If you ask any local business owner what his or her primary business objective is, he or she is likely to say “profit.” No shock there, right? I mean, it’s service fees and sales that ultimately determine whether a business succeeds or not. Then, if you ask that same business owner whether their marketing strategy prioritizes digital marketing to obtain their desired profit margins, he or she is likely to say “no,” or “not sure” and then might follow up with “I prefer print marketing. It’s worked for us for all these years.”
So what is print advertising? Think brochures, newspaper and magazine ads. These types of advertisements reach everyone and anyone with no consideration given to the stage of the buying life cycle people seeing these ads might be in. One issue here is that if you are looking to increase sales for your auto shop, and you decide to put up signs in the local shopping centers near your shop, for instance, you might have 5,000 eyeballs viewing those signs (or who knows, perhaps no one even notices them), but only 1 person who actually saw the sign schedules an appointment for a tire alignment. Does the $50 you might make from that 1 customer warrant the $1,000 or so you spent to design and print those signs??
And why did only 1 person out of 5,000 convert? That’s because the other 4,999 people were either in the research phase of the sales cycle, or weren’t in the market for auto service at all. You might say, “does that mean that print is dead? And if so, how should I be marketing instead?” Our answer: print is not dead; however, it has its place, and increasing profit for your auto business is not necessarily its place. What, then, should you be using?
As mentioned in the example above, the primary reason why 99% of the people reached with the signs did not result in revenue is because they were not at the bottom of the sales funnel. If you want to increase profit, you have to focus on the people who are ready to make a decision or buy, and leave brand awareness tactics, like the signs, to those still at the top of the funnel. A great marketing channel for interacting only with those who show purchase intent is something called pay-per-click advertising (also referred to as PPC or paid search).
So what is it? PPC is a way for you to bid on terms (normally referred to as keywords) related to your business that potential customers are searching for on Google, bing and Yahoo!, and serve up an ad at the top of search results that promotes your services. Unlike the signs that target all stages of the sales cycle, the benefit of PPC is that you can hand-pick keywords that are not only related to your auto repair services, but that show purchase intent (e.g., “price of an oil change” or “nearest tire shop”).
This sounds more like a strategy to increase profits, doesn’t it? And get this, a recent PPC study found that the auto industry sees average conversion rates of 2.27% – just think if the signs had converted that well, they would have resulted in 115 customers instead! Nice, right? And that’s not all; PPC has many more perks when it comes to profit.
Less than 50% of small business owners, though, dedicate more than 20% or more of their marketing budget to online advertising, such as PPC, despite the online traffic and in-store revenue benefit of PPC. With 80% of potential customers using search (think Google, Bing and Yahoo!) to research local businesses, like your auto shop, and given local small businesses only have 10 opportunities to show in search results when PPC isn’t part of their strategy (and might I add, likely alongside national, multi-location big brand businesses, like Jiffy Lube, that are likely hogging the top positions), it is shocking that businesses aren’t dedicating more of their ad spend to PPC, as it gives them more visibility in search.
First, why does more visibility matter? Well, the higher your business appears in search results, the more likely a potential customer is to visit your website – and you need website visitors in this digital age if you are to get in-store visitors. If you are thinking, “I’m sure my position 5, 6, or 10 ranking on page 1 is just fine,” then you might be interested in seeing how much traffic Google estimates each position receives:
- Position 1: 53%
- Position 2: 15%
- Position 3: 9%
- Position 4: 6%
- Position 5: 4%
Don’t worry – you can stop plugging your ears, screaming “la la la la,” and open your eyes; we promise not to torture you with the even more frightening stats for positions 6-10. We were a little afraid, ourselves, to see them.
To put this idea into context, though, someone going onto a search engine, like Google, in search of an auto shop is really no different than you or I going into a mall in search of a new pair of running shoes. As the numbers above show, the person on Google is likely to conduct a search, and then click on the first result he/she first sees, and whether or not that first result satisfies the person, will determine whether he/she hits the “back” button and continues to the second result. Similarly, if you or I walk into a mall, we are likely to visit Nike first if it happens to be the first shoe shop we happen upon, and well, that Finish Line store tucked snuggly in the middle of the mall is just something out of luck because I was lucky and found a shoe with nice cushion and a wallet-friendly price tag at my first stop.
And before we lose those of you who are fortunate to have high rankings, just stay put for a bit – there are still paid search benefits for you.
The auto repair industry is one local business sector that thrives on revenue – much of which occurs in-store (at the physical brick-and-mortar business location). So how can PPC help drive these in-store customers? A recent Google study found that searches with local intent (e.g., “brake service Alexandria” or “transmission flush near me”) are very likely to lead to in-store visits, as well as increased sales of 18% within 1 day after the local search is conducted. And for auto repair services, there are several of these local searches. Just take a look at the screenshot below.
It’s also estimated that local businesses, like auto shops, that use paid ads typically see an overall 3.6% boost in revenue and a 15-1 return on their ad spend – that means if you spend $1,000 on PPC, you could potentially see $15,000 in revenue as a result. Additionally local car shops that sell tires both online and in-store, for instance, could potentially see $6 in in-store revenue for every $1 in online revenue as highlighted by another study that examined local businesses using PPC to drive visitors to a coupon page with a printable and digital coupon code. And if you are in the auto industry, you are probably really familiar with customers’ obsession with coupons and discounts for routine maintenance services, like oil changes and tire rotation.
We are sure a few of you are now saying, “you promised that even if I had high rankings on Google, PPC could still help me. You better have a good argument for why I should put out money when I’m already doing well in search results.” Well, our skeptical crowd, we do. Much research has proven that when you have both a PPC result and a normal result on Google, the likelihood that customers will purchase from you rises 8%, and potential profit can increase up to 27%. Why is that, you ask? It’s because when a potential customer sees your business multiple times on the same search result page, they then perceive your business as having high brand authority – basically meaning that your very trustworthy, as well as an industry expert. That’s a pretty good argument, huh?
Conclusion: If you truly want to drive profit for your auto shop, you can’t solely rely on traditional marketing solutions, like flyers, direct mail and signage. You must also adopt digital advertising strategies, like PPC, in order to maximize your return on investment (i.e., see higher conversion rates at a lower cost per customer acquisition, as well as higher profit margins).
In fact, one of our case studies we are most proud of here at Conceptual Minds is helping one of our Northern Virginia-based auto repair and tire clients, Virginia Tire and Auto, achieve a 58% lift in leads, and a 24% decrease in cost-per-acquisition, by using PPC to super-charge their sales and marketing strategy. If you are interested in learning more about what we did to achieve these results, you can read the complete case study here, or hop over to our PPC service page to see how we might help your business accomplish similar results.