Key points:
1. When the shop is slow, Jiffy Lube technicians take the opportunity to drive impulse decisions from passing motorists using direct monetary incentives.
2. The immediacy of the technique makes it quite smart for the chain; Jiffy Lube has reasons for its customers not to think too hard about their decision.
3. While smart, the idea is easily imitated. Jiffy Lube might be wise to consider spicing up the incentives to drive business and boost its brand.
We were on our way to the Pine Tree Apple Orchard in White Bear Lake when the service light came on.
The service light meant, of course, that our 2005 Honda Odyssey wanted its oil changed. Surprisingly, it was at that same moment that my wife spotted a poor, dejected soul standing in front of the Jiffy Lube station holding a small sign that read “$24.99 Oil Change.”
I was content to wait until later in the week to get the work done at the dealer. My wife was not. We stopped.
Having a few minutes to kill (and after declining a half-dozen offers for additional service), I decided to ask the manager how the promotion worked. He mentioned I was getting the “$5 off” deal because I stopped after responding to the technician’s street-side offer. I would not have received the discount otherwise. Whenever the shop is empty, technicians pick up the appropriate offer sign (sometimes $5 off, sometimes $10 off) and try to encourage drivers to pull in for service. If the tech is successful, he or she also receives an incentive.
Not a bad idea, really.
Of course this wouldn’t work for every service business, but encouraging idle technicians to wave in new customers is preferable to them lounging around inside. From the franchisee’s perspective (and most Jiffy Lubes are franchises), every idle moment costs money. Technicians are on the clock. They might as well take an active role in the sales process. Finally, the action is easy and immediate. It addresses the issue (no customers) only if the situation exists. In other words: Don’t give out a special deal carte blanche; only do it when you need to. A guy on the street corner with a sign might seem crude, but it is actually a highly efficient sales promotion.
But there’s a bit of a bigger-picture issue at work.
Deep in the midst of a recession (as much psychological as it is economic), consumers are rethinking many of their purchases. Jiffy Lube’s clientele is no different. Auto dealerships (strapped for cash from record-low vehicle sales) are turning to their service departments like never before to drive business. Many are incentivizing new car buyers to use their service bays (by dramatically improving service and reducing wait times) instead of third-party providers such as Jiffy Lube. That is leaving Jiffy Lube in the unfortunate position of competing for owners of older vehicles who have less incentive to purchase profitable add-ons.
Add to that the industry’s wavering hold on the “3,000-mile-oil-change” argument, as auto maintenance-minder technology reminds newer car owners of the need for new oil at more realistic 5,000- to 10,000-mile intervals.
Add to that the lagging Jiffy Lube image problem, where unsuspecting consumers were charged (in some cases) for services paid for but not performed. That sting is not gone.
You could make an argument (and I would subscribe to it), that the sales promotion I described was just about perfect to combat those problems. Heck, it grudgingly worked on me. The promise of an immediate bargain can often supersede more rational thinking and spur an impulsive decision.
Again, not bad.
But isn’t there a part of you that wishes this genie couldn’t go back into the “high school sports team car wash” bottle? It seems to be catching on with going-out-of-business retailers. In fact, it seems to be popping up everywhere.
And that’s really the crux of the branding problem for Jiffy Lube.
Branding is all about separation. About “owning a space” in your customer’s mind. “Degree of differentiation” is the fancy language, but what it really means is that you are doing something that no one else could easily (or legitimately) repeat.
This Jiffy Lube sales promotion comes down to just one thing: price.
There is no shame in driving business with short-term incentives, but Jiffy Lube is beginning to use it as a crutch. The simple fact is that it won’t last long: Any competitor can lower his or her price. Any competitor can copy the technique.
Yes, I would argue that oil change service is a commodity service. And it is tempting to think it all just comes down to lower prices and greater throughput. But I am not so sure.
Jiffy Lube is the largest player in this market space (over 30 million customers per year) and, as such, commands enviable market power. It supports a variety of charitable and automotive educational causes. Because of its market position, it tends to support them in a big way.
Here’s an idea. Why not leverage those associations? Why not give people an incentive by making a donation to one of Jiffy Lube’s supported organizations? How about $10 to the American Heart Association? Or $10 to Cars for Courage?
I’d be happy to stop for that.
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