In 1993, marketing authors Al Ries and Jack Trout came out with a book entitled, “The 22 Immutable Laws of Marketing.” Number one in their book is “The Law of Leadership —It’s better to be first than it is to be better.” They note that Bert Hinkler was the second person to fly the Atlantic solo. He did it faster than Charles Lindbergh, consumed less fuel and did it more efficiently, but only Lindbergh did it first and got the fame.
In collision repair, there have been many firsts. Those shops that offered waterborne paint first got the jump on the later “me too” crowd. Now there is a new opportunity to be first. In my area, there are only a couple of shops offering “Cosmetic Car Upgrades,” but I predict after more shop owners take a close look at SEMA, they will all jump on this highly profitable bandwagon.
Learn From the Dealerships
As the profit per car sold has gradually decreased, new car dealers have had to get very creative in the ways they can make a profit.
Most dealerships have a merchandise store where they sell every imaginable accessory and restyling product. How profitable are these stores?
I attended SEMA for the first time in 2004. I read that in 2003, sales of specialty parts rose to a record $29 billion! From 2002 to 2003, the sale of vehicle body accessories increased a billion dollars, from $7.3 billion, to $8.3 billion. Audio and entertainment component sales increased from $3.4 billion to $3.8 billion. Even wash and wax product sales increased by $200 million.
Performance tires, custom wheels and suspension and steering enhancement sales increased by nearly a billion dollars, from $6.5 to $7.2 billion. We’re not just talking millions, here. We’re talking about BILLIONS! This is serious money! Retail sales of these products increased more than twice as fast as the general economy.
Much of the growth came from sales of parts and accessories for sport compact cars, but there was also an explosion in the sale of everything from ten dollar vinyl flame decals to $3000 turbochargers.
Younger buyers are looking for flashy items like custom seat covers, but also performance upgrades. Not every shop owner wants to get involved in engine work, but young buyers are looking for nitrous oxide injection systems and performance exhaust systems to dramatically boost the horsepower of their small car engines.
Nevertheless collision shops can easily offer custom wheels and tires to add uniqueness. Window tinting is big, along with chrome running boards. If the only time people are coming to a body shop is when they have an accident, the shop owner is missing out a very big piece of potential business.
Change May Be Hard
What percentage of this revenue could a shop owner capture with a bit of creative marketing? And more importantly, what would it do for his or her collision repair business to get these vehicle-savvy, eager buyers visiting the shop?
I’ve found shop owners reluctant to make this change in identity. They’ve relied on auto body repair and refinishing jobs as their only business for so many years, it’s difficult to start thinking in a new direction. But it’s becoming more and more necessary to do so.
Entering the merchandise marketing arena can be scary for a shop owner who’s never had to compete in that area. Real advertising, distributing coupons, and possibly even setting up shop at local swap meets would be an entirely new set of tasks for a shop owner. The upside of the activity would be hundreds—and possibly thousands—of new prospects informed of the existence of his or her business. And bigger profits too!
Our culture has become more and more a car culture. People spend an enormous amount of time in their vehicles. With cell phones, stereo systems, laptop computers and wireless devices they can operate in the car, today’s drivers have mobile offices and recreation rooms they can take on the road. And this doesn’t even take into account entertainment systems for kids.
This opens up a market for an endless array of products that could be sold at a body shop just as easily as at a dealership or any other location.
The shop owner who wants to continue to be profitable well into this new century will have to broaden his or her horizons. Bite the bullet. Put in an accessory and restyling counter. Train your desk people to learn the famous waiter and waitress line: “And do we have room for some dessert?”
They need to start asking every customer, “Is there some accessory we can sell you to enhance the power or beauty of your car?” There are billions being made by sellers of these products. Why not be one of them?