By Elite Worldwide Inc.
By Bob Cooper
Given the uncertainty many businesses around the world are currently experiencing, we must look for ways to save as much money for our shops as possible, while also making sure we are maintaining and building a more profitable business in the long haul. Here are 4 powerful tips to help you save on your shop’s expenses.
1. Review your profit and loss statement, and take a look at each and every line item. For each line item, you should ask yourself up to 3 questions: First, ask yourself if the line item is going to lead to an immediate profit. An example of this would be parts purchases or labor. If the answer to this question is no, then ask yourself if the line item will lead to a potential profit in the near future. An example of this would be your advertising or marketing investments. If the answer to this question is no again, then ask yourself if the line item will lead to any foreseeable profit at all. Examples of these items would be insurance investments, utilities, and your water cooler payment. Once you have the answer to these questions, it will be much easier to see where you can scale back or even put certain items on hold for the time being.
2. This tip comes from Dean Kuhn, a successful transmission shop owner and one of Elite’s rockstar Business Development Coaches. He recommends taking a look at the top 2-3 most expensive items on your financial statements each month. When you look at these expenses, really dive deep into every single line item that goes along with it. This way, nothing will slip through the cracks and you can get a complete picture your business’s finances, which will help you determine areas where you can save.
3. Always remember that your vendors are your partners, and it’s important to treat them this way. I would highly recommend meeting with each of your vendors and having an honest conversation with them to make sure your partnership is as mutually beneficial as possible. During these discussions, set clear expectations for the vendor and make sure that you are meeting theirs. This will save you valuable time in the long run and will make both of your businesses more successful!
4. To save on what’s likely one of your biggest expenses, I recommend that you sit down with your landlord or mortgage owner and have a conversation with them to see what can be done to reduce this cost. You’d be surprised how often an agreement can be made to help in situations like the one we are currently facing.
Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), 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 the industry’s #1 peer group of 90 successful shop owners, training and coaching from top shop owners, service advisor training, along with online and in-class sales, marketing and shop management courses. You can contact Elite at [email protected], or by calling 800-204-3548.
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By Mail Shark
I hear a lot of auto repair shop owners say they don't want to offer a cheap oil change coupon on their direct mail marketing. They feel the cheap oil change coupon brings in the wrong clientele, and they don't want to devalue their brand and position themselves as the cheap oil change shop.
As a quick note, the concept behind the cheap oil change offer is that it is a loss leader and utilized to entice new customers. The key is getting new customers through the door, which the cheap oil change can be extremely effective at doing. Once you get them in your shop and you do a great job for them, you can build a great rapport with them and win them over as a loyal customer.
All that said, you will always know your business better than any marketing company. Therefore, we certainly can't argue with the fact that you would not like to use this strategy if in fact you have already executed a cheap oil change coupon campaign and it did bring in the wrong clientele.
However, having an oil change coupon as part of your shop's direct mail marketing strategy is critical. Here are a few reasons why.
An oil change is something that every non-electric vehicle owner will need at some point in time. Consequently, I would venture to say that most vehicle owners are familiar with what an oil change is more so than any other maintenance service. Compare that to a timing belt replacement coupon or a serpentine belt replacement, each of which the average consumer may not be familiar. When you have a coupon that is familiar and relevant to everyone that you are targeting, you have a much higher chance of increasing redemption rates.
Therefore, for those shop owners that are afraid of attracting the wrong clientele or devaluing their brand with a low-price point oil change, the simple fix is to increase your oil change price point to a number that you are comfortable with and that is still a value from a consumer perspective. An alternate option would be to offer a specific $ off discount that you are comfortable with — for example, $10 off any conventional oil change & 15 off any full synthetic.
My next recommendation, if you are a general auto repair shop, which is a non-negotiable one, in my opinion, is to structure your oil change coupon to offer both a conventional and full synthetic oil change offer. All too often, shop owners only offer a conventional oil change coupon. A conventional oil change coupon is fine. However, it will never appeal or be applicable to owners of vehicles that require full synthetic oil. There is no reason to limit your offer to only appeal to a specific set of vehicles. It's crucial you cast a wider net and appeal to as many vehicle owners as possible. The simple and quick solution is to offer both options.
PRO TIP: if you are concerned about coupons bringing in the wrong clientele, think again. Even the wealthiest consumers use coupons.
Here is a snippet from our blog post entitled "WHY YOU SHOULD BE SENDING DIRECT MAIL COUPONS:
It might seem surprising, but wealthy people love saving money with coupons. In fact, households with annual incomes of $100,000 or more are twice as likely to use coupons than households earning less than $35,000 a year.
Wealthy customers may be able to afford your most expensive products and services, but that doesn't mean they don't want a good deal. The majority of them are cautious about spending money and rarely make frivolous, unnecessary purchases. Rather than viewing your business as cheap, they'll appreciate your coupons and the opportunity to save money,
You can check out the entire blog post here.
Executive Vice President of Sales
Email: [email protected]
Oil Change Coupon Example.pdf
Hello everyone, some of you may have seen me around already and know I’m in the process of opening a new shop. Was wondering if any of you would be willing to share your monthy expensives with me to help me get some ideas for my business plans? Not asking for all your personal info mostly just fixed cost such as rent, insurance, equipment lease, etc. I know everyone may not want to share this but I think it will be neat to compare what other shops have to shell out each month depending on there size or location.
Yesterday, went for a drive through North Jersey, was very concerned to see that independent shops are putting permanent signs with the $19.95 oil change offers, the $59 A/C recharge, and the $5 dollar flat fix. This reeks of desperation, clearly the industry is coming due for a strong correction. At my shops this month we are starting to see price resistance from the lower income segment, we are having to exert price flexibility for price discovery which we are finding to be 10% to 20% from list pricing. The mid to upper segments are still going strong.
Oil filters are one of those important parts categories that every shop usually stocks, to turn bays faster and offer an oil change service as a way to capture needed maintenance and repairs.
What is your preferred brand of oil filters and why? Are you stocking oil filters in your shop? How do you keep your inventory stocked and updated if you do? Who is your oil filter supplier and why? Are you using a standard or premium oil filter on average? If you service trucks, are you using Heavy Duty filters; Baldwin, Fleetguard, Luberfiner, etc.?