Tuesday, 31 January 2006 17:00

Increasing business by building on shop style

Written by Tom Franklin
Over the past dozen years or so, I've been in every imaginable style of shop. It's been surprising to me to see how many different ways shop owners and managers find to build their business and keep growing.
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Along the way, however, I've noticed that many of these owners and managers have become dissatisfied with their business base when they see another shop doing somewhat better with a different approach to the business. The guy who has a thriving fleet and commercial business sees a competitor doing better with DRP business and wants to jump into that specialty, as well. Another guy with several DRPs has experienced the unpredictability and precariousness of DRP programs and thinks he might do better and be more secure with fleet and commercial business.

It seems that few people are ever satisfied with what they have. Perhaps it's just the American way, but this "grass is greener on the other side" viewpoint often prevents shop owners and managers from taking full advantage of the specialty they do have. For every style and specialty, there may be a wealth of untapped potential business just waiting to be explored.

The cheapest job/discounter specialty

This type of shop may only exist in large cities where there's a big enough market to do a volume of low-cost business, but I have seen numerous shops surviving for many years on this type of business. The problem arises when the shop owner tires of doing cheap jobs for bottom-of-the-barrel prices, and decides he wants to become a DRP shop, or an authorized shop for a dealer. Regardless of which specialty a shop pursues, the number of years the owner has worked at it makes a huge difference. To now expect to jump into a new specialty without a comparable growth period is usually wishful thinking. A better choice would be expanding that low-end market to the max.

One example could be going after the student market. Young drivers, still in school, are unlikely to have big bucks for repairs. Ads in school papers are inexpensive, and many colleges and schools have bulletin boards where free ads can be posted. Public employees could be another market where discount pricing would be effective. Again, there are often public employee publications with reasonable ad rates. Every market has more depth to be explored - even this low-end market.

The family repeat business specialty

I'm often surprised at how many shops survive with no insurance, fleet, dealership, or other mass volume referral base at all. They survive strictly on repeat business and word-of-mouth referrals from prior customers. I'm often asked by owners of these shops how they might get volume referrals.

Actually, many of these shops might be successful in pursuing insurance, fleet, dealership, or referral sources. Their shops are usually attractive, well maintained, and have a wealth of customer satisfaction comments to pass along. The problem, once again, is encountering a long period of gradual progress to establish the necessary contacts and communications. A more immediate source of growth could be fully exploiting their existing specialty. I've found that most shops that rely almost exclusively on word-of-mouth referrals do very little to expand that resource and to press for additional referrals.

I've written extensively in the past about tapping more deeply into each customer's personal and business web of connections. Contact me for reprints of prior articles on how to expand this valuable source of added business.

The insurance direct repair specialty

Many shops now rely on a DRP relationship or drive-in status with one or more insurance companies. Shops that have this reliable source of business often do very well, but even these shops experience ups and downs in the volume of business referred. I've found many of these shops do little to exploit their relationship to the max. Any insurance company that uses agents or brokers to sell and service clients, provides an open path for a direct repair shop to stimulate an increased flow of business into the shop.

Monthly contact with the agents and brokers is a must, whether by live calls, a newsletter or just a postcard. Also, by asking every customer the name and number of his or her agent, it becomes possible to inform the agent of clients that have come to the shop for repairs. This simple procedure can greatly increase the volume of business coming from that insurance company's policy holders. Every couple of months, the shop owner should do an internet search to identify new agents and brokers to add to that contact database.

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The fleet & commercial business specialty

Shops doing a large volume of fleet and commercial business may have the best opportunity of all. They are generally free of the kind of nit-picking that goes with insurance business. Institutional and commercial accounts can be billed monthly and are generally paid consistently, if sometimes a bit late (like local government accounts).

Many shops that have this specialty also have a more extensive mechanical shop to do oil-changes, tune-ups, timing belts and other minor maintenance procedures. This opens the door to regular reminder mailings.

The problem of expanding this kind of business is it generally requires going out and calling on new prospects and selling them on switching to your shop. Many shop owners don't have the time and can't afford to put someone on the street to sell. Telemarketing calls are one possible alternative. At the very least, a promotional effort should include getting letters of appreciation from existing fleet customers, plus photos of completed fleet vehicles to send out. After the first live contact has been made, follow-up letters, calls or postcards monthly may eventually capture the business.

The dealership specialty

Shops that focus on being (or becoming) the authorized repair facility for one or more dealerships have an important edge at this time. With more and more hybrid vehicles on the road, plus vehicles calling for new frame, paint and welding technologies, the shops that focus on getting these new certifications can have a definite advantage. I've seen shops that get their technicians highly certified take business away from long established "authorized" shops.

I've also noted that those owners or managers of "authorized repair facilities" who establish an estimating desk, system, and estimator at the dealership, get far more autobody damage repair out of that dealership.

Community or political involvement

Some shop owners are born politicians. They feel comfortable wining and dining local bigwigs and often pick up city and county vehicle business as a result. Some even participate in state and national autobody organizations, like CIC or the local state Autobody Association.

This approach isn't for everyone, but even the owner of a small shop can get involved in some local community activities. Teen-age driver safety is a major concern nearly everywhere. Cooperative projects with local schools or driving schools can familiarize young drivers with your shop at an early age. Once a solid relationship has been built, those drivers are likely to choose your shop simply out of familiarity.

Expanding into new specialties

It's just human nature to want to explore new territory, but I believe most shop owners would be better off getting the most out of their existing specialty before jumping into unfamiliar territory. And when they do jump, it may be wise to stay as close as possible to those specialties that have paid the bills and provided so well for the present level of growth.

Tom Franklin has been a sales and marketing representative and consultant for forty years and is the author of the books, "Business Battlefield Marketing for Body Shops," "Tom Franklin's Top 40 Marketing Tactics for Body Shops," and "Strategies for Greater Body Shop Growth." His marketing company now provides marketing solutions and services for body shops and other businesses. He can be reached for questions or comments at (323) 871-6862, by fax at (323) 465-2228, or by E-Mail: tbfranklin@aol.com.

 

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