National Oil & Lube News

May 2017

Digital issues of National Oil & Lube News, the trade magazine for the preventive maintenance industry

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70 NOLN | www.noln.net " " VIEWPOINT Heavy Lifting Balancing Guest Count Growth With a Profitable Ticket Average by Sean Porcher It's no big secret that guest counts at oil change facilities remain a challenge. Oil change intervals continue to grow, competition continues to increase and the number of miles driven by millenni- als continues to decrease. Because of this, more and more empha- sis is placed on ticket average and supplemental revenue growth. It seems everywhere you turn, someone is churning out a new, expanded list of services. e days of a stand-alone drive through quick lube that focused solely on fluid maintenance, seem num- bered. However, with these increased service offerings generally come more time spent in the service bay. So what happens when a guest comes in for an oil change and ends up purchasing a brake job? How long does that car tie up an active service bay? In a typical tire shop that averages eight ser- vice bays, this is not a problem. But in a quick lube facility that has three or maybe even just two service bays, this presents a major challenge and, if left ignored, will be detrimental to the business. To be successful with this model, an operator needs to ensure they have well trained managers, technicians and, most importantly, efficient operations. Getting this wrong can expedite the demise of a location. e purpose of this article isn't to dissuade anyone from ex- panding their service offerings. In fact, I truly believe an expanded menu is the key to continued longevity of quick lube facilities. My purpose here is to provide readers with some alternative ways to increase ticket average without throwing a wrench in operations. I'd much rather see a service center provide service to 30 guests at an average ticket of $100 than to hear the manager boast of a 10 guest day with a $300 ticket average comprised of battery chang- es and brakes. Of course, it is all about balance. ere are several ways to boost ticket average and profitabili- ty without necessarily increasing service times. One of the best things I did for my business was implementing the concept of ser- vice packages. Many years ago, I learned the fine art of the "pop and pour" from my good friend Cricket Killingsworth. Cricket transformed me from a nonbeliever in fuel and engine treatments into a champion in the art of bundling. e idea of bundling a low- cost, high-profit fuel treatment and engine treatment into a stan- dard oil change is difficult for some operators to grasp. I always relate it to McDonalds. What do you order when you pull up to the drive through? Typically, the answer is a No. 1, 2 or 3. Offering an oil change package is no different. Basic oil change: No. 1. Basic oil change with fuel treatment: No. 2. Basic oil change with fuel and engine treatment: No. 3. If your base price is $39.99 and your av- erage oil change price ends up being $49.99 because of bundling, then you are dollars ahead without breaking a sweat. Packaging also allows you to deploy a bargain strategy. Let's just say you charge $20 for your engine treatment and $20 for your fuel treatment when purchased separately. If you add those two items to your basic oil change of $39.99, a consumer would pay $79.99. However, if you bundle those items together and offer them in a package, say No. 3 for $59.99, you can show the guest they are in fact saving $20 by buying that package. e best part, is you are providing the customer added value, increasing your ticket and profitability without adding additional labor. ere are other ways packaging can drive your ticket and profitability that are used by success- ful retailers and service providers. One of these concepts is often referred to as an anchor decoy. An anchor decoy is a product or service set at a very high price that you have no intention of selling. ink of it as a Ferrari oil change offered up to the driver of a Yugo. If you have no inten- tion of selling it and you know no one is going to buy it, why offer it? Well, let's say you offer it at Most consumers consider $9.99 and $9.49 the same just as they do $39.99 and $34.99. If you currently have any prices that don't end in $X.99 or $X9.99, try raising them to the next $X9.99 and see what happens to your sales and profitability.

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