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Thursday, 23 June 2011 16:12

How to Survive a Summer Slump

Written by Tom Franklin

In my neighborhood, several shops are saying they’re having a “summer slump.” Maybe it’s the economy. Maybe people have gone on vacation ignoring needed repairs. With gas prices sky high people are driving less and having less accidents. Whatever the case, it can come down to less business for the moment. What can a shop owner do to survive this down time?

Perhaps one bright spot is all of this is the fact that with less jobs to do, you may have more time to improve marketing and sales and maybe squeeze more profits out of the jobs you do get. This could be an ideal time to take a closer look at previous estimates (and estimators) to see if revenue and profits were slipping through the cracks. Today we have computer software to go through an estimate to find missed opportunities for revenue, but not every shop uses it, or takes the time to use it even if it’s available. Periodically a wise manager will review a few estimates to see how his or her estimators are doing. A summer slump can be a perfect time to get this done.

When business is slow, less money is coming in. It’s also a good time to look for costs that can be cut without harming the bottom line. Since personnel pay is usually the largest expense at a shop, laying people off is often the first choice in cost cutting, but it may not be the wisest. Cutting back on advertising and marketing during a slow time is not a good idea, but this can be a good time to get more bang for your marketing buck. Today Yellow Page listings and ads are outrageously expensive—unless they’re really bringing in customers. One shop did an inventory of Yellow Page ad responses to see how many calls actually produced business. The largest percentage of calls was from vendors trying to sell the shop some service or product. Hardly any calls produced even an estimate. This is a good place to start cutting costs.

Another area to examine while you have the time is closing ratios. How many estimates are resulting in work orders? Are your estimators capturing every possible job? I recall one shop I visited that often had a potential customer walk through some selected areas of the shop to look at highly precise repair operations like frame measurement and color matching. I was told that a little sales talk on the superiority of the shop’s expertise often convinced the customer that this was the best place to leave the car for repairs. This down time could also be a good time to get a couple of display areas highly polished for customer viewing.

Reviewing prior marketing efforts may also produce some unexpected opportunities. One shop I visit has repaired police vehicles for years, but he says when the sergeant in charge of repairs changes, there is always a danger of that individual having his own favorite repair facility. Losing that repair business could be very costly so he makes it a top priority to get to know a new sergeant immediately. A change in personnel at any key business source can represent either a danger of loss or an opportunity for gain. During this summer slump there may be time to call on some dealerships, commercial prospects or potential government agencies to get to know the person responsible for outsourcing vehicle repairs. It can be a good time to make change your ally.

Another good use of extra time can be checking out your neighborhood for ways to get more visitors to your shop. Schools, churches, health clubs and gyms and other organizations where a substantial number of people come can provide an opportunity to host an event at your shop. One shop offered a teacher at a church school an opportunity to bring her class to the shop for an educational tour to see what collision repair is like. Many shops have a large open space that isn’t used on a Saturday or Sunday afternoon. Offering a space for a bake sale or group meeting can get local people familiar with the shop and its activities. Most people prefer to patronize a familiar business.

Another way to benefit from checking out your neighborhood is noticing what signs are eye-catching. Many business owners are proud of their display efforts and would be willing to share information on what signs and displays have been most effective for bringing in new customers. Although these are reaching customers for a different kind of business, the odds are good that this information may open your eyes to a new way to reach local people. It’s unlikely you would ever try these outreach efforts when business is good, but taking advantage of this time to reach out may help you survive the “summer slump.”

Read 1627 times Last modified on Wednesday, 14 December 2016 21:07