Looking Past the Recession

In my 25 years of automotive shop ownership I’ve lived through at least three recessions or economic downturns if that’s what you’d like to call them. They have some factors in common of which we should all be aware, the primary one being that eventually they come to an end. So there’s your silver lining; knowing that at some point the economy will normalize itself. The trick is to still be there to take advantage of the good times that will no doubt return.

First a couple of definitions: Recession – When your neighbor loses his job. Depression – When you lose yours.

Recessions scare people, and when they are in fear of losing their income or a sizeable portion of it they cut way back on their spending. They try not to sign up for long term commitments like buying new houses or cars. They try to make do with what they have and of course, that’s where we come in.

Most people don’t lose their jobs during this period, only a small percentage of them do. After awhile Joe Average figures out that his job is safe. While he was worrying and not buying anything an interesting phenomenon was taking place. He was paying down a considerable portion of his debt, mostly credit card. Now when he begins to once again feel secure he starts to spend money again as if he had it. When enough people do that the recession ends.

That’s the cycle. How does it affect you?

In the beginning stages, when Joe stops spending, he really stops. He doesn’t even want to part with the money to maintain what he has. So he will only want to come in to have a specific problem fixed and that will no doubt be one that is really bothering him.

This is when you need to turn into super-salesperson. You have to seize every opportunity for business from that customer and as many of his friends, neighbors and relatives as you can. You do this by conducting a complete bumper to bumper and top to bottom inspection of every vehicle that comes through the door. Then you not only make the necessary service recommendations but you show the customer in black and white dollars and cents how having you perform these services will save him money either in the short or long term.

You can’t be casual about making these sales. They are important both to the customer who wants the car to last at least till the recession ends and to you who needs to do business today. In other words, you need to become more aggressive in closing these sales. That doesn’t mean that you back people into a corner or tell them that if they don’t let you service the car it will break down on some lonely road at three o’clock in the morning. It means that you take the time to explain the down and the up sides of having the service performed.

Follow up to that initial inspection is critical. You can’t make a bunch of service recommendations, have the customer say he’ll think about them and then sit and hope that he’ll take it upon himself to come in. Part of your aggressive strategy is to start making follow up phone calls to offer appointments to people whose cars you’ve already diagnosed.

Following up with customers is probably the most difficult discipline. There may not be any instant gratification and you may have to make many calls before people respond well to you, but it’s something you have to do. We can’t afford the luxury of leaving it to chance.

So if you want to survive this recession and prosper once it’s over, here’s what you’ll probably want to do:

Keep advertising, but be careful with your money. Interview each customer to find out exactly how they heard about you. Then adjust your spending to focus dollars on what works. Try coupons for loss leaders that will get vehicles up on your lifts to give you the opportunity for the full inspections you want to perform. Now is not so much the time for institutional advertising. It’s a time to be specific. Make offers that will actually bring a response.

Advertise to your existing customers and accounts. There’s no reason not to send coupons and make special offers to your existing customers. Too many shop owners think they need to extend these specials only to new customers while they give no breaks to existing clientele.

Don’t discount repairs. They are your bread and butter, but do discount services that will bring in new customers and bring back existing ones.

Launch an outside sales campaign. Nothing makes you feel better during times like these than getting out and doing something about it. Go knock on company doors. Every company owns vehicles and has employees who own vehicles. If you aren’t fixing them someone else is. Many times they aren’t happy with their service provider but keep using him because they don’t realize there is another choice. Be the other choice. Get out and make them aware that you exist and can help them. Find out what the competition does for them and offer to do more, do it better, and faster.

When the recession ends keep on doing these things that helped you through it. Now you can make the profits you really deserve.