There are many ways you can reach your customers today, and there are people in the industry who have made these connections their specialty.
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Jay Siff started his career as a repair shop owner, and also has experiences the OEM side of the business in a Chevrolet dealership. He has taken his knowledge of shop operations to the rest of the industry in his business Moving Targets. He recently shared with Motor Age his thoughts on the best ways for shops to market. Go to MotorAge.com/JaySiff to hear the interview in its entirety.
MOTOR AGE: Marketing is evolving more rapidly than ever. How have shops had to change their marketing needs in the last couple of years?
SIFF: I think the biggest change I’ve noticed is the shops have fewer dollars to spend. My belief is that most shops set a budget based on a percentage of sales they do, and when they do fewer sales, they wind up having fewer dollars to spend. That’s been a big part of the challenge, is how do they spend their money these days. What I’ve noticed, and it’s probably been about five years of down economy now, the first year or so, year two, even the chains cut back. Everybody was in a cost-cutting mode. The big companies out there, said, ‘We have to save money,’ and they scaled back their marketing, as did the independent repair shops. But after a year or two, what ewe noticed is the big guys said, and they do a very good job of scaling down very quickly to stay profitable, once they did their cost-cutting, they saw that the only way they were going to increase their bottom line or make bigger profits was by increasing their top-line revenue. They had the wherewithal and the dollars to go out and do a lot of enhanced marketing. I think that created a lot of separation than ever before. The small, independent guy didn’t have the money, while the bigger guy started marketing robustly against them. Again, the playing field was tilted more for the big guys and in the last year, maybe a little longer, we’ve noticed all of a sudden new car dealers have settled down after so many of them closed and sales went down and now they’re competing for the aftermarket business. I think in the last several years, the competition has gotten a lot tougher and shops have had less money to spend. On top of that, certainly everybody recognizes there are fewer miles being driven, the cars are more reliable, so there just isn’t as much work out there as there was.
It’s trying to compete in a tougher market with more competition and do it with fewer dollars.
MOTOR AGE: What types of rewards programs should shops be considering in today’s economy that will entice consumers but not break the shop’s bank?
SIFF: I have very mixed emotions on rewards programs. Part of me believes if you do a good job, your customers are going to come back. I think the biggest thing is that they trust you. And if they trust you, then they’re going to come back even if you’re not the lowest price out there or your not giving away something.
In terms of a rewards program, you have to think carefully about it, particularly if you’re going to say spend X number f dollars or have X number of visits and get some sort of a discount. That’s money you’re giving away right off the bottom line. To set up that kind of behavior with your customers, you have to think carefully about. I’m not sure you want to use a rewards program at all. If you do, just be aware of what the discounts are going to cost you, and somehow you’re going to have to make up for that. It’s a shame to make the least money on your best customers.
One thing we notice, there’s a big difference between giving somebody a discount and giving somebody something for free. … Free is something special. The difference between selling something for a penny and giving it away for free is huge. What I might suggest is rather than giving discounts, you give something for free. Spend X amount of dollars, visit X amount of time or get X amount of service and I’ll give you something for nothing. Not only can you do a program like that where you’re not discounting but gifting, you don’t have to necessarily do it with a rewards program. You could just choose to reward your customers at a particular time and take your best customer list and say, here’s a free oil change or state inspection if your state has that and do that selectively periodically. I think it makes a bigger impact with the customer, frankly, because they’re getting something for free, and for you, you’re not just discounting and cutting money off the top.
MOTOR AGE: If shops had to focus on one aspect of marketing, what would be the starting point, or does it vary by shop?
SIFF: I think it varies by shop, but for a starting point in my mind, the first thing I would look at is everyone tends to agree there are three ways you’re going to build your business. You’re going to get new customers, you’re going to get your existing customers to visit more often and you’re going to get them to spend more money on each visit.
The first thing I think a shop should look at is which one of those three legs are they weakest in? Do their customers don’t come to them as often as they should? Maybe they go to a fast lube when they need an oil change and not visit the shop, so they’re not visiting, and they can compare that with national averages.
Similarly, they could look at how much their customers are spending with them each visit and compare that with the national averages to work on that. Then they can look at their attrition. Shops typically lose 20 to 30 percent fo their customers a year, and it could be through no fault of their own. People move, people pass away, people buy new vehicles. To me, the first thing would be where do I seem most deficient, and that would be the place I would say you should start to address first.
MOTOR AGE: What are some focuses or initiatives going on at Moving Targets now?
SIFF: The biggest one would be our entrance into the social media world. A couple of years ago I was at the ATI Super Conference…saw a presentation on social media, the speakers when they were done said how many of you guys, and there had to be a couple hundred people in the room, how many of you folks think you should be involved in social media, and every hand in the room went up. Then they said, how many of you are using social media, and three hands went up. A light bulb went off, and I said here’s a potential opportunity for us, because we’re a company based on we do it for you. I used to be a shop owner, I was a Chevrolet dealer before I started this business, so I understand that world. I recognize that people don’t have the time or expertise to do it themselves. I came back and met with some of our younger team members, because frankly social media is not second nature to me, and we thought we could put a program together where we handle social media for shops. We tested it with some existing customers for about a year, and then about a year and a half ago, we launched it. We’re now mananging social media for hundreds of businesses. We take a little bit of a different approach than everybody else, in that we believe social media is social. People want to talk to you, not always about reviews or technical stuff, but fun things. What’s going on in your town, in your business, in your neighborhood. We help shops engage their customers. We’re still doing the same traditional direct mail programs we’ve done, and email and text messaging, but the big new thing really is helping shops in the world of social media.
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