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Thursday, 25 October 2012 17:38

The New Co-Op Marketing

Written by Tom Franklin

In the early ‘90s, the term “Piggy-back marketing” meant that the trial of a new product on the market was linked to another product that already had wide acceptance in the marketplace. The intent was that this weaker new product would be “piggy-backed” on the strength of the “carrier” product. Soon the practice was expanded so that many products were “piggy-backed” on products already being used. You see this all the time when you receive a credit card bill or gasoline credit card bill and find offers inside to buy a wide range of products. You know this must be a successful strategy because it has continued on so long.

The question is how can a fixed service like collision repair, use “piggy-backing” to increase sales and business volume? Marketing guru Jay Abraham, in his great book Getting Everything You Can Out of All You’ve Got, calls this a “host-beneficiary” relationship. Greatly simplified, it’s sort of a co-operative marketing plan whereby two (or more) companies that are non-competitive but possibly complement one another’s products or services, can either bring customers and sales to one another’s businesses, or bring some other value.

Collision repair facilities engage in this kind of relationship all the time, but probably don’t think of it in those terms. DRP relationships are the best example. Insurance companies send customers to the shop. The value they receive in return mainly consists of lower labor and parts and materials costs. Dealership relationships and fleet management company relationships operate similarly. Some shops also have a more direct exchange relationship with a towing firm, pin-striping and graphics service, car rental company, transmission repair shop, personal liability attorney or car wash.

As valuable as these relationships may be, often a few major shops have most of the best relationships in an area locked up so that many other shops are out looking for business the hard way. For them, it may be time to engage in some creative thinking about other possible “piggy-back” or co-operative arrangements. Even though the SEMA Show in Las Vegas is becoming a major gathering place for collision repair professionals, few shops have yet to take advantage of the vast accessory marketplace. Dealerships, of course, have entire accessory showrooms and enjoy a substantial profit flow from accessory sales. But few shops can afford to invest in a similar showroom, and only a few push for add-on accessory sales. An obvious “piggy-back” relationship would be with one or more accessory stores in the area. But less obvious are other retail establishments that offer audio-video products or cosmetic elements that car owners should find attractive. Some printers now offer wraps for cars. Since vision is important for safe driving, an optometrist might be interested in a co-op referral arrangement.

A common arrangement is cash for referrals—especially with a towing company or new and used car dealership. But this is mainly a one-way street and can be very expensive. The ideal co-op arrangement is one where the shop also refers business to its co-operative partner. The easiest way to do this is through promotional programs. Obviously website links and other web-based connections are easy to arrange, but if a shop also sends out a newsletter or sends summaries of completed work with enclosures there is an opportunity to refer many other kinds of businesses, much as your credit card companies do. If a referring business also has on-line and/or mail promotions, the arrangement would have your shop information (or even literature) included with theirs.

Mailing a summary of completed work after a vehicle has been delivered is a very inexpensive way to establish a longer-term relationship with customers. If a vehicle owner resells or trades-in the vehicle, having a summary of work done on the vehicle  may help keep the purchase price higher. Along with sending the summary, a promotional offer for a discounted detail or cosmetic improvement should be included, plus perhaps a specified discount for a friend, family member or business associate in need of vehicle body repair. For a shop with deeper pockets, sending a before and after photo along with the summary would be appreciated.

A more in-depth approach to the co-op referral partnership can extend to events, educational seminars or workshops and more. Driving schools would be a good candidate for this. New drivers are brought to the shop for a walk-through to see the damage that may have been done to vehicles because of careless or reckless driving. And if the driving school has a weekly or monthly group presentation, the shop should always have someone there to answer questions. Many shops now do exchange events with insurance agents and auto dealerships, but this should only be a beginning. The possibilities of piggybacking on the success of other businesses and entering into cooperative promotional schemes will only be limited by the imagination and ingenuity of a shop owner or manager.

 

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