TBC Competition
Now Viewing TBC's competition in: Automotive Repair Shops
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How important is repeat business for the company? - Almost 80 percent of mechanical repair shop customers and 60 percent of collision repair shop customers are repeat customers, according to the Automotive Service Association (ASA).
How big is the company's geographical market area? - Auto repair shops typically draw customers from a 20 to 30 mile radius.
What are the company's most effective marketing and promotional vehicles? - Marketing and promotional vehicles include phone directories; signage; local newspaper, TV, and radio advertising; and direct mail.
How important is word-of-mouth for the company? - Companies rely heavily on customer referrals. An honest reputation can generate positive word-of-mouth.
What are the benefits of insurance-related sales? - Body shops that participate in insurance sponsored "approved service provider" programs or direct repair programs (DRPs) can generate double the sales of a non-DRP shop, according to Body Shop Business.
What warranties does the company offer? - Many shops offer warranties on repairs, in case problems arise.
How does the company's pricing compare to the competition? - Repair "tickets" range from $275 to $400 for mechanical repair shops, split about evenly between parts and labor. The average ticket is about $2,000 for body shops, split about evenly between parts and supplies and labor.
How frequently does the company see the same customers? - Mechanical repair shops service the same car about three times annually.
What is the company's primary competition? - Competition includes other venues which provide automotive services, including some gas stations, car dealerships, and branches of chain stores, like Sears and Kmart.
Competitive Landscape
Demand depends on car usage and the number of cars on the road. The profitability of individual companies depends on convenient location and good marketing. Large companies can maximize use of expensive diagnostic equipment and have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by providing superior customer service or offering specialized services. The industry is labor-intensive: average annual revenue per worker is about $100,000.
Business Challenges
CRITICAL ISSUES
Competition from Large Repair Shops and Chains - The greater operational and pricing efficiencies of large shops allow them to take business from smaller shops, despite some having less convenient locations. Franchise chains, dealerships, and large shops also have advantages in buying, managing inventory, and amortizing expensive equipment. Because of strong competition in local markets, repair shops have limited ability to raise prices.
Public Mistrust - Because of the complexity of cars, consumers can't easily judge if a repair shop has treated them fairly. Polls consistently show that a high percentage of consumers believe that repair shops make unnecessary repairs, overcharge, or use inferior replacement parts. Press stories about repair shops engaged in unethical practices, including insurance fraud, are frequent.
Industries Where TBC Competes
- Retail
- Auto Parts Retail(primary)
- Consumer Services
- Automotive Service & Collision Repair
- Industrial Manufacturing
- Rubber & Plastic Product Manufacturing
