Help needed. If I'm wrong, I need to be corrected ASAP

[Ron Ipach]

I released a video on my blog yesterday that seems to be causing a bit of a stir. Some shop owners are saying my idea is brilliant - others say I'm totally wrong.

In a nutshell, I'm advocating giving away $100 in services for a new client referral.

The last thing I want to do is give away bad information, so I'm asking for some help to set me straight if I'm way off base.

You can watch the video here for my full explaination: http://www.captaincarcount.com/auto-repair-marketing/is-this-a-crazy-idea-or-what/

[skm]

I don't know if that is the best strategy. I think way too much emphasis is put on car count.. Some of our best weeks have been with lower car counts.. I think more needs to be focused on quality of work and charging fair and appropriate fees for the service provided.. In turn results in a proper higher RO amount . Cars now a days are too sophisticated and need someone who really knows what they are doing to diagnose, repair , and confirm that repair. So a quick in and out or building the car count may produce a less favorable repair ie. more comebacks, and even throwing parts at cars to get the next one in . Resulting in a larger income for a short time , but maybe a lower income for the long run. This may work for say a quick lube or tire place, but for a full service shop may actually hurt the reputation and the business in the long run.. That being said it is your business. Do what you think will work that is just my 2 cents.

[gandgautorepair]

We already give $20 cash to the customer for the referral and $20 discount to the 1st time referred customer, and it works very well for us. We use the $20 bill certificate that looks like a $20 bill and has my picture on it. My graphics designer did it and it's very high quality. We currently get a lot of new customers regularly and the shop is growing consistently. If/when this drops off for us, I would definitely consider upping the program to $100 in service. 

To the comment above, we don't decrease our quality. Quality work and reputation is a totally different function than marketing to get new customers. 

[kars]

When I worked for a large dealer chain, the bean counters claimed it cost about $350 to acquire a new customer. With that in mind $100 would be cheap, especially since it is not $100 in actual cost. On the other hand if you have wronged a good customer, it would be a sound business decision to spent up to $350 to keep a customer, if that's what it would take to make them happy, whole and keep them coming back.

If I could get 20 new customers a month for 2 grand I would do it in a heartbeat. I spend 1500-2000 a month in advertising with no guarantee of getting a single customer from it.

[HarrytheCarGeek]

10 hours ago, kars said:

When I worked for a large dealer chain, the bean counters claimed it cost about $350 to acquire a new customer. With that in mind $100 would be cheap, especially since it is not $100 in actual cost. On the other hand if you have wronged a good customer, it would be a sound business decision to spent up to $350 to keep a customer, if that's what it would take to make them happy, whole and keep them coming back.

If I could get 20 new customers a month for 2 grand I would do it in a heartbeat. I spend 1500-2000 a month in advertising with no guarantee of getting a single customer from it.

Rent plays a big part in new customer acquisitions, if you are situated in a high traffic area the cost of your rent is a big part of the cost of acquiring that new customer.

[tyrguy]

10 hours ago, kars said:

When I worked for a large dealer chain, the bean counters claimed it cost about $350 to acquire a new customer. With that in mind $100 would be cheap, especially since it is not $100 in actual cost. On the other hand if you have wronged a good customer, it would be a sound business decision to spent up to $350 to keep a customer, if that's what it would take to make them happy, whole and keep them coming back.

If I could get 20 new customers a month for 2 grand I would do it in a heartbeat. I spend 1500-2000 a month in advertising with no guarantee of getting a single customer from it.

Right, not all cost, just cost AND PROFIT. At the end of the day, if you write a check for $100 and hand it to the customer [writing it off as advertising] or discount his bill $100 [thus decreasing sales] the result to your bottom line is the same. Your net is $100 less.

[skm]

On 8/31/2017 at 10:18 AM, gandgautorepair said:

To the comment above, we don't decrease our quality. Quality work and reputation is a totally different function than marketing to get new customers. 

All depending on the size of your business, the quality and integrity of your employees. I am not new in the automotive industry, I have seen many many many techs. Unfortunately many don't care as much about the customer nor the business as they do about  their pay check. So if the shop starts to get an influx of customers and is already running at a good high rate , there is going to be more pressure put on the staff to get these cars in and "repaired" to keep the new customers happy. In return that WILL put more pressure on your staff. Also if your staff is more worried about what is going in their pockets vs taking care of the customer and building a long relationship your quality of work and reputation can be effected. I Did not say that is the case in every shop, I was just giving my 2 cents when someone asked for help 😜

[alfredauto]

Weeks with the highest car counts correlate with the lowest profits at my place. Like SKM said when the pressure is on to move 15-20 cars through a day inspections get skipped, recommendations disappear, services opportunities get missed and profit tanks. 

Example: tire rotation. If time allows a tire rotation could mean new struts, brakes, tires, sway bar links, alignment, a whole host of good win-win-win necessary jobs for everyone involved. Push the tech to do them in 10 minutes everybody loses. Line up people at the counter and the SA cuts corners. 

However, not getting customers in when they want results in lost sales as well. No cars on the lift means no opportunity to do anything. Just hire more highly qualified people and put in more bays. Simple. Nobody said it was easy.