In the automotive service industry, we all need to accept the fact that we’re going to have competition. With competition comes consumer choice. And, as we all know, when customers are lured away by a competitor, we may not get their business back very easily.
Businesses that don’t understand this will struggle to survive. Just look at some of the household names that have gone by the wayside: American Motors, Montgomery Ward, Blockbuster, Woolworth’s, A&P and Circuit City, to name a few. All of these companies lost touch with their customers, and, in essence, failed to recognize that their businesses did not offer customers a compelling reason to buy from them. Nor did they put enough effort into setting their business apart from the competition.
We all get caught up in the daily routine and, to a degree, have become complacent. Independent businesses need to offer customers something more in order to effectively compete and increase their potential for success. It all comes down to differentiation, innovation and expertise.
Over the past decade, we’ve all seen the large retailers continue to grow through acquisition and organic growth. They have large advertising budgets focused on building their business and stealing customers from the smaller independent businesses. Their brands have become more dominant and have provided customers with a host of reasons to buy from them, including price (or the perception of a great price).
What do the following industries all have in common?
- Fast food restaurants
- Clothing retailers
The answer is, large or national retailers dominate them all. In many ways, the smaller independents have fallen by the wayside in these industries.
Before effective marketing strategies, advertising, direct mail, websites, social media or reminder programs can have any real impact on growing your business, you need to let consumers know how your business is different from every other business, and communicate why that should be important to them.
The Power of Differentiation
Like it or not, basic services have become a commodity. Everyone seems to offer them, so the only differentiator for the consumer is price. You have got to get out of the commodity business. You need to stake your claim on a simple idea or position in the mind of your prospective customers. Basically, determine what you do in your shop that no other competitor does and how does it benefit the customer.
This may take some soul-searching. My suggestion is to sit down with your team and get everyone’s input. The key question you need to ask yourself is what I call the “so-what test,” meaning, does the consumer think “so-what” when they hear your message? This helps strengthen the outcome.
Here are some ideas to create a unique point of differentiation for your shop:
- Product. Can you offer a product that is unique or even trendy? Or, can you offer a valuable service to make the product more useful to the customer?
- Service. Do you specialize in diagnostics, install lift kits or install custom exhaust? Many shops will claim to be able to provide these services, but attach a tech’s name to the service to make it more personable and believable, for example “custom exhaust by Greg.” If you sell tires and can provide a guarantee of say “29 minutes or less” for a four-tire install, that tells customers that you know their time is valuable. A nice bonus to this approach is you can sometimes raise your prices when you specialize in a particular service.
- Offer. Can you become known by an offer you make? Large retailers flood the airways with rebates and buy-3-get-1-free offers, but you have to wonder if customers know that there will be another offer next month and don’t feel the need to buy now.
- Message of Value. Many times, there are things that you fail to communicate, such as extras you provide or services you think should be included. Your positioning might just rest on more effectively communicating what you already do. Are you conducting car care clinics, working with the next generation to prepare them for driving or sending newsletters with driving tips? Promote the value of the things you already provide.
- Guarantee or Warranty. Can you offer a guarantee or warranty so strong that no one else in the market would dream of doing it? This one frightens many shop owners, but you probably stand behind your work anyway — you just don’t say so. Come out and boldly announce that you guarantee/warranty results and watch what happens!
- Customer Service. Specialty retailer Nordstrom is known for its above-and-beyond customer service. Create your own above-and-beyond program. Word-of-mouth advertising and social media will make it a hit. A great way to kick this off is to over deliver on your customer’s first experience. Give them something more than they expected, like a gift or related service for free.
- Something Unique. Do you provide something in your business that competition does not? This is your “secret sauce.” This might include loaner vehicles, shuttle service or in-store credit. Think about the community and how you might serve its needs. If it’s a commuter market, extended hours might make it easier to get a vehicle serviced, or people might appreciate having their vehicle washed when it’s there for the day. Think outside of the box for ways to offer value to your customers.
- Look at the Competition. Sometimes you can create a niche by looking for holes in the offerings of your competitors. If everyone in the market fails to address a certain problem, boldly grab onto solving that problem and use your competition as the point of difference. This might be telling customers that you specialize in vehicle diagnostics, or that you can service their hybrid vehicle.
- Look at Your Current Customers. What common elements exist among your best customers? Take the time to talk to your best customers and ask why they chose your business, why they stay and why they refer others. Look at your competitors more closely. What do they do that you could do better? What don’t they offer that you could? How do they position themselves?
Once you find or develop a strategy to differentiate your business, all of your advertising and promotional efforts should be centered on proclaiming that difference.
This is your competitive advantage. Commit to it, stay focused on it and resist the temptation to wander off in the next new direction. Make sure your entire team believes in it. This is about building your brand, and it takes time and patience.
The reward is a sustainable business, which ultimately is what differentiates the winners from the losers.