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Editor's Notebook

Death by a Thousand Cuts

Is your good nature and the ‘cost of doing business’ doing in your business?

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We’ve talked about the dangers of “creeping normalcy.” When changes – good or bad – are so subtle so as to not even be noticed, that’s creeping normalcy.

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Obviously the result of subtle negative shifts is an intensive negative, and compounded virtually invisible positive changes create a massive positive.

The sister phrase to “creeping normalcy” is “death by a thousand cuts,” five words rooted in an ancient form of torture and execution. Mostly torture. The concept is pretty self-explanatory, so we’ll leave it at that.

In the business world, “death by a thousand cuts” is always bad. There is no upside to the sum of small negatives over time. While usually via outside forces, those “thousands cuts” can also be self-inflicted – a form of business suicide no one sees coming but everyone sees. The absolute worst way to go, as they say.

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Those five words came to mind when I was reading a recent column in Tire Trax by Bob Richey, a member of the board of directors of the Tire Dealers Association of Western Pennsylvania. Richey’s “Little Things Add Up” in the association’s monthly newsletter suggested that tire dealers needed to be smarter with their generosity.

The “one-size-fits-all-approach” that drove $29.99 oil changes and $79 brake jobs and even the still popular “out the door” tire prices might have been great for gen­erating traffic and landing some sales, but they played hell on the financials.

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“Even on the simplest jobs, such as an oil change,” he wrote, “there are many factors that can ultimately play into the total cost of the job for your customers, as well as for your business.

Besides the cost of special weights or grades of oil that add to the lost profits from loss-leader oil change deals, “What if the vehicle requires a special oil filter? For years, conventional spin-on filters were the norm, and the cost did not vary significantly. In recent years, we are seeing many canister filters or special filters, and often they cost more and are more time consuming to replace.

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“What if the car has an air dam or shield that has to be removed to accomplish an oil change? Or what if it is an engine that requires more than five quarts of oil” – the amount most dealers advertise as the limit to their oil change deals?

And what of any necessary oil disposal fees, collection costs or recycle charges? Surely your service tech will use at least one rag to wipe his or her hands. What happens if the oil pan plug goes missing or is dropped deep into a bucket of waste oil?

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Digging elsewhere, what happens when your tire tech spots a couple of missing valve caps on a TPMS-equip­ped car that came in for a free inflation check? When your techs do a courtesy check, who’s paying to top off the windshield washer fluid or coolant or brake fluid or tranny oil?

How much brake cleaner do you go through on a simple brake pad replacement job? What about brake shims and clips, or the rust cutting spray needed for that suspension job? There’s an endless collection of nuts and bolts and fuses leaving your shop on customer cars with nary a dime collected.

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When you work out those “out the door” tire prices, have you figured in the cost (plus fair profit) for valve stems and caps, tech time to do a proper demount/mount, and the actual cost of all those road hazard warranties and free future tire rotations promised?

Probably not. Some of you count it as the cost of doing business. After all, a happy customer today will be back tomorrow and tomorrow’s tomorrow. The little things do add up, and the kind of good customer you are trying so hard to attract will be dazzled, grateful and loyal.

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But how badly does all of this “good­will” ding your financial results? Are you building a sustainable business on the basis of the next dollar deal or “valued added” that goes unaccounted for, or with your expertise and reputation and quality and honesty?

Sure, some of you play with that “back side” money, which works great when you buy tires by the train-car load and collect the max volume deal possible. Front side or back side, profits are profits and when you give profits away, it’s called a loss.

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How can you be profitable, let alone secure and growing, if you keep giving it all away one nickel, dime or dollar at a time?

Richey said he’s a “firm believer that the price of the job should reflect the material cost and the labor involved.” And he recognizes that with all of the makes and models and designs and configurations on the road today, one size cannot possibly fit all.

The little things, he knows, do add up.

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