Tips to Identify Your Ideal Market
SHOP STATS: Orozco's Auto Service Location: 3 in California (2 in Long Beach, Bellflower) Operator: Servando Orozco Average Monthly Car Count: 470 Staff Size: 24 Shop Size: Ranging in size from 2,500 to 10,500 sq ft Annual Revenue: $4.2 million
Advertising is almost half of a $1 trillion industry—the 2016 advertising revenue hit $493 billion. Usually, a person never thinks they are affected by advertising because they don’t find themselves jumping off of the couch and rushing to the nearest fast-food chain when they see a McDonald’s commercial. Over time, however, when a person needs a job done, they need a source, and advertising links the two together.
The same goes for the auto repair industry, except unlike national fast-food chains that are trying to get anyone they can, marketing to the right customer will get you the customers you want.
But why is advertising to the right customer important? Can’t you just advertise a special and watch people come running to the door? Not exactly.
Why is it important, exactly? Well:
- Wasting money isn’t usually on everyone’s list of to-dos. The most important thing about finding the right target marketing is so ad dollars are not wasted, according to Olivia Hensley, founder of Smart Marketing.
- Finding the market you want will help build an audience you want—simple enough. When you find the right customers, keeping them is of utmost importance. Instead of losing your ideal customers and gaining ones outside of your market, the same ones keep coming back for more, with referrals and the right advertising attracting more business, says Servando Orozco, CEO, and owner of the three location Orozco’s Auto Service in California.
Ratchet+Wrench spoke with Orozco and Hensley on the best ways to find a shop’s target customer and from there, how to go about marketing to that demographic.
Phase 1: Identifying the Target Customer
Step 1: Gather the information.
“You always have to measure the results—you have to track everything you do—from marketing, performance, sales, you name it,” says Orozco.
For Hensley, her marketing business specializes in independent auto repair shops. She says in order to find the ideal customer, start off with your CRM system and take a look at the database to see where customers are clustered—this includes age, car make and year, and average repair order cost. This is how you can identify the traits of the customers that are spending the most with you.
And that’s exactly what Orozco did with his system. A couple of years ago, he went through his CRM system and found that one of his shops did almost $1 million in sales. He decided to sit down and look through past customer tickets to see who spent the most money and who was coming in most often—and the results shocked him.
“I found out 20 percent of my customers spent 80 percent of the money,” said Orozco, meaning these select customers had tickets that accounted for 80 percent of the total revenue. Whether it was multiple visits or more repairs, Orozco knew he needed to take action.
“When I identified those customers—who they are, where they live, what they do—I said, ‘Wow, I need more of them,’” Orozco says.
Step 2: Zeroing in on customer traits.
After identifying these select customers over time, he found the ideal age of his target market: men 30–60 years old and women 25–50. These customers, he found, were spending the most on repairs— helping ARO overall—and took care of their cars, which meant they were coming into the shop more often.
Adding to this, Hensley says the “sweet spot” for auto repair shops lies with customers who own or rent a home, have children in the household, and own a car that is just past the warranty period.
When it came to class, Orozco said he wasn’t after high-income people, but middle-class folks— high-income folks tend to buy a new car when something goes wrong rather than fix the problem, he says.
And it even comes down to the type of car a customer drives and how often. Orozco found that customers who own Mercedes, BMW or any other European vehicles care more about their cars and want to protect their investment, all while providing a “healthy ticket” as he puts it.
From there, Hensley says all of this information will lead you to the ideal zip-code area, putting your ad dollars into the right place with the right customers.
Phase 2: Marketing to Your Target Customer
Step 1: Reach out.
Not only are demographics important to identify, but so are psychographics as well. And by psychographics, she means why a customer buys something, rather than who is buying.
“When you talk about demographics, they are so closely intertwined with psychographics, it’s almost impossible to separate them,” says Hensley.
Once Orozco knew who his ideal select customers were, he called them and asked them a couple of simple questions:
What is the most common thing you do in this community?
Where do you spend most of your time?
What are your hobbies?
What are your plans for the weekend?
It’s all about finding out who the ideal target customer is. Meaning their age, lifestyle, values and hobbies. By asking these questions, Orozco was able to narrow in more on what drives his customers and how he could best reach them. For his target market, he found they were avid golf players, involved in private fitness centers and school programs, along with organizations and nonprofits.
From there, Orozco found a way to immerse the business into their lifestyle.
Step 2: Put your name in view.
After finding the target market, Orozco decided to “put his name in front of them”—advertising on the golf course, donating to nonprofits, and attending local functions. He even has recognized customers at restaurants and has picked up their tab to show he’s invested. He says being a part of the community gives an opportunity to present yourself to your target market in a good light and will keep your name of mind next time they need a repair.
Step 3: Make the message consistent.
Making the message follow in line every time ensures you align with your goals and keep the same customers, says Orozco. For his business, he not only promotes the same values every time but advertises to the same target market clientele, too.