(Photo: Kevin Rose, Rose Studios)
Dismissing the practice of up-selling, these shop owners say they’re able to thrive because they concentrate on offering reputable service and clean, comfortable facilities aimed at encouraging repeat customers who, in turn, make positive referrals to friends and families.
Referrals appear to be a driving force throughout the Atlanta battleground. Several shop owners marvel at how this below-the-radar strategy gleans a better response than phone book listings or direct mail campaigns. This tactic is further enhanced through Internet sites touting customer commentaries: Make a referral and you get a free oil change, discount coupon or similar perk.
Neighbor talking to neighbor “This garage has been here since 1954, and all our customers are word-of-mouth,” says Buddy Boutelle, a mechan-ic – not a technician – at the three-bay Ed’s Auto Service over on Franklin Street in Avondale Estates. The company does no advertising.Covering more than 8,000 square miles, Atlanta’s 28-county Core Based Statistical Area (CBSA) experienced a 10 percent population increase from 2000 to 2004. The growth is projected to continue at an 11.6 percent clip through 2009, according to census bureau estimates. According to a market analysis by R.L. Polk & Co., 52.9 percent of the CBSA’s motorists are do-it-for-me (DIFM) customers; 8.1 percent fall into the do-it-yourself (DIY) category. Nearly 40 percent are “tweeners,” those who choose DIFM or DIY repairs based on circumstance. The national DIFM vs. DIY ratio is 42 percent to 32 percent.
(Graphic: R.L. Polk & Co.)
“It’s just neighbor talking to neighbor,” Boutelle explains. “We run it like an old-timey garage. If you live in the neighborhood and you have a flat tire, we’ll come over, jack it up and fix it.”
Located in DeKalb County, Avondale’s population is 5,382. Future growth appears to be static, but residents enjoy a median household income of $70,625, compared to the nationwide $44,684.
Polk’s DIFM ranking for the community is 65.4 percent; DIYers account for just 3.8 percent. Two shops have closed over the past few years, but Boutelle says they made a profitable exit from the scene.
“Developers wanted the land, and opportunity only knocks one time,” he observes. “They recommended that all their customers come to us.”
Ed’s did have to make a few adjustments, however, to adequately serve the influx. “The new people coming in here couldn’t believe that we didn’t take credit cards,” Boutelle recounts, noting that this option was eventually implemented two years ago.
“We used to be out in the country, but not anymore,” he says, referring to the development that has enveloped this historic community.
The new [residents]are going to dealerships. A lot of people have new cars,
and they think they have to go to the dealer to get the maintenance done. The dealers have made them think that.
— Sharon Caudell, owner, Five Forks Automotive
From 1980 to 2005 the number of housing units in Alpharetta rose by more than 1,000 percent, with continued expansion expected through 2025. The median household income is $71,207. Roswell’s demographics are similar; both communities have Polk DIFM rankings approaching 65 percent and miniscule DIY percentages.
Hughes says new customers frequently sample the company’s quick lube services prior to purchasing other repairs. The complex features a comfortable waiting room with WiFi capability. An inviting gazebo presents a more-relaxed setting reminiscent of the genteel Old South.
“We treat them like family, and they know they’re going to be treated fairly,” says Hughes. “We’ve been here 24 years.”
A rewards program pushes customer referrals with a free oil change; first-timers receive the same offer. The staff also provides rides to a customer’s workplace. Pricing is set at about 20 percent below what the local car dealers charge.
“Anything a dealer can do, we can do here. But we try to give them quicker service,” says Hughes, who encourages others to take advantage of the many technological and educational opportunities that are available. “You have to keep up with the training and equipment or you’ll get left behind,” he cautions.
(Photo: Five Forks Automotive)
Adopting electronic ordering has proven to be an especially wise move. “The accuracy is much better,” says Hughes. “Most of the time if we get a wrong part, it’s because we ordered it incorrectly.”
The whole nine yards Being nimble enough to adjust to your local marketplace can be critical, according to Robert Brantley, owner of Mount Zion Automotive in Carrolton. “In the automotive business you have to be versatile,” he says.Metropolitan Atlanta’s western boundary continues to expand as farmland gives way to development. “A long time ago there was nothing out here; now we’re on the Carroll Corridor. They’re building 286 houses right nearby and 540 houses down the road,” Brantley reports. “We knew they were coming out here, so the investment has paid off.”
With five technicians manning 13 bays, Mount Zion has built-up a positive reputation for integrity and mechanical competence over the past 17 years at this location. The shop’s customers include fleet accounts with all types of vehicles, including school buses and garbage trucks. “We’ll even fix your farm tractor,” says Brantley.
Carrollton’s several ZIP codes post both the highest Polk DIFM rate (87 percent) along with a near-high DIY ranking exceeding 27 percent. Median household income is on the low side at $27,559; it is expected to rise with the influx of new residents.
From 2000 to 2004, the population of Cobb County’s county seat, Marietta, grew 7.5 percent. Residents in the neighborhood surrounding Alan Cox Automotive have a median household income of $82,549 and a Polk DIFM figure approaching 50 percent. DIYers account for just 3.4 percent of the population.
