One of the hardest things to come to terms with as a business owner is that some things are simply out of your control, whether that’s the amount of quality technicians available for hire, or a new auto shop opening up in your neighborhood. However, the way to stay ahead of the things you can’t control is to make sure that you are thriving at things you can control. A top struggle most shop owners have is understanding how to market their business effectively.
Many shop owners solely rely on word-of-mouth, and choose not to invest in marketing because they think it’s too expensive or are scared that it might not provide the desired returns they want. However, the real issue isn’t the marketing itself—it’s not properly understanding the best tactics or marketing tools to drive the right results.
To fix this situation, we need to start like you would with any car that comes into your shop—by checking under the hood to properly diagnose the problem.
The Symptoms
Before you jump into diagnosing a vehicle, you ask your customer what the symptoms of their issues have been. So, why would you treat your business any differently? Before choosing any marketing tactic, you first need to understand what problem you are trying to fix with your marketing.
To understand what you need to focus on, you need to understand the revenue bucket, and more specifically, the holes in it. You will be able to understand the health of your shop by determining how you are performing at each level. Ask yourself three questions:
- Is my shop driving in as many new customers as I want?
- Is my shop retaining as many existing customers as I want?
- Is my shop winning back as many lost customers as I want?
If you answered “no” or “yes, but…” to any of the questions above, you just found the holes in your revenue bucket. To run a successful shop you need to be able to balance all three of these segments. Use those three questions to evaluate and diagnose the true needs of your business. Too many shop owners get so focused on giving all their attention to one or two of these segments, that the other(s) get completely ignored and cause the shop to not realize it’s full potential.
The Diagnosis
Once you have evaluated what the true needs of your business are, and where the holes in your bucket are, it’s time to make a diagnosis. Now that you have a better understanding of which part of the revenue bucket needs some attention, it’s time to apply the right tactic.
If word-of-mouth is working and bringing in as many new cars each month as you desire on a regular basis, then maybe you need to turn your focus on to winning back some of the customers you’ve lost. Marketing to the wrong segment with the wrong tactic is like assuming that a battery needs to be replaced when an engine stops working, when the real issue is the alternator.
Once you’ve chosen what your goals are, you need to use a direct response vehicle to drive an immediate and real-time call to action. Now that you see where your gaps are, you want to plug them up and do it quickly (and efficiently). One of the best ways to drive a direct response is to utilize targeted direct mail.
I know you what you might be thinking: “Isn’t direct mail outdated? I heard that digital is the way to go.”
Yes, digital marketing is the new, cool kid on the block, but direct mail still pulls a higher response rate than any other digital direct marketing medium out there. In fact, according to DTS, the direct mail response rate ranges from five to nine times greater than that of email, paid search, or social media.
Direct mail advertising has a number of advantages compared to other marketing channels, such as:
1. Unparalleled Targeting
Direct mail advertising has enormous targeting power, including but not limited to:
- Age
- Gender
- Income
- Geography
- Vehicle ownership
- Vehicle type, make and year
2. Personalization
Direct mail allows you to speak directly to your ideal customer. If you know who your ideal customer is, and if you truly understand their needs, direct mail marketing can be especially effective. Using data and digital printing technology marketers can personalize every aspect of a direct mail piece.
3. Higher Engagement
Direct mail requires 21 percent less cognitive effort to process than digital media and leads to a much higher brand recall. In other words, it’s easier to understand and more memorable.
These are all reasons why you should use targeted direct mail to help you fill the holes in your bucket. Now that you’ve decided on the medium, it’s time to decide on the type of targeted direct mail that is going to be the best for your shop.
The Tools
The type of direct mail that will work best for your shop will depend upon what segment you want to focus on: new customers, existing customers, or lost customers. Here are the top options for each segment.
New Customer Acquisition:
- Hyper local postcards. This is the most cost-effective form of direct mail on a price per piece basis and a great way to dominate the neighborhoods around your shop. Several sizes are available, but usually a 6x11 size yields the highest ROI. Best practice is to do a pin map to utilize existing client data, so you can establish your hot areas and ensure you “fish where the fish are.”
- New mover campaigns. According to US Census data, 35.5 million people move every year. This presents a great opportunity for you to be the first to introduce your shop to those who are new to your neighborhood and develop a loyal customer. Lists can be run monthly or quarterly to identify who these people are, so you can be the first to market to them.
Existing Customer Retention:
- Gift cards. This plastic mailer format is a great tool to reward your best customers. Leverage your customer data to pick 500–1,000 quality customers and reward them with a high-value offer in the form of a gift card. This tactic can be sent out effectively 2–4 times per year to keep them from going to a competitor.
- Seasonal offer postcards. We all know it’s cheaper to keep a customer than acquire a new one. Ensure you stay engaged year-round with your customers by sending them specials based on seasonality throughout the year. This format makes it possible to contact all of your customers to stay top of mind, without breaking the bank.
Lost Customer Win Back:
- Personalized letters. Those who haven’t done business with you in many months/years should not be completely forgotten about. It is unknown why they stopped visiting your shop, so why not invite them back with a personalized letter to get them re-engaged? You can utilize vehicle data with a strong call to action to incentivize them to come back in so you can do things better the second time around.
- “We want you back” postcards. This takes the same principles mentioned above, but changes up the format to a 6x11 postcard. This is a very cost-effective option for those who don’t want to do a letter. This format allows you to hit a broader audience, while yielding an amazing return on investment.
The Outcome
It is amazing what a shop can achieve once it properly understands the best tactics and marketing tools to drive the right results it is after. Be honest to find where you are lacking and focus on those segments first. By blending the above strategy with the value offered by your shop, you will be able to not only grow a sustainable business, but to thrive and exceed the growth goals by keeping your revenue bucket full.
Once you diagnose everything, all that is left to do is to implement your plan. Some simple math can help you determine how many mailers are needed to achieve the numbers you desire in each of these segments. Finally, you can take all of this information to lay out a budget conscious plan for the next 6–12 months and rest easy knowing you have a winning game plan that will drive results for your shop.
Tim Ross is Co-Founder and CEO at Mudlick Marketing. He has over a decade of auto repair marketing experience, helping over 5,000 shops increase their car count over the years. For more information, visit www.mudlickmarketing.com or email him at [email protected].
