XYZ Fast Lube owner Bill is reviewing his first quarter results. He’s shocked to realize his customer count is down by almost 5 percent, while gross sales have increased 3 percent. With the additional ancillary services he has added, his average ticket has increased, producing the sale increase. With this increase, his business appeared to be healthy.
With the increased sales, he has not paid attention to his marketing efforts. In fact, he has not really had any significant marketing efforts the past few months. Why spend the money on marketing when your sales are increasing?
He found one brake service could cover the loss of several lost oil change customers. Bill decided to act, and placed a direct mail drop with a deep discount on his oil change service bringing vehicles back to the store. Customers are racing back in to take advantage of this discount but are not purchasing additional products or services, which causes a drop in his average ticket.
To increase the average ticket, he puts several ancillary services on sale at large discounts to appeal to the discounted oil change customers. It works! Ancillary services are sold, and his average ticket increases. His problem appears solved.
At month’s end his accountant calls to ask what happened to his gross profit? Bill asked what are you talking about, my customer count is up and my average ticket is fine. Bill wonders what he must do? He increased his car count, fixed his average ticket and now his profit margin is dropping.
As you lower your margins to attract more customers, your fixed expenses don’t change. You could end up in a position where more customers and more sales are not profitable. Have you been here?
Your Marketing Plan If Bill had a marketing plan in place, necessary decisions or adjustments that fit his long-term goals could be made. Your plan will give you stability that will help you stay the course.
Your planning process needs to start sometime before the year begins in this way by creating a 52-week marketing plan. Before you start planning, set your goals and objectives. These goals and objectives should be for a longer period, at least five years. With today’s longer intervals, your objective is to satisfy each customer for longer periods of time. There are many things to consider beyond customer count and total sales. Here are just a few: • Who are your customers? • Where do they live? • What are your most popular zip codes? • Identify your core strength; what is your point of differentiation? • Why do they buy from you? • What percentage of your total customers are repeat? • What percentage are new customers? • What is their age range? 25-55, 35-65 or older? • Who is your competition and why? • Have you or will you change your product and/or service mix?
The Message Review your answers to these questions to develop your message. The message is what will set you apart from your competition. It answers the most important question — why should they choose you over the others? After they choose you, determine what you did and what will you do to keep them coming back. These answers must come from store operations and marketing working together. The marketing efforts need to support your customer service efforts. I like to say advertising and marketing can bring future customers in, but only great customer service will bring them back.
The Media Now it’s time to select the media you will use throughout the year. Social media has added many choices not available just a few years ago. Based upon past experiences and current research, select the different advertising mediums you plan to utilize. Some to consider: • Direct mail • Reminder email and postcards • Email sale promotions • SEO • Facebook Business Page • Twitter • Google Plus • Instagram • Radio — usually very costly due to inability to target • Cable TV — buy zones targeted to your locations • Sports sponsorships and promotions • Not-for-profit sponsorships • Local school events
Your priority is to build customer loyalty by keeping your current customers. If 80 percent of your customers are repeat customers, consider spending up to 80 percent of your advertising budget here. Your budget should be a percent of your budgeted sales. I recommend you build a flow chart using a spreadsheet where you can layout 12 months and all 52 weeks. Since oil changes are the backbone of a lube shop and they are driven by individual travel plans, you will first need to identify and lay out all major holidays. To achieve the highest return on your investment you should always have your major ad drops — direct mail or other — about two weeks in front of the holiday travel period.
Your current customers will need to be touched often. Schedule reminder emails and postcards to start when they are due for their next oil change. List reminders on your spreadsheet for all 52 weeks, since there will be reminders going out to certain customers every week.
Social media offers you a wonderful opportunity to develop long-term relationships with your customers. I highly recommend a Facebook business page. The business page allows you to build ads and boost your post to your target audience. To build this relationship someone must be available and responsible for your page by posting ads and responding to others’ posts.
I recently used the check-in button on my Facebook page to let others know I was eating at a new restaurant. I mentioned that I “love” this place because of the healthy selections. The following day the restaurant responded they “love” me too. This is an excellent example of how your business can stay involved with your customers. All your other advertisements, invoices and in-store signage should have your social media logos saying “follow us on” your social networks. The key here is that someone is assigned to engage with your social media contacts several times each week. They will also be responsible for developing your online brand identity.
You should also have a Facebook personal page to share posts with your friends. In this way, you can keep your business brand all about the business and not about you or your personal views on different subjects. Your business page should never have your individual views or personal beliefs.
There are many other social media platforms you could consider using. Most of them have different demographics for their audience. Only use them if they match your targeted audience.
Don’t End Up Like Bill In our story above, Bill reacted to his current situation by buying different media he believed would solve a problem. Without a well thought out plan designed to reach your targeted audience each month, you could get off course, spend unnecessary monies and lose customers. Stay on course. Getting someone’s attention in today’s media world is difficult. Ads are coming at us from all directions. Keep your message clear and constant throughout all the different forms of media you choose.
Your plan will keep you from wasting time on the next flashy social media platform or going overboard next week’s super big deal. It’s not that great of a deal if it doesn’t fit your plan.
Hold yourself accountable; test and measure every new idea. Budget a small amount for testing new media and ideas. Get a basic return on investment for every marketing dollar you spend. If this test works, enter it in next year’s plan. By running these tests throughout the year, you will know what to include in next year’s plan.
Team Understanding & Support All marketing efforts must have your team’s full support. Teams’ work schedules should be built around your ad drops. The best advertising is great customer service. Great service will lead to referrals, online reviews and likes on your Facebook page. When your team knows what your marketing efforts will do for them, then you will get the great customer service.
Great service and a strong marketing plan will bring your customers back again and again.
It’s not too late. If you don’t have a plan in place for 2017, get started now!