By Joe Marconi
We, automotive shop owners of America, must take the opportunity of a lifetime and turn it into a bunch of success stories. What opportunity? Look around you. The world is in turmoil. COVID-19, social unrest, uncertainty about the presidential election, the economy, how are we going to get out kids back to school, on and on and on.
While the world is spiraling out of control, we have the power to make big changes to our auto repair shops. And it can all be positive!
First, the average age of a car in the U.S. is about 12 years old, attaining well over 200k on the clock.
Second, Uber, taxis and limo companies are suffering. Guess why?
Third, the motoring public in the foreseeable future will be traveling by car, taking road trips like they have never did before.
Fourth, the roads are packed with motor vehicles, as more and more people prefer their own car as their primary means of transportation.
Fifth, as the cars get older and older, more of them will be out of factory warranty.
Sixth, independent auto repair shops have a vast amount of training, resources and replacement parts.
Seventh, the overwhelming majority of cars being build and sold today are still internal combustion engine powered cars. If you factor in the expected average age of car these days, we can safely bet that those gas engine cars being sold today will still be on the road in 2033 and beyond!
Eight, You need more? That's not enough!
Get your plan in place. Get your prices in line with making a profit. Don't give anything away anymore (I am mostly referring to checking, testing, diags of any sort!) Offer world class customer service. Be a leader of your employees. Show the world what you are made of!
By Joe Marconi
For many of us, it's been a wild ride the past few months. We had to take care of everything, making tough decisions, dealing with banks and the SBA and running the shop from the trenches. But, with things looking better each day, it’s time that we get back into the role of building and operating the company.
For many, the COVID-19 crisis is far from over. However, the sooner we begin to adjust and build for the future, the better off we will be.
Shop Owners are among the hardest working people on the planet. We find ways to get through the most difficult situations. I have no doubt that the lesson’s learned from this crisis will make us stronger and more successful.
I currently employ a mechanic and friend who has been with me for about 20 years. He was formerly a transmission rebuilder, but we have switched to mostly reman units and have no need for a rebuilder. His pay has remained the same despite his value declining. I am currently paying him roughly $100,000 a year. The problem i'm having is that his skill set is not near that pay level anymore. He does light diagnostic and basic managerial work, but I am not confident enough for him to run the shop for more than an hour. With the current state of the industry our numbers have gone down a bit over the last two years. While still being profitable, I can't help but think about the extra income that would be available by terminating this employee, I just dont know how to do it. Any advice on how to do this? I like him as a person and have known him a very long time, but I feel his is paid about twice as much as he is worth. Any help wouldbe greatly appreciated.
By Joe Marconi
Shop owners, you have a little less than two months before the end of the year. And that means it's time to start thinkning about your Tax Planning for 2019. Don't procrastinate on this. Meet with accountant. Review the year, review profit. Consider things such as major equipmenet purchases and other major investments you made in 2019. Look at bottom line profit and determine if you set aside enough cash to pay your taxes come April 15, 2020.
One thing, Cash is King, So, before you purhase any major equipment before the end of the year, listen to your accoutant, not the Tool Sales-person. In many cases, it's better to pay some tax and hold on to cash for a rainy day.
A little planning now will save you big time in 2020, and also help you sleep better!
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