Prior to the great depression of the 1930’s, Ford outsold Chevrolet. Reacting to the downturn in the economy of that era, Ford cutback back on advertising while Chevrolet continued with an aggressive marketing plan. Ford’s sales suffered and the two companies actually reversed roles in the automotive market place.
It seems everyone is looking to cut costs theses days, and for good reasons. With the economy in a recession, we need to make tough decisions. Cutting advertising during these times is simply the wrong thing to do and a great way to kill your business. Shop owners need to look at their expenese made during the last few years and find ways to cut the “fat” not the “meat”. We need to understand the difference between an expense and an investment. Investments will eventually add to your business, unnecessary expenses will hurt business.
Want another way to kill your business? Offer deep price discounts. We are all concerned about our customer’s wallets and hear the complaints about prices everyday. If you think that deep discounting is a way to sell work and bring in customers, think again. In past recessions, it hasn’t been the companies providing the cheapest goods and services that have done well. Consumers become very picky about how they spend their money during tough economic times.
Concentrate on value, not price. If consumers only cared about price, the Yugo would have outsold Toyota or Honda. Yugo was about price, not value. The end result: You don’t see a lot of Yugos around, do you? Being competitive in your market is one thing, giving away much-needed profits can be disastrous.
It’s better to offer a Winter Maintenance Package (which includes an oil change) for $49.95, then trying to sell $14.95 oil changes. Selling a Winter Maintenance Package has value and will give your techs the opportunity to look for other profitable service work. Work on increasing car counts, this will increase your opportunity. Don’t try to hit a home run on every car. The little things add up at the end of the day. Adding a few cabin filters, air filters, wipers and batteries will add much-needed dollars to your bottom line.
Here’s another way to kill your business: Worrying about all the bad things that might happen. When your thoughts are focused on all the things that can go wrong, a lot of the things you worry about actually occur. It’s like the kid in little league that walks up the plate and says to himself over and over again; “I’m going to strike out. I hope I don’t strike out. I always strike out”. And guess what happens…he strikes out!
Be positive. You are the leader of your company. You need to be strong and show confidence. This is equally important when talking with customers. Don’t complain about the economy, this makes things worse. People want to be associated with winners.
And here’s the last way to really kill a business? Ignore your two most important assets: your employees and your customers. Your loyal customers and your faithful staff were with you building your business during the good times. When things seem bleak, it’s easy to forget the good times. But good times will come again. Things go in cycles. Don’t take my word for it, just look at history and listen to people like Warren Buffet. So, take care of the people that made your business a success: your employees and your customers. Treat them with respect, show them you care about their well-being and they will be there when things turn around.