Batenhorst on Navigating Industry Downturns: Strategic Planning for Shops

Winston Churchill famously said, "Mountaintops inspire leaders, but valleys mature them.” As an industry, we rode the wave of post-COVID evolution, including never-before-seen used car price appreciation and two to three months of backlog work, which for many shops triggered a hiring spree. For most of us, including my shop, that wave has receded. And what’s left are empty parking spaces and technicians hungry for cars to fix.  

No one thought too much about marketing back then, as we were fat and happy with work. Bad habits crept into shops silently and steadily. Repair planning inaccuracies, rework, self-inflicted delays, etc. all were overlooked as another job could be pulled in without worry. Fast forward to today, and I don’t see many managers and owners boasting about record high sales on LinkedIn anymore, and instead I see shops reacting to the downturn instead of being proactively ready for it.

New behavior has now emerged. On my dealer row in Glendale, shops have scrambled to outbid each other to scoop up sponsorships and certifications. Many of these shops take advantage of OEMs, completing only one in-person audit per year to get certified and stay certified. Are their facilities and work product really at the level OEMs require? Many would argue that no they are not, but for that one day they were audited, they were good enough to pass. Insurers are trimming low-performing shops out of their DRP networks and not adding many on, as claims count is still too low. Shops are fighting for SEO space in the auction insights by outbidding competitors for their own search terms, just so their name populates in the search results when their competitor is searched by a consumer. In the past few months, I have even found shops in the Los Angeles market lying about being certified, illegally using manufacturer logos, and creating clickbait content on Instagram and TikTok to attempt to lure customers into their businesses.  

Subversive behavior like this doesn’t work as a long-term strategy, and I’ve already seen shops going up for sale because they did not have a sound vision/business plan. Creating a strategic plan for your shop for the next 12 months, along with the next 3-5 years, may seem daunting and unfamiliar but can certainly help you ensure a stable flow of work. Many of my cohorts in our industry have ridden through this downturn and fared far better than most, courtesy of the effort they put into guiding their business through this rough patch. Whether you make your plan with your leadership team or hire a leadership coach to assist with this, the investment is well worth your time.  

The warm comfort of good sales does not create the conditions to prepare you for the challenges of market changes that you cannot control. I have learned more through my many years of mistakes and struggle than I did with my one-to-two times-a-year record sales month. Take those moments as an opportunity to improve, strategize, and most importantly ensure you keep track of your progress and adjust accordingly. There is no silver bullet to success; it’s all hard work and dedication even in the face of failure.