Selling Synthetic Oil

Oct. 6, 2020

As the industry moves toward more synthetic oils, the quick lube industry is tasked with much of the customer education as part of the transition. 

What works in a drag car should work in a daily driver, right?

When it comes to synthetic motor oil, that was the trajectory for Jim Oberhofer. He’s a quick lube owner now, but in the late ’90s, he was the team general manager and crew chief on NHRA driver Doug Kalitta’s top fuel drag car. At the time, there wasn’t a lot of synthetic oil going into drag cars. It was mostly the heavy, 70W conventional oil.

As the crew members disassembled the engine after each race, they were seeing issues with piston scuffage. That is, until Oberhofer met Red Line Synthetic Oil co-founder Tim Kerrigan.

“We were scuffing probably three or four pistons per run at that time. And we tried many different things to fix this and make it work,” Oberhofer says. “So, finally, one day Tim Kerrigan gave us some of his synthetic oil—70W synthetic oil. We put it in the car, and it fixed everything. We went from scuffing three or four pistons per run to scuffing nothing.”

He says that it took some convincing from Kerrigan about the benefits of synthetic oils, which at the time hadn’t been track-tested as much as conventional. Years later, Oberhofer is selling Red Line synthetic oil at his Victory Lane Quick Oil Change shop in Plano, Texas, and telling customers about the same benefits that Kerrigan shared.

Nowadays, synthetic oils are the go-to product in a growing number of everyday vehicles. Customer preferences, OE recommendations, and engine technology changes have all led to synthetic being a larger part of oil inventory at quick lubes, which can reap sales benefits from the trend. Last month, NOLN took a deep dive into the world of add-on products that shops can offer. 

This month, get back to the basics and see how industry changes can help shops sell higher-quality oil changes, more often.

Synthetic Oil Sales Over Time

1999: 7 percent of customers purchased “synthetic lubricants”
2005: 9-12 percent of customers purchased synthetics
2015: 16 percent of motor oil sales are synthetic
2020: 32.2 percent of oil changes are synthetic

(Source: NOLN Operator Surveys. Thanks for Valvoline for sponsoring the 2020 NOLN Operator Survey.)

How They Got to Synthetics

Jim Oberhofer, Victory Lane Quick Oil Change of Plano, Texas

Full Synthetic: 60 percent of overall oil changes

Oberhofer got his start in the racing world in 1988, when he joined the Kalitta team. After about 31 years, he was looking for his next opportunity. He met the Victory Lane team in 2017 at a drag race.

“We just started talking about me becoming a franchise owner and their desire to expand down in the Dallas-Fort Worth area,” he says.

He launched his franchise shop about a year later.

When it came time to plan out his oil inventory, he remembered what Kerrigan taught him about the benefits of synthetic oil. Oberhofer says one explanation stuck with him about how the oil moves between the engine space.

“With any good oil, you want it to get in and out, and that way it will do its job and it will lubricate and cool down,” Oberhofer says. “But if you have a thicker oil in there, it has a harder time getting in and out.”

Carl Goede, Roadrunner Express, Mukwonago, Wisc.

Full Synthetic: 40 percent of overall oil changes

Carl Goede has been in the quick lube business for 25 years, and along with his brother he now runs two quick lube-car washes and a third standalone car wash. Like most operators, he wasn’t selling much synthetic oil when he started.

“Very seldom did we fill anything other than a conventional oil change back in those times,” he says.

Within the broad industry changes that led to the growth of synthetic oil use, individual operators had their own set of circumstances that helped those sales grow. For Goede, it was an opportune product from his supplier that came about in the late 90s.

Quaker State came out with a winter blend that was a synthetic blend. He says that the marketing for reliable cold-weather operations resonated with his customer base in Wisconsin.

“The distributor, Perkins Oil, had this winter blend and helped us bring it in,” Goede says. “And it just exploded in popularity.”

Today, Goede says that around 40 percent of his oil changes are full synthetics, with an overall 70 percent being a specialty oil to include blends or high-mileage varieties.

The best part? Goede says that the change has lifted his bottom line.

“I think that annual sales are probably 15-to-20-percent higher than it would be than what they would be if it were all conventional oil,” he says.

Dan Lindahl, The Gunny Lube of Gunnison, Colo.

Full Synthetic: 40 percent of overall oil changes

Dan Lindahl has been the general manager at his small-town quick lube for eight years, though the shop has been around since 2004.

Even when he started, synthetics were just coming into the picture.

“There was definitely some synthetic, more than I had experienced in other places in the automotive industry,” Lindahl says. “I think, at that time, our conventional oils still outweighed our synthetic oil (sales).”

At his shop, there was a strong customer education component. With better oil products on the market, Lindahl and his staff were able to recommend them to customers. Similar to what Goede experienced in Wisconsin, Lindahl’s customer base was interested in a high-performing oil.

