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Formulating Auto Repair Business Strategies for the Upcoming Year

MarketingStrategyAfter measuring key performance indicators and identifying trends in business results – strategies should be developed to address the most important areas. Enacting any plan of action involves strategy and tactics. Strategy refers to what you will do – tactics is the definition of how you will do it. Identifying strategies involves looking at the possible alternatives to address any given situation. Often choices can be narrowed down during the strategy formulation process as cost and impact will be readily obvious. Sometimes comparison and choice will need to be determined after tactical approaches have been defined. Also, although business strategies are focused on certain areas they’re inter-related and must be implemented in a coordinated fashion. Following are guidelines for formulating strategies:

 

  1. Identify Methods for Addressing the Customer Base – Measuring customer retention, attrition and acquisition rates will indicate what areas need more focus. There are many possible methods of dealing with these challenges. For the upcoming year deciding on which options to employ should be based on areas that need the most attention and resource availability.
  2. Select Customer Engagement Strategies – The methods employed in the sales process are a large part of the ability to earn business. The largest part of sales volume in auto repair is generated by turning quotes into sales and earning business through recommended services. Evaluating this part of the business and choosing successful strategies will have significant impact on sales volume.
  3. Determine a Course of Action for Labor and Parts Profit Margins – Gross profit margins on labor and parts must cover operating expenses. Actual profit margins should provide a reasonable return on investment. Pricing must be in line with market circumstances. Employee compensation must be competitive. Parts margins can be affected to a certain extent through focusing on cost during the procurement process. Care should be given to the fact that price shopping can increase overhead costs and thus negatively impact actual profits.
  4. Choose Business Growth Strategies – In auto repair the most accurate measure of business growth is the number of labor hours sold. Many factors can impact this and it’s imperative that the best strategies be chosen. Marketing, sales strategies and operational efficiencies can all impact capacity and therefore business growth. Business growth can also be achieved through expanded capacities or expansive marketing strategies. The key point is that effective growth strategies must be employed or business decline will be inevitable.
  5. Define Operational Process Improvement Strategies – Doing better what is already being done is the way Peter Drucker defines efficiency. Process improvements can lower overhead costs and improve throughput. The impact of advances in this area cannot be overstated. The key is to focus on the areas where the greatest impact will be recognized.
  6. Identify Quality Assurance Objectives – Improvements in quality assurance can reduce overhead costs and improve labor utilization. Some improvements in quality assurance can be enacted with minimal cost impact while others have costs associated with them. In this area return on investment can be readily identified and the most effective strategies chosen.

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