Entrepreneur Creates Successful Automotive Repair Shop Direct Mail Business Model

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Greg Sands does not worry about where his next customer is coming from in any of his 20 repair shops across the country. The reason is, Sands who owns and operates repair shops in Georgia, Texas, and Colorado, is also the founder and CEO of Mudlick Mail, an auto repair service direct mail provider.

In Colorado, Sands’ shops operate under the Service Street moniker. His Thornton-based Service Street store opened last March, and is achieving a monthly repair order (RO) count that’s higher than his 650 average across the country thanks, in part, to his targeted direct-mail campaign.

Sands said the key to running a successful repair shop is getting customers in the front door to increase car counts.

“Mudlick (Mail) is really the secret,” Sands said during a recent interview at his Service Street shop in Parker, which opened in 2008. “Most don’t do anything to get more cars in their shop. There are a lot of ways to do direct mail wrong.”

Sands said he developed his understanding of the automotive service industry in Texas, where he was a minority owner and president of a chain of 38 Goodyear stores.

“I wanted to take all the things I learned, minus what I didn’t like, and make it my own,” Sands said when developing his repair shop concepts that operate under the names Service Street, Driver’s Auto Repair, and America’s Service Stations.

Two years in the making, Service Street repair shops feature ’50s architectural style, good curb appeal, and offer an environment where women like to shop, Sands said.

“We wanted to design something unique, especially structurally,” Sands said. “We wanted to be different.” In addition to the two Colorado locations, there is a Service Street shop in Atlanta.

“I like to go in an area where there still is demand,” Sands said, pointing out that the Denver market can support up to 16 stores. The business model uses a combination of demographics, income, and visibility, he said.

When it comes to staffing the shops, Sands said he’s discovered over the years that non-industry people work out pretty well, especially managers from the food service industry.

“The reason is that we want to raise the level of customer service,” Sands said, pointing out that food service people have typically gone through formal customer service training, know how to multitask, and are concerned with cleanliness.

Each shop’s service manager, usually an experienced one, delivers the necessary industry knowledge to make the shop run smoothly, Sands said.

“There are a lot of things that happen behind the scenes in a repair shop that require multitasking,” he said, such as service writing, ordering parts, communicating with technicians, picking up a customer, and dropping them off.

“A car breaking down is a real stressful time for the customer,” Sands said. “We want to take out as much stress as possible.”

Although auto service customers across the country generally expect the same type of service once they enter the shop, the trigger points for getting them in vary drastically, Sands said.

“You don’t want to under-price yourself in a high-end market,” Sands said, pointing to Colorado as an example. The median income in Colorado, for example, is much greater than that of Nebraska, he said. “You must match appropriate pricing by market. That’s why I started Mudlick Mail.”

Running Mudlick is President Tim Ross, who works with more than 300 shops across the country to create custom-tailored campaigns for shop owners, who enjoy exclusivity in each of their markets, Sands said.

Unlike coupon mailers that go to both low-end and high-end people, direct mail can be tailored to geographic areas, demographics, income, or vehicle make, he said. “Coupon mailers worked, but they tended to attract the low-end customer.”

Although his method is more expensive than mass coupon mailers, it is much more effective, Sands said. What he discovered is that high-income customers are non-coupon shoppers who use the direct-mail piece as a trigger to visit the shop, even using the map on the back for directions.

“For the higher-end customers, the coupon simply serves as a point of reference. The offer is less important to them,” said Sands.

A common pitfall that many shop owners make when evaluating direct-mail campaigns is counting the amount of coupons collected, Sands said. Moreover, they compare that month’s sales with the previous month’s.

A more accurate barometer is comparing the direct-mail sales for one month with the same month’s sales in the previous year, Sands said. If a shop is experiencing a sales problem, it’s either low ticket average or car count, he said.

Forging ahead, Sands said he is currently working on a new shop concept in Farragut, Tenn., with a Mudlick Mail customer to open 1st Choice Automotive, where he’s purchased the land and the building for the owner. It is one of six shops planned to open in 2011, he said.

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