Why Are Shops Shedding Their Marketing Efforts?

marketing efforts

A few years ago, I spoke at a collision trade association meeting about marketing and advertising in the body shop world.

One shop owner approached me after my talk.

"Why do I have to spend money on marketing, because we get 150 cars every month from the insurance companies?" he asked. "We probably get five or six vehicles every year when people wander in here, but 99 percent of the time we get them through our insurance partnerships."

I've heard lately that more and more shops have decided to cut back on their marketing expenditures, because the economy is booming with no end in sight. Saving money by cutting costs is always a good idea, but what happens when things go sideways or when you lose a DRP or two for a wide range of reasons? Are you established enough in your region that marketing and advertising are no longer smart investments?

I think it's a good question, so I reached out to a group of shop owners from all over the country who are known for their marketing and advertising efforts. Why are they still in the promotional game while many shops have decided to shed at least part of their marketing budgets recently?

Brad Zara, the owner of Zara's Collision Center in Springfield, IL, has been aggressively marketing his highly successful business since day one. He is well-known for his series of humorous and engaging outdoor billboards and his strong presence online.

"We continue to invest heavily in marketing and community support initiatives even though we are heavily DRP," Zara said. "Our belief is that DRP customers still have a choice to make, in most cases, from a list of preferred shops in their area, so we want to be the most recognizable name on that list. Our approach to marketing is not intended to tell people what we do, as that's already a given. We want them to know more about whom we are--established with a good sense of humor, and deeply rooted in our community."

Lefler Collision and Glass is a third-generation, family-owned-and-operated, full-service collision and glass repair center with four locations in Indiana and Kentucky. Owner Jimmy Lefler said marketing is indispensable and that he approaches it through a combination of strategies.

"We ask ourselves---what if the DRP model changed tomorrow? How long would it take for you to catch up to me on name recognition? Marketing builds trust from the community and creates personal relationships as long as you actually get involved in the events sponsored. I agree that you are wasting money if you do nothing more than just air TV and radio commercials. Part of our strategy is the use of social media. I personally look at customer reviews and online feedback prior to purchasing products and services."

Marketing Director Megan Williams at Lefler Collision and Glass Repair Centers agrees that without marketing, shops can lose control of their image and profits.

"A huge part of our marketing strategy is just as much public relations as it is anything else," Williams said. "Relying on DRPs to send us business is taking the control out of our hands, while maintaining positive marketing and public relations efforts helps us control and sustain our own revenue. Marketing plays a big role in promoting and cultivating a positive brand image and company culture, which is helpful when it comes to hiring and retaining employees. Also, many studies show that younger generations prefer to spend their money with companies that give back."

Jim Keller, President of 1Collision, headquartered in Milwaukee, WI, advises his network shops on marketing every day. Although he agrees that the industry’s method of gaining new customers is heading more in an electronic direction, some things will never change.

"Yes, things are evolving quickly, but good old referrals from people to people will always be a big reason why some shops fail and others don't,” Keller said. “Customers can still be heavily influenced by many things, and that's not going to change just because the process is changing. As long as the consumer is able to make the decision or at least play a role in it, marketing is essential. The final arbiter is the customer and in many ways, the technology has made them smarter and more discerning. The technology has made us more independent and it enables us to make our own choices. Years ago, people would take their cars to the shops their insurance company recommended, but now they know more about their cars and many of them want to play a role in that decision."

Dino DiGiulio, owner of Body Best Collision in Sonoma, CA, does more marketing than some MSOs.

"New shops come to town, the competition picks up and the MSOs are always looking to take more of the market," he said. "So, if I'm not out there promoting my business, the insurance companies are going to look around for the best deal they can find. Marketing is not something you can turn off and then turn back on when things change for whatever reason, because you never know when the next accident will occur."

DiGiulio saw the writing on the wall four years ago, so he started pursuing certifications and shedding DRPs, but his marketing budget has actually increased during that entire time.

"I promote to my database, which is the best source of referrals we've ever used," he said. "If you don't promote your business, your shop will shrink. It may not happen tomorrow or the next day, but eventually you will look up and realize that you're losing work to other shops that are marketing themselves better than you are."

Big Sky Collision Center, with two locations in Montana, is a second-generation business run by Matthew McDonnell, an owner who is surprised when he hears about shops that are cutting their marketing budgets.

"We have these crutches in this industry, like DRPs, and after a while we rely on them too much," he said. "We expect them to keep giving, but we are all one mistake away from losing a DRP, regardless of wherever you are. One bad comment by a customer and you can be dropped without hesitation, which does not seem like a true partnership, but that's the reality of the situation. We try to educate our customers through videos and commercials, and they really do work. We have one DRP now---our business gets better every year and our promotional efforts are a huge part of that. If you look at the most successful shops in any area, they are the ones doing most of the marketing and advertising. So what does that tell you?"

Ed Attanasio

Ed Attanasio is an automotive journalist and Autobody News columnist based in San Francisco.

Website Rt Graphic Ep.51 Nancy Rolland 600x400 1.9.24

Shop & Product Showcase