Running a Shop Sales+Marketing Selling+Closing More Jobs

Posting About Customer Pay Opportunities

Order Reprints
Money

SHOP STATS: CARSTAR Body Best Collision   Location: Sonoma, Calif. Operator: Dino DiGiulio  Average Monthly Car Count: 80  Staff Size: 5 technicians on the floor including detailer, 5 in the office, 1 manager and 2 estimators  Shop Size: 7,500 square feet; Annual Revenue;$2.4 million

Dino DiGiulio, CEO of CARSTAR Body Best Collision in Sonoma, Calif., and Suisun, Calif., has been aware of customer pay and how it affects his revenue since the very beginning of opening his shop in 1990. After all, his first customers—his friends and family—were all paying out of pocket. Eventually, his 100 percent of customer pay business trickled down to what is now 10 percent, but DiGiulio still recognizes how important it is to bring in customer pay for the shop’s revenue. Not only does it add to the shop’s revenue, but it also helps create long-lasting and loyal customers, he says.

The first promotion he did to advertise that customers can come in and pay for minor repairs was a bumper repair special. He offered customers a flat rate to fix scratches and minor bumper dents.

Soon, DiGiulio discovered that simply offering incentives for customers to pay without filing a claim was not enough. He needed to look further into marketing and put his efforts there.

In 2008, the shop produced roughly $1.5 million in annual revenue which, after turning around DiGiulio’s survey and marketing strategy, increased by roughly $350,000 over the next three-and-a-half years.

 

The Backstory

DiGiulio learned early on that an owner needs to pay for someone to do marketing for the shop or master the task in their own right. He chose to take classes through a company called Drive Marketing and learn how to target a specific demographic.

“You don’t know what you don’t know,” DiGiulio says. “The more you market yourself, the more traffic will come to your door.”

 

The Problem

DiGiulio wanted to retain as much customer pay work as possible, but he needed to figure out the best marketing campaigns for that type of work that resonated with customers. DiGiulio got trained on how to conduct market research surveys and find out how to best advertise to his town. His plan was to gather the results, analyze the phrases most often used by customers to describe what’s most important to them about a collision repair, and then create marketing campaigns based off those phrases and sentiments.

That way, he believed, he could guarantee the marketing campaign would hit home with customers and drive customer pay work.

In 2011, he sent out 150 surveys and started mailing surveys out twice per year. But as each year passed, fewer and fewer people responded to the surveys. At that time, the words that grabbed his customers’ attention were “clean shop” but now, eight years later, customers will click on an online advertisement if the shop uses terms like “referred,” and “quick service,” he says.

DiGiulio had to formulate a new goal and new marketing campaigns to send out to customers.

When DiGiulio allocated about 6 percent of his revenue as his marketing budget and started sending out new postcards with different marketing and targeted advertising questions on them, he started to notice a change in his customer pay percentage.

 

The Solution

After going to a weeklong marketing training class, DiGiulio realized that his customer pay percentage went hand in hand with the insurance work the shop did. For example, if the shop promoted that it offered minor services for the customer to pay without insurance, it brought the customer into the shop. Then, if the shop found larger, underlying damage to the vehicle after it was brought in for an estimate, the shop would inform the customer, who then could file a larger insurance claim. In the end, some of the customer pay work turned into even larger repair jobs costing around $4,000, he says.

An accurate number of people coming into the shop after receiving a postcard was roughly 1 percent of one percent, DiGiulio says. For example, if he sent out 1,000 postcards to advertise to customers, roughy 10 of those customers would end up coming into the shop.

DiGiulio focused his marketing strategy on sending out postcards, or later putting up a billboard in the shop’s other, larger location of Suisun, Calif. After time, customers would see the ads, recognize the key targeted terms like “number one referred shop” and trust in the business enough to come in. So, he quickly realized that while marketing is a “whole other beast” to deal with in the shop, it was essential to getting customers to even show up at his door so he could sell to them.

 

The Aftermath

By 2012, the shop produced $2.3 million in revenue. DiGiulio saw the biggest effect on revenue stream when he focused his time on marketing with targeted words that were gathered through his survey data, he says.

He maintained a ratio of 70 percent DRP work, while also remembering the impact that could be had when customers pay out of pocket, or tell their friends and family about the “quick” service and refer the shop. That word—“quick”—was a direct result of putting the idea that a customer could bring a small job to the shop, pay for it out of pocket and, in record time, have his or her car repaired correctly.

Now, the shop produces roughly $250,000 per year from customer pay, DiGiulio says.

 

The Takeaway

Through his marketing training with Drive, DiGiulio learned that it’s important to not let the customer worry about the cost of the repair and instead write the estimate as soon as possible for him or her.

Realistically, he says, the shop staff shouldn’t speed the customer through the process and make a sale. It might be hard to the estimate “curbside” but it could result in the customer saying “yes” to the job  faster.

 

Expert Advice: Getting the Most Out of Customer Pay

Every shop should diversify their portfolio, says Steve Trapp, strategic accounts manager in North America for Axalta Coatings Systems.

The logic there, Trapp says, is that it is possible that once a customer comes into the shop, that patron could become a client for life.

According to Trapp, roughly 35 percent of estimates written are from customers paying out of their own pocket or considering doing so. Customer-pay claims are a lot smaller than claims from insurance claims, of course.

Trapp outlines what a shop can do to increase its customer pay and, essentially, make customers for life who go on to later refer your shop to others.

1. Be their resource on what it will cost.

Give the customer an up front, day-to-day estimate on what the repair will cost. The goal is to get as many people as possible to come in and offer them the math up front. Try not to let them make a call to a spouse or friend, but make sure to show them the benefits while they are in the shop.

2. Sell appearance allowances.

For instance, if a customer comes into the shop with some scratches on an older vehicle. Perhaps the customer has had the vehicle since his or her college days. Then, one way the shop can increase customer pay in this instance is to offer to limit the damage, Trapp says. Offer to give $50-$100 for damage; the customer will save $200 toward his or her deductible and it will limit the appearance of scratches on the car.

3. Be an advisor or an advocate.

Trapp suggests being an advisor that helps the customer through the decision-making process.

“Listen, build and earn their trust,” Trapp says.

Stop making a “bitter beer face” at the customer, he says, light-heartedly. Such negative vibes can occur without a shop employee even realizing it when they hear the customer does not have a claim number. Facial expressions and willingness to help can affect a sale, Trapp says, adding that it’s important to treat each customer’s situation differently.  

4. Ask the customer to authorize.

Employees can ask a customer to authorize a partial assessment of damage to a vehicle and ask for payment for a partial repair. Sell it as a way for the customer to get a more accurate idea of what the estimate will be. If the vehicle is not safe to drive, then the customer could make an insurance claim, Trapp says.

 

 

Related Articles

Turning Recalls into Customer Service Opportunities

Growing Your Customer-Pay Segment

All About People

You must login or register in order to post a comment.