In 1993, a good friend of mine and fellow auto salvage business owner DL Fitz opened a new location about 60 miles south of his family’s existing locations, near Tacoma, WA. Traffic in the Tacoma area made delivering parts on time very difficult. In response, a new facility at Graham was added to speed deliveries.
DL created a marketing plan that outlined how they would attract retail and wholesale business in the Graham area. Following the plan, they advertised on the back of buses. They figured bus ads were a smart use of their advertising dollars because all the slow-moving traffic would have plenty of time to look at their ads.
They failed to consider, however, that wholesalers were accounting for most of the volume that the Graham facility was adding at the time. The added orders from wholesalers came as a result of reliably and promptly delivering excellent quality parts.
The back-of-buses campaign was expensive and yet the retail market in that locale did not yield the gains they anticipated. Retail generally provided fewer hits per dollar spent; the market was too broad. They were broadcasting to everyone by virtue of the bus ads. No primary customer had yet been identified.
As DL and his father analyzed and discussed the situation at Graham, they realized most of the business was wholesale. So they decided to slowly cut back on their bus-advertising budget.
This point should help illustrate the differences between advertising and marketing. They gained business by cutting their advertising budget in half and focusing their efforts on the wholesalers. They redirected that advertising dollars into marketing directly to their target customers, monitoring the zip codes against the returns. They created a customized list of wholesalers within reach. They added new customers by going after them with outside sales reps.
More direct marketing by mail (using magazines like Recycler’s Power Source) and sales reps and personal contact caused an even greater surge in their wholesale sales. They still served a retail market, but they were no longer throwing money at it unnecessarily.
Here’s another brief marketing tip. Isolate your top one hundred customers. Put them down on an exclusive list. Then interview them, go out either personally or through your sales reps. Ask about your competition. Ask your customers what they want or need most. Ask them what pleases them within your service/product structure and what would please them more. You want them to suggest ways in which you could be of even better service or provide a better product. One of them just might give you a clue you hadn’t considered before.
That’s marketing. You define the customer. You make sure he knows who you are and what you provide. Then you go after the customer to see what he really needs and what he really desires. If you can, you fill the need, provide the desired service. The return is in part more revenue, which of course you want; but you will also see returns in customer loyalty. It’s something you can’t buy with advertising dollars.
Once you know who your customer is, you use that information to guide all your decisions. This knowledge helps you determine how many parking places you should put in, how many delivery trucks you really need, and what to display in your showroom. It affects all product and services decisions.
Remember, only you can make BUSINESS GREAT!
Please visit our web site www.autosalvageconsultant.com to see the last 5 years’ articles posted.
AutoSalvageconsultant.com was formed in 2001 to help recyclers improve their businesses. With over fifty years of experience in three staff members, the group is THE definitive source for recyclers’ management and training needs. The founder, Ron Sturgeon, is past owner of AAA Small Car World. You can review his resume, with skills and experience, at our website. In 2002, his book How to Salvage Millions From Your Small Business was published to help small business owners achieve significant success. It was recently reprinted in the U.S. and published in China, Korea and the Czech Republic. You can learn more about how to help your business at www.autosalvageconsultant.com. You can reach us at 5940 Eden, Haltom City, TX 76117.