Archives for May 2015

Marketing Lessons from Jiffy Lube – Part II – Education

May 19, 2015 by Mike McRitchie Leave a Comment

In yesterday’s post we looked at the three price points and the psychology behind how someone would evaluate the options. And how you might profit from that by redesigning your price point options in your business.

So today lets look at another aspect of Jiffy Lube’s marketing approach.

Educating the customer.

On the left side of the “Jiffy Lube Signature Service Oil Change” they list out the inclusions.

So what does this do?

Pictures and Headers

First off they have headers with pictures next to them:

“Change” with a drip picture for oil
“Inspect” with a magnifying glass
“Check/Fill” with a checkmark
“Clean” with a sparkle shape

These give you a quick, at a glance sense of what is going to happen when you get an oil change at Jiffy Lube. They’ll change your oil and oil filter, inspect the major operating fluids and components, check and fill your tire pressure and fluids, and finally clean your windows and vacuum your floors.

Headline and Bullet Points

Below each headline they give you a bullet point list of what is included under that headline. Easy to ready and understand quickly.

The other nice thing about this is when you drop your car off, they walk you inside the building, offer you water or coffee, point out where you can take a seat until they’re ready for you. This gives you a chance to look at the sign, absorb what the services are, and review the offering before you’re called up to write up the estimate and make those service choices.

Fine Print and Addressing Objections

We covered what’s included. But there is more as well. If you check out the fine print at the bottom of the first board, you’ll see,

“As an added value, between service visits up to 3,000 miles, customers receive free top-offs on motor oil with same type of oil purchased originally and on any of the vital fluids, with a maximum of 2 quarts per fluid.”

So what’s this about?

It does several things.

Free Sells

It is something free. People love free things. And if you have an older car that is leaking fluids, wouldn’t that be the place you want to take your car for oil changes? That gets you a customer for life. Because if you get your fluids filled there, would you take your car somewhere else next time for an oil change? Probably not.

And as we all know, it is significantly less expensive to resell to an existing customer than acquire a new one – particularly when you add advertising costs to the equation.

It also breeds confidence in your offering. “Why would they offer free top offs if they did shoddy work?”

And also for those who are wary and suspicious of the too-good-to-be-true-offering, they’ll check out the fine print. And you tackled their concerns and objections head on.

Go Implement

How might you do the same with your offering? Have you addressed everything up front? Pre-sold them to turn a sales situation into a more profitable order taking situation that is smoother to process (and achieve the sales results of using a salesman without the sales pressure…your marketing did that for you).

So that’s it for today’s edition. So how can you educate your customers with your headlines, bullet points, and fine print, along with addressing their concerns ? And make more sales?

In tomorrow’s edition we’ll check out board #2…the upsells.

Marketing Lessons from Jiffy Lube – Part I – 3 Choices

May 18, 2015 by Mike McRitchie Leave a Comment

Yesterday I was at Jiffy Lube getting my oil changed. Yes it was past the 7,000 mile point they told me I should get it changed at. I drive a lot and those miles just fly by. And I have a lot on my plate…

…sounds like a bunch of excuses right?

Well enough about my plight. Today let’s talk about the marketing elements at play here at Jiffy Lube. This is what I noticed while sitting in the waiting room for the 15 minutes while my car’s oil is being changed.

Three Choices/Price Points

The first rule to offering options is no more than three options should be offered. And they do a great job of that.

Conventional (for most vehicles) – $37.99
Specialty
- Synthetic Blend (Synthetic blend for enhanced performance) – $54.99
- High-Mileage (Specially designed for vehicles with 75,000+ miles) – $54.99
Full Synthetic (Full Synthetic for premium performance) – $75.99

Now it is true that there were four options, not three. But the two “Specialty” options were the same price.

So how does someone go about choosing?

Let’s start with the low end Conventional choice.

If you came to get your oil changed, not a car buff, have a typical car, and just want an oil change, you probably go with the Conventional oil.

Why? Well you went there because you didn’t want to go to the dealer and get charged a mint. Jiffy Lube is a well known brand so you felt like you wouldn’t get ripped off. You probably didn’t know the pricing before you came in but were thinking probably getting it for $29.99. You had a little sticker shock with the $37.99…but when you read the board and saw that you could be paying $50 or $75 you felt okay about sinking the $37.99.

I’m guessing this is the choice of 75% to 85% of the people. That is because people who will choose the high end oil are not likely to come to a Jiffy Lube. They’ll go to the BMW or Mercedes dealership for their oil change (also probably because it is a leased car and all service is covered for three years).

So on to the Specialty price point.

Here we have the Specialty oil. A synthetic blend. this is kind of like the middle grade gas at your gas station. It gives you a basis of comparison and probably makes the company better margins. Why? Because oil cost is very minimal compared to labor (i.e. $14.97 for conventional vs $22.97 for 5 qts of synthetic at Walmart – $8 more. And for a synthetic blend assume $4). And the labor cost doesn’t go up with a better grade of oil. So in this case Jiffy Lube at a minimum (since I’m looking at retail Walmart oil prices vs wholesale prices Jiffy Lube can get) is getting an additional $17 less $4 = $13 profit for basically providing the same service.

