Riding Out the Recession With Repairs
Shelly Investments, which owns two California car dealers, and other businesses are keeping the cash register ringing with repairs
Last year the management at Shelly Investments, which owns a pair of car dealerships and an auto repair service, Spectrum Collision, in Irvine, Calif., worried that the stalling economy would send their new car sales screeching to a halt.
In order to prepare, the company turned to a Pepperdine University program in which MBA students offer consulting advice over the course of a semester. Their recommendation? Try to make up for the drop in new car sales with a greater focus on the repair shop.
Shelly quickly stepped up its marketing of fix-it services, placing signs in its dealerships and positioning Spectrum employees in the dealers' service departments to recommend repairs. The shift has paid off: Business at Spectrum has remained steady, with the company continuing to pull in about $800,000 a month. "It's a survival game right now," says Spectrum's business manager, Susan Spadier. "We'll do anything we can to retain the customers."
Taking the InitiativeIf there's ever been a time to promote your company's repair or refurbishment services, it's now. As the economy has sputtered, frugal customers are spending less on new goods and fixing up or maintaining what they already own. Small companies like Shelly Investments are hoping to capitalize on the trend, turning to outside consultants or public-relations agencies, boosting advertising budgets, or using search engine marketing to target consumers hunting for repair services. "Business owners have to be pro-active, not reactive [in this economy]" says Dr. Dave McMahon, associate professor of marketing at Pepperdine University. "Don't react to what competitors may be doing," he says. "Carve your own niche."
That's what Cliff Spencer, who runs his own furniture and cabinetry shop in Marina del Rey, Calif., has done —literally. As the economy turned, he saw orders for large cabinetry projects in homes "go out like a match," so now he's promoting his reclaimed wood and refinishing capabilities. Customers can bring in older furniture or a reclaimed piece of wood, and he can craft it into something new. With help from his wife Leigh, he's spread the word about the service through blogs, industry newsletters, and a new Web site. Demand for such projects has quadrupled over the past six months. "The economic downturn is frustrating, but the benefit of it is you see more people wanting to live a little more efficiently and give a second look to what they already have around them," he says.
Some experts feel that this may be more than a recession-driven trend, and advise that small business owners should prepare to focus on repairs over the longer term. "In the last 15 to 20 years we've become a much more throw-away, as opposed to repair-oriented, society," says David Urban, professor of marketing at Virginia Commonwealth University. "I've got a feeling that the severity of this economic downturn may have some long-lasting implications and get people to re-examine their behavior."
Lots of Appliance QuestionsThat would suit JustAnswer, a San Francisco firm that allows customers to ask questions of experts in any field for a small fee, just fine. The company has been in business for more than five years, but didn't experience acute growth until the economy soured. Anticipating a demand for fix-it services, JustAnswer spent five times more on appliance repair advertising than any other area, buying up key words on Google and other search engines.
The results of their efforts? JustAnswer has seen a 57% boost in traffic related to appliance and auto repair services over the past year. Some of the sharpest jumps have come in the number of questions asked about common—but expensive—household items. Refrigerator and computer repair questions have risen 409% and 780%, respectively. "It's been remarkable; we're seeing tons of growth," says CEO Andy Kurtzig. "We're spending a lot of time and money bringing in new customers."