Auto Repair Shops- What Marketing Providers Need To Know

The Auto Repair industry has grown steadily over the last five years. Industry revenue declined during the recession as falling disposable income and corporate profit limited consumers’ and businesses’ ability to pay for motor vehicle maintenance and repair services. However, as these trends have reversed in subsequent years, spending on industry services has increased, to the benefit of industry operators. As a result, industry revenue is expected to grow at an annualized rate of 1.1% to $65.0 billion over the next five years to 2020, including a 0.5% increase this year.

Households and individual consumers represent the largest market served by the Auto Repair industry, accounting for an estimated 68.7% of industry revenue. Services provided to consumers aged 45-64 years old, typically the highest-earning consumers, account for almost a third (32.3%) of the revenue derived from sales to households and individuals.

With over 268,000 repair shops nationwide, this segment of the SMB market presents a significant opportunity for marketing providers. In 2015, the average auto repair shop will spend $12,000-$15,000 on marketing efforts. A large portion of this money will be dedicated to traditional forms of media such as Yellow Pages, and Newspapers. Intuitively, this makes sense as the heavy users of these types of media are older and fit the auto repair shop’s most profitable target market. The average transaction price for a Millennial is $327 for a repair service versus $533 for a Boomer or Senior.

 

SMB owners view traditional media as the most effective marketing method with 28% stating Yellow Pages are the best source for leads. 

 

While our studies show traditional media still plays a role, more and more, auto repair shops are broadening into digital areas. Roughly, half of auto repair shops have a website. This is lagging other SMB segments however, there are some positive signs, with 32% increasing budgets in this area in 2015. Other digital areas that show promise are social media, and mobile advertising as these businesses are trying to find ways to reach the elusive younger generations. As these businesses begin to get on the web, they need help with some of the basics of digital marketing.

 

Emergency-Repair

 

Areas where marketing providers can provide the most help include SEO, Listings Management, and Loyalty Marketing. Being newcomers to the web, these businesses are struggling with search optimization, being found with accurate information, and cultivating a loyal customer base. These are all areas many businesses struggle with and it presents an opportunity for marketing providers targeting this segment of the marketplace.

 

This segment of the SMB marketplace provides a huge opportunity for marketing providers. Hopefully, some of the information we provided will be helpful in your endeavors.

 

Get More Information

We have provided only a few data points for this business segment. For a more detailed analysis, please contact me directly.

 

Jason Peaslee

Jason Peaslee is the Managing Partner of Thrive Analytics, a marketing research and analytics consulting firm. His career spans more than 20 years in marketing, advertising, product development, research, and business management. Before founding Thrive Analytics in 2010, he held several senior leadership roles at AT&T, Reynolds & Reynolds, Berry Network, & The Berry Company.

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