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Get a Burst of Business for 2005Posted 2/10/2005By Hank Nunn
Marketing is one of the big mysteries of the auto repair business. Everyone talks about "marketing the business." Shops have Yellow Page ads, sponsor little league teams, run radio spots, and they may be thinking about a cable TV ad. That's marketing, right? Yes, those are all marketing activities or things. Advertising is a part of marketing, but not all of it. Today's repair shop should think of marketing as a huge concept reaching far beyond a Yellow Page ad or having lunch with adjusters. Here's a working definition of marketing: Everything you do to bring a customer to the point of sale. In most shops, the point of sale is the front counter, service drive or estimator's office. Marketing is everything involved in bringing customers to your office. It's not just the ads you run; it's the way you treat your existing customers, the way you answer your phone, the way your office, building and employees look plus a whole lot more. Marketing places your company name in the minds of prospective customers. Once you've been placed or positioned in their mind, you may eventually find them at your office door. Marketing is how you treat your customers during and after the repair. Marketing is big. Yet the average auto repair shop owner pays little attention to marketing. They think, "We've got a couple of ads we run, we're good to our customers, and we do a great job." I have asked many shop owners if they have a marketing plan and their response is "Yes, I've got it right here in my head." Is that enough? Nope. You need a marketing plan. Owners need a written plan to assemble their marketing efforts and make them work together to maximize their efforts. The marketing plan must accomplish the marketing goals and objectives of the overall business plan and ensure a continuous flow of work into the repair facility. Yet most shops do not have a business plan and even fewer shops have a marketing plan. In the development of DuPont's SMART Sales and Marketing, we have developed a simple, five-step process to begin the process of market plan development. The marketing plan is composed of five sections: value proposition, current circumstances, goals and objectives, critical operating tasks (COTs) and financial implications. Value proposition is a statement of value that you provide to your customer. It answers questions like: Why do your customers buy from you? How are you different from your competition? This may be referred to as a mission statement or a unique sales position. Either way, you need to spell it out. What is your business all about? Begin the process of creating your marketing plan by creating your value proposition. Ask your key customers and referral contacts why they choose to do business with you. Talk with key employees and suppliers, asking for their input. This is not something you just sit down and write. You need input from others. You want to know what your business really is, not what you think it is. Believe it or not, there is frequently a big difference from what we see in our shop and what others see in the same business. Current circumstances is the next marketing plan component that must be developed. The current circumstances portion of the marketing plans tells us where we are. You need to know where you are before you can figure out how to get where you want to go. In this section, you want to list current marketing information such as sales mix, sources of business, what you are currently doing and how it's working. Market share calculations and a good competitive analysis should be included in the current circumstances section of your marketing plan. It is a good idea to include a list of marketing strategies you have developed and the current success for the strategies. If your company has a customer retention and referral program (every shop should), that program would be noted in this section. Any current advertising programs and campaigns should also be listed. If you have some advertising in place, this is a good time to check to see that it carries the same message. Do your ads and other marketing tools conform to your value proposition? Do they carry the same tone and style? Goal and objectives tell us where we want the business to go. Goals and objectives will frequently come from the development of current circumstances. During the development of current circumstances, you discover things you don't know, especially during the early market plan development. Discovering the unknown item can become a goal and objective such as "determine market share" or "perform a competitive analysis." In this section, you will describe what you want to do - not how to do it. For example, "Increase customer-driven referrals by $4,000 per month" is a goal and objective. In this section of your marketing plan, you specify what you want to do. This can be anything from increasing sales to a new dollar amount to measuring the effectiveness of an advertising campaign. Critical operating tasks (COTs) and tactics tell us how we are going to get where we want the business to go. They spell out what will be done to achieve the goals and objectives as well as who is going to do it and when it will be done. This is the "what we are going to do" part of accomplishing a goal. Tactics spell out how we are going to do it, who is doing it and how it is going to be done. The COT will generally come from goals and objectives. An example of a COT is: Increase customer-driven referrals by $4,000 per month. An example of a tactic is: Mike will develop a customer-referral program. He will also develop a vehicle delivery presentation using follow-up letters and calls to train customers to refer other customers. Mike will present the program for review and approval in 30 days. For every goal and objective, there should be COTs and tactics designed to achieve the goal. Be sure you develop methods to measure your success with each tactic. In the above example, Mike is responsible for developing a customer-referral program within 30 days. Following that time, there should be an implementation period (about six months) during which we can see if Mike's plan is working. To determine if the tactic is successful, we must monitor customer-driven referrals to see if the tactic accomplished the COT of increasing customer-driven referrals by $4,000 per month. Financial implications and measuring success is the fifth and final section of the marketing plan. In this section, we summarize the measurement criteria and budget for our marketing plan. This will determine which key performance indicators (KPIs) to track as an indication of the marketing plan tactic success. How much should you spend on your marketing costs? The standard rule of thumb is to spend between 3 percent to 5 percent of gross sales on marketing activities. Within the framework of the marketing plan, you can decide how to spend the money. Getting started is the toughest part of developing your marketing plan. But the payoff is huge. Imagine having a regular flow of customers driven to your door from a variety of different sources. Those same customers, having been completely satisfied with your service and the way they were treated, become salespeople for your business forever. To get a pretty picture, you must paint that picture with a marketing plan.
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