Driving Sales Upward

Dec 2, 2009

Checking the headlines today I see the typical news that has inundated us for months: Fluctuation in the stock market, a rise in home foreclosures, and generally higher prices – the usual doom-and-gloom. Certainly the economy has taken a hit as a result but to what extent? Has the independent speed shop had to adjust its marketing techniques to combat such challenges?

Even in a strong economy, companies must give their all to win customers’ business – and sometimes it’s an even tougher task since competition is likely greater and stiffer. As Executive VP of Shiefer Media Doug Dwyer says, shops should remember two things while developing a marketing plan: 1) Culturalize their business to fit the targetedconsumer, and 2) Make the products or services as easy to purchase as possible.

For this article Performance Business interviewed a handful of very capable business professionals that represent speed shops nationwide. They shared a wealth of knowledge as to how you can market your businesses properly and how to do it in a cost-effective manner. If you require a little marketing assistance, perhaps these tips will keep your shop moving in the right direction.

Gaining Market Presence

Getting your name in front of potential customers will obviously create exposure for your shop. But sometimes this is easier said than done.

“Businesses need to be present,” says Dwyer, “actually or virtually.Businesses need to be involved in events with an actual presence as sponsors or merchants or with a virtual presence through integrated advertising.”

As far as advertising goes, Zan Martin, President of Martin & Co., believes that, “For the investment dollar, I have seen the best success locally with radio and graffiti art.Radio, of course, must be specifically targeted to your appropriate demographic. Here in the South, we have found country radio stations to be most effective.Graffiti art, with ads in bathrooms, are quite affordable and do indeed hold attention for a captive audience.”

As Martin suggests, knowing the audience and the blend of individuals in the community is an important piece of information. Don Fall, President of Fall Advertising, believes that “becoming the local speed shop where customers want to go and hang out is key to your success.”

Sometimes reaching your target audience doesn’t always have to center upon paid advertisements. Lawson Mollica, VP Business Development, KTC Media Group says shop owners should “build project vehicles, support local racers who are stand-up guys (with a written agreement, of course), and use your marketing venues to tell not only what you do, but who you are.” He says a lot of speed shops sell the same services, so “making an emotional connection with potential customers when the market is down and competition is tight could mean the difference between red and black on the bottom line.”

Connecting with the customer also means tapping into different demographics. Martin believes that age should be one element that is not overlooked.

“With the maturation of the average automotive enthusiast, it is vital for everyone involved in this industry to be getting children and young teens passionate about automobiles.Several speed shops I know of have established local annual events for people to come display their vehicles and hand out special awards for father/child building teams.” It is Martin’s contention that activities such as this, by both manufacturers and speed shops alike, will help to perpetuate the aftermarket industry as a whole through the establishment of passion among today’s youth.

The concept is very forward-thinking, an idea with which Mollica agrees.

“You have to look inward,” he says. “Define the vision for your shop. What do you want it to look like in five years? Once you have a clear vision of what you want your company to be, you will know what your audience is.”

Cost Effective Alternatives

Once shops define their audience, they can begin to recruit partners to market their presence. This doesn’t have to be an expensive process, and there are many ways to keep costs at a minimum while promoting the business.

“Lean on the manufacturers you sell for co-op dollars,” suggests Fall. “Nearly every manufacturer offers those dollars. Use five to 10 percent of your sales as a base figure for marketing expenses.”

He also offers up the advice of partnering with a local radio station which provides inexpensive “remotes” that hit your main demographic. And having a frequent customer plan that rewards loyal customers by granting discounts on referrals can help.

Says Dwyer: “It’s not about cost; it’s about value and effectiveness. Cheap advertising can be a big waste of money, and worse, a waste of time. It can also confuse the consumer.”

So what are some more cost effective alternatives that also add value?

“During these tough economic times, it is important to remember the value of networking and free publicity,” says Martin. Martin cites an example – an idea she developed to start event at Hunter’s Custom Automotive titled Hunter’s Fest, featuring Stacey David of GearZ. “It will be an all day Gearhead bash, where attendees can show off their hot cars and trucks, and mingle with fellow enthusiasts. The trick is to think of creative ways to team up with other automotive related folks within your region, and get the local media excited about what you are planning.”

