If you aren’t regularly marketing — or only marketing when you realize you’re in need of some business — then you won’t get good quality clients who will help you see long term success, a pair of shop coaches recently observed.
If you get into a state where you will take any customer you can get, it exacerbates underlying issues in your business, explained Kent Bullard, chief operating officer of the Institute for Automotive Business Excellence.
“They’re going to do discount advertising to bring in discount customers who aren’t going to pay any kind of profitable revenue to the business,” he said during the webinar Best Advice for Running a Successful Auto Repair Business. “They’re going to do just an oil change and get on with it. They’re not going to buy into additional services that you need to do as a shop.
Cecil Bullard, chief executive officer of the Institute for Automotive Business Excellence, agreed. He pointed to ‘scarcity thinking’ versus ‘abundance thinking.’ In short, scarcity thinking leads one to believe that there are limited opportunities, options and resources available — so they grab everything they can get. Meanwhile, abundance thinking tells you that there are enough resources and successes for all to share. In the case of auto repair, that means there are better customers out there for you to get, so long as you try to get them.
When in a scarcity mindset, you’re only going to get low-margin work. Your average repair order is going to be low.
“You’re going to do a lot of oil changes where the margins are low. The more coolant flushes you sell — if the car doesn’t need it, we’re not going to sell it — but if it needs it, we should be selling it,” Cecil said during the AutoLeap-hosted webinar. “The more water pumps you do, those have higher margins. Those will bring margin up. So it’s not just about labour rate.”
What he meant by the last point was that simply raising labour rate isn’t the end-all and be-all for solving your business’ financial woes. There has to be a deeper level of work and a deeper level of value provided to the customer. A customer who only comes in for oil changes will not help your business succeed. Rather, one that also gets their water pump replaced — when needed, obviously — in addition to the oil changes and other low-margin work will help your shop’s bottom line.