Stirring Up Business: A Dash of Marketing and a Spoonful of Optimism

Published in New England Automotive Report – Thomas Greco Publishing

For nearly half a decade, body shops have been juggling more work than they could handle, and then suddenly – BOOM! Things shifted; volume has been decreasing in repair facilities across the country since last year. 

“Not since the pandemic year of 2020 have so many US shops reported six-month sales and net profit being below the same period a year earlier,” Crash Network reported in April, citing its recent “Collision Industry Business Perspectives” survey. “Nearly half (46 percent) said their sales and net profit in the second half [of] 2024 were down from what they were in the second half of 2023. It’s the fourth survey in a row where that percentage has risen (from a low of just seven percent who said six-month sales were down in 2022) and is almost as high as when 53 percent of shops reported sales down in the second half of 2020.”

Although the Crash Network survey indicated 39 percent of shops had seen no six-month change in sales and net profit, only 15 percent reported an increase in the second half of 2024 compared to the same period in 2023. “Again, it hasn’t been since 2020 when [so] few shops were seeing an uptick.”

According to Focus Advisors’ “2024 Year in Review: Some Excel on a Bumpy Road,” some operators reported “their trailing 12-month sales were down as much as 20 to 30 percent.”

Commonwealth collision repairers are feeling the effects as well.

“We have slowed down a lot,” reports Kevin Gallerani (Cape Auto Body and Service; Plymouth). “I feel like my shop is at half capacity right now.”

Matthew Ciaschini (Full Tilt Auto Body & Collision; West Hatfield) acknowledges “a slight slowdown compared to the volume we had in the previous couple of years,” but he insists, “It’s nothing alarming, but it’s definitely noticeable. While we were used to being booked two months out, we are now only booked for the next two weeks.”

What’s causing the reduction in workload?

“It’s the perfect storm of factors,” Ciaschini suggests. “Claims are down overall. Total losses are up because used car prices have stabilized while salvage has not, thus making totals much easier to get to. The economic climate also plays a role: repairs are expensive, and people are scared. They are scared to spend their money but also scared of the unknown, like the possibility of their insurance policy rates going up.”

Gallerani agrees that “it is a combination of a few things. First, it has been a mild winter with few storms and really no bad weather. Second, not many people travel a lot during winter and spring (summer is usually a busy travel season). Third, I think people are wary about the economy and are trying to save money where they can. Fourth, insurance is expensive, so people are scared to call in claims; they are just ignoring cosmetic damage. Fifth, ADAS is working on preventing accidents, and it’s likely that we will see fewer collisions and fewer vehicles in need of repair year after year.”

Unfortunately, while technology contributes to the reduction in workload, it is simultaneously creating the need for many shops to make significant investments in their businesses via ADAS diagnostic tools, recalibration systems, training and various facility and equipment upgrades related to calibrations and OEM certification. Thus, net profit drops even lower as the revenue being collected is allocated to updates necessary for shops to remain relevant in this ever-changing industry.

So, what can shops do to ensure they’re still viable before the situation comes to a boil?

Cape Auto Body and Service is combating these challenges by doing a few things: “continuing to market our business as we always have, continuing to give our customers the best options that we can and spending more time than usual trying to sell ourselves to customers,” Gallerani shares. “When things are good and we’re busy, we focus less on those vital sales skills. When things dry up, it’s obvious that we need to focus on those selling skills and become better salespeople.”

“We’re trying to be more efficient in our capture of clientele, our process and our message,” Ciaschini offers. “We want it to be undeniable for customers to choose us, so we have continued to try to stand out from our competition through our marketing and branding.  Our social media plays a huge role in establishing who we are and why someone would choose us.  I think this is particularly important when you are not on the insurers’ programs because no one is shuffling your work. You need to prove yourself in your market through reputation and ability.”

But doesn’t marketing just cost more money?

“One thing that shops can do when they are slow, which doesn’t cost money, is to maximize their Google Business profile,” recommends Micki Woods (Micki Woods Marketing). “It’s something every business has on Google; they can claim their business profile, add photos, make sure the hours of operation and contact information is all correct. That is basically a shop’s digital business card. It doesn’t take a whole lot of time or effort, but it’s super important and highly valuable.” 

Optimizing the shop’s Google Business profile and website requires little to no investment, depending on one’s technical abilities. Mike Anderson (Collision Advice) offers some critical advice: “You absolutely have to have the ability for a customer to request an estimate or schedule an appointment via your Google Business listing as well as your website.” 

He also urges OEM-certified shops to capitalize on the digital resources at their disposal. “Check your shop’s listing on the OEM shop locator just to make sure that it’s accurate and that all of the links are working. A lot of times, I’ll go to a link in the OEM shop locator for a shop, click and find it broken. You just can’t assume that all is ok. Go in and just check it.”

David Luehr (Elite Body Shop Solutions) suggests another way to capitalize on those certifications. “If I was slow right now, I would be at the closest dealership, especially if my shop had certifications, and I’d sit down and do a presentation for their service writers on why my shop is the only shop in town they should send their work to.”

Of course, OEM certifications aren’t the only thing that can help shops stand out. Luehr insists the best marketing tool is identifying what makes your shop unique and focusing on that. “A lot of body shops fail because they are out there selling mediocrity. They don’t have a unique selling proposition (USP) that answers the question of why someone should bring their car to your shop over everyone else in town. It can’t just be because we have great customer service or do high-quality work because everyone says that. Shops have to be super clear on what makes them stand out amongst the mediocre competition.Shops will want to offer an USP that won’t make a customer ask ‘so what?’” 

According to Woods, “There is so much value in old school traditional networking.” Local networking can provide myriad opportunities, and she suggests reaching out to schools, chambers of commerce and other businesses to create a network that can refer business to one another. 

Anderson agrees that plenty of opportunities exist in one’s local community, and he suggests hosting open houses for car clubs during the warm months which provide a great time to get in front of customers.

Luehr suggests getting creative. Back in his Salem, OR body shop days, he had “Salem’s fleet specialist” brochures drawn up and left them at any company he noted had a fleet of vehicles. “What I unknowingly did was create something out of air that people wanted. I created a perception that my shop was the only fleet shop in Salem. So, guess who got the business? Me, because I was supposedly a fleet specialist.” 

Marketing isn’t a short-term fix, though. It should be applied consistently to reap the greatest results. “Collision repair is an on-demand business,” Luehr points out. “Marketing is only going to be effective if someone hears it the moment they’ve been in an accident” unless the shop has already created name recognition through its ongoing advertising strategies. 

“Marketing is about having customers know who you are before they wreck their vehicle,” Anderson adds.

Worried about how long this downturn in work may last? No one knows for sure, of course, but there’s reason for optimism.

Luehr acknowledges that dips in the business happen regularly. “We hope it’s a short-term dip, but it does happen. Pre-COVID, dips happened every year. It’s not some strange new anomaly.”

Ciaschini sees the current market conditions as “more of a time to reflect for a moment than a panic situation.” In the meantime, he recommends, “Stay aggressive, stay visible, and run your shop like a real business, not just an extension of the insurance companies. Invest in your people and your processes, because shortcuts will kill you faster than the slowdown will.”

“Be a better salesman, and focus on your capture rate,” Gallerani contributes. “Focus on the customer experience and try to put yourselves in your customers’ shoes.

“There will always be highs and lows,” he observes, predicting, “Things will come back, they always do!”