What Makes Shops Profitable?Posted 3/12/2006
By Karin White
The automotive service industry's future is encouraging. In the 2005 "How's Your Business?" survey, 54 percent of our mechanical shop population cited an increase in sales at an average of 13 percent. Seventy-one percent of mechanical businesses polled expect annual sales for 2006 to increase.
Customer service was the top reason (52 percent) cited for the 13 percent increase. The second reason was marketing and advertising efforts (41 percent).
Ninety-five percent of mechanical businesses conduct some form of marketing and advertising. The top advertising method for mechanical members is word-of-mouth (90 percent), which is free and a reflection of the service customers receive at your shop.
Nearly half of ASA's collision members are experiencing a 12 percent increase in sales, according to the same "How's Your Business?" survey. Again, improved customer service was cited as a reason by 41 percent. This was followed by economic conditions (36 percent) and marketing and advertising (34 percent). Ninety-six percent of collision facilities use marketing and advertising to reach their customers and predict a 71 percent increase in annual sales for 2006 due to those efforts.
The health of the U.S. economy directly influences the automotive aftermarket. Fluctuations caused by many factors such as new car sales, fuel prices, regulations and other issues are uncontrollable. Manageable at the shop level and cited by 88 percent of collision members is word-of-mouth advertising, which is the most popular vehicle for attracting new customers.
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