5 Ways to Turn Your Repair Department Into a Profit Center
At 2014 Summer NAMM, Robert Christie, owner of A & G Central Music, gave music retailers the straight skinny on repair shop profitability. He focused on the financial side of a successful repair department, how to apply the same sales strategies you use on your sales floor with repairs and how the repair shop interacts with your overall business strategy.
“All of these contacts we have with the customers are an opportunity to sell our repair shop, increase their level of satisfaction and, if handled properly, can increase the revenues coming into our store,” Christie said.
He highlighted five areas of opportunity for repair shops:
When the instrument comes in. When you open the case, take a good look. Are there accessories in the case? Where was the instrument purchased? Is it a professional instrument? Start a dialogue with the customer instead of rushing to fill out a repair ticket. Determine what the customer’s expectation is for the repair, so you can meet those expectations and provide a high level of customer satisfaction. “It’s more than just doing the repair,” he said, adding that repairs are a sales opportunity and a chance to make sure that the customer has a good experience. He suggested that you have a sticker or tag that identifies your repair service, store name, phone number and website, and put the sticker inside the instrument case. His store provides both a sticker and a nametag.
Estimates. Christie’s policy is to contact the customer with a complete estimate later—similar to the auto-repair shop model. Even though his repair people prepare the estimates, they don’t get pulled off their current jobs. This way, their time and workflow is managed more efficiently. If customers want to talk nuts and bolts, Christie’s repairmen can always chat with them, but he said it’s best to keep the estimate process simple.
So how do you deliver the estimate to the customer? Christie has his salespeople make the phone call. “Whoever calls the customer, make sure they have some training,” he cautioned. “They’re going to sell the repair.” You’re already training your salespeople to sell on the floor, so it make sense to have them contact repair customers. This also creates an opportunity to discuss add-on sales.
Christie also emphasized the importance of preparing a complete estimate. “Make recommendations, and let the customer tell you ‘no,’” he said. This prevents potential customer-service problems if, for instance, you notice an issue that might affect playability and the customer has to bring the instrument back. Keep good maintenance and tracking records of your work. In the long run, your customer service will improve.
Customization. It’s simpler than you think to offer some level of customization, including finishes, engraving and plating. Custom options can give customers a higher degree of satisfaction and pride of ownership. When musicians are playing in the community, they’re often asked where their custom work was done. For step-up repairs, you can take it as far as you want. Christie gave his 5 cents of advice: “Ask the people in your repair department for their custom ideas, and then offer it to your customers.”
Billing. At Christie’s shop, customers get charged by the hour for the work. The hourly shop rate builds in margins but can make accounting for expenses difficult. So, he includes a miscellaneous charge—a percentage of the total repair cost—on the bill. This helps recover costs for supplies, pipe cleaners, rubber gloves, towels and so on. (Many auto repair shops invoice this way.) He also does flat-rate repair jobs, but they must be repeatable jobs, such as Ultrasonic cleaning, restringing or setup. Certain high-volume jobs have a blanket or package price.
Maintenance agreements. Maintenance agreements are a hot topic for customers and store owners. “Figure out how to offer a maintenance agreement,” Christie said. “Your agreements need to offer a good value to your customer at a price you can make money at.”
He explained that he doesn’t like the idea of trying to get the maintenance agreement at the same time as the initial sale. Instead, his company sends a thank you letter to customers who purchase or convert from a rental to ownership. They’re offered a final instrument check within 30 days, which normally ranges from $55–$75. These charges are zeroed out on the customer invoice. Christie’s staff is trained to offer a maintenance agreement when the customer returns to pick up his or her newly serviced instrument. “Now that you have an instrument that’s working well, let’s keep it that way,” he said. Christie also advised that you set the expectation with customers that a new instrument needs to be broken in, and they might need to bring it back. Maintenance agreements, he added, are part of good customer service.