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Letter to the Editor

Developing a Comprehensive Marketing Plan

Putting the Marketing Tools at Your Disposal to Best Use Will Focus Your Efforts and Promote Growth...

As competition in the collision repair industry continues to increase, repair facilities must pay attention to the marketing of their facility. In past issues of INSIGHT, we have examined in-depth market research activities and how they can be used to develop a marketing plan. As winter approaches, and business levels in many communities increase due to inclement weather, it’s time for shops to take out the plans they worked up in previous years and prepare an update.

Taking a look at past plans and determining how effectively they were implemented and how successful they were at achieving the facilities’ goals for growth can point towards new opportunities to increase business.

In this issue of INSIGHT, we will detail the steps toward marketing plan development and discuss specific tools shops are using to capture business from their direct competitors.

Strategy

Every collision repair facility owner needs to develop a written guideline that sets forth the business’s marketing strategy. This document is necessary so that the repair facility’s management can judge the appropriateness of each action that the shop takes to promote the business. If a company has to take an action that is off-strategy, it may indicate a temporary emergency action prompted by competition or other factors beyond normal management control. Or it may indicate the need to change or revise the company’s marketing strategy.

The marketing strategy section of your marketing plan will form your facility’s goals into one cohesive set of marketing strategy statements. This statement should summarize relations with key customer types, such as individual vehicle owners and referral sources, and also explain how you will uniquely position the facility compared to other collision repair businesses in the marketplace.

A good marketing strategy provides specific goals and should include:

• a description of the key or target customers
• competitive market segments in which the company will compete
• the unique positioning of the company versus the competition
• the reasons why the business is unique or compelling to customers
• price strategy versus competition
• marketing spending strategy with advertising and promotion
• possible research and development
• market research expenditure strategies.

Strategy Statement

With the specific considerations outlined above, management needs to develop a detailed strategy statement for the repair facility. The strategy statement developed should satisfy the goals outlined above and should pass specific tests regarding their viability.

These statements on your marketing strategy should be measurable and provide a clear course of action to differentiate your company from the competition. Specific areas to cover in your strategy statement include financial, quality, technology, personnel and more.

Examples of strategy statements that provide clearly defined missions for marketing and management and measurable performance include:

Our company will exceed the level of performance for operational
benchmarks of the Top 25 percent of collision repair facilities.

Or,

Our company will leverage the use of computer technology
to secure and better serve our customer base by providing better
information, faster service and more consistent quality.

Both provide measurable strategies. Financial benchmarks can be tracked, goals set and monitored. Achieving the goals provides the shop operator with a clearly defined marketing advantage. Better performance equates to better service for the customer.

The second statement provides a direction for investment and selling strategies. Why do many shops have three estimating systems? Many would say because they are required to have them to service the insurers they work with in their market. On the other hand, having the ability to communicate electronically, whether with estimates, images, or repair progress updates, will set many repairers apart from competitors who do not make the investment.

Keep in mind that a good working marketing strategy should not be changed every year. It should not need to be revised until your facility’s financial, marketing and other goals are achieved, or the competitive situation has changed dramatically.

Action Plan

With a firm understanding of your market, your personal goals, and the marketing strategy you want to employ, the final portion of the marketing plan details the actions to take to reach the goals you defined. The marketing action plan outlines each specific event or action you will take to increase sales. For example, the action plan can contain a summary of quarterly promotion and advertising plans, with spending and timing details for each program.

Marketing tools for collision repair services fall under two main categories:

• Pre-sale marketing
• After-sale marketing.

Pre-sale marketing includes all of the efforts undertaken by the shop to create awareness of the facility. Pre-Sale Marketing Activities include:

• Yellow Page Advertising
• Agent Referral
• Dealer Referral
• Newspaper Advertising
• Radio/Television Advertising
• Billboards
• Internet Advertising
• Youth Sports Sponsorships
• Personal Contacts
• Signage
• Targeted Direct Mail
• Event Promotion.

All of these tools are geared towards creating awareness and projecting a mental image of the facility in the prospective customer’s mind. A facility’s image is marketed through all of the above pre-sale marketing activities, with each area providing support for another. For example, establishing referral volume is much easier if the referral source is already familiar with the shop because of advertising or signage and has received a favorable impression of the business.

