Auto Repair Recession Planning: 4 Steps to Plan for Multiple Scenarios

Our economy is already showing signs of a downturn. Now’s the time to plan.

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Conceptual Minds | Feb 22, 2023

Man genuinely, and god laughs.

Few things in this world are truly predictable; it’s hard enough trusting tomorrow’s weather, let alone the round-the-clock coverage of the next economic downturn. That said, it’s hard to ignore storm clouds when they knock down your door. Our economy is already showing signs of a downturn.

Now’s the time to act.

Don’t know where to start?

We—the auto repair marketing coaches at Conceptual Minds—will put you at ease with a step-by-step guide to recession planning.

Why Plan Your Auto Repair Shop’s Recession Response?

For every painful experience, there are two pain points: the pang of the painful event itself and our brain’s frenzied response to it.

Recessions are the same way. The economic shock naturally activates our survival instincts, sending us into what we like to call “avoiding disaster mode.” In response, owners make deep across-the-board cuts, suspending all efforts at growth.

Just like in life, over-correction is a risk.

You can give yourself the confidence and breathing room you need to tackle these changes thoughtfully with a range of actionable recession response plans.

4 Steps to Plan Your Auto Repair Shop’s Recession Response

There’s no telling how the next recession will shake out. The national impact is hard to predict, but local responses can vary even more.

Nailing down the recession’s impact on your community is essential. Once you see what your locals are up against, you’ll be better able to rework your services, service features, pricing, and marketing to address them and win their favor.

1. Learn What's Driving Economic Change in Your Area

Your plan’s effectiveness depends on how accurately you’ve diagnosed–and addressed–the recession’s local impact. To do that, you need a keen understanding of the factors that drive your local recession reality.

Keep tabs on the following recession factors:

The social world: Think about changing demographics; aging baby boomers, newly-licensed Gen Z students, laborers with reduced hours, laid-off white-collar workers…
The economy: The news will focus on the recession’s macro impact, but you need the local story. Understand the area’s local economy, including its employment and housing market, as well as its impact on its industrial and commercial base.
Politics: Legislation impacts regulation and taxation. If your local government is seeing less sales tax, it might cut back on spending. The same goes for regional, state-wide, and national government entities—knowing what’s around the pike gives you a chance to prepare.
Industry: The auto repair industry’s challenges won’t pause for the downturn’s duration. Repair shops must still combat the labor shortage to attract quality candidates; that might mean significant changes to workplace conditions, benefits, and pay.

2. Plot Out Your Change Variables

Here, variables are the potential scenarios you’re planning against. Reductions in customer demand, rising expenses, and supply chain issues are all potential outcomes of a recession.

Your job is to plan for those most likely to occur.

If you struggle to come up with your own, the following three variables will cover a wide array of likely outcomes.

Minor recession causing a 20% demand drop
Major recession causing a 50% demand drop (Less likely)
Labor shortages reducing capacity 25%

3. Establish Your Variable’s Timeframe

Your planning will benefit enormously from a rough timeline of your economic event variable. After all, you can’t account for an open-ended scenario.

Since our variables deal in reduced demand and increased cost, they’ll likely stick around for the length of the recession. Thankfully, recessions are pretty vigorously studied, so we know they last two or more fiscal quarters on average (Typically, the more severe the recession, the longer the recovery).

Adding the timeline, our variables now look like this:

Minor recession causing a 20% demand drop (2-4 Quarters)
Major recession causing a 50% demand drop (3-5 Quarters)
Shortages driving a 25% costs increase (2-4 Quarters)

4. Pick Five Actions You Can Take to Remedy the Situation

Say the situation you’re worrying about comes to pass. What then?

Obviously, it depends on the scenario, but rest assured you’ll still have viable strategic responses for each plan. For our purposes, detail five steps you can take to remedy the situation.

For instance, let’s say our 20% demand drop takes place.

As a response, we might do any of the following:

Diversify marketing toward recession-proof customers—Offer desirable features like shuttle service and online booking, and market in areas trafficked by high-income residents
Monitor your competitor’s pricing for changes on a weekly basis—Take note of changes and consider matching our price in response
Launch high-volume, low-cost print campaigns—Use low-cost customer generation to offset our demand drop and run loyalty campaigns to get more visits and loyalty from current customers
Make smart reductions to staff hours—Cuts should be fair and even; discuss them honestly and transparently (Be clear with staff about when conditions might return to normal)
Cut low-ROI marketing channels—Suspending marketing might compound our already-low demand, but not all efforts are worth continuing

[Need help with more ways to respond and take action during a recession. Check out our blog on the topic]

When in Doubt, Don't Panic

It’s impossible to avoid tough times in business and life. The safest choice from the outset may appear to require massive spending cuts, but you can turn a recession into a massive growth opportunity by planning effectively.

Learn About Conceptual Minds

As automotive industry veterans, the Conceptual Minds team are experts at growing car counts in any location, in any economic circomstance. So, if you are unsure of your current marketing strategy and would like some guidance, contact us today at 877.524.7696.

Need help implementing your recession plan?

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