One of the more interesting aspects of my day job is the opportunity to interact with technicians in an environment where I am able to observe “emerging trends” — in the form of focus group research that my partner and I conduct. We assemble a group of technicians based on their use of certain parts or providers, or who perform certain types of service on certain categories of vehicles. The interactive discussion enables the researcher to gain insight into how installers think as well as to identify changes that are taking place in the business.
One longstanding paradigm from the research we do with service technicians is that most of them want to install a quality product for two reasons. The first reason is customer satisfaction, and the second is to prevent comebacks that require them to do the job twice. They have been comfortable in this position because consumers rarely push back on component pricing because for the most part, they have no reference point for what the price should be.
Historically, techs have told me that the exceptions to this are certain high-visibility products or job categories. The exceptions include highly advertised products like oil or filters or similarly highly promoted jobs like a $19.99 oil change or a $59 brake job. Extensive advertising has sharpened consumer price sensitivity in these areas while they get very little pushback on other parts and services.
Interestingly, that has started to change. Increasingly techs are reporting that consumers are coming into their shops knowledgeable about price points for starters, water pumps, tensioners and other items for which historically they have had no idea what constituted a good price. What’s driving that change? The Internet.
Many installers say their customers are coming in armed with significant Internet research on prices for parts that are required for their repair.
Installers are addressing these new price-sensitive shoppers by offering them a choice of components: the traditional national brand OE equivalent, or a lower-priced, typically unbranded alternative. I’m sure this comes as a great flash of marketing genius since that is precisely what most parts sellers do.
But the good techs are doing two things that I think are brilliant and strategically superior to how most manufacturers and parts sellers approach product grades in their marketing mix.
First, techs explain the difference in the product grades in terms of quality or performance. They say things like, ”This break pad will stop your car safely, but it might make a bit of noise or show some dust on your wheels.” Or, ”This filter will perform well as long as you change your oil regularly.” But more importantly, they make a clear and important distinction with the warranty they offer with the cheaper product. Most techs tell me they offer either no labor warranty or a limited one, typically 90 days or less, with value-priced products.
Which brings me to the second “differentiator” techs employ when selling value-line products. The good techs will not so much as offer a value-line product in certain categories or for certain jobs. A good example is timing belts. One tech in a recent focus group went on as to how idiotic it was that his supplier even offered a value line of timing belts.
“Why on earth would anyone even think about using anything less than a first-quality timing belt, given that some of the jobs take four or more hours to perform? Think about it — offer the customer a $20 savings on a $700-plus job and risk having to do it over. You would have to be out of your mind.”
I think many merchants of auto parts could learn a valuable lesson from their customers when it comes to differentiating and positioning product grades. First, not every category is a candidate for a value line. And second, they need to communicate the difference in performance or life expectancy in value lines in some way other than price.
One of the more interesting aspects of my day job is the opportunity to interact with technicians in an environment where I am able to observe “emerging trends” — in the form of focus group research that my partner and I conduct. We assemble a group of technicians based on their use of certain parts or providers, or who perform certain types of service on certain categories of vehicles. The interactive discussion enables the researcher to gain insight into how installers think as well as to identify changes that are taking place in the business.
One longstanding paradigm from the research we do with service technicians is that most of them want to install a quality product for two reasons. The first reason is customer satisfaction, and the second is to prevent comebacks that require them to do the job twice. They have been comfortable in this position because consumers rarely push back on component pricing because for the most part, they have no reference point for what the price should be.
Historically, techs have told me that the exceptions to this are certain high-visibility products or job categories. The exceptions include highly advertised products like oil or filters or similarly highly promoted jobs like a $19.99 oil change or a $59 brake job. Extensive advertising has sharpened consumer price sensitivity in these areas while they get very little pushback on other parts and services.
Interestingly, that has started to change. Increasingly techs are reporting that consumers are coming into their shops knowledgeable about price points for starters, water pumps, tensioners and other items for which historically they have had no idea what constituted a good price. What’s driving that change? The Internet.
Many installers say their customers are coming in armed with significant Internet research on prices for parts that are required for their repair.
Installers are addressing these new price-sensitive shoppers by offering them a choice of components: the traditional national brand OE equivalent, or a lower-priced, typically unbranded alternative. I’m sure this comes as a great flash of marketing genius since that is precisely what most parts sellers do.
But the good techs are doing two things that I think are brilliant and strategically superior to how most manufacturers and parts sellers approach product grades in their marketing mix.
First, techs explain the difference in the product grades in terms of quality or performance. They say things like, ”This break pad will stop your car safely, but it might make a bit of noise or show some dust on your wheels.” Or, ”This filter will perform well as long as you change your oil regularly.” But more importantly, they make a clear and important distinction with the warranty they offer with the cheaper product. Most techs tell me they offer either no labor warranty or a limited one, typically 90 days or less, with value-priced products.
Which brings me to the second “differentiator” techs employ when selling value-line products. The good techs will not so much as offer a value-line product in certain categories or for certain jobs. A good example is timing belts. One tech in a recent focus group went on as to how idiotic it was that his supplier even offered a value line of timing belts.
“Why on earth would anyone even think about using anything less than a first-quality timing belt, given that some of the jobs take four or more hours to perform? Think about it — offer the customer a $20 savings on a $700-plus job and risk having to do it over. You would have to be out of your mind.”
I think many merchants of auto parts could learn a valuable lesson from their customers when it comes to differentiating and positioning product grades. First, not every category is a candidate for a value line. And second, they need to communicate the difference in performance or life expectancy in value lines in some way other than price.
