call us 1-866-665-1605
Thursday, March 26, 2020
With the possible exception of the financial stimulus bill, there hasn’t been much good news for auto repair shop owners (or really any business owners) in the past couple of weeks. One of the only good things going for them: after years of record low unemployment, not many technicians or service writers woke up today and thought it would be a good time to change jobs.
There’s talk of a 30% unemployment rate by serious people right now, so your shop employees are probably staying put. For now. But if your employees aren’t convinced that your shop can withstand the coming economic downturn, they’re going to at least consider a move in the coming months to a shop they think is on better financial footing.
If you are on a good financial footing, it’s important to give your employees enough information for them to have confidence that this is the case. If you’ve been investing in your shop and in your employees over the past few years of economic expansion, they’ll believe you when you point out that you couldn’t have done that without a profitable business model.
If you aren’t in great financial shape, you need a plan for how to keep your best employees. Otherwise, they will jump ship, leaving you only with your lower performing employees – the ones that couldn’t find work elsewhere. As bad as the next few months might seem, it’s going to be much worse without your best staff members helping you pull through.
Finally, there are likely to be a lot of great deals out there in the coming months, and some great financing options to go with it. But if you decide to make some long-term investments during the downturn, make sure to retain enough financial cushion to keep your best employees – even if the economy performs worse than expected. Those debt companies keep sending the same bills even when your revenue starts drying up.
To learn how Repair Shop Websites can bring revenue to your shop, call us at 855-294-6397 or email us at Team_RSW@RepairShopWebsites.com.
Tuesday, March 24, 2020
What’s the value of a new customer? It depends on the customer – but it also depends on the shop. Click here for ideas on how to turn jobs into recurring revenue without cutting away at your margins by handing out a coupon book.
Thursday, March 19, 2020
It’s amazing how fast reality can change. One month ago, the economy was in great shape, with low unemployment, high customer confidence, and all-time high stock prices. All three of those are getting shattered this week.
Don’t panic – even in tough times, good decisions make prosperous companies. Here are some important learnings from past recessions.
Customer Needs Change
Customers don’t pay auto shops to fix cars, they pay them to fix problems. Unfortunately, right now customers might assume that interaction with your shop will create more problems than it fixes.
Shops and customers both have a common understanding of why they go to a repair shop, and what happens when they get there. But all of that knowledge gets upended during times of crisis. Think about how this virus should change the way you operate and tell customers about it. Can you conduct business in an open-air space instead of the enclosed waiting area? What maintenance and repair can you offer without ever setting foot inside the customer’s vehicle? If you do need to get inside, what precautions do you need to take to prevent direct contact with the seat, steering wheel, gear shift and door handles?
Get Ahead of the Curve
Part of the reason we’re facing so much uncertainty in the US is that we didn’t get ahead of the curve. That same problem happens when businesses face a recession. If you wait until the bank account is running low to prepare a response, your options will be far more limited. We don’t know for sure if the economy will sink after the immediate health scare is over. But if it does, you’re going to need to make a wide range of changes to your business to succeed during that time. Have a plan for how you’ll put those changes into effect as soon as your customers are moving around normally.
Transportation Isn’t Optional
There’s a good chance that this outbreak will send us into a global recession. That’s bad news, but it doesn’t mean the world is ending. There have been twenty recessions since Henry Ford built the Model T, and the auto repair industry has survived every one of them. Consumers can forego all sorts of purchases, but transportation isn’t optional.
In fact, repair shops can benefit from recessions. Recessions can force people to prioritize necessary purchases over preferred ones. There are plenty of people who prefer to get a new vehicle every three to five years – but better judgement might bring those people to your shop for automotive service instead.
In fact, with automakers facing so many supply chain issues for their vehicle parts, they might not have much of a choice. The average vehicle has 30,000 parts, and the assembly line stops when they run out of one of them. For repair shops, on the other hand, a shortage of one part only prevents one type of repair. Hopefully, the industry will find supply alternatives for most parts affected by the crisis.
To learn how Repair Shop Websites can bring more business to your shop, call us at 855-294-6397 or email us at Team_RSW@RepairShopWebsites.com
Wednesday, February 26, 2020
Coronavirus is just beginning to take root outside of China, but its spread is (finally) beginning to slow inside of China. It’s not yet clear how supply chains are going to be impacted by the weeks-long shut down of manufacturing plants across that country. The odds are good, however, that there will be a shortage of at least some car parts – China is responsible for around $40 billion worth of global auto parts manufacturing.
While this may be a problem for auto repair shops, it’s not as big of a problem as it is in China. Most of the plants that shut down for weeks probably had no contingency plan for being out of commission for that long. When it comes to recovery, they’re going to be working hard and hoping it works out.
Coronavirus may not be the thing that shuts down your shop for two weeks, but that doesn’t mean that something won’t. If it does, do you have a plan? How long could your shop survive an unexpected shutdown with a strong chance of recovery? If you don’t like the answer to that question, it’s probably time to build a contingency plan.
The federal government provides a few guides for how to prepare for natural emergencies – they’re available at Ready.gov. There are plenty of other types of emergencies beyond natural ones, however. What happens if you’re unexpectedly out sick for weeks? What happens if your shop management system goes down, and your customer data doesn’t return after it is restored? What happens when a customer makes a threat towards you or an employee?
