In sales the effects of actions and reactions are probably more accentuated than in other areas of business. This is where the rubber meets the road and the impact on business success and failure can be dramatic. High pricing, overselling and favoring sales over relationships can negatively impact business success. Conversely containing costs and selling judiciously can support long term success. Following are points on sales related actions and reactions:
- Higher Prices Result in Reduced Sales Volume – It’s readily apparent that when sales prices are raised – sales volume will decrease. When prices are lowered the opposite will occur. It stands to reason that pricing can be used as a control to facilitate higher or lower sales volume. In the auto repair business this would mean that if a shop is running at below capacity lowering prices would stimulate greater sales volume. Conversely if the shop is running at or above capacity it may be advantageous to raise prices.
- Over Selling Increases Customer Attrition Rates – In automotive repair upselling is a valuable method of increasing business volume. Repair requirements identified through inspections can benefit the customer as well as the shop. However, overselling recommended services can result in lost customers. For that reason – recommendations must be made judiciously. On the other hand – under selling can cost the shop in terms of lost revenue and can negatively impact the customer. Telling the customer which recommended repairs should be done right away, which can be deferred temporarily and those which are optional will go a long way toward sustaining relationships.
- A Sale Can Kill a Relationship – A relationship is more valuable than a sale. And often a potential long-term relationship is ended over one sales transaction. If the customer feels that they’re being taken advantage of they likely won’t return. Landing a big sale can have a huge cost over the long term. But the opposite is also true. If every effort is put forth to manage the financial impact on the customer – a positive long-term relationship can be sustained.