So does anyone buy that? And what is the purpose of having this option if people don’t buy?

First off, some people do buy. They buy it because it says “Specially designed for vehicles with 75,000 miles”. That is the hook. People with high mileage vehicles don’t want their car to break down on them. Spending $17 extra to avoid a major repair bill is probably a good idea. Is it justified? Is the oil that much better? Probably not but I’ll leave that to you mechanics to sort out.

The other “Synthetic Blend” option references “enhanced performance”. That is to help the people on the low end choose the “Conventional” rather than going to another shop down the street. It makes them feel like they’re getting a deal since they don’t have a performance car. Or if they have a performance car or want to think they do then that validates them.

Alright. Now to the last option.

The major upsell. Now we’re talking “Full Synthetic” for “Premium Performance”. This is for people with sports cars that really work hard with high RPM’s. The oil cost is another $4 more. But the price went up another $21. Sol $21 – $4 = another $17 profit (or $17 + $13 = $30 more profit for no extra work!)

Now it is true, as I indicated earlier, that not many high end car owners will go to Jiffy Lube. But there may be a few takers. And much more than that, it helps people justify their decision on the lower two price points. Because they can say, “At least I didn’t pay $75 for an oil change!”

And that’s how it works.

So how could you use this in your business?

How many options are you giving your customers? If more than three, cut it back to three. Test different price points and assess the results. You’ll want to see what percentage go with each option and weight that against the profit margins on that option. Look at the whole picture before making a final decision on prices. Also try changing up the wording. Change the order. Change the colors and layout.

And after each test version, assess the results.

As you can see from the exercise, profit margins differ dramatically. If you’re not testing you’re leaving a lot on the table.

Go check out your situation now…and then come back tomorrow for another piece of this interesting case study puzzle…educating your customer.

Go Get Your #2!

May 17, 2015 by Mike McRitchie Leave a Comment

Who’s Your #2?

Every great business has a great #1 AND a #2.

What does that mean? You need a great leader/marketer/visionary. And you also need someone who can get things done for you based on that vision.

Here’s a few great 1-2 combinations…

Apple: Steve Jobs and Paul Wozniak

Microsoft: Bill Gates and Paul Allen

Google: Larry Page and Sergey Brin

Ben & Jerry’s: Ben Cohen and Jerry Greenfield

Led Zeppelin: Robert Plant and Jimmy Page

San Francisco 49’ers: Joe Montana and Jerry Rice

Musical Scores: Rodgers and Hammerstein

Movie Critics: Gene Siskel and Roger Ebert

Aren’t Partnership’s Doomed to Failure?

Now with small businesses a standard rule is don’t do partnerships. They have a very high failure rate. But that is typically because there is often unequal commitment to the goal, or the methods, or both want to lead and it is tough to have a two headed leadership model. Basically people get confused over who to follow.

But if you have one who is a visionary, and another who is great at executing that vision, you have a recipe for success.

I spent most of my business life as that #2 person.

For over 25 years I’ve worked with many great small business entrepreneurs.

They had tremendous passion. They had a vision for where they’d like to take their business. They could sell that vision. Their energy and enthusiasm was contagious.

And that was where their strengths were most beneficial.

Sometimes You Need Help

Their strength wasn’t in translating the vision into implementation. It wasn’t in creating the necessary infrastructure to support the vision. It wasn’t in hiring the right people, getting them trained and up to speed quickly, and dealing with the endless challenges that people bring to a perfectly good business idea.

So that was where I would come in. I would help them convert their vision into reality.

Full Contact Collaboration

We would strategize together. We’d discuss options and impacts.

I’d challenge their ideas…but never their leadership.

They could be passionate. And I could too.

Nothing topic was off limits. But we never attacked the person. That was the only way to ensure the collaboration would be a success in the end.

And as long as you both know and are committed to your respective roles, you can achieve great things.

Greatness is Waiting…Will You Accept the Call?

The good news about all this is if you’re a business owner. If you’re the #1 type. And you can get past your insecurities. And be willing to hire or promote or reassign the appropriate team member to support your vision, you can achieve so much more that you ever would have without that person.

And what if you’re not there yet? What if you aren’t quite that emotionally secure yet?

Outsourcing…the Entry Level #2

Well start with outsourcing. Outsource those areas that are not critical for you to perform but will free up your day to do more of where your strengths lie.

By doing this it is almost like having a silent #2 doing your bookkeeping, or running personal errands, or running your lead generation campaigns.

You’ll find that you achieve so much more. And your vision for your business will be achieved at a much faster pace.

Enjoy your #2…and enjoy Freedom!

