In 1997, I read Anthony Robbins' challenging book "Awaken the Giant Within." In his book, he says if you want to increase your income, the question to ask yourself is: "How can I increase the value of what I do by ten to fifteen times?" He says if you do this, you'll have no trouble increasing your income. This statement intrigued me. I already work 10 to 12 hours most working days. I found it difficult to conceive of a way I could multiply the value of what I do ten to fifteen times.
Perhaps there is a way to do that, but initially I thought I would be happy if I could just double the value of what I do. I imagine most shop owners would be very happy to double their volume or their profits in a year. What would it take to accomplish this very ambitious goal? I tried answering that question in an article entitled, "Dare to Double Your Business in 1997." I updated it again in the year 2000. Now, four years later, I'm taking another run at it.
Multiple sources of business
During the past twelve years that I've called on body shop owners, I've identified at least eight different ways they bring in new business. If you chose just five of those ways and focus on increasing business from each of these sources by 20 percent, you would have achieved your 100% growth goal.
Of course in the real world, you're not likely to increase each source by exactly 20 percent. You might raise some by 50 percent and some by 10 percent. As long as it all adds up to 100 percent, you'll be on target.
The top eight sources I've identified are:
1. Repeat customers and customer referrals.
2. Insurance DRP and agent referrals.
3. Dealership referrals.
4. Local commercial and institutional vehicles.
5. Local business referrals (mechanics, etc.)
6. Local and national fleet business.
7. Drive-in and call-in prospects (from advertising).
8. Relationship networking, event publicity, and P.R.
Double repeat customer business
This comes under the heading of building customer loyalty. The dictionary says loyalty is "devoted attachment." At a time when insurance company steering is at an all-time high, this task has become more and more difficult. Creating a feeling of "attachment" to your shop may not be a simple task, but there are several steps you can take that have proven to be effective for many shop owners I've spoken to.
• Send a "Thank You" card or letter after every completed job, and provide some incentive to come back to your shop, like a coupon or discount offer.
• Ask for birthdays and anniversaries on your customer information form, and send out greeting cards with some small gift, like a theatre ticket, flowers or candy.
• Offer the same kind of small gift for family and friend referrals.
• Ask for e-mail addresses on your customer information form. These days more and more people have e-mail. Periodically e-mail an invitation to come in for a touch-up, buff and polish, air conditioning or other service at a special rate.
• Mail to your customer database at least once a year. Many shops just mail at Christmas or New Years, but I believe it is more effective to mail to 8 or 9 percent of the database a month, so by the end of the year you've reached everyone. That way you're more likely to generate a constant flow of business. In an earlier article entitled "Straight to Source," I suggested a simple postcard message. Call for a re-print if you missed it.
• Some shops are now trying the rebate or discount card system used by some office supply stores and other merchandisers. If a customer or some member of his or her family has a minor accident - especially if it's self-pay - they will get the standard discount promised on the card.
Doubling repeat business alone might double your overall volume.
Doubling insurance business
This is actually simpler than building repeat customer business, mainly because there's not as much that you can do. Calling on agents has become less effective since so many insurance companies now provide 800 number direct claim reporting. Nevertheless, maintaining some form of continual contact with local agents will bring in an occasional referral, and those agents will give you a better recommendation if you seek a direct repair relationship with an insurance company they represent. This is also a good reason to maintain a good relationship with local appraisers and adjusters. DRP coordinators who are located a vast distance from your area may rely on recommendations by their local adjusters and representatives. A monthly or quarterly newsletter mailed or delivered to local agents is a good way to keep them informed and stay in contact.
Going for a direct repair relationship with a major insurance company requires the ultimate in tact and persistence. Sending a very professional presentation package is only a beginning. Some DRP coordinators are now requesting a CD with the presentation information on it, and others are accepting information via E-mail. One effective short-cut is to have your "Shop Tour" pictured effectively on your website. That way anyone can check out your shop at their leisure. Next, the best way to get insurance referrals is to build a lot of business from every source possible. Getting a DRP is like getting a bank loan. They only want to give it to you if you don't really need it.
