Developing a Marketing Plan

Nov. 1, 2011

Continuous marketing efforts curb spikes and slides in business sales—that’s why a long-term, written marketing plan is so important, says Rod Cahoy, business development manager for DuPont Performance Coatings. Developing your marketing plan should start with insight from your current customers: who they are, where they’re coming from and which marketing tactics got them through the door.

FenderBender talked to Cahoy about the value of a thorough marketing strategy, and how to base your plan off the customers you already serve.

Collision repair is an “on demand” industry. Just like hospitals, plumbers or electricians, people won’t think about your company until they need your services. So it’s critical for shops to have brand recognition throughout their community. That’s where the value of consistent marketing comes into play.

Shops need to understand that marketing is a marathon, not a sprint. Sporadic, one-time strategies will not improve business over the long term. It takes a lot of preparation to be successful. Shop operators should think ahead, and plan their marketing strategy at least 12 months in advance.

Creating a marketing plan starts with knowing your current customer base. Always ask customers how they heard about you and why they chose to visit your location. Most of the time, people involved in accidents consult their friends or family for shop recommendations even before they listen to their insurance provider. So shop operators need to understand what triggered the customer to choose their facility.

You can obtain that information in a few simple ways. Talk to customers when they initially enter your facility or include it as a question in their post-repair customer service indexing (CSI) survey. If you’re diligent about asking every customer how and why they chose your shop, you will develop a helpful database of information over time. That will highlight your most successful marketing tactics that drive people to your door.

Customer feedback is highly valuable. It will help you develop a specific marketing plan for the future. For example, if most customers tell you they were referred to your shop by an insurance agent, that is a strong indicator for you to ramp-up communication and marketing campaigns directed toward insurers.

Many shop operators struggle to identify where to focus marketing efforts. You have to know where your customers are physically coming from so you know which geographic locations are best for your marketing dollars. Identify the zip codes that surround your facility. Track how much of your customer base comes out of each area. Then calculate the amount of collision repair business that’s available within each zip code, and decide whether you’re getting a fair share of the available market. That will help you identify specific areas for marketing efforts. It’s up to shop operators to make a business decision on whether to concentrate marketing in areas where they have low market share, or instead focus solely on areas where they’re doing well.

Marketing campaigns should be equally focused on obtaining new customers and retaining existing ones. Focus on both simultaneously. That’s because your existing customer base will forget the name of your business within six months after their repair. They will forget where you are entirely after 12 months. If you have a constant focus on customer retention through marketing, they will be much more likely to refer others to you. And that’s how you create new, organic growth for your business.

You have to know whether each of your marketing efforts is working. Constant measurement and analysis is critical. Again, the best way to measure that is through your customer. That gives you real, raw data to help you critically analyze your marketing plan and strategize a tactical way to approach the market in the future.

You’ll never have any idea which of your marketing techniques is successful if you neglect to do that. You could be wasting money on certain initiatives for a long time without even knowing it. For example, if customers never mention your road signage, that’s a big red flag that your signs are not effective. Cut those things out of your marketing plan immediately, and don’t implement any new tactics that aren’t based on the voice of your customers. That ensures you’re not just guessing on where—or how—to market.

Shop operators should plan to spend between 1.5 and 3 percent of gross sales on marketing. You shouldn’t have to spend any more than that. You may experience diminishing returns if you do, and you might end up wasting time and energy on things that don’t provide much additional return.

Remember, certain marketing initiatives won’t always provide immediate returns on the investment. But that doesn’t always mean it’s a bad thing to do. For example, when farmers plant seeds, it takes a long time for that seed to develop and become a sustainable crop. The same goes for marketing. It takes at least 12 months before you can acquire enough data to know whether your efforts are working or not. So let your marketing plan run at least that long before making an assessment. That will give you time to determine whether your business has received any organic growth from the strategy you put in place.

Assess your marketing strategy on a monthly basis after that 12-month period is up. You need to experience a solid financial return for your marketing investments to be worthwhile. As a rule of thumb, shops should obtain at least a 20 percent return on their marketing dollars. 

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