Sherry Richardson, Cox’s owner, enlisted a professional Web page designer to construct a highly informative Internet site that lists a multitude of customer services and testimonials from satisfied clients.
(Photos: Alan Cox Automotive)
“There are a lot of good automobile repair businesses in the Atlanta area,” she says, citing a need to make her 12-bay shop stand out amid a number of consumer choices.
“”We’ve been doing some marketing, and we have new customers coming in,” Richardson notes. A recent direct mail campaign has generated a good response; the shop’s Internet site, www.alancoxautomotive.com, is proving to be a useful tool for driving repeat business by providing convenience for its large existing customer base.
Tough times Of course, with more than 400 auto repair centers listed in the phone directory, this marketplace has more than a few enterprises that are no longer in business.“A large number of them have closed up,” says Sharon Caudell, owner of Five Forks Automotive in Lilburn. “This business went down like a rock after 9/11, and it hasn’t come back.”
In the past, Five Forks had annual revenues of $650,000 to $700,000 with five technicians on the job. Last year the 12-bay business – which was forced by economics to reduce its staffing level to just two technicians – brought in $325,000. A third technician was recently hired, but Caudell remains concerned.
“This area is very affluent,” she explains, “but we don’t get a lot of drop-in business here.” About 87 percent of the clientele is either repeat customers or direct referrals.
A mass-mailing of 1,500 letters last October offering a 10 percent discount resulted in Five Forks getting “slammed” with customers, but the shop had difficulty getting the work done and covering the expenses.
Chain stores and dealerships are posting prices “that I can’t even touch” based on their ability to buy in volume. A nearby quick lube was selling transmission flushes for $99; Caudell’s cost for the same amount of fluid is $65 before a single dime of overhead is paid. “I can’t compete with an operation that buys fluid like that.”
Lilburn has seen its population rise an eye-popping 18.7 percent since 2000. The Five Forks neighborhood in Gwinnett County has a median household income of $65,717 with a Polk DIFM percentage of 46.9 percent.
“The new [residents] are going to dealerships. A lot of people have new cars, and they think they have to go to the dealer to get the maintenance done. The dealers have made them think that,” says Caudell. “We started doing diesel repairs in the last year. I thought that we would the ticket, but it hasn’t turned out like I thought it would.”
A gold mine However, it’s a different story just three-and-a-half miles away.“For us, business is booming,” says Karl Jaeger, owner of the Killian Hill Service Center. “When I bought this in ’01, we were sitting in the middle of 400 to 500 acres, and now it’s being developed. We’re drawing 15 new customers a week plus all the repeat referrals.”
He jokingly balks at revealing “the golden secret” behind his success. But the key to his strategy consists of “being totally honest with your customers and not selling them anything they don’t need. If I’m out with my family, I’m going to see people who come into my shop, and I want to be able to look them in the eye.”
A native of northeastern Ohio, Jaeger worked 14 years as a technician in the Atlanta area. In 2001, he bought the Killian’s location; the four-bay facility “fit what I needed.”
At that time, the operation’s annual sales hovered at $100,000, and Jaeger went to work building the business. He started out trying to beat all the other shops on price, but it all changed with the realization that “I’m worth more than that.” Quality and customer service became the new mode of operation.
Check It OutR. L. Polk & Co.(800) Go-4-Polk
www.polk.comMetro Atlanta Chamber of Commerce
(404) 880-9000
www.metroatlantachamber.comGeorgia Entrepreneur & Small Business Coordinating Network
(404) 962-4000
www.georgia.orgAtlanta Convention & Visitors Bureau
(404) 521-6600
www.atlanta.net/ACVBSperling’s BestPlaces
www.bestplaces.netE-Podunk
www.epodunk.com
“I want people who want to spend money. We’re more expensive than the chains and probably the dealers,” explains Jaeger.
Jaeger credits a series of automotive business courses he has taken. He also takes great stock in his ability to socially relate to each of the customers: “You don’t have to be a technician to own a car repair business, but you do have to be a people person.”
Jaeger had previously tried mass mailings of coupons and advertisements in the local newspaper with limited success. “I pour a lot of effort into referral advertising,” he says, referring to a strong presence on the consumer testimonial Internet site at www.kudzu.com.
Another turning point came two-and-a-half years ago when Jaeger hired Joe Otto to be Killian’s service advisor. Prior to coming on board, Otto had no auto experience.
“I saw that attitude from day one,” says Jaeger, citing Otto’s ability to relate to people. “There’s no ‘smoke and mirrors.’ He’s a real person. He doesn’t sell you things you don’t need – it is what it is.”
If an especially vexing mechanical problem comes up when dealing with a customer, a technician or Jaeger is summoned to explain the situation.
“I’ve pretty much been pushed to the side,” Jaeger reports with mock irritation. “People come in here all the time and ask for my service writer – and it doesn’t bother me a bit.”
About the Author
James Guyette
James E. Guyette is a long-time contributing editor to Aftermarket Business World, ABRN and Motor Age magazines.