3 Customer Focused Ways to Increase Your Shop's Sales By $50,000 in 2014

How do you plan to increase your shop's sales next year? In this email I am going to show you how a shop with $1.5 million in annual sales can increase its sales by $50,000 in 2014.

Many shops focus on insurance company DRP's and other third parties like agents, dealerships and fleets when they want to grow their businesses.

While I agree third party companies are an important part of growing your business I also believe focusing on consumers that already know, like and trust your business can be a simple, inexpensive and effective way to grow your company's sales and profits in 2014 and beyond. 

Below are 3 ways a shop with $1.5 million in annual sales can increase its sales by $50,000 for an investment of about $200 per month and 15 minutes per day.

1. Implement an unsold estimate follow up and sales system 
2. Market and sell additional services to your existing customer base
3. Ask your existing customers for a referral 2-4 times per year.

Let's review each of these opportunities.

1. Implement an unsold estimate follow up and sales system. The industry's closing ratio average is approximately 65%. Secondly a vast majority of shops do not have a formal unsold estimate follow up and sales process. Finally, shops must ask for the sale if they expect to earn the customer's business.

A shop with $1.5 million in annual sales and a 65% closing ratio has more than 360 consumers walk away from their shop without agreeing to have their car repaired at that time.

If this shop were to implement a system that followed up and asked that customer for their business and provided them reasons why they should have their car repaired at that shop we have seen conversion ratios that range from 1% to 5%.

By converting 2.5% of their unsold estimates this shop could add 9 RO's or approximately $20,000 in additional revenues

How does a shop implement an unsold estimate follow up and sales system? In today's world where a majority of consumers own a smart phone, follow up phone calls are becoming less effective because many consumers don't answer calls from numbers they don't recognize.

We recommend an email and text based system that automatically sends follow up text messages and emails to the consumer 2-4 times with 10 days after they visited the shop. The messages should be short, focused on why the consumer should bring their car to your shop and mention the importance of safety. You can even use special promotions to incentivize them to come back.

Here is a short video on our eMarketPlace Unsold Estimate Follow Up and Sales System.




2. Market and sell additional services to your existing customer base. Industry statistics tell us the typical consumer spends $500.00 per year on their vehicle for mechanical and appearance related services. 75% or $375.00 per year is spent on mechanical repairs and 25% or $125.00 is spent on appearance related services.

We know that that a typical shop with $1.5 million in annual sales repairs approximately 68 RO's per month or 818 per year. Based on these numbers the customers that had their vehicles repaired at this shop in 2013 will spend approximately $400,000 on their vehicles in 2014! That's right....$400,000!!!!

OK, let's say your shop may not have the capability to perform mechanical services but can do detailing, PDR, bumper repair, headlight restoration, etc. 25% of $400,000 is $100,000! If you want to increase your shop's sales in this area why not market appearance related services to your existing customer base.

For example, let's say you offer a $200 detail, bumper repair, glass service, paint sealant or other service to last year's 818 customers and 5% take you up on your offer. That equates to 41 RO's or more than $8000.00 in additional revenues in 2014!

What if you have been in business for 10 years and you have 8000 customers in your database and you get 5%? That equals 400 RO's or $80,000!




How can a shop market and sell additional services to its exiting customer base? We recommend email and social media. Email is inexpensive, generates a $44 dollar return on every dollar invested and is preferred by more than 77% of consumers when it comes to receiving offers and promotions. The shop can also use social media if it has a large enough following.

3. Ask your existing customers for a referral 2-4 times per year. Did you know that the typical consumer has influence over 4.2 vehicles? What is influence? They refer or have influence on where their family, friends and associates vehicles get repaired.

As we have mentioned earlier, a shop with $1.5 Million in annual sales repairs approximately 818 vehicles per year. Based on referral influence those 818 consumers actually have "influence" over 3,434 vehicles.

Statistically we know that approximately 2.25% of vehicles on the road will be involved in an accident every year. This means approximately 77 of the 3434 "influenced vehicles" will be involved in an accident in 2014.  Again, if this shop has been in business for 10 years and has 8000 customers in their database, the "influence factor" increases to 33,600 vehicles or 756 potential accidents!

By asking a shop's existing customer base for a referral 2-4 times per year they can expect a 10% referral rate. If 10% of the 77 "influenced vehicle" accidents are referred to the shop that equates to 8 RO's or $18,000 in additional revenues.

Here is a short video on our eMarketPlace customer database that allows you to automatically touch your customers 4-12 times per year.


 

How does a shop ask it's existing customers for referrals 2-4 times per year? Email and social media. In today's world a shop needs to keep its brand in front of the consumer and the best ways to do that is via email and social media.

Shops should send a branded email communication to every customer 4-6 times per year educating them about their vehicles, insurance, claims and other vehicle related educational topics. They should use social media in the same way.

How much time and money will a shop need to spend to accomplish this? About 15-20 minutes of administrative time per day by a shop employee and anywhere from $150 to $225 per month for the tools and technologies to automate these processes.

These "costs" should not alarm any shop based on an investment to ROI ratio of 1326%! We believe any shop owner would invest $4000 for a return of $50,000!

**Blog written by Frank Terlep, CEO of eMarketing Sherpas**