GROW OR DIE NOW!
This is my 6th recession as a business owner. The first 5 were relatively short and simple. This one isn’t — for most businesses. Now I admit in the early part of my career I was lucky to make it through those tough times. But as I applied lessons learned I began to focus on what I could control and not allow paralyzing fear to set in.
Hesitation
It is true that when we are not sure what to do, we tend to hesitate or do nothing like a deer in the headlights. While this is and will be the main cause of many shop failures this year, it’s not the whole story. A large number of shop owners will hesitate to do what they need to do until they are desperate…and then will make bad decisions driven by fear or ego. If you have or are experiencing this, you’re not the Lone Ranger! I have done it dozens of times over the years, if I’ve done it once.
How do you get out of this deadly cycle? How do you survive and even thrive in this economy? One thing is for certain — you cannot compete on price with the big chains and discounters out there and survive this year! You can’t control what they do on price so quit focusing on it!
You’re THE Best…But No One Knows It!
As an independent shop owner you have an ability that no one out there has – you can take care of your customer and build trust in ways the dealers and chains only dream about! Every CSI (customer service index) I have ever seen shows that the average indie beats the very best dealers and chains – hands down!
However, we have a problem – NO ONE KNOWS IT!! WHY? Because we don’t know how to advertise or how to brand our greatest asset! You shop owners who mess around with deeply discounted offers and gimmicks, or the rest of you who never discount but do a poor job in your value proposition (like in the ads listing every service known to man but which don’t address what’s in it for the customer)…you will continue to suffer throughout this recession if you survive that long!
On the other hand, if you want to learn from my mistakes and successes, listen up!
My Mistakes
In the 70s, 80s and early 90s I had two small shops (a 3-bay and a 6-bay) in great locations on high traffic streets. I didn’t understand advertising — I had never done any except a small yellow page ad and a neighborhood discount card. (Like I said, I did not understand advertising!) Our good work, reputation and referrals drove the business.
Then in 1994 I consolidated my operations into one 11-bay shop. But, there was a big difference, and I was about to learn the hard way. The new location was on a low traffic street. I knew I needed to step up my advertising so I bought into everything that offered an exclusive for a repair shop in my neighborhood. The problem — it was all discount type stuff. After a few months of this we were in a serious negative cash flow. I didn’t understand exactly why because my car count was sky-rocketing. I knew I needed to do something different but hesitated because I wasn’t sure what to do.
Then, over the course of the next 2-3 years we hired and fired THREE ad agencies. I found it was just more of the same — lots of no-value customers driven in by fancy new methods and gimmicks but no improvement to my bottom line.
The Turn Around
In 1997 we hired David Rogers as a service advisor. Within a year or so he was running the shop. I trusted him because of his results and consistency even though his methods were different than what I was used to. In 1998 he came to me and suggested we let our current ad agency go and that he wanted a shot at managing our advertising. Up to that point he had done everything for the shop that he had committed to do. His understanding of people – especially our employees and customers — was amazing! I had confidence he would find a way to make a connection with the high value customers we wanted out there in our community so I turned him loose!
Today, I don’t mind telling you that this was one of the most brilliant decisions of my life! Over the next 3 years he cut my car count (and no-value customers) in half and increased sales from just over $1 million per year to $3.5 million! Profits were unbelievable and so was the morale of the crew. And the quality and value of our customers increased every year since then.
Something To Learn
Now, am I just bragging or is there something to learn from the time you spent reading this today? I can tell you that every shop owner who has asked David to help them with their marketing — and who has followed his advice on how to deliver what the advertising promises — has seen significant improvement in bringing in the right customers who are ready to buy.
Why did I have the confidence to go this direction? Because David had proven himself and his methods. Why did I increase my ad budget in the face of a recession by 50% in March of 2008? Because this advertising program has been proven in my own shop over many years, and in dozens and dozens of our clients’ shops.
Many of us independents are in THE BEST position of our business careers to take our shops to the next level and most of us don’t even know it! Let me illustrate. How hard is it to take away a good, loyal customer from another shop? Very difficult indeed. But, if we are branding properly on a regular basis, where will that customer go if his shop or dealership closes down (as thousands will this year)?
It is a proven fact that those companies who advertise during a recession have the greatest growth during and after that recession. And those who don’t advertise or don’t do it in the right way will be left fighting for the table scraps or will starve to death!
Now for the good news: those same marketing pieces that I’m using in my shop are available to you. Leave a comment below or drop me a line if you’ve got any questions about how they work or why they work. I’m happy to help!