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5 Steps to Defining a Winning Auto Repair Business Model

A business model defines the methods by which a company creates, delivers and captures value. The key point in this methodology is the emphasis on value. The starting point in developing a sound business model is target market definition and subsequently recognition of customer perceived value. For example a customer will bring their vehicle to a shop for repair but their objective isn’t necessarily a repaired vehicle. Their real concern may be safety or performance. Identifying what a customer perceives as the most important benefits of vehicle maintenance is the foundation of an effective business model. Any given shop may support several different ‘customer types’ or target markets each with their own idea of what constitutes value. The objective in business model development is to clearly identify the customer’s perception of value and ensure that value creation and delivery as well as value capture (payment received) supports that idea. Following are 5 steps to defining a winning business model:

  1. Define Your Target Market – The objective of target market definition is to divide the potential market into smaller segments allowing marketing efforts to be specifically directed to a group of specific prospects within the overall market … Read More >>
  2. Identify Customer Value Expectations – Customers purchase benefits. A vehicle owner doesn’t have their automobile taken care of for the sake of the vehicle. Their vehicle provides one or more specific values in their life and this is what they’re seeking … Read More >>
  3. State Your Unique Value Proposition – Businesses succeed by providing value to customers. The unique value proposition is the statement of the means by which value will be provided to a specific target audience … Read More >>
  4. Define Your Value Chain Structure – When defining and refining the methods by which value is delivered to customers all building blocks of the service offering should be included. An effective business model definition focuses on all aspects of service delivery and strives to ensure their alignment with customer perceived value … Read More >>
  5. Specify Your Value Capture Plan – A successful business model is dependent on the appropriate level of value capture. Value creation and value delivery result in value capture. Thus the focus should always be on value creation otherwise the cart will be placed before the horse … Read More >>

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