[pbrennan]

Bob,

This is great advice! I once worked with a contractor that was complaining about cash flow problems. So I asked him what his bi-weekly payroll was, how much cash he had in the bank, and what his receivables were. He didn’t know the answer to any of these questions! Furthermore, his books were a mess, and during a short visit to his business, we found $60k in un-deposited checks just lying in a drawer in the office, going unnoticed! 

So I would add to this by saying that getting accurate numbers is the first step to knowing your numbers. My first suggestion to this contractor was to hire a professional Controller to straighten his books out & put processes in place – so he would never have this issue again. So it’s important to first implement good tracking systems so your numbers will be accurate. 

On another note, I have a follow-up question: 

What are some good productivity & efficiency benchmarks for service shops?

What % of revenue should a shop be spending on advertising & marketing, given a growth state?

[pbrennan]

Awesome, Tom!

When I was in the residential heating, air conditioning, and plumbing business, we had what was called a “home service plan.” It entitled owners (who paid for it) to a 15% discount on repairs, plus priority service & extended warranties on their work.

I created a program where our sales people got in touch with large local organizations like hospitals, big companies, etc – to approach them as offering the service plan as some part of their employee benefits. We’re talking companies with anywhere from 50-5,000+ employees, all with a new benefit as part of their benefits package – that they’d be willing to chip in or offer at a discount, our services to help them take care of their employees’ homes.

Now we all know the cost to acquire a new customer is pretty high – somewhere between $50-$250 per. You could charge $50/year per employee, or just give it away! If you gave away 1 free oil change to each employee per year, plus a 10% or 15% discount on repairs at your shop (etc etc – a big value to them), could you “sell” this as part of a benefits package to a large company? Wouldn’t it be in that company’s best interest to ensure their employees’ vehicles are in great condition & they can get to work reliably? 

[pbrennan]

In my experience, AdWords can pay off handsomely for an auto repair business. I agree with Stephen in that it’s much less expensive per lead than traditional media outlets like print.

The key to successful adwords campaigns goes so in-depth, you can write a book about it! (And there are lots on it…)

A lot of digital agencies I’ve dealt with don’t really give it the time & attention it deserves, and a lot of business owners I know don’t give it the time & attention it deserves, either. It actually works both ways!

It’s false to assume it’s a waste of money. You can actually beat out the big competitors because you have an advantage over them. They are managing multiple campaigns over many geographic locations most of the time, and many times (not always) don’t spend time optimizing their campaigns locally or extensively testing new ad copy / techniques. 

On the part of the owner paying for the campaigns, you must: 

1. Dedicate time to learn about it. The time is over when you could just place ads in yellow pages or send out post cards. You have to be well diversified & educated about all marketing mediums.

2. Dedicate the time to review campaign results. Track it to the gnat’s eyebrow & hold your management company accountable to producing a cost per lead (phone call) that will work for you.

3. Make sure YOU are doing your job answering the phone correctly. I can’t tell you how many service businesses I’ve been in where phone booking skills were not even on their radar. They think their phone booking rate is 90%, when in reality it’s 35%-50%. This is the single largest source of found money in a service business, and one that has to be absolutely solid in order to maximize marketing dollars.

4. Give it time. It takes time to optimize an account’s campaigns – generally 60-90 days, and a dedicated, decent budget. No, you don’t have to break the bank! But force yourself to at least allocate some sort of budget to it, and commit for 3 months. Notice the trend, and if the trend is looking good, increase the budget.

If you’re not going to do those 4 things above, it surely will be a waste of money. 

I hope that helps!

[pbrennan]

What do you think about this idea related to loaner cars?

– You have a “discount club” (call it whatever you want) offered at, say $99/yr per car. It INCLUDES 3 oil changes. Members of the club enjoy great benefits (10% off all repairs, priority service, FREE loaner cars, etc etc)

– Offer loaner cars to customers at $10/day (cheaper than any rental car service out there) who are not part of the club.

1. Makes selling a club membership MUCH easier because of the huge value.

2. Ensures those customers will at least come to you for oil changes, where you will have the chance to get them involved in other services / repairs

3. Covers some of the cost of owning the loaner cars.

I think you should wrap or at least sticker the windows of the cars you loan out – it’s additional free advertising.

Thoughts?

[pbrennan]

I’ve heard mixed reviews about Angie’s List for service companies. I think the general rule of thumb is this: If you focus on it, you can make it successful (like anything else). 

If you have some money in the budget or you can afford to test it, everything is worth testing. Just make sure you educate yourself about it first, and put some systems in place to make it successful. If it’s really true that you can get a ton of referral from it, the cost per lead is probably really low!

I’m guessing it’s 500% better than Yelp’s paid programs, though. 😉

[pbrennan]

Good points everyone is making. 

I rate good web designs with the following factors in mind, in order of importance:

1. Conversions – Is it designed in a way that will maximize the number of phone calls & customers you get? I.E., large phone numbers that are click-able, customer reviews that build trust, mobile-friendly design, easy to read colors, calls-to-action, etc.

2. SEO-ability – Is structured to take advantage of best-practice SEO techniques. This includes things like a mobile-friendly design, use of rich snippets / micro formats, website speed, and strategic internal linking – to name a few.

3. “Future Proof” – Hard to measure & evaluate, but it should be built on a content management system or platform that is consistently supported & updated, plus give you the ability to manage & control the site yourself, should you ever want to take it over or switch providers.

I personally have seen & like Kukui’s designs, although I think there are a few usability improvements they can make (like making their website templates responsive & not just having a mobile-friendly version of the site). 

[pbrennan]

I tend to agree with Lowel on this one – getting referral business is perhaps the cheapest & most effective way to get customers, but really starts with the shop’s ability to provide great service, then continues with a good referral system.

I think when you evaluate a marketing company, these are the key things to take into consideration:

1. Their reputation (obviously!) – based on results.

2. Transparency: You want reports, frequently, and you want visibility into your campaigns & progress made. Get cost per lead, and make them include their management fees as part of that cost!

3. No cookie-cutter solutions: It’s important you receive individualized attention & each account is looked at uniquely. Too often companies try to specialize & end up making a “cooke-cutter” approach to your SEO / PPC or whatever, when really each account has its own unique challenges & you don’t really fit into a box. 

4. Education: Will the company take the time to educate you on how to make important decisions regarding your marketing?

5. Control: Always retain control of your accounts if you can. For example, many companies like to restrict access to your adwords account because it’d be too easy for you to switch companies. This one is tough to get, simply because many companies spent time developing keyword lists that are exhaustive. 

Just my 1 cent!