Past INSIGHT articles on marketing have recommended a marketing budget of between three to five percent of gross sales. This figure should include traditional marketing expenditures, such as Yellow Page and newspaper advertising, and also the incremental costs related to discounts put forth to secure referral volumes.

As the TrendLine Survey on page 8 indicates, traditional marketing expenditures account for approximately 2.3 percent of leading repair facilities sales. Adding the cost of discounts to secure referral volumes will bring this average figure near the 5 percent level recommended by INSIGHT.

Also, the TrendLine Survey shows that the vast majority of repair facilities, fully 86 percent, still spend significant sums on Yellow Page advertising. For detailed information on making your Yellow-Page expenditures work more effectively:

Getting the Most Out of Your Yellow Pages Advertising Virtually Every Repair Facility Uses Yellow Page Advertising, But Do They Know the Keys to Effective Ads? If you are going to use Yellow Page advertising, and it can be effective if used properly, look over the checklist shown in the chart below and see how your display ad stacks up. This checklist is based on discussions that we have had with shop owners and dealer shop managers that are convinced that their advertising has proven effective. Unlike general advertising, where products are offered, the Yellow Page user has already determined that he needs collision repair. Focus on the reasons why the reader should do business with you instead of with a competitor, and include every important reason that you believe will make them choose your facility. Remember: you have to sell your facility. Every one of your local competitors will be listed within one or two pages of your advertisement. Showing the prospect why he should ignore your competition and do business with you should be the only goal of Yellow Page advertising. Yellow Page Ad Checklist Show what is unique about your shop's operation, i.e., training, equipment, location, years in business, warranty, etc. Use key motivators. Fast service, on-time delivery, and color expertise are the strongest, followed by convenient hours. Always list your hours and emphasize any extended or weekend hours. Use strong, bold, or unique borders, and keep type away from the borders. Colors can be effective for borders. Be careful of fine artwork and crowded, small type. They tend not to reproduce well on Yellow Page stock. Busy ads don't sell. Don't try to be too clever with slogans or puns, and don't try to be humorous. Yellow Page shoppers are looking for professionalism. If appropriate, show I-CAR, ASA, ASE, and SCRS logos. Try to have a memorable phone number, making call backs easier. Avoid statements that aren't easy to prove. Telling prospects that you are a professional and courteous is a waste of space. People expect that you are anyway. If you have been in business a long time, say it, but be brief. "Serving the community for over 25 years" or "third generation" is all you need to say. Think like a buyer. Yellow Page users are ready to buy. Put yourself in their shoes and answer the questions you would have about selecting a shop to repair your vehicle. They will be the same questions that your prospective customer will ask about your facility.

Tracking the cost of referral discounts is crucial to the success of any referral relationship, or to judge the relative benefit between two competing relationships. For instance, a five percent discount on parts to an insurer to secure a DRP arrangement has a definable cost for each job. This cost can be tracked and included as part of your marketing budget.

With the costs of incremental volume established the expenditures on support materials, such as targeted brochures for referral sources can be determined.

With a budget for marketing expenditures established, the shop can judge how to allocate this money among available marketing activities based upon their market research. Each tool or program employed should fit within the defined marketing strategy, supporting the overall goals to increase business.

After-Sale marketing includes efforts to make sure that current customers are satisfied with the service provided and make them into a strong referral base. This is crucially important because Collision Repair Industry INSIGHT research indicates that, on average, 80 percent of customers, including crucial referral volume from dealers and insurers, are influenced by your current customers.

In simple terms, this means that 80 percent of your customers will buy service from your facility based upon the experiences of past customers who have used, or know someone who has used, your facility and are satisfied with the service provided. The remaining 20 percent is new business created through Pre-Sale marketing efforts. What does this tell you? CSI is crucial to success.

Whether in-house or performed by a third-party provider, CSI participation can also be included in the overall action plan for marketing your facility.

Conclusion

With winter fast approaching, now is the perfect time to analyze your marketing activities and prepare for the coming year. Doing so now will give you a step up on the competition and provide for a more thorough, planned approach.   o

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