Is signing up to a price comparison website good for business? Or could it be a road to problems, headaches and financial insecurity?
When Capricorn asked Members about the biggest challenges facing the automotive industry in our State of the Nation survey, 24% named price comparison websites. It was the seventh most popular answer, after the likes of changing technology, finding qualified staff and accessing technical information.
The fear, perhaps, is that the auto industry — like the airline and hotel industries before it — will be changed forever by these online platforms, as customers seek out services at the lowest possible price.
On the other hand, comparison websites send business your way — keeping your hoists full and your technicians busy.
So, are they a good idea, or not?
The case against price comparison websites
Geoff Mutton, General Manager at The Automotive Technician, said when the first big price comparison website appeared in Australia he did a lot of research and had lawyers look at the terms and conditions the platform put on workshops.
“We were very concerned,” he said. “I suppose, because we saw the long-term potential damage that it could do (to the industry).
“All their marketing says they’re going to save the customer money, but on back end of that is an industry that is already undercharging. If we’re going to lower our costs even more, and then pay a 20% commission back to this website, then we are not making any money.
“What’s more, the price comparison website controls the market. They will market to that customer continually throughout the next 12 months. They don’t care whether that customer goes back to you to get the next job done.
“So, workshops have to make a decision: do we just want work given to us and we pay a commission, or do we want to go out and find our own customers and then work hard to keep them?”
The case for price comparison websites
But automotive business coach Workshop Whisperer Rachael Sheldrick said there is nothing “fundamentally bad or wrong” about workshops using price comparison websites. The key is to use them in the right way.
“At the end of the day, they fill empty spots,” she said. “And if you use a comparison website to fill your empty spots, then that should be a good thing.”
Of course, once a customer is through the door you have an opportunity to impress them with your customer service, knowledge and expertise — potentially converting them into long-term customers.
Ms Sheldrick said the problem comes if you’re relying on price comparison websites to get customers in through the door. She said that indicates there is a bigger problem in your business, because you aren’t generating your own customers and leads.
Keeping busy without using price comparison websites
For some Members, signing up to a price comparison website will be an attractive option. For those who wish to avoid using price comparison websites, Mr Mutton has some advice.
“We've got to look at what these price comparison sites do well and we’ve got to do that well for ourselves,” he said.
“They make online bookings easy and finding a workshop easy; they do marketing incredibly well. So, we’ve got to have our online booking system; we’ve got to regularly communicate with our database; we’ve got to ask customers for online reviews.”
If you need help finding and communicating with new customers, check out the resources available to Members through AutoBoost.