Is Your Pricing Strategy Driving Customers Away?

Dealerships are leaving money on the table by focusing on pricing the wrong way. On a recent episode of Retention Roadmap, we sat down with Joe Gibson, VP of Sales & Marketing at IntelliCheck, and Melissa Marlatt, IntelliCheck’s Chief Operating Officer.

Together, they shared some great insights on how dealerships can better position themselves against the real competition—by making smarter pricing decisions and focusing on the customer experience.

Our last Retention Report backs up their perspectives: while price is a factor in loyalty, the real drivers for choosing a service provider are quality of work, customer service, and overall experience—in that order.

Our guests explained that many dealerships mistakenly view other dealers as their main competition, but the real battle is against aftermarket providers. To stay competitive, it’s not just about dropping prices—it’s about showing customers the value they get by choosing your dealership, building trust, and delivering a standout experience they’re willing to pay a little more for.

Today we’re taking a look at some of those insights, and how to use competitive intelligence and customer experience strategies to find the right balance between pricing and quality to keep your customers coming back.

Competitive pricing strategies for key services

Pricing strategy is not one-size-fits-all. The real power comes from knowing when to go head-to-head with competitors and when to charge a premium because the experience or expertise you offer is worth it. The key is to be intentional. Here’s how to navigate it:

When to compete on price? Routine services

Services like oil changes, basic maintenance, and tire replacements are the ones to focus on. These are “gateway” services that bring customers in the door. If a customer defects for these, they’re likely taking their more profitable work (like repairs or major maintenance) somewhere else too.

What to do: use competitive intelligence to stay in line with or just slightly above the market rate—enough to remain competitive, but still communicate the extra value the dealership provides (e.g., OEM parts, certified technicians).

Example: Joe and Melissa shared that customers often balk at dealership prices for something as simple as an oil change. Yet, there’s no reason a dealership should be priced “outrageously high” on these services. The solution? Make the value clear and stay within about 20% of the local average.

When to charge a premium? Complex, specialized services

Diagnostics, transmission work, electrical repairs—these are where dealerships should focus on their expertise and brand value.

Why charge more: customers are more understanding of higher costs if the service requires specialized knowledge and if the stakes (and vehicle safety) are higher.

What to do: use competitive intelligence not to match the competition, but to differentiate from them. Communicate why the dealership’s techs and parts are worth the premium price.

Highlight expertise and benefits: as Melissa Marlatt points out, the dealership’s biggest edge is in the quality of service and parts, not just pricing. Make it clear: paying more at the dealership means better quality, fewer headaches, and a greater peace of mind.

The balance: value vs. price

It’s not about being the cheapest – it’s about being the smartest: while being cost-competitive is essential for routine services, a successful strategy also hinges on how well a dealership conveys its value. Customers are willing to pay more if they see that the service is worth it.

Messaging tip: clearly explain what makes the dealership experience different. Use language like, “When you service here, you’re getting more than just a repair—you’re getting peace of mind, factory-trained expertise, and parts designed specifically for your vehicle.”

Aligning service offerings with market needs

Not all services are equal when it comes to customer perception and pricing flexibility. The idea is to focus efforts on the right mix of services, using competitive intelligence to guide decisions. Here’s how:

Study the competition

Track local competitor pricing and wait times: this isn’t just about knowing what others charge—it’s about understanding what you’re up against in terms of convenience, service speed, and customer experience.

So where are some areas to differentiate?

• Speed: if wait times are shorter, emphasize that. Make it a part of your marketing message. Knowing that the independent shop down the road has a two-week wait for tire replacements means you can use quicker availability as a selling point, even if your prices are slightly higher.
• Convenience: Highlight features like easy online scheduling, same-day service options, or shuttle services that make it hassle-free for customers to choose your dealership.
• Experience and perks: if you offer perks like value added services, or amenities like a comfortable waiting area, make it known. These are areas where customers see added value.

Choose the right services to compete on

Focus on high-defection services: tires are a prime example. Most customers aren’t buying their tires from the dealership (even loyal ones). The problem? They either don’t know the dealership sells them or don’t see the value. Regularly monitor tire prices, offer renewable road hazard protection like DriveSure, and communicate the benefits clearly.

Use loss-leader strategies for essential services: routine services like oil changes and tire rotations can sometimes act as a loss leader, where the goal isn’t to profit directly from them but to keep customers coming back.

Pricing tip: for oil changes, aim to be “competitive but not the lowest.” Customers will pay a bit more if they feel the experience is worth it.

Bundle and promote prepaid maintenance packages

Why does bundling work? Prepaid maintenance bundles (e.g., three oil changes, tire rotations, and multi-point inspections at a set price) not only lock in loyalty but also simplify customer decisions.

How to structure packages: use competitive intelligence to set a bundle price that’s attractive but still profitable. Consider including added perks like free wiper blades or air filter replacements.

Promote with clarity: make sure customers understand how the bundle saves them money over time compared to paying per service. Use direct comparisons (e.g., “Save 20% compared to paying as you go!”) to make it compelling.

By intentionally balancing competitive pricing on routine services with premium pricing on specialized offerings, dealerships can strategically position themselves to retain customers while maintaining profitability. The key takeaway? Price competitively where it counts, but don’t undervalue your strengths.

Use great customer service as a competitive advantage

Competitive pricing gets customers in the door—but exceptional customer experience keeps them coming back. With today’s customers prioritizing quality of service over price, it’s clear that dealerships need to invest in providing a standout experience.

1. Build trust through transparency and communication. Customers will pay a premium if they trust your service advisors and feel they’re getting real value. Train your team to communicate clearly about what makes your dealership’s service superior, from certified technicians to the use of OEM parts. Emphasize what customers gain by choosing your dealership over a cheaper alternative.
2. Make it easy for customers to interact with you. Text messaging, now the preferred communication channel, is a simple yet effective way to engage customers between visits. Use it to send service reminders, update them on their vehicle’s status, and follow up afterward.
3. Focus on consistency. A single bad experience can undo years of loyalty. Make sure every customer interaction—whether it’s a quick oil change or a major repair—reflects the same high level of service. With the right balance of competitive intelligence and customer-first service, your dealership can retain more customers, boost loyalty, and build long-term success.

Winning in today’s market isn’t just about having the lowest prices. It’s about knowing when to compete and when to charge for what you’re worth—and making sure customers see the value. Use competitive data to guide your pricing, focus on trust and communication, and prioritize customer experience if you want to stay ahead.

Want to dig deeper into what keeps service customers loyal? Check out the Dealership Service Retention Report​ for more insight into shifting customer preferences (and actionable strategies).

What keeps customers coming back to your dealership?

Download the 2023 Dealership Service Retention Report to see what dealership service customers have to say.