The saying goes that those who ignore history's lessons are doomed to repeat its mistakes. This axiom certainly applies to tire dealers who offer automotive services. Here's why.
Prior to the tragedy of Sept. 11, the slowing economy was already a major concern to the sharper owners and managers in the business. Regardless of the type of automotive service facility they operate, they already were reviewing existing promotions and discussing ways to advertise and follow up more effectively.
Unfortunately, some bosses I meet seem stunned or paralyzed by the current economic downturn. Equally disconcerting is the knee-jerk reaction to cut expenses wherever possible regardless of the potential consequences. Once again, I see that advertising and promotional budgets are the first things to get axed. To the contrary, tough times demand solid, steady and focused promotions.
Let's review history to see what savvy owners and managers learned during the last recession. First of all, those who had been promoting their businesses steadily and effectively weathered economic slowdowns better than their competitors did. ``Promoting'' the business went beyond traditional advertising because it also included maintenance reminder mailings and consistent telephone follow-ups to close sales on written estimates.
The people I really respect for keeping their service departments busy year 'round caution that you shouldn't wait until a recession to begin mailing out maintenance reminders. What's more, reminder mailings and telephone follow-ups may become more important than traditional advertising during tough times. After all, when you personally remind enough people, a percentage of them will make appointments.
Likewise, the phone follow-ups will close a percentage of those service sales where an estimate was prepared but the work was postponed. Simple math: Cull a bigger percentage than your competitor and you're ahead!
I have often cited the importance of maintenance work. The tire dealer or service shop operator who wins the maintenance battle wins the automotive service war. ``Preventive'' tune-ups, filter changes, oil changes, timing belts, water pumps, cooling system services etc., are relatively quick and easy to do. Because this work is predictable and profitable, it should be your bread and butter in good times and bad.
Another lesson from previous economic downturns is that if all service business drops off, you want to position yourself to attract as much of the higher-profit, quicker-turn-around work as possible. That's why focusing on and attracting maintenance work will serve you well during tough economic times. Where possible, leave the low-profit heavy mechanical jobs and/or those deadly, in-depth diagnostic marathons to the service shops that are desperate for any work.
Moreover, in bad times it's a relief to know you have a reliable foundation of predictable, profitable work to keep the service department humming along. Having this foundation makes it easier for you to choose the other work during slower times. If you decide to take prickly jobs, take them on your terms-your schedule and your fees-and not because you're just trying to keep your crew busy.
Some owners and managers tell me the last recession taught them that selling maintenance is easier than convincing an uncertain motorist to invest major repairs in a questionable vehicle. Obviously we've all seen cases where the consumer had no choice but to purchase big-ticket work on his or her credit card or else walk to work.
But these fellows agreed that it's much easier to sell maintenance with the pay-me-now-or-pay-me-later approach when the motorist already has a decent vehicle. ``Psychologically,'' one source said, ``it's easier to sell vehicle preservation than vehicle resurrection. Some people will understand the long-term savings of preserving what they already own.''
Whatever you do these days, don't wait for imaginary windfalls or upturns. And don't sit around doing nothing. Create some promotions based on what those motorists really need-and that's maintenance. Maintenance is always cheaper than a new vehicle. Furthermore, it's always less money when the vehicle owner does it when it's supposed to be done.
What a concept-selling the truth!