PC&D MAGAZINE
Attention to Detail: Marketing details
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From Volume 24, Issue 11 - November 2000
Department
A complete guide for marketing your detail business.
by: Robert Roman
 
 Related Information
  Developing the ideal sales process
  Developing a product mix
  Example outline of a strategic marketing plan

Detail shop operators need to acknowledge the importance that marketing plays in sustaining and growing a small business. Although there are many detail operators who do a fine job of presenting and marketing their business, there are certainly many who would admit that marketing is unfamiliar territory to them.

Narrowly defined, marketing includes activities that direct the flow of goods and services from the provider to the consumer. The marketing function includes research, consumer analysis, products and services, distribution, promotion, price and management.

Research

Research includes collecting and analyzing information to help solve marketing problems. However, before collecting any information, the first step is to define the problem.

For example, you may be interested in finding out why you aren't selling as many details as you would like to. In this case, you would want to collect information related to sales such as volume, prices, advertising expenditures, inventory purchases, etc. This type of information can be found in trade journals (detail survey), your company's internal records and from vendors and distributors. Data analysis can be as simple as making comparisons of your past and present performance with the results of industry surveys and that of your competition.

Consumer analysis

The purpose of consumer analysis is to help determine who your customers are. Once you understand this, you will be in a better position to both appeal to them and satisfy them. The demographic factors most commonly used to develop consumer profiles include age, gender, race, occupation, type of housing, income, education, location, mobility (ie. number of vehicles per household) and marital status.

You can collect this type of information when you write up service orders or by taking a customer survey. You can also obtain similar demographic profiles for your market area (traffic analysis zone or census tract level) from your local planning commission or metropolitan planning organization's economic department.

Although demographic profiles will not provide you with a lot of meaningful information about individual purchasing habits and preferences, comparing your existing profile with the area profile may provide you with information that could be useful to determine if you have any significant promotional deficiencies. For example, if the area profile indicates a large ethnic population but your internal profile does not, you may want to consider a promotional campaign and advertisements targeted at this untapped customer base.

Products and services

Consumer goods include both tangible and extended products. Tangible goods include your detailing and car washing services and any type of merchandise that you offer. Extended products include things that could significantly add to the image of your business such as pick-up and delivery service, warranties, refund policies, free estimates or technical advice.

The number of different products and service lines and the number of items you offer within each line will describe your product mix. However, product mix can be a double-edged sword. On one hand, you want to have a wide mix of services and products to appeal to different consumer needs. However, a wide mix may require additional resources for inventory, expertise and production.

This is especially important to consider when you are first starting out. Unless you have sufficient capital, manpower and a broad range of technical capabilities, it's best not to offer every detail service under the sun. Develop your core business first and then add additional profit centers as you improve your ability to provide high quality service in a consistent manner (see Developing a product mix in the sidebar).

Distribution

Distribution includes activities related to the transfer of products or services from the provider to the consumer. For a detail shop this includes your physical location, hours of operation, transactions and atmosphere.

Location is the single most important factor for a successful retail outlet. Where your store is located will help determine your expected customer mix and who you will be competing against.

Good locations for building a strong retail business can often be found in secondary and neighborhood business districts (SBD's and NBD's). SBD's are usually bounded by the intersection of major streets and generally have department, variety stores and other types of service shops that serve as good attractors.

NBD's are located on major streets that feature strip centers and convenience shopping. SBD's and NBD's provide the type of visibility, traffic volume and complementary shopping that a detail shop can draw customers from.

In addition to normal business hours, many retail operations offer extended hours and special features such as key slots for night drops and pick-up and delivery service to accommodate a broader customer base. In some areas of the country, credit purchases make up to as much as 70 percent of total retail sales. Not having a merchant service to accept credit cards or personal checks may cause a loss of potential sales.

Finally, operators should do everything possible to ensure their business projects a professional image and a customer-friendly atmosphere. This may include having uniforms, a well-designed, clean and organized shop, professionally made signs and menus, a lobby or waiting area with comfortable furniture and adequate lighting, clean bathrooms and properly displayed merchandise.

Promotion

Promotion includes activities that deal with informing and persuading consumers such as advertising, publicity and personal selling. Advertising is simply messages that you pay for - but it can be a tricky business. For example, flyers are relatively inexpensive to produce and distribute but they tend to have a very high throwaway rate. Yellow page ads are an effective way to inform the general public who you are and where you're located, but you are stuck with the same message for an entire year.

In order for an advertising campaign to be effective, you must use suitable advertising media and your message needs to be directed at the market segment that you want to capture.

Publicity is non-paid messages that are delivered by others. This includes word-of-mouth (both good and bad) from customers, participating in charitable or social events and press releases through local newspapers or local radio and TV stations.

Personal selling is primarily the mechanism to close a sale. However, it is also a promotional activity. Selling at a detail shop often requires more skills than selling at a professional carwash. Once a customer has pulled into the carwash waiting line, you can pretty much count on them buying at least a wash. However, at a detail shop, the vast majority of your potential customers will be shopping you. The degree of personal contact will be greater and the purchasing decision will be more complicated.

The advantage is that you have more time and can use your professional expertise to convince them to buy. This is why it is important to develop a formal sales process, rather than a canned or predetermined presentation. Building a rapport with your customer to determine their wants and needs helps establish the type of relationship that leads to trust and makes it far easier to convert an uncertain customer into a sale (see Developing the ideal sales process in the sidebar).

Price

To a certain degree the value your customers can expect to receive is a reflection of the price you charge for your detailing services. Setting prices too low will not only discount your hard efforts but it may also prevent you from attracting a sufficient volume of business since many consumers may perceive your services as having a low value.

If you want to participate in the wholesale market (dealer work), you will most likely have to engage in price competition and set your prices at the existing market rate. Setting prices below the going rate usually does not work because price can easily be matched by the competition.

The retail market offers more opportunities to minimize price as a demand factor. For example, the more you are able to differentiate your products and services from the competition through promotion, customer service, quality or other marketing factors, the easier it will be for you to set prices higher than the competition.

Another advantage of competing in a retail market is the ability to use a cost-based price strategy. With this strategy, you establish price by computing production, service and overhead costs and then adding the desired level of profit to these values. For example, if you computed that your average operating cost was $30 per hour, you would have to charge $40 for each service hour to achieve an average profit margin of 25 percent.

Management

The first step in developing an effective marketing program is to acknowledge that regardless of your geographical location you are going to be operating in an environment where you will have a considerable amount of control over some factors and absolutely none over others.

For example, you can't force consumers to purchase your services, you can't stop Johnny's Detail down the street from selling hand waxes for $9.95 and you certainly can't make the automobile industry use one type of paint finish. However, you can control the line of business that you're in and what your objectives are. In turn, you can develop your target market, what products and services you will offer, where you will do business, how you will promote your business and what prices you will charge.

In many companies and organizations, strategic planning is often used to develop and implement a marketing program. The planning process usually includes defining an organizational mission; establishing individual strategic business units (profit centers); setting marketing objectives; conducting a situational analysis; designing a marketing strategy; developing an implementation plan; and monitoring the results.

Robert Roman is a long-time carwash operator and currently is a small business consultant based in Clearwater, FL.
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