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Marketing Budgets for Building World-Class Auto Repair Shops

Elite Worldwide Inc.

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In the world of auto repair and service, one thing is for certain: You are going to lose customers. They will move, no longer have a need for their automobile, turn to one of your competitors, or buy a new vehicle and then take it to the dealer for service. Accordingly, you need a consistent stream of new customers, and since you more than likely have competition in your community, you need to help those potential customers see that your shop is the right shop. The way that you accomplish this goal is by identifying who your targeted customer is, and then investing in your marketing and advertising programs, along with your customer retention programs. The question is; how much money should you be investing in those programs? Well, here are the guidelines that we share with the top shops in America.

If you have a general repair shop, a good place to start is at 4-5% of your annual sales. If you have a transmission shop, you may find that you need to increase your budget to 6-8%. Bear in mind that your budget needs to be a percentage of your “targeted” sales, not your current sales. For example, if you are currently generating $800,000 in annual sales, but your target is $1,000,000 in sales, then your marketing budget would need to be 4-5% of $1,000,000, not $800,000.

The second thing you should do is something that very few shops do, which is invest at least 50% of your budget into what we at Elite refer to as non-traditional advertising programs. Whereas traditional programs include media like direct mail, TV, radio and websites, non-traditional programs are comprised of media such as fund raisers, social media, car care events held at your shop, and any other advertising programs that are outside of the mainstream marketing channels typically used in your community.

Now here is one of our best kept secrets at Elite. We have long recognized the Y Generation (born 1980 - 1990) as the emerging market. These people are not only your customers of tomorrow, but since this generation was brought up using search and social media on their Smartphones, they are often turned to by older generations that are looking for a good auto repair shop. Accordingly, we encourage all of our coaching clients to invest 50% of their non-traditional advertising budgets into programs that are specifically directed toward the Y Gen’s in their communities. We have to remember that the first to reach this emerging market will benefit the most, so why not you?

In order to get the best return on your advertising investments, there are a number of things you should do. First of all, we encourage you to explore every opportunity to use the strength of other respected brands. For example, using names such as Valvoline, Jasper Engines & Transmissions, and AAA can enable you to build even more customer confidence in your brand. You will also need to monitor and measure the results of your advertising programs. Here’s how…

With all first-time customers, even if they are holding your coupon, you should ask, “By the way, may I ask who referred you to us? When I was still operating my shops, I discovered that this question would send a strong message that we received a lot of referrals, which is a very good thing. In addition, we discovered that many of those customers (even those with a coupon) would respond by saying something like, “I see your ads on TV all of the time.” Since brand awareness media like TV and radio is so hard to monitor, this question would often help us obtain the answers we were looking for. We also discovered that more often than not, customers would tell us that they were referred by a friend, which indicated that while the media (coupons, ads, etc.) were the calls to action that caused them to contact us, the customers were actually sold on us due to recommendations from their friends. We would then call our customers who gave us the referrals, and thank them for their trust in us.

In conclusion, if you want to build a base of satisfied customers, you need to know who your ideal customers are, make the right investments in the right media, monitor and measure the results, and then do an amazing job of turning those customers… into raving fans.

Since 1990, Bob Cooper has been the president of Elite, a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers one-on-one coaching from the industry’s top shop owners, service advisor training, peer groups, along with sales, marketing and shop management courses. You can learn more about Elite by visiting www.EliteWorldwide.com



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