Building business growth and survival in 2012 and beyond
I have spent a lot of time recently working with collision shops and industry groups on collision shop profitability and survival in 2012. Several key concepts keep finding their way to the top in every market, with every group. Times are tighter, and competition for every collision dollar continues to put pressure on the bottom line. How do we succeed and grow in the face of all the challenges that our industry faces?
I am going to highlight a few things that appear to be consistent across all shop sizes and locations. First, you need to own your customer: remember that experts say that one individual has influence over 4.2 cars owned by family, friends and co-workers. In addition, the latest industry numbers show that 87 percent of repairs come from repeat business or a referral. Considering this information, when was the last time you asked for a referral, marketed to your customer database or reached out to your customers' friends and family?
With collision repair numbers in the United States starting to rebound, and reported accidents up for the first time since 2008, the average repair order amount is moving up slightly after several years of small declines. Yes, people are driving a few less average miles due to the economy and fuel prices, but we do have more people driving. Will this be enough to reverse earlier negative trends?
I have been writing about using the estimating process as a closing tool while also building a profitable gross profit margin into the repair plan. I believe the two tasks are not on opposite ends of the same spectrum. To get your customer's car keys and land a repair job, you need to build value for both your personal "brand" and your organization as a whole. Simply put, you need to convince the customer that you are their best choice to care for them and their car.