A $175 Oil Change
By Peter L DeHaan
few years ago I bought a new car. Although it
wasn’t my practice to take my cars to their respective dealers for
maintenance, a new car changed that habit. After
all, there was warranty work to be considered and their coupons for
low cost oil changes were enticing. It was about
the time that my auto servicing behavior was firmly altered that the
warranty ran out and the discount oil change incentives stopped.
Still, I continued returning to the dealer for service.
It was smart marketing on the part of the dealer. Too
bad their efforts were thwarted.
was time for my regular oil change and I had a list of other things
that needed attention. Since I am not a mechanic, I
try not to tell them what needs to be done, but rather inform them of
symptoms. I want to make sure that I don’t ask
for, and pay for, a tune-up when the problem may be a loose vacuum
hose. It only took one passive-aggressive mechanic
to do exactly what I said, while ignoring the real problem, to drive
this point home.
I dropped off my car, I said, “It is time for an oil change.
Also, the car pulls to the right and it starts hard and runs
rough.” I left anticipating that they would
change the oil, do a front-end alignment, and give the car a tune-up.
I estimated the cost would be about $100.
I was somewhat taken aback when I was presented with a $175 bill.
As I read the paperwork, my mild surprise changed to anger.
Here is what it said:
1. Change oil: Oil, lube, filter, labor: $24.95
2. Car pulls to right: Test drove car;
recommend front end
3. Hard to start:
Instruct driver not to press gas pedal while
starting vehicle: $56.00
4. Runs rough: Perform engine analysis; checks okay;
do tune-up in
3,000 miles: $75.00
for $175 I had my oil changed and was given some costly advice.
My complaints to the service manager accomplished nothing, so I
left and never returned. Once again, my local
mechanic, who I trust to do good work and to be fair and honest, is
servicing my cars.
many businesses, car dealers measure the work their employees do.
Mechanics are checked to make sure they are productive
throughout the day, that they document and bill for all of their time,
and that they complete their work within the “standard” allotment.
Mechanics who meet expectations are given raises and
promotions; mechanics who don’t, even when it’s in the
customer’s best interest, are given poor reviews, lower raises, or
let go. Some garages pay their mechanics based on
billable work. Therefore, the more they bill, the
more they make. I think I have been to those
places, too. At one shop, specializing in unusual
foreign cars, it seemed that every bill was always around $500.
They weren’t in business long.
people also bill by time. Lawyers and accountants
come to mind. I have been advised to never use an
attorney trying to make partner. In order to get
the attention of the other partners, he or she will need to log over
2,000 billable hours a year and their clients will pay the price.
once called my CPA’s office to discuss converting my IRA to a Roth
IRA. I talked with the junior accountant to whom I
had been assigned, asking if there were any other tax ramifications
that I should know about. She said there weren’t
and suggested she do an analysis for me. “No,
that is not necessary.” I replied, “You
confirmed what I needed.” “But we just got this
new program that I want to try out,” she begged. “Will
you let me do an analysis for you?” Thinking that
I was doing her a favor, I consented. The call took
less than a minute. A few days later, I received a
one page spreadsheet telling me that I should switch to a Roth IRA and
a bill for $100. The managing partner agreed that
the charge was unwarranted, but insisted that I pay it anyway!
He promised to “make it up to me later.” I
quickly found a different tax advisor.
years ago, a friend landed a summer job repairing TVs. He
was paid 20% of whatever he billed. Being
enterprising, he analyzed the rate chart and quickly determined how he
could add $35 to each bill for only a minute and a half of additional
work. He would take the back off of the unit and
hit it with a burst of compressed air, charging $8.00 to “clean
chassis.” Next, he would squirt the tuner with
cleaning spray, charging $10.50 to “lubricate tuner.” Then
he would turn on the set. If the filaments of the
vacuum tubes glowed, he would bill $16.50 to “check all vacuum
tubes.” With these rudimentarily tasks completed,
he would then repair the problem and add to the bill accordingly.
He earned a lot of money that summer.
has been said, “What gets measured, gets done and what gets paid for
gets done better.” Consider what you are
measuring in your organization and what you are paying for.
The intent, no doubt, is to improve your operation, be it to
pursue greater efficiency, increase production, decrease costs, or
maximize revenue. But carefully consider the consequences.
In an effort to please you, maximize their rating, or earn a
raise, are your employees directly or indirectly encouraged to do
things that ultimately drives away customers, lowers quality, or hurts your business?
you monitor productivity, does your staff, either intentionally or
subconsciously, alter their work habits to appear more productive?
Does staff assume they need
to work faster, thereby setting aside all semblances of quality? If
your customer service staff, programmers, or project managers track
project time, is unnecessary work preformed? Are
time logs padded? Do they think they need 2,000
hours of “billable” time a year to get a raise?
your commissioned sales reps sell what isn’t needed, or even wanted,
so that they can meet their quota or earn a bonus? Do
you have a “no credits” policy, either stated or implied, that
leaves staff with no viable solution for frustrated customers?
consider billing. One only needs to look at phone
company bills for examples of how to do it wrong. First
of all, does anyone really understand their telephone company’s
bill? Can the phone company reps comprehensibly
explain it? Often times they can’t. Consider
the countless surcharges and fees that are tacked onto each bill.
The amounts change frequently and coherent explanations are
rare. These ancillary charges are blamed on the
FCC, credited to an esoteric law, or attributed to local or state
government. On my long distance bill, dividing the
total owed by the minutes used, reveals that my 4.5 cents a minute
long distance actually costs me 9.7 cents a minute.
message do your invoices send? Are they easy to
understand and read? Can your staff correctly and
concisely explain every line item and charge? Are
you billing surcharges and blaming it on outside forces?
there are sound business reasons for each task that you track and
measure; these practices can leave your business stronger and more
fiscally sound, but there is also a risk. Don’t
be “penny wise and pound foolish” when it comes to measuring your
business; being astute and pragmatic – from the customer’s
perspective – will ultimately produce the result you want.
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