Getting dealership business
Many dealerships already have a body shop, but I know of many independent shop owners who get overflow work from those same dealerships. One way to increase your chances of getting dealership work is to get your technicians certified for the particular make of vehicle sold by the dealership you're trying to get work from. Some shop owners have negotiated to buy all their parts from a dealership if they get a guarantee to get some of the dealership's repair business.
Once again, staying in touch with a monthly or quarterly newsletter is a good way to keep key people at the dealership informed and aware of your shop's interest in working with them. One dealership deal alone would be enough to double the gross revenue for many shops.
Increasing fleet & institutional business
Operating a shop is a full-time job. Few shop owners have the time to get out and make sales calls, but more and more it is necessary to generate business the old-fashioned way. Every city has government vehicles and utility vehicles. Every community has electricians, plumbers, pest control people, and mortuaries. The only way to develop this business is to call on key people. Join their clubs. Play golf with them. Take them to lunch. Participate in local business organizations. Sales calls alone may do it, but generally you have to build a stronger relationship to get significant business. The good news is, when you do get the business, it could be more than double what you expected.
Increasing referrals from local business
I'm amazed at how few shop owners know the other business people on their street or in their neighborhood. At the very least every shop should have a business card exchange set-up with other local businesses. When possible, an effort should be made to place a plastic brochure holder on the counters of selected neighborhood businesses. Dry cleaners, print and copy shops, gas stations, mechanics, car washes and other service businesses are eager to get business just like you are. Why not structure referral exchanges with everyone possible? Sometimes a finder's fee is appropriate, but more often just an exchange of referrals is adequate to bring in some business.
Also keep aware that small businesses change hands frequently. You may be missing some good opportunities by not staying alert to new ownerships in your neighborhood. Referrals from local and related businesses have doubled the revenue of several shops I know of.
Increasing drive-in & call-in business
The most obvious way to do this is with signs and banners. If you're not on a main thoroughfare, the next best strategy is to rent sign or banner space from a near-by business that does have good traffic exposure. With that done, the next important issue is what you say on the sign or banner. A new shop opening in my area has competitors up and down the street. His sign says: "We meet or beat any legitimate estimate!" Another shop that fronts on a freeway exit has a banner that emphasizes paintless dent removal. He says 90 percent of the people coming in to ask about that service aren't really candidates for paintless dent removal, so he upsells a large percentage of them on a complete repair and refinish job. He says he was surprised at how many people came in to ask about the service. It was definitely worth the $150 he spent on the banner!
Naturally Yellow Page advertising is intended to build this kind of business, but for the extreme price of most phone book advertising, you could run a bunch of small 2 or 3 line ads in several of the local papers that are distributed in your neighborhood. The key to making them effective is to tie them into your website, where you have a chance to really sell the qualities and capabilities of your shop. Setting up a good website can cost as little as $500, less than a month of Yellow Page advertising in many areas. (If you don't have a website developer in that price range, give me a call and I'll provide you with a contact.) A small classified ad that says, "We meet or beat any legitimate estimate!" would be followed by your phone number and a reference to your website: www.myshop.com.
Drive-in and call-in business may not be enough to double your volume, but it can help fund some advertising and marketing that will do the doubling. And it will also help keep your shop looking busy and desirable for insurance and fleet companies.
Double your determination
If you own an eight-cylinder automobile, you're unlikely to be satisfied if it's only running on one or two cylinders. The same is true for your shop. You have at least eight good sources of potential business. If you've been running on four or less, and suddenly now you're hitting on all eight, you can be certain you're well on your way to doubling your business in this new year!
Tom Franklin has been a sales and marketing representative and consultant for forty years and is the author of the books, "Business Battlefield Marketing for Body Shops," "Tom Franklin's Top 40 Marketing Tactics for Body Shops," and "Strategies for Greater Body Shop Growth." His marketing company now provides marketing solutions and services for body shops and other businesses. He can be reached for questions or comments at (323) 871-6862, by fax at (323) 465-2228, or by e-mail: firstname.lastname@example.org.