“They know that I’m going to recommend something that I feel is more beneficial to the vehicle,” he says. “In our high mountain driving, everything is extreme use. Our winters are extreme, and in our summers, everyone is recreating.”

Today, around 40 percent of oil changes at The Gunny Lube are with full synthetics. They still offer conventionals and blends, and Lindahl says that the variety has given his staff great latitude to work with customers to reach the best product for their vehicles and situations.

Mason Benn, Freedom Lube Service of Nevada, Mo.

Full Synthetic: 42 percent of overall oil changes

Benn doesn’t have any conventional oils in his inventory. Like Oberhofer, his base oil change package is with a synthetic blend.

Benn’s shop represents a shift in the landscape of the business. His operation is new to the industry, having just opened in August 2019. Instead of going through a transition period toward synthetic oils, Benn saw where the industry had gone and opted to open his shop without conventional on hand for gasoline engines.

“I don’t have any conventional oil in my shop at all,” Benn says. “I don’t keep any on my shelf or any of my backup oils. I just run my full synthetics and my synthetic blends.”

He did a lot of research before finalizing his oil inventory. When it came time to open, he paid close attention to what his customers wanted and what their vehicle manufacturers recommended. That mix pointed to a synthetic blend and full synthetic inventory.

Among his customer base, there are lots of newer vehicles. On top of that, he’s seeing a lot of Chevrolets, which require the Dexos standard, which is not met by conventional oils. That’s been a big part of the overall trend toward synthetic, he says.

“I think that’s why the full synthetics are on the rise right now, because Chevy’s requiring the Dexos additive in their stuff,” he says. “And that’s what pushes the full synthetic side of the marketplace.”

Industry Oil Changes by SAE Grade 

0W-16: 1%
0W-20: 22%
5W-20: 26%
5W-30: 32%
5W-40: 4%
10W-30: 4%
15W-40: 8%
Other: 3%

(Source: 2020 NOLN Operator Survey. Thanks for Valvoline for sponsoring the 2020 NOLN Operator Survey.)

Industry Changes

The growth of synthetic oil in the light-duty vehicle market largely started with the desire to offer a higher-quality product to customers. But in the last decade or so, those changes quickened amid an industry push for greater efficiency and more power from smaller engines.

Using a lower-viscosity oil means that engine parts face less resistance and can produce more power. But the oil still must provide the protection that thicker oils would. Synthetics are good at both. 

Consumer Reports found this to be true after talking with Honda about its recommendations for synthetic oils in late-model Civics. Honda told CR that they choose synthetic for its performance at low viscosities. The company is not alone. An analyst with the outlet said that around 70 percent of new cars for the 2019 model year came with either full synthetic or a synthetic blend.

For Oberhofer, the parallels between the racing world and his quick lube business are obvious. The same low-viscosity performance that enhances efficiency also produces power.

“When I got into this quick lube business, we’ve got 0W-16 oils and all that, but I know for a fact in the racing world, some of the high performance gasoline engines, they're running just no weight at all in these quarter-mile engines,” he says.

Those factors become more important in turbocharged engines found inside everyday vehicles. Turbocharged power plants have become more common to produce power out of smaller, more efficient models. A high-revving turbo can add stress to engine parts, and the oil must keep up. A blog post from Chevron summed up the conditions.

“Today’s turbocharged cars require engine oils to lubricate the turbo shaft with a thin layer of oil while withstanding the punishing effects of the shaft spinning as much as 200,000 revolutions per minute,” according to Chevron.

Synthetic oils are also less likely to lead to engine sludge buildup and they resist breakdown longer, allowing customers to lengthen their oil change intervals. Of course, these are benefits that many quick lube operators know, because the customer education component is key to boosting synthetic oil sales.

Customer Care

It can be difficult to balance the customer preference against the best product or a manufacturer recommendation. Every operator knows the customer who comes in and just asks for the cheapest option or the customer coming off a warranty and not knowing that the manufacturer recommends a higher-tier oil. 

“Whatever they’ve been putting into it” is a common request, according to Goede. This is why the customer education component is important.

Finding the Right Product

There’s not really any way around it. If the manufacturer recommends a synthetic, your tech may need to explain to the customer why that’s necessary. This is common for Chevrolet Dexos requirements, as mentioned earlier, as well as most 0W-20 and the emerging 0W-16 varieties, most often used by Honda and Toyota.

Oberhofer recalls one customer who came in with a 2018 Chevrolet Silverado and just asked for the cheapest oil change. Oberhofer went through his explanations about the performance benefits of synthetic oil, as well as the recommendations for his engine. 

