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Repair Shop Advice

What We Learned from the Last Recession

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.

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