A New Idea I'd Like Feedback On.

by Jason Hatchett

Posted: 11 years ago 17 replies

OFFLINE MARKETING

I'm Jason Hatchett from Spokane WA. I own Final Touch Automotive Paint Chip Repair. We service mostly auto dealers & some retail. I've been putting together a new idea for my business. What I've noticed about new car warranty's is they don't include paint chip touch up. So I'm putting together a warranty program to fill this need and I'd like some feedback to make sure I'm covering everything.

It works like this (I want to keep it very simple): We charge the auto dealer $35 per new vehicle sold. Say they sell 60 new cars a month. 60 cars X $35=$2100. Each new vehicle has a one year paint touch up protection warranty. The dealer can use this to help them close deals (It's free to their customer). Factory warranty's & extended warranty's don't cover paint chips. The dealers customer can call us up as many times as needed for one year and we will touch up their paint chip for free . The stipulation is, they have to come to my shop & they must have the car washed first. 50% of the people will never use this and the ones that do might use it once and maybe twice a year. And a vehicle doesn't get very many paint chips in a year either.

After one year they can use our touch up service for 50% off our retail price of $85 - $100 for as long as they own their vehicle. At $45 it is still very profitable to us.

Keeping track is very simple too. We'll put a card in the glove box with our ad on one side and the VIN and date they bought it on the other. I'll put the VIN in my tracking system so when they call to have the warranty work done I can verify everything.

Here's my brochure touchup
I've corrected all the spelling on my new one.

Thank You,
Jason Hatchett

#feedback #idea

DaniMc 11 years ago

This is a great and innovative idea.

The main points I can think of are:

The customers have other cars besides the one they bring you so you may be able to upsell them on the other vehicles. Train your people to talk to them about their other cars. Maybe come up with a standard offer to fix paint chips on other cars for 50% off normal price during that year also.

Make sure to sell them on other services like buffing, accident repair, windshields...I'm just thinking out loud...but if you talk to them about your other services, it is only a matter of time before they need something. Perhaps give them some special offer cards.

It might also be good to provide them (maybe on the same card you are placing in their glove box) with an "Accident Quick Response Card" so that if they are ever in an accident, they can tell the tow-driver where to take the car immediately so you can begin estimating repairs and working a quote for their insurance. Make sure to let them know this info is on there.
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Aaron Doud 11 years ago

Honestly I think the price is insanely low. But I'm not the customer you would want to see. You would see me more than once a year. I normally ignore chips but for that price why not have them fixed?
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umc 11 years ago

I agree with Aaron in that your price seems too low. Well, in my opinion the 50% off for life really seems low. Maybe 50% off for a certain period of time(maybe the second year), and I'd maybe put a cap on how many paint chips I'd fix at that price. Also, you might want to consider whether or not the warranty would be transferable.

Overall I do like the idea. I had thought about doing similar things in my detailing business, but decided against it because I'm too busy with my other businesses to pursue that option. I hope that your idea goes well. Have you done research to see if anyone else out there offers something similar? If so, you might be able to pick their brain on some best practices.
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Khemosabi 11 years ago

Hi Jason!
I think your idea is a great one! You have some great answers to your questions also. I agree with Aaron and umc, I think you should raise your price point so you don't appear to be a Maaco (LOL)

This is just a question, but have you ever considered a product you could apply to their wheels to protect the chrome during the winters and the crap that Spokane puts down as de-icer? I know we would pay for that. We have Centerlines and now they look like crap. So does our grill and any other chrome.

I wish you much success, and have you dropped off your information at the new dealership on Hwy. 2 ? It's pretty big!

~ Theresa
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laurencewins 11 years ago

You could also ask for referrals and offer a deal for any referrals that actually comer in too...a discount for the referral and a discount for the new person. Word of Mouth will quickly spread for you that way without you doing anything extra.
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Mwind076 11 years ago

I agree that it's too low. It's a great idea! I'm thinking someone in the windshield chip business could do this too...
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DesertSand 11 years ago

Way too low. I'd charge the dealership at LEAST 150 per vehicle. This is nothing to them. They'd just pass it on to the client anyway.
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misterme 11 years ago

My hunch is the dealerships aren't going to give it away to every customer. They'll turn it into something their finance guy cross sells, plus get the interest because they'll roll it into the payments. In other words they'll take that $35 cost and have the customer pay $6 a month for it for 36 months. So maybe that's how to approach it, as something the dealership will PROFIT from selling it along with warranties and after-services. Their service departments can also sell it.

That being said, if it's true that "50% of the people will never use this and the ones that do might use it once and maybe twice a year. And a vehicle doesn't get very many paint chips in a year either," then this is a weak offer. What can you add to it to make it more desirable? Routine glass treatment? Coupons off car washes? Stack more stuff on it that doesn't cost you much if anything, to make it crazy for anyone to turn it down.
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Jason Hatchett 11 years ago

Thank you for contributing your thoughts & idea. Really helps me out. I've got 3 dealers that have an interest.

Jason
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rideotm 11 years ago

Good idea Jason, breakage will definately be your friend here. if you have them go to your website to register their date of purchase, you will have a list to periodically mail to with specials and to also alert them of the upcomong expiration down the road for renewals.
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DarrenRM 11 years ago

Great idea. You're more or less selling insurance. Hopefully not too many customers will claim. Would def raise the price, and I agree that the 50% off should be for a limited period. Maybe a few years at the most.
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jwall13512 11 years ago

I would increase the price to $49.50, still very good value and as your 50% off kicks in it is even more attractive to the client, as they are saving more money and you pocket more, if you see what I mean.
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- Jason Hatchett 11 years ago
  
  I think I will increase my price to start & come down some if I need to.
  Here's my New and Improved Brochure!
  touchup
  
  Thank You,
  Jason Hatchett
  
  Thanks
  
  Signature
  
  Jason Hatchett
  
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EaglePiServ 11 years ago

This seems like a good idea, but the proof will be in the pudding - that is if you can get the dealerships to offer it. View Profile: misterme brought up a good point in that it seems like a one-trick pony.

Offer it and see what the feedback is. Then tailor it to suit.
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JM Biz 11 years ago

You have the cost to the dealer on the first page as $35 per vehicle. On the bottom of the second page it says $55-$65 per vehicle.
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- Jason Hatchett 11 years ago
  
  The wholesale cost to the dealer for us to touch up there USED CARS is $55 - $65. The cost to put the paint touch up warranty on each NEW car is $35.
  
  Thanks,
  Jason
  
  Thanks
  
  1 reply
  
  Signature
  
  Jason Hatchett
  
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  dnjoseph1 11 years ago
  
  You've got a great idea brother! As noted earlier, the dealership is likely going to want to profit from it as best they can. Phrasing it as them being able to add $5 per month for 36 months onto the cost of the car is a great idea. The dealership will make $180. You can then give it to them at a "wholesale price" which could be half of that, or $90. Either way, I think dealerships would be crazy to not see the potential from this! Great idea!
  
  Thanks
  
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