Wheelin’ and Dealin’

Sometimes you have to sweeten the deal to close the sale. Do so wisely, and you’ll boost traffic without burning the bottom line.

A few months back, a smashed-up Chevy truck landed in the shop of Marc Garza, owner of G&G Automotive and Collision in Brownsville, Texas. Garza estimated the wrecked front would run $3,000 to repair. The truck owner, like most consumers these days, was feeling cautious. He wanted to shop around to be sure he was getting the best deal possible.

Knowing that most “shoppers” don’t return for the repair, Garza was compelled to land the job right away. His dilemma: “I don’t offer promotional deals,” Garza says, “and I don’t lower the price on the job.”

But he does find ways to sweeten the deal.

“It was a nice [2008] truck with 22-inch wheels,” Garza says. So he offered to put racing stripes on the front end of the truck’s hood and on the tailgate—for free.

The deal was sealed. And the sole cost to Garza was the time it took to tape up the racing stripes, and some white paint and clearcoat—which he was already putting on the front end anyway. The extra $50 of work was a mere skim off the $3,000 job.

Garza wheels-and-deals that way when he thinks a potential customer might walk. He’s offered buff-and-polishes, safety inspections, window tinting and headlight upgrades. About 60 percent of the time, the deal boosts his closing ratio on the spot: eight more jobs a month, $8,000 in sales each month, about an extra $100,000 a year. For a shop that does just $650,000 in annual revenues, that’s a sweet deal.
“Those offers land about 15 percent of the total work we do,” Garza says. “It really works.”

Still, such side deals are not without controversy among shop owners. Chris Sheehy, president of Autobody Consulting Group in Rumford, R.I., says there are good promotions, and bad ones—and no one right or simple answer. He encourages shop owners to track how promotional deals, whether offered on the spot or marketed more formally, add value to the business. And when you do decide to deal, never give away more than you must, he counsels.

Create Raving Fans

A well-done promotional strategy can lead to an increase in market share and a stronger hold in the community. William Romaniello, owner of All Pro Collision Repair in Plantsville, Conn., did exactly that with a promotion designed to garner attention beyond collision repair. With Sheehy’s help, All Pro launched a civically based community program in March. Romaniello hoped to give back to the community while gaining the area’s market share.

“We’ve been working to weave ourselves into the fabric of the community,” Romaniello says. “We want to do more than just fix cars for customers; we want to create an emotional attachment to our business.”

The program donates a small portion of money to one of three nonprofit organizations in the community for every repair the shop makes. It’s up to the customers to decide where they want the donation to go. “They make the choice; we write the check,” Romaniello says. “It promotes a civic awareness.”

The shop received nine repair jobs—which averaged a few thousand dollars each—within two months after implementing the program. Romaniello says that was the sole reason those customers chose the shop.

“Offering money back to the community creates an emotional draw for customers, and they come because they feel like they’re helping drive those donations,” Romaniello says. “We’re not about making just a satisfied customer, we’re about making a raving fan of our business,” noting that the promotion has been a huge differentiator between All Pro and the other six shops in the area.

Satisfy Customers for Cheap

Customer satisfaction is hugely important in collision repair, and promotional deals can help with that, too. Here are some ideas on how to move forward with a promo program that won’t sacrifice your bottom line:

Offer door busters. Sheehy advocates for shops to give customers a service worth about $40 per repair—like Garza’s racing stripes. Headlight restorations fit the bill, too. “It has an immediate impact; customers can clearly see the difference right away—and they appreciate that,” Sheehy says.

Offer safety checks. Free safety checks are another customer benefit that Garza promotes to drivers who are on the fence. Not all states require vehicle safety checks, but shops in states that do might want to give this some consideration. G&G is a certified state inspection station at a cost to Garza of just $300 a year. He averages 30 inspections daily.

“That’s 30 people every day who find out I have a body shop,” Garza says.

Sheehy agrees: “You’re getting a prospective customer in the door that is there for something other than collision,” he says. “You spend five minutes with the customer and talk to them about the virtues of safety for their vehicle. If you do your job right, they will come back to you because of that extra attention you gave them—and in the back of their mind, you’re a safety advocate.”

Deliver clean cars. A lot of shops already do this, Sheehy says. The problem is they don’t let the customer know they did it, and leave it up to chance that the customer will notice it. “It’s a great promotion, but you need to let the customer know.”

Support the community. Sheehy suggests sponsoring local sports teams. “Host a barbeque at the first and last game of the year,” he says. “If you’re branded as a company that gives back to other organizations within the community, many people won’t ask you to offer any other discounts.” That won’t happen every time, but even if it happens 50 percent less often, that’s more profit for you.

Don’t Do Deductibles

There are numerous promotional offers you can extend—as long as their financial impact is known. But there is one deal that carries particularly negative repercussions beyond the walls of a single shop: covering customer deductibles. Sheehy says that can create long-term damage to the industry.

“It gives consumers the impression that this practice is a general course of business,” Sheehy says. The customer has an agreement with an insurance agent covering what the driver pays and when. So why do shop operators feel the need to carry that burden as a promotion?
Paying a driver’s premium is a tough rut to escape once the precedent’s been set. Many Sheehy clients on the East Coast—where covering deductibles is a common tactic—deal with that problem with almost every customer. They spend inordinate amounts of time explaining to customers why they won’t offer to cover deductibles.

Some shop operators make those kinds of offers as a knee-jerk reaction because they don’t know any other effective strategies to close the sale, Sheehy says. “It’s a Band-Aid fix because those shops don’t really know how to promote themselves,” and they revert back to the only negotiating factor they can think of—cutting the price of the job—to persuade the customer to stay.

“This industry doesn’t [generate] the money that we’re worth,” says Kari Barnes, co-owner of ABC Collision & Marine Repair Inc. in Brainerd, Minn. When body shop owners continue to discount and lower the value of their work—and of the profession itself—customers will, too.

So what can shops do to get more customers through the door and build the bottom line at the same time? Deliver true value to your customer and add value to your community, says the community-focused Romaniello. Do that right, and “the rest will fall into place.”