Actually, Auernheimer doesn’t see it as “bragging.” Five years ago, she and her husband, Rob, realized this was the demographic they would go after and have dedicated all their time and resources into capturing it—and it completely reshaped their business.
“Williamson County is one of the fastest growing counties in the U.S.” she says. “Our population is one of the most educated cities in the country. We realized we have this market of wealth right here.”
Not every neighborhood is blessed with movie stars and Grammy-winning artists, but the Auernheimers are living proof that you can capture any demographic available in your area that will be beneficial to your business. That’s how Cool Springs (CS) Automotive in Brentwood, Tenn., was able to almost double its annual revenue without raising its monthly car count. They were able to do it by evaluating their market, fine tuning their branding, and altering their labor rates—three simple steps any shop owner can follow.
Step 1: Evaluate Your Market
What do you want out of your customer?
The market in Williamson County, just one mile south of Nashville, Tenn., is just as diverse as any stretch of land in the country.
But Auernheimer didn’t just want any old customer—she wanted the customer that would help propel her business, which was pulling in $720,000 annually with three bays, to the next level five years ago. And for her, that meant people more likely to invest in high-dollar repairs that turned a larger profit.
The Takeaway: Identify your shop’s weak spots, and then brainstorm what kind of customers could help overcome them.
What trends can you observe about your market?
It’s one thing to strive for a certain kind of customer, but you’ll need to ensure that that demographic is substantial enough to sustain your business, Auernheimer says. Having lived in her region for over 20 years, she knew that the typical mom-dad-and-two-and-a-half-children family with a white picket fence largely dominated the streets around her shop.
But you’ll want to go deeper than just a surface observation, which she did as she researched annual reports from a local web-based newspaper and the area chamber of commerce. Those reports not only outlined demographic shifts in her region, but identified new prominent businesses coming into town.
The Takeaway: Utilize the research provided by your local community and study your area’s demographics.
Which demographics fit your vision?
This helped Auernheimer realize two very important trends. First, as lawyers and CEOs moved into her area, real estate began to jump through the roof, meaning higher-end vehicles were filling the garages.
“If people are buying houses, they're probably buying cars,” she says.
Second, she realized her shop could market to up-and-coming businesses in the area, vying for fleet accounts and securing an entire office worth of vehicles.
After all of this research, Auernheimer was able to boil down CS Automotive’s target audience:
“Our optimal customers earn between $300,000 and $1.5 million and have college-aged kids,” she says. “They have enough money that everyone in the family drives a car.”
The Takeaway: Study your market and identify the demographics that have potential to become your customer base.
Step 2: Target Your Branding
Will your facility appeal to your ideal customer?
Five years ago, it was difficult to imagine a wealthy family bringing its high-end vehicles to a somewhat dingy, three-bay shop with two technicians. That’s why, first and foremost, the Auernheimers made a point of presenting a building design that catered to those customers’ tastes.
They secured a loan for a brand new $1.3 million facility and went from three bays to 10. They also expanded the size of the waiting room and invested in high-end furniture that gave off a more luxurious feel to anyone who walked into CS. From the space to the color scheme of the building to the amenities offered, Auernheimer says her shop began to embody everything her optimal customer would expect from an automotive repair shop.
The Takeaway: Your target customer expects a certain kind of shop—so give it to them.
What services appeal to those customers?
Going beyond aesthetics, Auernheimer realized the importance of catering the entire repair process to her ideal customers. That’s why she began to train her staff on forming relationships with customers, from the phone calls to drop offs to repair updates to vehicle pick-ups. The training was focused on the shop’s two target demographics.
For the wealthy families in the market, Auernheimer determined it was best to appeal to the mothers who typically brought in vehicles for repairs. She has their personalities down to a T, going so far as to identify her most frequent customers as “40-something blonde moms, driving a Lexus LX 470, wearing yoga pants, on her way to work out or have coffee.”
“We made sure we were female friendly,” Auernheimer says. “We’re so female friendly that both people at the front counter are female. So when people walk in, there are three females moving around, and the men are in the back.”
For the business owners in town, Auernheimer specifically targeted the 1.5-mile-long stretch of office space home to multi-million-dollar corporations. She visited the offices, pitched her business’s services, and even started offering a shuttle service that went to and from the offices.
The Takeaway: Evaluate your repair process from top to bottom and tinker with procedures to cater to your target customer.
Step 3: Sell Your Value
How do your labor rates reflect your business?
One of CS’s turning points was when the Auernheimers realized their discounted, competitive prices, while affordable and attractive to a certain crowd, were not reflective of the business they’d like to be running.
“When we first started, we found out we were the best shop in town—and the cheapest,” Auernheimer says. “So we had customers that were only coming to us because we were cheap.”
“We were trying to be the best, trying to make everybody happy. And we got to the point where everyone was happy but us,” she adds.
That was the wake-up call: CS’s “competitive” prices were not only costing the shop profits, but also unattractive to the demographic they sought to acquire.
The Takeaway: Compare your shop’s labor rates to its competitors, and make sure your rate reflects the image your target customers desire.
What’s the sweet spot for your ideal customer?
In January 2012, the labor rate at CS sat right around $84. After attending a Worldpac conference and joining a 20 Group, they mimicked the average rates from successful shops and immediately raised the labor rate by $7 in the new facility.
Did it cost the Auernheimers customers? Yes.
But did it cost them the optimal customers? Based on the near 100 percent increase in annual revenue, the answer is, clearly, nope.
The Auernheimers didn’t stop there. When their shop’s labor rate didn’t scare away their target demographics, they continued to raise rates each year, topping out at $112 in 2017—a $30 increase over five years. That rate is working so well for CS that Auernheimer says she’d like to increase it by 5 percent in 2018.
The Takeaway: Don’t be afraid to alter your shop’s labor rate and find what price your target customers are willing to pay.
How are you selling that value?
Advertising low labor rates is like advertising low value, Auernheimer says, and it undercuts the knowledge your technicians bring to the table. She says to find a labor rate that appeals to your optimal customer, and then tell them why your technicians are worth the investment.
“To drive away cheapskates and bring in target customers,” she says, “we worry less about pricing and more about the value of what we’re giving. Safety and the ease of doing business with us are the selling points.”
The Takeaway: Don’t sell the price of your services—sell the experience and your employees’ value.