B. B. King RIP

May 15, 2015 by Mike McRitchie Leave a Comment

The Thrill Is Gone

B. B. King, a Blues Legend, has passed on to the great gig in the sky…

B. B. King was a lifetime entertainer if there ever was one. Someone who loved to play guitar and entertain audiences wherever he went. Confident and humble. He worked with the best of the best from all eras. He loved to jam on his electric guitar, Lucille.

If you’re a guitar player, as I am, you can appreciate the greatness that B. B. brought to generations of blues fans. His passion was contagious. His skills, unprecedented. Hit longevity, amazing.

And I think that is what is most inspiring. Something that we all have the potential to find. And he found it early in life and never wavered from it.

Passion Matters

And that is making your life’s work something your are completely crazy passionate about.

And why does that matter?

Because if you have that level of passion about something, it is infectious. It comes out in your work. Your work becomes like play. You can’t get enough of it. You want to do it all the time.

And when you’re in that zone, everything becomes easy for you. The hard work and long hours you put in are worth it. The ability to make your fans feel the joy and pain you share through your art. Or the commitment you have to your customers that makes them want to snap up every offer you make to them.

Caring is Contagious

Your customers sense that you care about them…because you do. You know what they need before they do. You help them enjoy the best of what your products or services can create in their lives.

You connect with them. You share in their successes. You feel their pain. And that drives you to create, market, sell, and repeat the process. Over and over again. Knowing that your contribution matters.

So are you following your passion? Do you sense you’re headed in the right direction?

If you are, are you fully engaged? Fully committed? Fully alive?

Share Your Gift

If not, recognize your unique contribution…your gift. And know that it is your responsibility to bring it to the marketplace. It is your obligation to do this. Your customers deserve nothing less.

And if you’re not headed in the right direction yet, now is the time for some self reflection. Take the time to figure out where your passion is simmering. And free it from that crock pot so it can boil over.

Do as B. B. King does. And share that passion today!

Deflate-gate…a Case Study of How Not to Address Problems in Your Business

May 11, 2015 by Mike McRitchie Leave a Comment

Deflate-gate…a Case Study

So today the penalties came out in the New England Patriots’ Deflate-gate case. Tom Brady gets a 4-game suspension and the Patriots are fined $1 million and lose 2 draft picks.

So what’s wrong with that?

Justice done. The league can go back to business as usual, right?

Not quite.

The deal is that is just going to be something to continue the conversation around football. Not in a good way either. Brady is going to appeal. So the drama will continue to unfold.

Now you say, “Any publicity is good publicity,” right?

Well this year football got hit hard with a lot of scandals and PR problems. Ray Rice, earlier retirements to avoid concussions, etc.

And Deflate-gate was such a non-issue anyway.

Just look at it. Each team gets to inflate the balls within a range to match their quarterback’s needs. Each team uses their own balls on offense. So by definition the understanding is the quarterback is setting the balls up for his needs.

If someone has a problem with the inflation level, call a spot check during the game during the next TV timeout. You can make that problem go away instantly. No muss, no fuss. The TV audience doesn’t even have to see it happening.

If it is good for the league to have properly inflated footballs, they could address it when there is a concern. They could even have penalties involved if that was necessary.

Or they could change the rules to have a central keeper of the balls that isn’t part of either team (like a ball keeping ref).

But owners want payback

But that isn’t what happened. There was a big investigation instead. That’s what happens when everyone’s a lawyer. You’re trying to assign blame rather than solve the problem (i.e. deal immediately with the underinflated ball situation during the game).

And so now the public is involved. Tom Brady’s name and the Patriots name is maligned in the press and everyone will say the Brady/Patriot Superbowl win should have an asterisk next to it.

Really???

This is football not tiddly winks

That’s what it has come to? Doesn’t everyone realize that everyone is taking a competitive edge? Whether it is steroids or blood doping. People are kidding themselves if they think professional sports…and in particular pro football is immune from that. Players and teams are just playing the game (and not the game of football but working the system to get their team the biggest competitive edge).

And Deflate-gate was just a really bad example of a witch-hunt that was so unnecessary.

My opinion is it was some disgruntled owners who were pissed off at Brady and the Patriots because they worked the system better than they did and sought revenge.

And what happens?

Everyone loses

They all lose. Now the NFL (which supports these NFL owners and players) is on the ropes. How is that going to damage their brand? How is it going to impact future revenues?

That remains to be seen but there was certainly an opportunity to do things differently.

And so I want you to take that to heart. And back to your business situations.

A blame culture kills morale

How often do we focus on placing blame instead of solving the problems.

It is so easy to demonize someone else. To assume guilt or bad intent.

And how often is that really the case. And when it is, isn’t that created by the culture of the organization?

Are you contributing to the problem?

And isn’t that driven from the top? From you the business owner?

Well what are you going to do to take the reins of your business culture? How are you going to make yourself and your team accountable?

Think about that and look inside. And take action today.