It is well-known that local businesses panic when a recession is looming. This trend runs true for auto repair shops, who (in many cases) struggle to stay competitive during normal economic times. But when equipped with the right information and strategies, auto shops should be able to navigate a recession. All it takes is a bit of strategic thinking to succeed in the long-run.
The state of auto shop competitors during a recession
In times before a recession, auto dealerships remain the main top competitors for auto repair shops. But when times are tough, dealerships are some of the first to suffer. Prices of parts become high, and expendable income for consumers decreases. This results in auto dealerships hurting significantly. But for auto repair shops, recessions are the chance to cut above the competition and make their businesses known and trusted in their local communities.
What happens to auto shop consumers during a recession?
With money becoming tight, consumers will no longer have the expendable income to buy a new car if they desire. This means that they will keep their current cars longer and will consequently need more auto repairs as the cars get older.
In fact, since the COVID-19 pandemic struck the United States in early 2020, recent research on Google ads trends even shows a glimmer of hope for auto repair shop conversion rates. While general automotive PPC conversion rates have decreased by 30%, vehicle repair and maintenance conversion rates have actually increased by 44%.
This is a huge advantage for local auto repair shops that have the opportunity to take advantage of these positive search trends and turn online researchers into paying customers.
So what should auto repair shops do during a recession?
Auto repair shops should not cut back on marketing spend during a recession. In fact, the opposite is true. Maintaining or increasing marketing budget is actually a good idea during a recession.
Instead of cutting back on marketing, here’s what to do instead:
Evaluate your target market
While it is easy to strictly think about how a recession will affect your business, it is also important to consider your target audience and how they will be affected by an economic downturn. Will they be hit hard and have to stop spending together? Or maybe they are more financially stable and well-off. Whatever the case, you must take this into consideration when deciding how to communicate with your audience.
Most people today need transportation to effectively live their lives, so car repairs are a necessity, making auto repair shops essential businesses. At the same token, auto repairs may be considered “postponable” and be put off until they become an absolute emergency. This is something for auto repair shops to keep in mind during a recession, but should also aid in keeping auto repair shop owners positive during hard times.
Choose more effective marketing channels
While a strong online foundation is important for local businesses, many auto shops today are frequently approached by companies looking to build expensive websites. It is important to note that these websites are a luxury, not a necessity. Instead of dropping thousands of dollars on a new website, consider building a free site and move the extra budget towards generating new business instead.
When deciding how to generate this new business, consider which marketing channels will generate the highest ROI for your auto shop, as well as be the most cost-effective.
Traditional channels, such as print advertising, tend to cost more than digital channels and likely don’t yield a short-term gain. For this reason, digital marketing channels such as paid social advertising are good choices for shops to choose during recession times. Google pay-per-click ads and Facebook ads, for example, can fit any budget and offer detailed audience and location targeting options so you can feel confident in the money that you are spending. Make sure to think strategically about who your ideal customers are and where they spend time when choosing a marketing channel that fits your business.
Adopt technology to keep costs down and automate business
When one thinks of adding technology to a business, they are likely to come to the conclusion that it will be too big of an expense for their business - especially during a recession. But as a business owner, you also need to consider the amount of time that automating manual business tasks and operations would save both you and your team. Time is money, and automation can save you time.
Marketing automation, for example, can run in the background and consistently boost your auto repair shop’s brand awareness as well as push your leads through the buying journey until they decide to visit your shop. This means that your shop is generating new business while still having the time to focus on everyday business operations and customer service.
This is accomplished through targeted landing pages which collect leads’ contact information via opt-in forms. These new leads can then be sent automated emails and text messages advertising your auto shop and providing promotions and discounts for the leads to redeem in-store. Once your auto shop has this marketing automation technology in place, you can consistently generate new business with little to no manual work on your end.
Focus on your existing customers
Retaining your existing customers should be a top priority during a recession. It is crucial to create and maintain a customer experience that will keep your clientele happy. Below are some ideas for how to boost customer loyalty during a recession:
- Offer loyalty incentives such as value packages: Value packages bundle together multiple auto repair services into one discounted price. This method works great for basic services such as oil changes and tire rotations. For example, an auto repair shop could sell a value package of “buy three oil changes, get the fourth for free.” This is a great way to retain your customers and keep them coming back for a year or more!
- Add an online store to your website: E-commerce selling tools open up doors for growing auto repair shops today. Consumers expect convenience and want to be able to buy at the touch of a button. E-commerce selling tools allow auto shops to set up online stores to sell the products and services that they are already offering in the shop.
- Think creatively and offer new services to increase customer satisfaction: Beyond technology, there are many other things that auto repair shops can do in order to keep their customers happy. Consider offering car pickup and drop-off services so your customers can go about their days without being inconvenienced. Another similar option is to offer a mobile service that goes directly to the customer at home or at their office, and complete the service there. These are just a few ways to increase customer satisfaction - make sure to think creatively so your auto repair shop stands out amongst the competition.
- Over communicate with your customers: In times of uncertainty and panic, people look for guidance and want to feel confident in the businesses that they are choosing. Stay in touch with your customers using email and text automation to share any updates and changes to your business that may be taking place. Also provide knowledge and answer any questions that your customers may have during these times. By communicating clearly and consistently, your auto repair shop will become the go-to source in your local community.
With a recession looming, it is crucial that your auto shop takes on challenges confidently. By evaluating your current situation and implementing new marketing channels and technology accordingly, your shop should be able to navigate through these uncertain times. By executing these ideas, you can boost brand awareness in your local community while also generating sales that will bring your auto shop out on top when the dust settles.