“There’s a reason why your car manufacturer says this is what you should put in it. Oil is not oil. When these engineers design these engines, they didn’t just say we want to put 0W-20 in this because so and so is going to give us money to be doing this,” Oberhofer says. “It’s to keep your car running as good as possible for as long as possible.”

But none of that really convinced the customer. It was the longer oil change interval that sealed the deal. He says that when the customer saw that it would be 6,000 miles before the next service was due with synthetic oil, he came around to the sale.

Lindahl has seen the same effect.

“We do have several customers who have switched over to synthetic in their older vehicles as well,” he says. “Part of it is convenience. Some of them say, ‘I’m horrible with getting in for an oil change. So if I can drive a little farther on the synthetic, let’s go ahead and do that.’”

Making the Right Sale

For years, conventional oil at a heavier viscosity was just the standard oil change, and some customers still expect that when they come into the quick lube.

When quick lube techs go through their scripts for add-on sales and additives, a move up to synthetic oil should be a part of the pitch. Benn says he’s been pretty successful in converting drivers to full synthetic with this strategy.

“I'll sit there and talk to them about how good going into synthetic is because of the science and technology and how the industry is pulling away from conventional in general, especially at the lower weight levels,” he says. “And I’ve converted several from conventional.”

At The Gunny Lube, Lindahl has a similar strategy and says that his rapport with customers is crucial in this area. If a customer asks what Lindahl recommends, it’s because they’ve established that trusting relationship. If a customer really wants conventional, and their vehicle takes that kind of oil, he’ll stress the importance of a smaller service interval. 

“Living in the community we do, there are a lot of older vehicles. And that's all they've ever used and all they ever want to use,” he says. “When that comes up, I do stress to them the importance of getting them to change regularly. That’s the most important aspect.”

Goede echoed that idea. He still sells conventional oil changes to customers who really want it. That customer relationship is top of mind, and the upsell can transition to an add-on service.

“I would much rather they come in and spend $40 every time than spend $100 once and never come back,” he says. “There are so many other opportunities, like tire rotations, filters, and wiper blades.”

When it comes to the full synthetic upsell, he says that one thing has been helpful with customers. It’s a visual display in the shop that features three jars representing the molecular makeup of conventional, synthetic blend, and full synthetic oil. The conventional jar is filled with gravel. The blend contains gravel and silver beads. The full synthetic representation is only silver beads, uniformly lined up to represent the more refined, higher quality oil.

“This is the equivalent, on a massive scale, of the difference between conventional and synthetic,” Lindahl says. “And a lot of times they'll say, ‘I can see why that synthetic lubricates better.’”

The display came to the shop years ago from a distributor.

The Distributor Resource

Where does an operator get all the information to make their pitch to customers? All of the operators in the story got a great deal of support from their distributors.

Benn says his supplier has been a great help.

“I talk to my sales rep about every other day,” he says. “Because I’ll get questions from customers, and I have a paper that I write all my questions on. And I’ll hit up my person at a minimum once a week and tell them: Here are my questions.”

Those are the people who know the most about the oils they sell, as well as the benefits to the customers. Distributor representatives are in a great position to position shops to succeed in sales.

Distributor relationships are also crucial when you’re setting up your shop to be competitive in selling synthetic blend or full synthetic oil changes. For shops whose basic oil change features a blend, the price of that service needs to remain competitive with other shops that might sell conventional.

“We have to be competitive with the local shops in town,” Benn says. “We’re the only quick lube shop in town, but there are about 10 or 11 mechanic shops. So we have to be competitive with their prices and still able to get by with what we’ve got.”

Operators should work with their distributors as much as possible on pricing. Goede says that he saw a big difference once he crossed into bulk purchasing of synthetic.

“Because we buy everything in bulk, that’s where the big advantage is in pricing,” he says.

The Takeaway

Whether the customer has a strict OE recommendation, is moving up to a synthetic or just wants whatever is necessary for their vehicle, it’s up to the quick lube to make sure drivers are comfortable with the oil they choose.

“When people can look at their cars or feel like the car makes more power or gets better fuel economy, that says a lot about the product,” Oberhofer says.

The industry as a whole is still in the synthetic oil transition. Newer shops, like those run by Oberhofer and Benn, are working with their customers and price points to offer only synthetics and blends. Others, like Lindahl and Goede, are moving to higher-tier oils while still offering the conventional choice to longtime customers. In both cases, these shops are committed to giving their customers what’s best.

While upselling strategies vary, the fundamental piece is the customer relationship. As Lindahl says, his oil recommendation bears the weight of that relationship.

“We build into it a lot of customer trust,” he says. “When people come to me, I've built up relationships with people over many years at this point. And they know I'm not going to sell them something they don't need.”

That’s the key to boosting tickets with your core product of oil changes. If your techs are focused on add-ons and retail items, take a closer look at the kinds of oil you’re selling.