Some shops’ tactics can differ from others, for instance, stores with online commerce versus stores without it.

“For a brick and mortar shop that does not sell online, the simplest way is to market locally to its target audience through media outlets that cater to a speed shop’s customer base,” says Mollica. “Think about what car guys in your area like to do when they are not wrenching or racing. What do they read and watch on TV? What activities are they involved in? There are affordable opportunities in the venues you will find.”

Though, web-based promotions can certainly help, as well. Mollica continues, “The Internet is a natural, and using search engine optimization techniques you can position your company online in a region to drive more relevant traffic to your site. Invest in your infrastructure, meaning have a usable web site with the product information and support today’s consumers have come to expect.”

Perhaps a few of these affordable options involve visiting regional locations such as your local racetrack.  Fall believes it is beneficial to “place signs on those tracks. Go to the races and get acquainted with all the racers. Tell them you would be glad to open up anytime 24/7 for parts or machine shop service if they need it.”

Whatever your approach, be sure to pursue it full-force.

Soft Economy Solutions

As noted in the opening of this article, there seem to be a lot of obstacles and diversions in today’s market. The real challenge remains: How are you going to overcome them?

Dwyer says that lack of consumer confidence has put a crimp on spending; however, “it is a temporary condition, some businesses will fail because of it and some will survive. Those that survive will be stronger and those that don’t will start over.”

Fall notices those same spending trends among consumers as individuals are buying products that they need instead of want. He advises shops to “consider offering a knowledge base on how to improve the mileage and performance through specific products aimed at just that. Make sure you know what you are talking about and offer name-brand tuners, headers and similar products. Offer free installation.”

Even though consumers’ discretionary income has decreased, Martin believes that the passion of those in the business has not. “They are browsing with enthusiasm,” she says, “until they can save enough for the products they want and/or need.”

Martin echoes Fall’s previous claim that a marketing budget in the ballpark of five to 10 percent of sales is a fair estimate, but she also admits that during a weak economy those figures can be tough to achieve.

“The really forward thinking companies often do all they can to maintain that figure so that when the turn-around finally comes, they will be shining in the spotlight,” she says.

Mollica believes that shop owners must be able to adapt while also trusting the market that a rebound will occur. He says, “The key here is to be flexible. If you are a specialist, target your message to that specific audience. If you cater to multiple performance segments, have your finger on the pulse of the market and shift your marketing message as enthusiasts shift their collective interests. The great thing about our industry is that it has always been able to adjust quickly to trends.”

Problems To Avoid

In certain circumstances, a marketing plan will fail because the wrong approach is taken. This is not to say that shops themselves have failed, only that a few minor tweaks could be made.

Dwyer believes the biggest problem with small businesses is that they don’t understand their customers. “They let much of the profit potential walk out the door,” he explains. “Often the profit and source of customers lies in small related sale items, not in the big ticket items.”

Content and context are also two elements to keep in mind. Dwyer defines content as what you are selling while context is where and when to run the promotion.

“Promotions need to be presentedwith culturally compatible content and in the proper context of where and when,” he says. For example, “A June snow tire promotion in Phoenix is probably not a good idea. Introducing a new Drag Radial with free mounting and balancing just before the local drag strip is opening might work better. And making sure that you have lots of low friction brake pads and new lug nuts on display and to sell could make it more profitable.”

In the past, one concern for companies has been over-promoting products and services. With spam- and junk mail-related issues in today’s communication-loaded world, this can definitely become an issue. However, the marketing message doesn’t not have to take on the form of a nagging message. Martin says, “Repetition is the building block for establishing brand equity.The speed shop’s name is its brand, and the more it is heard and seen, the more it becomes the ‘go-to’ place when anything automotive is needed, be it product, or simply expert advice.”

Fall believes a focused, yet regular marketing campaign is appropriate. “As a consumer you need to be continually prompted to remember a retailer, especially a targeted retailer like a speed shop,” he says. “But make sure some of it is soft-sell with maintenance reminders; new product introductions and other data of interest that does not involve a purchase.”

Still, make sure the information you are relaying is valuable. Mollica warns, “If you don’t have anything to say, don’t waste people’s time.” He places a fine line between frequency of promotion or advertising to brand build and messages that are just plain annoying. “If you promote relevant content, your customer base will listen.”