a convenience for the customer and KEEPING THEM IN OUR SHOP. It was funny I saw your post this morning ,because I watched one of my counter guys with a customer yesterday . Let me tell you a quick story : Guy comes in Monday and prices 275/55/20 LS2's ( warranty only customer). Comes back yesterday with a quote from Joe Blow Tire that was $74 cheaper a set. We were that far off based upon Nitrogen ( plus road hazard ) and Lifetime rotation. My guy then asked the customer how much he was paying for rotations down the street and told him what it costs here. We showed him that we would actually save him money in the long run buying from us ( versus $24.95 per rotation each time ). We are putting those on as we speak...And plus I just found out the place where he was having his Tahoe serviced never put back on the valve stem caps and 2 of the sensors are bad and need replaced.My opinion is that you cannot get into tires and expect it to be high gross .As far as brakes, we only mark up pads and shoes a little over "trade" ( most 69.95 )and I feel we do a good job selling.

We have 4 independent Tire/Exhaust/Coop places within 6-10 minutes from us.....

This is the fourth dealership I have worked for in 20+ years and I can tell you that
dealership location is a huge factor for tires......

Add value in the products you sell ! And good luck !

[Tyler Robbins]

First and foremost, the aftermarket advertizing is on TV, the Radio and in the Newspaper, so unless your dealer wants to actually spend some serious dollars advertizing in these same areas (which we know he wont) then the only customers you can truly "combat the deceptive advertising" to are those that come into your dealership.

Realize, the fact that they showed up at your dealership at all is a good thing, as customers who truly get sucked in by the "per axle installation extra" ad, never show up at your store at all!!!

I suggest you make up some kind of document that breaks down your competition's "deceptions" and share it with every customer that walks in your door, whether they are in your shop for that type of repair/service or not. By taking this proactive step, you reassure your existing customers that you are competitive and aware of your competitions "tactics", which will work to retain customers in your shop!

I get a kick out of those brake ads - "per Axle, Installation Extra", so what does the customer really get? "PADS in a BOX". Most dealerships, rather than explaining the pricing structure proactively to customers, simply jump on the "factory trained techs, OEM parts" line... which in reality, tells the customers you are more expensive because of those 2 reasons. In most cases, if you break-down your pricing completely and your competitors prices completely, you will be very close, or just a little over/under.

[mbowers]

From Lloyd Schiller of Dealer Service Corp.:

Hi Guys,

Try lighting one candle instead of cursing the darkness.

Your first example was on tires. Take your most popularly serviced vehicle around for price quotes on tires (or brakes), and bring back the printed estimates. I did this recently on my bosss 2005 Acura TL.

I went to a Goodyear Gemini, a Pep Boys and an Advance on a Sunday. I simply asked what tires they would recommend as replacements and what the cost would be.

The printed estimates were GREAT! I guessed Goodyear would be the highest and they were. Pep Boys was second with some Chinese tires I had never heard of, and I have heard of them all.

We took her car to the Acura Dealer, bought a set of Michelin Exalto Plus (high end touring), mounted, balanced, nitrogend and 4-wheel aligned for LESS than Pep Boys way way off-brand!!!

And this was the Dealers standard price, not courtesy discounts (or senior citizens J).

I THINK that printed estimates from your competition in your Service Drives and Customer Lounges would help you sell more tires based on the Automakers programs plus the local deals youve struck.

Lloyd Schiller
Dealer Service Corporation

[TheOne]

I find the best way to COMBAT priced advertising is to take the OFFENSIVE.

I advertise every tire $5.00 over cost everyday. Need custom 22's no problem $5.00 over cost. Need a wheel barrow tire, no problem $5.00 over cost.

I matrix valve stems, dollar cost average and matrix wheel weights, and sell lots of alignments......

[This message has been edited by TheOne (edited 06-22-2009).]

[sp7128]

Post a copy of this in your write-up area or waiting room.....I would cross out "Midas" wherever it is in print.


California accuses 22 Midas shops in 'massive' bait and switch scheme
Mitch Lipka
Jun 30th 2009 at 7:00PMText SizeAAAFiled under: Ripoffs and Scams, Transportation, Consumer Complaints

California filed a $222 million lawsuit against the owner of 22 Midas Muffler shops after uncover agents discovered a "massive" scheme in which consumers were charged for unneeded repairs, California Attorney General Edmund G. Brown Jr. announced.

"These Midas shops were running a massive bait-and-switch scam, in which customers were lured in with the promise of cheap brake specials and then charged hundreds more for unnecessary repairs," Brown said in a statement. "This investigation revealed a shady and deceptive operation that violated the trust of its customers."
During the four-year investigation, agents found shops owned by Maurice Irving Glad regularly advertised sub-$100 brake specials to lure customers into paying for hundreds of dollars of work that was not needed or, sometimes, not even done.

The lawsuit, filed was filed by Brown along with Alameda County District Attorney Tom Orloff and Fresno County District Attorney Elizabeth A. Egan.

This isn't Glad's first brush with the law. He ran afoul of the state in the 1980s and was under a 1989 injunction prohibiting the practices being alleged.

Shops charged agents an average of almost $300 in unnecessary brake rotor resurfacings, brake drum repairs, brake adjustments, brake cleaning services and other services, the Attorney General's Office said.

UPDATE: Midas spokesman Bob Troyer said the company had no specific comment on the lawsuit.

However, he noted that Glad has been franchisee for 32 years and has been committed to training his workforce in technical and customer service areas. Since learning of the California investigation, the company has been working with those shops.

And, Troyer added, "We do not control the day-to-day in-shop operations of franchised shops."

[bsilcox]

Oldest One in the Book
Monday July 6, 2009
Wow. There's a $222 million-plus law suit pending against a group of Midas repair shops in Oakland, California for perpetrating the oldest upsell in the book -- rotors. Pretty much anyone walking into a chain store for brake pads can count on the rotors upsell. They lure you in with a very cheap brake pad replacement advertisement then hit you with the worn rotors bit. Before the chain-store flunkies start getting upset, I have to tell you that sometimes you really do need to replace your brake rotors. The problem comes with a shop telling everybody that they need that level of service. Time may have caught up with this shop. Read more at KCRA.com.

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Bob Silcox