Competition for auto shop repairs is fierce and often based on price – which means smaller competitors often lose in the price wars. Auto shop management is not the only group to struggle with this problem, however. Most mom and pop grocery stores were put out of business in the last 20 years by large conglomerates like Walmart who could demand goods from suppliers at prices they demanded simply because of the leverage they had with their extended market.
In order to avoid a similar fate, auto shop managers should consider carefully if they can compete in the general auto repair market or if it would make more sense to pinpoint a niche market within the greater market and then develop services that best serve that market. An important additional step would include targeting their marketing to that same audience.
What is a niche market? Entrepreneur defines it as, “A portion of a market that you’ve identified as having some special characteristic and that’s worth marketing to.” Specializing in the repair of electric or hybrid cars would be one way of narrowing the market, both in terms raw volume and demographics. Choosing to focus on women and child-friendly customer service is another way of making an auto shop more desirable to a certain clientele. To specialize in hybrid repair might require additional investments in equipment or training, offering a more comfortable experience to women customers might mean renovating facilities or hiring different staff.
Of course, not all niche markets are created equal. The challenge for auto shop owners is to carefully study the repair markets they are located in or wish to target and determine if there are any gaps in service. The best and most lucrative niche markets have specific needs, are currently underserved, are large enough to support at least one business, yours, can be served with specifically tailored products and services, and have needs that your auto repair shop can afford to serve without breaking the bank.
Once your business has determined an appropriate niche to target, an effective marketing strategy can be developed to draw in those customers who will best benefit from your specifically designed service menu. This marketing can and should involve a number of strategies we’ve discussed before, including:
How your auto shop forms its strategy, of course, depends on which niche market it is targeting. Consult the Automotive Management Network’s extensive online archives for more specific tips and the experiences of others in the business.