What the auto repair industry should take away for 2023, from Target, Walmart and Delta Airlines’ Q3 earnings reports.
Conceptual Minds | November 18, 2022
What Target’s Q3 Earnings Spell for the Auto Repair Industry In 2023
It would be great if marketing advice was as dependable as advice from a good mechanic.
It’s easy to get confused, or misled—whether it’s a post anyone could have written, a self-proclaimed expert, or a potentially inexperienced marketing consultant. To make matters worse, the stakes are high.
Ideally, you’d make an investment of that size with more confidence.
Auto repair marketing isn’t a puzzle, but it can be complicated and sometimes counterintuitive. As auto repair markers ourselves, we’ve helped numerous shop owners draw customers and develop reputations. And through this we encountered more than a few widespread misconceptions—these seven are among the most harmful and common we see.
Why the Airline Industry Has it Wrong
Before we take down some of the most pernicious marketing myths, there are three rules of marketing that never change. They are:
- What once worked will likely change
- There’s always something brand new
- There’s a LOT of misinformation about both
The things that draw people to business change; consumers age out of driving, move away, purchase a car with dealer-dedicated repairs, and new generations start getting behind the wheel. Not to mention the much larger changes that shift cultures, economies, nations, and the world.
Marketing works best as a cycle of learning, executing, and re-learning. Understand what you know and don’t know about your customers, competitors, and industry, and set out to answer them one-by-one.
What Should the Auto Industry Take Away from the 2022 Q3 Earnings Season?
Overall, the Federal Reserve is succeeding in slowing down the economy albeit not at the pace they’d like. Additionally, the historic rate hikes that have already been implemented are likely to take several months to filter through the economy, which means more pain ahead for consumers.
This is going to negatively impact the purchasing power of consumers.
As a consequence, consumers will likely continue to pivot their spending toward needs and away from wants. Consumers are likely to forgo expensive plane trips and begin traveling to regional and nearby destinations with their cars.
Since auto repair is generally considered a need, the industry is unlikely to be impacted dramatically. However, consumers are likely to opt for less expensive parts and services, which means they’re more likely to wait for promotions and bargains–or delay purchases altogether.
How Should Auto Repair Businesses Prepare for 2023?
This is a great time to start thinking about your parts and tire mix. Shop operators should ensure that the product offerings span all price points—including lower-tier price points—as consumers will likely drop service levels to save money.
- Make sure you’re taking a concerted effort to keep their market competitive, as pricing is likely to change quickly (I’d recommend maintaining a list of 8-10 of your most frequently performed jobs, and check your rates against the competition on a monthly basis)
- Focus on improving operational efficiency – not just lowering head counts
- Highlight your business value while presenting payment plan options that can help break up their cost over several months—in many cases, at 0% rates.
- Consider marketing channels that attract value-driven shoppers like Yelp
- Put more marketing dollars on direct ROI marketing like email and direct mail
As margin pressure builds, less savvy operators are likely to curb marketing investments which in turn will adversely affect their sales and cause a greater decline in revenues.
This type of environment could be an opportunity for more savvy operators where they can get their message out even more effectively and work towards gaining market share.
How can Auto Repair Businesses Survive and Thrive in 2023 and beyond?
All this begs the question: how does one thrive during a recessionary environment?
Ultimately, that’s a longer conversation than we have time for today—look out for an upcoming post on recession marketing in the weeks ahead—but there’s some great evergreen guidance in the topic that I usually point to in times like these.
According to the Harvard Business Review, the companies that tend to come out best are what’s referred to as progressive companies. These are companies that shy away from some of the more self-destructive recessionary behaviors—like sudden and massive cuts to functions that ultimately reduce a business’s capacity to bring in more revenue.
“These companies’ defensive moves are selective. They cut costs mainly by improving operational efficiency rather than by slashing the number of employees relative to peers. However, their offensive moves are comprehensive. They develop new business opportunities by making significantly greater investments than their rivals do in R&D and marketing, and they invest in assets such as plants and machinery. Their post-recession growth in sales and earnings is the best among the groups in our study.”
What Kind of Service Will Ailing Customers Need?
It’s safe to say life for consumers is about to get harder. As they adjust their expectations and budgets to favor necessities over luxuries and local trips over national and international travel, they’ll be looking for service providers that have their best interest at heart.
The Brains Behind Conceptual Minds
Want to get ahead with a recession focused marketing plan for your automotive business?
Looking for help reaching a cash-strapped audience? The master marketers at Conceptual Minds can help.