Nevertheless, periodically it’s necessary to re-evaluate any system or procedure that’s been used for a long time. I, for example, tend to invest in dividend-bearing securities that I can count on generating consistent income for the long haul. But from time-to-time I have to weed out the poor producers and replace them with better producers or perhaps just purchase more of the good producers. An astute shop owner or manager should do the same thing with marketing procedures.
Sadly many shops fail to accurately track the effectiveness of promotional ads, mailings, e-mails, website hits and events. At one time this was understandable. We didn’t have tools like hit counters or e-mails received reports or 800 number calls. But even tools like these don’t really tell us whether any of these promotional responses turned into real jobs. Our only reliable statistic is the customer’s report about what sent him or her to the shop. Without those numbers the shop owner or manager has no real idea what marketing actions to drop and which ones to double up, to refine or replace.
Even with customers’ information about who sent them, it’s still not always possible to know how to reinforce the sources that sent business to the shop. Some insurance company referrals will specify the customer’s agent but sometimes the agent is many miles away so that it’s not practical to market to thse remote agents. If most of the jobs come to the shop referred by one insurance company, how secure is it to bet the survival of the shop on one source that could cripple the shop if it stops sending work? One again, the investment metaphor applies. How secure is it to put most of your investment money into purchasing or holding just one stock, bond or other security? It’s well known that a certain amount of diversity is necessary to protect oneself against possible market turndowns.
Another factor that must be considered in a re-evaluaton is the cost of each marketing action. Some promotional actions are hard to track but cost so little it may be worth keeping them in motion. But if a marketing move is costly, it’s definitely worthwhile to take a close look at how much profit that action is creating. One shop owner I knew well kept a DRP with a low-profit, cut-rate insurance company that he knew barely made him a profit on each job. But when he was able to get a contract with a much better paying DRP, he dropped the other one like a rock!
I’ve found that some shop owners don’t really know the true cost of referral arrangements with insurance companies, dealerships and other referral sources. If the labor and parts discount is calculated per job, and give-aways factored in, like lot damage, totals storage and more, the real costs of some of those relationships may be much more than they seem to be at a glance. Like the automatic production procedure, a shop owner may have gotten so comfortable with a relationship, he or she may not realize it’s time to re-evaluate that relationship and perhaps consider looking for a new one -- or re-negotiating the profitability of that long-term situation.
Finally, our world has changed significantly with the proliferation of smart phones and tablets. New apps for these pop up daily now, and there is an expectation that every business can provide instant electronic information. Printed paper phone books and many publications are now rarely read or used. Resources spent in this direction may be totally wasted. While it can be costly to seek out a good provider for social media promotion and possibly even a smart phone app, it would be wise to face up to that cost now or be left behind in the dust. And even this marketing effort and cost might not be necessary if a shop’s primary customer base is unlikely to seek out or respond to this electronic kind of marketing.
The location, age, environment and occupations of a shop’s customers could be such that the shop could get away with another year of limited state-of-the-art electronic marketing. But the young people becoming adults today are totally conversant with smart phones, social media and more. If a shop plans to be in business past this year, there’s no getting aweay from the need to embrace these new technologies and put the marketing dollars in that direction.