Increasing Competitiveness in Today’s Marketplace
If you’ve been in the automotive repair industry for any length of time, you know that consolidation is nothing new.
What has changed in this consolidation-rich environment is the rate at which these acquisitions are now occurring, driven in part by new entrants to the industry.
As independent shop owners, it’s important to understand why this consolidation is happening and what impact they have on your business. While some shop owners might see the trends, and view this as a perfect opportunity to cash out, if you’re in it for the long haul, you’ll need to figure out how to continue growing your business in light of the consolidation.
Here are some strategies that should help you better compete in this fast-changing environment.
Evaluate Your Business. There’s no time like the present to really examine your shop and how you stack up to the competition — both large and small. Look at the services and benefits you offer and consider how they compare to other shops in your area. Are you open as long as your competitors? Do you offer the same type of warranties on repairs? Do you offer a shuttle service or free rental cars? Are your discounts on par with what others are providing? If you answered “no” to any of those questions, it’s worth evaluating why.
It may not be possible to offer similar benefits across the board, but it’s worth matching up or exceeding your competitors’ offerings as much as possible. For example, if you can’t afford a shuttle or rental cars, a good alternative is to pay for Lyft or Uber services for customers instead. It’s also wise to consider distinguishing yourself with services that might not be available in your market. If you operate in an area with lots of environmentally-conscious customers, obtaining your “green” certification or specializing in servicing hybrid vehicles might earn you more customers.
Ramp Up Recruitment. The industry’s biggest challenge — for both corporate owners and independents — is finding and keeping skilled technicians. Since your shop’s success depends on having efficient and effective technicians, you need to be recruiting constantly — not just when an opening arises. To attract talented techs, you may need to make some changes. Covering health benefits for technicians is now becoming standard practice. Pay is also a factor and if you can’t compete with the base salaries others are paying, you may want to consider offering profit-sharing or bonuses based on performance.
Paying for outside training can also serve as incentive as can offering a clear path for advancement. It’s also important to stock your shop with up-to-date equipment and tools, so your techs feel like you’re committed to keeping pace with technology and creating an environment where they can continue to learn and succeed.
Deliver An Exceptional Experience. The truth is, consumers expect more from an independent shop than they do a large chain. If they chose you over a larger competitor, it’s because they want more personal service. This is an opportunity for you to deliver something different — particularly with basic maintenance. A company-owned shop may view an oil change as an inconvenience, but you can use this service as way to build a long-term relationship. Make it convenient for the customer by offering to get them in as soon as possible, rather than having them wait in what can seem like a factory-like assembly line.
If they choose to drop off their car, keep them updated on the status of their service. Even vacuuming the car after the service can go a long way in differentiating you from the competition. It’s also important to maintain strong reviews by soliciting feedback from customers after their service and immediately addressing any issues. If you do receive a bad review or complaint either online or through the Better Business Bureau, work quickly to alleviate the situation and document the steps you’ve taken to improve the customer’s experience.
Another good tactic is to host goodwill events — whether that’s a workshop on child safety seat installation or a maintenance clinic for women. Those types of efforts will prove that you’re motivated by more than just money, and are personally invested in your community.
Focus on Retention. Research shows that it costs five times more to acquire a new customer than to keep an existing customer. Wouldn’t you rather spend that money on skilled techs or on improving your customer benefits? The key to any retention effort is followup. Direct mail can be a great tool for customer acquisition. You can send postcards to remind customers about services coming due and seasonal maintenance, and include discounted offers to compel them to action. Combine direct mail with phone calls to customers who deferred services in the past to increase your chances of engaging with a customer and generating a visit. There are good CRM programs available to help you organize that process. No matter how you decide to perform this outreach, it’s imperative to continue communication with the customers already in your database to ensure that they are customers for life.