For the last couple of years, since the initial downturn from COVID, the auto repair aftermarket has been on fire. ATI's shop owners have been setting record after record. Then inflation happened, and interest rates went up. Now the recessionary mindset is creeping into the auto repair shops' customers and employees. Selling during a recessionary climate can be challenging, but it is not impossible.
What is the recessionary mindset?
The recessionary mindset is a state of mind that people adopt during an economic recession or financial crisis. It is characterized by a heightened sense of anxiety, fear, and uncertainty about the future and a tendency towards risk aversion, reduced spending, and increased saving.
Depending on where you are in the country, you may never feel part of the recession. That is unless you think you will — and then, of course, you are right! So, the first thing in selling in a recessionary climate is to not trick yourself into thinking the customer doesn't have money.
The average cost to maintain and repair a vehicle
The average amount I tell customers to plan for car maintenance is $3,000 a year per car. Costs can vary depending on specific circumstances. It's possible repairs can be $1,500 one year and $4,500 the next. Suppose we let the customer know what it takes to drive a car and keep it going down the road until it rusts out and is no longer worth anything. In that case, the customer knows his or her responsibility in driving a vehicle and is no longer shocked that he or she must spend money to maintain it. ATI's vehicle maintenance calculator shows all the maintenance and repairs broken down by cost per mileage.
When you put your prices into the worksheet, finding the cost per mile is much easier. The range is typically from 15 to 20 cents per mile. The average person drives 15,000 miles a year, so by using time and mileage, each car he or she owns will cost about $2,250 - $3,000 per year in maintenance. It will cost more if he or she drives more, but it won't cost less if he or she drives less.
So how do we apply our realistic vehicle maintenance knowledge to an effective sales process? Here are five ways to sell and interact with your customers in a recessionary climate.
1. Understand our customers' needs
During a recession, people may be more cautious with spending and prioritize their needs over wants. This means that they are more likely to spend money on essentials or things that provide a significant return on their investment, like auto repairs. Therefore, to successfully sell during a recession, it is important to understand your customers' needs and demonstrate how your product or service can meet those needs cost-effectively.
If someone doesn't have the money to maintain and repair their vehicle, where will the money come from to buy a new or a used one? If he or she buys a new one, the repair cost today is probably less than the sales tax on a new vehicle. The customer would pay more interest on sales tax and registration fees. If he or she buys a used vehicle, he or she is buying one that has probably not been maintained properly and will need thousands of dollars in work to bring it up to reliable levels. So, in short, he or she is buying someone else's problem that was not maintained as it should have been.
2. Educate your customer
As automotive professionals, we know what we are doing. And we often think the customer knows what we are doing, so we don't truly educate the customer. To the customer, it may seem like we are doing something to them or always after their money. However, if we take the time to explain and educate, they will feel more comfortable coming to us for services. So, let's educate them on what we are doing to and for their vehicle and why.
One way to educate is to explain the problem in simple terms. When discussing auto repairs with your customers, using language they can understand is essential. Avoid using technical jargon and instead explain the problem in simple terms. This will help your customers feel more comfortable and confident in their understanding of the repair process. Overall, educating your customers on auto repair can improve their experience and build trust in your business. By using simple language, providing visual aids, offering options, and providing maintenance tips, you can help your customers feel confident and empowered when it comes to auto repair.
3. Be upfront and honest
Are you presenting the customer with an accurate plan for what is coming up with their vehicle based on time, mileage, maintenance, and where the wearables are? Or are we cashing them out without being upfront and honest about their vehicle? Wouldn't it be much easier to get them to say yes next time if they knew what was coming and how much it cost? It only takes a minute to get their mileage on the drop to start the education process. And it only takes a minute to give them a plan when we cash them out. If we keep the cost per mile a secret and the true state of their vehicle a secret, then you can't be surprised when your conversion rate goes down on your sales and your techs start looking for another shop to work at.
4. Improve your customer service
Providing excellent customer service is always important, but it becomes even more critical during a recession. Customers want to feel valued and appreciated, so ensure you provide top-notch service to retain their loyalty and encourage them to refer others to you. Be responsive to customer inquiries and concerns, provide personalized attention and support, and go above and beyond to exceed customer expectations. To improve your customer service, you must hire and train the right people, provide the tools and resources they need to do their jobs effectively and create a culture of customer service excellence throughout your shop.
5. Be flexible
During financial challenges, business conditions can change quickly. To be successful in selling during a recession, you need to be prepared to adapt your sales strategy and be flexible in terms of pricing, product offerings, and other aspects of your business to respond to changing market conditions. This means staying current on automotive industry trends, monitoring customer feedback, and being willing to experiment with new sales strategies and tactics. Be ready and willing to pivot quickly when market conditions change. This means having the right systems and processes in place to collect and analyze data, make informed decisions, and implement changes quickly and efficiently.
To sell in a recessionary climate, we must keep the right mindset about what is possible. First, we need to truly take care of the customer and let them know their responsibility in owning a vehicle. Then we need to make sure and give them a plan on what is coming due on their vehicle and quit shocking them by asking for money. Treat them like they need to be treated, and they will be your loyal customer through thick and thin.