Unexpected events like these happen to thousands of shops every year – and most shops aren’t prepared to deal with them. Just because the event wasn’t expected doesn’t mean you can’t be prepared! Much like recoveries at those auto part plants in China, execution at a shop is going to be pretty weak if there was no planning ahead of time; emergencies aren’t the best times for sitting down and making well-thought out plans.
Take a look at the contingency planning suggestions at Ratchet and Wrench (these were suggestions from a parts department manager) as well as those at The Balance. If the worst does happen, you’re likely to come out of it much better off if you’ve got a plan in place to address it.
To learn how Repair Shop Websites can help your auto repair shop gain more customers, call us at 855-394-6397 or email us at Team_RSW@RepairShopWebsites.com.
Friday, February 14, 2020
Type “customer loyalty” into Google, and you’ll get ads for companies trying to sell you loyalty programs. Below that is a featured snippet from the book The Intuitive Customer which defines customer loyalty as a “result of a consistently positive emotional experience”.
When you really think about it, though, can a loyalty program inspire an emotional response? Who really goes to Starbucks, downloads their customer loyalty app, and feels an emotional connection when they earn their five stars for a Venti coffee? (Only twenty more to go for a free vanilla syrup upgrade.)
The reality is that customer loyalty isn’t a present/absent attribute. There are four different levels of loyalty: Best Option Loyalty, Habit-Based Loyalty, Conscious Loyalty, and Identity Loyalty. If you’re using a card-punch or points-based program to earn customer loyalty, it’s never going to get you past Level 2, and generally won’t even get you there. Here’s what each level looks like.
Level 1: Best Option Loyalty
Customers who reach this level of loyalty visit your auto repair shop because they think you’re the best option at the time. In most cases, it’s because your shop is nearby and they know that you did a good job the last time they brought their vehicle in. It might also be because they’ve got a coupon book from your shop in their car, or they remember a discount you sent them that they can pull up on their smartphone.
This may seem like a weak form of loyalty – and it is. People’s loyalty to most companies they regularly visit never gets past this level, however. They’ll keep bringing their vehicles into your shop until they notice a good reason to walk away. That could be a big discount at a competitor, a strong referral to another shop, or an annoying experience at your shop. That might take years – or it might happen tomorrow.
Level 2: Habit-Based Loyalty
If a customer comes to your shop enough times, it will become a habit. The average person makes thousands of decisions per day – several per minute. It’s exhausting, which is why most decisions aren’t conscious. Most decisions are based on habit – when you decide to set your alarm clock, you set it for the same time every morning unless you have a good reason to change it. And if people visit your shop enough times, they’ll keep coming to your shop unless they have a good reason to stop doing it.
At this point, a $10 off coupon from a competitor, or a minor annoyance during a visit to your shop, isn’t going to get them to change their behavior. Changing shops requires too much effort. Is the other shop rated well? Where is it? Is a ride available to work? Is there a restaurant nearby for food while waiting? Going to the trouble of figuring all of this out will require an emotional reason.
They will still change shops if they have an emotional reason to do so, however. They’ll also do it if they decide that their habit no longer makes sense – for instance, if they move or change jobs, and your shop isn’t convenient anymore.
Level 3: Conscious Loyalty
To reach this level, customers have to feel like you’ve done something for them that is far outside of the norm for your industry. Unlike lower levels of loyalty, this is an emotional connection – “I go to a shop because they’re the only one that does X for their customers” is generally an emotional statement.
It doesn’t necessarily have to be anything expensive either. It could be a simple gesture like adding a free service to an expensive bill after they’ve already agreed to pay for it. Even a hand-written thank you note is surprising these days.
Ironically, this loyalty is often created out of the ashes of a bad experience. When customers complain about the quality of service they receive, they expect some acknowledgement of the response (and some unethical customers take advantage of this fact). But they don’t expect compassion – in a world full of publicly traded companies and 1-800 customer service lines, it’s just not common anymore.
At small businesses, however, customers often experience something unexpected when they get bad service. A manager or owner admits the error, owns responsibility for it, apologizes, and makes a generous offer to make up for it. At this point, a mixture of surprise at the response and guilt for making a big deal out of it can lead the customer to want to repay the kindness.
Level 4: Identity Loyalty
Most people only have a couple of brands in their lives that form a part of their identity. Vehicles are actually one of the few items where it’s common for customers to identify with a brand. Most people who drive Harleys or Corvettes don’t do it because it was cheaper or had a better warranty than competing products. They do it because they think the vehicle represents them personally.
Once customers reach this level, it takes a tremendous level of effort to get them to change products. In fact, the only way they’ll change brands is if the product or service lets them down in a very substantial way or challenges some other aspect of their identity. That’s because using a different product requires more than changing a product – it requires changing who they are and how they see themselves. Most brands have to invest a tremendous amount of money and effort to ever have a chance at earning customers with Identity Loyalty, which is why most small businesses don’t have any customers who reach this level.
To learn how Repair Shop Websites can bring new customers into your shop, call us at 855-394-6397 or email us at Team_RSW@RepairShopWebsites.com.