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Coupons vs Value Based Auto Repair Marketing

Saturday, February 11, 2012

You can't deny the popularity of auto repair discount coupons but do they attract the customers you want?

Most auto repair shop marketing uses price discounting to attract new customers. I call this lazy (or desperate) auto repair marketing. Most shop owners are hooked on it and don't know what else to do.

To move beyond price based auto repair marketing shop owners will need to change their whole concept of automotive shop marketing. Auto shop owners must think beyond discount based marketing so they can maintain margins and attract a better quality of customer.

Discounting – A Race To The Bottom

Auto repair marketing downward spiral1Competing on price alone is a slippery slope to business failure. Discounting auto repair prices only attracts price driven, disloyal customers which lead to lower profit levels that can't sustain a healthy company.

You will always have a competitor who will sell services or products for less. If you join this no-win game you will end up in a race to the bottom. So how should auto repair shops market their services to retain profit margins? Base your auto repair marketing on value - not price.

Stop Price Comparison

Marketing of auto repair services should instead use “packaged” services that focus on increasing the “value” that people see in the “total” package. Instead of using a lower price as the carrot use added value to catch people's attention. Change the focus from the “price” of your offer to the “value” gained.

The key to maintaining auto repair shop profitability is auto repair marketing that can not be directly compared on price. You need to get away from using copy-cat specials that shoppers can directly compare on price.

Rather than competing with everyone else in town for the cheapest oil change, charge a higher price for a package deal that includes an oil change combined with another service or two that most people would want. Make your oil change “package” unique so that people can't straight across price compare. Make your "special" YOURS and something your competitors can't easily match. If done well enough it can become part of your Brand and something that your business becomes known for.

Better Response Rate

Sure your “package” promotion may not get as much attention, but the response you do get will be from people who will be of a much higher long-term customer value. Your marketing is changed from targeting “price” shoppers to focusing on attracting people looking for “good value”.

So the bottom line is stop relying on no profit loss leaders to build your business. Use value added promotions to attract a better caliber of customer. Some people say that any customer is a good customer but profitable auto repair shops need long-term, loyal customers rather than one time bargain shoppers.

Use Your Time Wisely

Auto repair shops sell their “time”. And you only have so much of it in any one day. If you are smart you will seek the highest profit work for the time you have available. Do you want to do low profit oil changes based on a hope the bargain shoppers will return, or high profit brake or timing belt repairs?

Your shop size limits the time available for the work you produce. Auto shop management needs to be selective about the “type” of jobs (and customer) their auto shop marketing attracts. Promoting a bunch of low/ no profit specials with the hope of converting people who respond into more profitable work has very poor success. The conversion rate is often so low it is largely a waste of your limited resources. What you want to do is customize your auto repair marketing “product” for a select group.

Greater ROI

For greater auto repair marketing ROI make your promotion compelling and relevant to a smaller, more value driven group of customers. Be more selective in who your marketing is targeting. Pre-screening your prospective customers weeds out the time-wasting, low profit work allowing you to provide a higher standard of service. To do this you need to build a “customized” offer, not a “product” that can be price comparison shopped.

Offers That Satisfy Customer Needs

To make your offer attractive to this different (better...) group of prospective customers you should focus on assisting or satisfying the total customer “need” set. Create an offer that looks at the customer's needs holistically. In reality an oil change is very low on the priority order of most people's to do list. To stand out shops need to provide a packaged, multi-dimensional offer that includes a set or group of services that considers the many needs people have in their lives. Auto shop marketing should not see an oil change as just a specific service, but as a small, low priority part of the many things a person may need to get done that day. To increase the priority of that service in the mind of the customer, and the opportunity for you to get the job, your offer must “assist” the customer in a greater way that extends beyond the benefits of the repair work you do.

It's All About Time

Time is the most important commodity for people. They may need their vehicle serviced but in the big picture of their busy lives it is a low priority. Auto repair shops can raise the priority of the work they do, and get a premium price for it, by helping people multitask.

A large part of the value added component is the “arranging” of the package. For example, getting an oil change service plus full interior detail and exterior hand car wash all in one appointment would be a “convenience” people would pay a premium for. Often sweetening the package with an unrelated service or product is very successful. Movie tickets, manicure, coupon for lunch or dinner, etc. are all combinations that can be attractive to people. The secret to making value marketing work is including an element that is valuable, difficult to purchase, and most importantly, difficult to price comparison shop.

Here is a realistic example. A busy mother needs to get her vehicle's air conditioning serviced, grocery shop for a family BBQ, care for her two young teenage kids and two of their friends, and meet a friend for lunch. Your offer can include:

  1. Air conditioning service;
  2. Lunch for two at nice local restaurant;
  3. Tickets for a day at the local water-park for the kids;
  4. Grocery shopping service;
  5. Provide on-call transport to and from shopping center including grocery pickup.

The shop can prearrange a discount at a local restaurant and water-park in exchange for co-marketing arrangement. The grocery order can be emailed or faxed to a local store. Transport is provided by your in-house shuttle service for transport to and from the restaurant. Customer picks up their vehicle and collects the groceries and kids on way home from your shop.

At $199 the package price provides a high profit margin. And instead of competing on price you are competing with the perceived value of your offer. The customer not only gets their vehicle serviced but help with all the other things she needs to get done that day.

Here is a comparison to clarify your understanding of Price Marketing versus Value Marketing.

Price Marketing Value Marketing
  • Choose service to sell
  • Choose customer group to target
  • Select benefit to promote
  • Determine customer needs
  • Set price to attract customers & capture market share
Create packaged offer
  • Sell service to as many customers as possible & hope for repeat business to reclaim profits lost from discounting.
  • Sell fewer high profit services to loyal customer group. Easier up-sell and repeat business.
  • Further discounting to acquire new customers.http://robertmaxim.com/node/845/edit
  • Sell high margin services to chosen loyal customer groups.

The goal of “value” auto repair marketing is to target high value customer groups from the start so that you don't have to waste time on doing profit eroding, loss-leader, low success rate customer acquisition service work. The concept is to initially target customers with the highest probability of providing high profit, repeat business. If you have been collecting and building your customer list you should have a good group to target with email or direct mail.

You may need to advertise Value Added services in different ways. You need to be able to describe the added value of your offer in enough detail for the person to grasp what is all included and decide it is good value. Print advertising such as newspaper, direct mail, and hand bills can be effective especially if you can attract people to your website.

Placing your offer on your website allows you to fully explain the value of your offer. Using Robert Maxim Website Solution's Promotions Calendar feature is a great way to expose your Value Added special to the search engines and people looking for the auto repair service your value added package is related to.


About The Author

Doug Fentiman is an auto repair shop website marketing specialist and owner of Robert Maxim Website Solutions. He provides an inexpensive, easy to use, website based marketing system that is designed from the ground up for automotive repair shops. Doug helps shop owners build profitable businesses by attracting quality customers.

Copyright©2015 by Doug Fentiman. All rights reserved under USA, Canadian, and International law.