Prior to the COVID-19 pandemic, many people were wondering whether or not the auto body industry was in trouble. Many repair shops across the country were extremely reliant on collision repairs and insurance claims, fueling a need for diversification inside the company.
Prior to the COVID-19 pandemic, many people were wondering whether or not the auto body industry was in trouble. Many repair shops across the country were extremely reliant on collision repairs and insurance claims, fueling a need for diversification inside the company. Now that the COVID-19 pandemic has turned our world upside-down for the entirety of 2020, auto body shops around the country are struggling like never before. People weren’t driving as much due to COVID-related protocols and the number of car accidents decreased as a result.
So, what can the autobody industry do?
As we close in on the month of December, auto body shops need to rethink their strategy moving forward. There are a ton of ways a repair shop can diversify their revenue and set themselves up for sustained success.
The problem is most body shop owners fail to take that next step. They fear the added overhead and added responsibility that comes with diversification.
Getting over that fear has to be your top priority, but don’t panic. Diversifying your revenue is a rewarding process and there are ways to be smart, calculated, and protected throughout. In fact, we’re going to share with you some of the most prominent ways to revolutionize your company.
How to Diversify Your Auto Repair Shop
Diversifying your business can be done in a variety of ways, but they generally fall into one of three categories -- concentric diversification, horizontal diversification, and lateral diversification. The beautiful thing about diversification is you can succeed in a combination of categories. Don’t worry, we’ll break down the differences between each category and showcase some of our brightest ideas for each category. Together, your auto body shop business is in good hands.
1. Concentric Diversification
Concentric diversification is a strategy that involves introducing your business’ current strengths to a new target audience. For the most part, you’re doing the same type of work and completing the same processes for the customer. The only difference is it’s a new customer. For example, let’s say your business currently provides repair services to individual car owners and families. Providing those same repair services to other businesses and service vehicles is an easy way to diversify your income.
2. Horizontal Diversification
Where concentric diversification focuses on providing the same services to new customers, horizontal diversification involves providing different services to existing customers. It allows you to get the most out of the customers you’ve already built loyalty with. For example, an auto body shop can diversify their income by providing oil changes, selling tires, offering a maintenance subscription plan, and selling products that your customers find useful (cleaning supplies, windshield wipers, and other DIY items).
3. Lateral Diversification
Finally, we have lateral diversification. With the other two strategies, you’re mostly staying in the same realm of work. With lateral diversification, you’re entering an entirely new aspect of your business and it often takes creativity to pull it off. If you can pull it off, it could change the way you do business forever -- for the better.
A good example of utilizing this strategy with your auto body shop is offering a car wash service, turning part of your property into a used car lot, and becoming an authorized U-Haul rental agency. These aren’t necessary services a repair shop provides, but they’re ‘sister’ businesses that could help you reach a higher monthly income.
The more we study the recent auto body shop industry analysis and auto body industry statistics, the more we realize how important it is to diversify your revenue. Especially in the age of COVID, auto body shops and repair shops across the country need to find new ways of doing business. For more tools, resources, and tips when getting the most out of your business, contact ClarityCoat today. We can’t wait to help you revolutionize the way your auto body shop operates in this ever-evolving industry.
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