Looking to attract customers who need a skilled and trusted mechanic? We thought you might be. Coupons for auto repair service are a proven, profitable way to do just that. There are two reasons why:
- Every car needs service. Eventually, every car needs some type of maintenance or repairs. For car owners like myself, that need might not occur until the 90K mile mark. But when it rains, it pours! First it was the A/C. Then it was the brakes. Then it was the timing belt and a broken window. There are hundreds of car owners in your area in similar situations. By offering a coupon discount on service, you can reach these consumers and generate big bucks for your shop.
- Repairs are expensive. The average American family spends 1.5% of their annual income on auto repairs. For a standard family, that’s $929 a year! Instead of avoiding those repairs due to cost, a coupon for auto repair service can make it less painful for car owners to bring their vehicle into the shop. Plus, you control the discounts and can ensure that each repair is profitable.
4 Steps to Create Effective Coupons for Auto Repair Service
- Determine Your Average Repair Order
- Calculate Profitability
- Create Your Coupon
- Choose a Trusted Coupon Advertising Program
1. Determine Your Average Repair Order
Before you decide how much of a discount to offer to potential customers, you need to have a firm understanding of how much they will spend when they come into your shop. While you can’t know the exact price of a future repair, you can use data from past customers to determine your average repair order (also called the average ticket price).
You can even get more sophisticated by creating tiers (or ranges) based on the type of service provided.
For example, basic maintenance (oil changes, inspections, wiper blades) run between $10-$100. Major repair services (brake pads, A/C, timing belt) are more likely to run between $200 – $500 on average.
How much is the average repair order for your auto shop? Once you know the answer, you can move forward with creating a discount that still yields a profit.
2. Calculate Profitability
Set your campaign up for success. Using the formula below, plug in numbers to calculate how steep of a discount you can offer, what the profit will be on each redeemed coupon, and how many redemptions you’d need to break-even on the advertising spend.
For example, a $150 average repair order that costs the shop $100 to provide will leave you with $50 to spare. Your discount to the customer has to be less than $50 to generate a positive revenue. If your discount is $25, you will gain a $25 profit on each coupon that is redeemed.
Next, multiply the average profit by the number of coupons you expect to be redeemed. This will give you the total sales revenue for the campaign.
But wait! Don’t forget to subtract the cost of your advertising program from the sales revenue. If you’ve generated $30,000 in revenue, but your direct mail campaign costs $30,000 over the course of the year, then you may want to look at other advertising channels.
Use the formula as a framework to calculate the overall profitability of your coupon advertising campaign. Drop in the numbers that you know, play with the numbers you don’t, and at the end you’ll know exactly how to accomplish your campaign goals.
3. Create Your Coupon
Once you know the amount of the discount, you’ll need to create the physical coupon that is distributed to prospects. There are many ways to present a coupon for auto repair service. At the end of the day, you’ll have to decide which format will have the most perceived value for your customers.
This type of coupon works especially well if you know that your average repair order is over $100.
Why? The customer sees the coupon for $25 off $100 and perceives the overall value as a 25% savings. But because your average repair order is more commonly $150, the customer will end up with a 16% discount.
Your customer is happy because of the value, and your shop still makes a profit!
You can also implement this approach through tiered dollar off discounts.
Instead of dollars, you can give potential customers a percentage discount off their ticket. Customers tend to pick the coupon that gives the most value at first glance. On a $75 service, consumers will be more enticed by a 20% discount than $15 off (even though they’re the same price!) .
Some shops may want to limit the discount to a specific service type. If you choose this route, just make sure it is a common service. There may only be a handful of car owners in your town who need their timing belt replaced. But there could be hundreds that need a state inspection or their brake pads replaced. This increases the likelihood that potential customers can actually use your coupon before it expires.
Combine With Other Services
Some auto shops choose to throw in a service for free, rather than discount the original repair order. This is a good option if the cost of the free service is actually less expensive than the dollar or percentage discount you would give on the repair.
4. Choose a Trusted Coupon Advertising Program
Coupons for auto repair service are proven to draw in new customers and generate a profit.
Once you’ve determined your average repair order, the amount of the discount, and the format for distribution, you’ll need to evaluate the best way to advertise your auto shops coupons.