Smart strategies for a changing landscape

Aug. 1, 2016
Changing industry dynamics have made it difficult for many mom and pop shops to post the sales they once did. If you’re serious about turning the tide, consider adopting the following strategies.

If you’ve noticed your car counts shrinking, you’re not alone. The automotive repair industry has undergone a seismic shift in the last decade.

Thanks to a slew of manufacture incentives, car sales have exploded since the recession. New car sales set a record in 2015 with 17.5 million vehicles sold — a 5.7 percent increase over 2014. Today’s cars are more technologically advanced, safer and more reliable than their older counterparts and thus, require fewer repairs.

Not only are cars better built, but the competition for automotive service customers has increased. Specialty chains, such as Jiffy Lube and Midas, that used to focus simply on oil changes or muffler repairs, have become full-services shops and are often open longer and on weekends, unlike many independent service centers. Dealerships have also become more aggressive in courting service business to supplement the one-time revenue generated by sales.   

These changing industry dynamics have made it difficult for many mom and pop shops to post the sales they once did. To stem the decline, shop owners will need to ask themselves if they are providing the services their customers want in the way they want them delivered. The new landscape provides an opportunity for shop owners to evaluate their practices and embrace new ways of doing business.

If you’re serious about turning the tide, consider adopting the following strategies. Even after just a few months, you should see a significant improvement in car count and sales.

Focus on maintenance, not simply repairs.

Long gone are the days when a shop could survive on big repairs alone. Those big jobs are fewer and farther between and with more competition in the marketplace, there’s no guarantee that a customer is going to call you first when a car breaks down. Make oil changes and other regularly needed services the bread and butter of your business. To achieve this goal, you’ll need to make it clear to your customers that you’re more than just the place to go when a big problem occurs. Start advertising offers for oil changes with vehicle inspections, seasonal services (such as air conditioning checks or holiday tune-ups) or free safety inspections. These types of offers provide the opportunity to establish yourself as a full-service shop and allow you to detect issues before they become big problems. The other key to changing the perception of your shop is to back up your work with a warranty. This practice builds trust between you and your customers, increases your credibility and improves your standing against the competition.

Become a yes company.

Many shops are confused by the concept of being a “yes” company. Being a yes company simply means putting the customer at the center of your business.  If a customer needs an oil change and wants to bring in his car this afternoon, say yes rather than asking them to work around your schedule. That might mean moving a major repair job to the side temporarily, so you can accommodate the oil change. You may also have to start scheduling service based on when a customer needs a car rather than based on when the car was dropped off. Your goal is to make the service experience as easy and convenient as possible. Here are some other features that will help position your business as one that puts customers first: 

  • Extended hours. The large chains are built around providing service when a customer needs it – whether that’s 10 a.m. on a Tuesday or 5 p.m. on Saturday. You may need to adjust your hours to compete effectively.
  • Shuttle services or rental cars. Let’s face it, for most customers being without a car is a major inconvenience. By providing a rental car or shuttle service, you’re enabling your customers to get back to where they need to be with as little disruption as possible.
  • Accommodating waiting rooms. If customers choose to wait for their cars in your shop, you should try to provide them with a pleasant environment. Free Wi-Fi, clean bathrooms, sufficient seating and free coffee and water should all be standard.  
  • Payment financing options. It’s not uncommon for customers to put off repairs if they can’t afford the cost. In a 2014 survey, AAA found that one in eight Americans couldn’t afford a car repair of $1,000 or more.  Partnering with a financing program will allow you to service these cars and again makes you a more attractive option for service in the eyes of your customers. 
  • Pick-up service. If a car is drivable, but the customer can’t make it in to your shop, consider picking up the car and bringing it in. Going that extra mile will help you stand out from the competition and engender loyalty.   

Market more strategically.

When it comes to marketing, it’s easy to get into the habit of simply throwing a lot of offers out there and seeing what sticks. A better approach is to tie your offers to the services your customers need most. When it comes to attracting new customers, a coupon for an oil change is a great way to get customers in for what is a fairly common maintenance item. Offering a dollar amount off of a service rather than a percentage is also a better option because it gives the customer something more tangible to consider. For retention efforts, make your offers based on what services your customers have purchased in the past as well as for services that might be coming due. For example, if a customer needs an annual inspection to renew his car registration, it would be wise to send a reminder via direct mail with a coupon for the service a few months in advance. With this type of personalized approach, your redemption rate is bound to be much higher.

The other mistake many shop owners make is to market to their existing database rather than the population of potential new customers. You’re going to lose a certain number of customers each year simply due to attrition – some will move, some will buy new cars and some may just switch shops. Keep in mind, that although that customer may appear to represent just one car, you’re actually losing two to three visits a year. For that reason, it’s crucial to focus on new customer acquisition.

And finally, don’t restrict your marketing efforts to digital-only avenues. Technology is wonderful, but there are still some drawbacks to relying solely on email blasts or SEO to promote your shop. Direct mail has better response rates than email, which consumers have come to view as spam. Direct mail also provides the ability to target by income, zip code, household make-up and even vehicle make – these are all important characteristics to factor in when conducting a customer acquisition campaign.

Change is never easy. But sitting idly by and running your business the way you always have is not an effective response to an increasingly challenging environment. Instead, seize the moment and adopt new strategies to better serve your customers and grow your sales. Visit the Mudlick Mail Automotive Learning Center for FREE shop owner resources, tools and how-to videos.

About the Author

Tim Ross | Contributor

Tim Ross is co-founder and president of UpSwell, a provider of direct mail services for the automotive service industry. He has been with UpSwell since 2008.

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