Marketing Strategies for Startup

Discuss all aspects of headlight restoration, including marketing, technical, and business advice.
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Marketing Strategies for Startup

Post by HW Miles » December 8th, 2015, 11:18 am

Hello, this is my first post. I am researching the market in anticipation of entering this business full time. I would like this business to work, but I am beginning to have some doubts. Once I have decided to proceed I will commit 100% to building a business, so I first need to be sure the market is viable. There is clearly a need but it appears the demand for the service is weak especially retail. Most of the sales/marketing discussion on this board is focused on dealers and fleets. However, I expect I would need to gain some experience in retail before successfully selling to fleet accounts since the dealer/fleet customer would only deal with an established business. Therefore, the retail market would seem to be very important in the startup phase and It appears that there are few retail customers to be found. What are your thoughts?

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Re: Marketing Strategies for Startup

Post by Brent Deines » December 8th, 2015, 1:37 pm

In my opinion the problem with retail headlight restoration is the lack of understanding by consumers and the expense of advertising to retail customers, especially if going strictly mobile or if you don't have a great fixed location. It is a safety issue and after restoration our customers always comment on how much better they can see at night, in the rain and in the fog, but I'm constantly amazed at how many times customers tell us they never really noticed how bad their lights looked and performed until we asked them about it.

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Re: Marketing Strategies for Startup

Post by HW Miles » December 8th, 2015, 3:06 pm

Brent, I agree with you. There is a clear need, but little demand in retail. Is it reasonable to get dealer work for a new startup? What is the best way to gain experience and get established?

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Re: Marketing Strategies for Startup

Post by Brent Deines » December 9th, 2015, 2:13 pm

One of the great things about headlight restoration is that you don't need a lot of practice to be good at it so you don't have the intimidation factor when approaching a dealership or any other business for that matter. My experience has been that in some areas dealerships are very receptive to outside headlight restoration services while in other areas they are a little more skeptical that spending "a little" money to make a used car look "a lot" better will help sell it faster. Before I started restoring headlights I would have never purchased a used car that had damaged headlights so I enjoy convincing car lot owners that they can not only sell the car for more but get a higher price for it if the headlights are restored.

Don't stop with dealerships however, truck and bus fleets can also be very lucrative and in many areas there is little or no competition for fleets. The headlights are often considerably more expensive than passenger car headlights and because they are often subject to high mileage, severe weather conditions and are rarely parked indoors, there is a considerable demand. It's also easier to convince fleet owners that there is a safety issue that could cost them a bundle in collision repairs and lawsuits if not addressed. In some cases the owner will remove the headlights for you so you can restore the headlights offsite, then swap the restored lights for more damaged ones at every visit. One thing to keep in mind with fleets however, is that for the same reasons the OEM lights don't hold up very long the restored lights will also not last as long as they would in a passenger car before needing to be restored again. Adjust your warranty accordingly.

I would not give up on retail either, you just need to practice a little creative marketing. One method of marketing I have found to work particularly well is to pay other businesses referral fees combined with discounts for their customers. For example, give the owner of ABC Auto Repair Shop a handful of flyers advertising your business. Each flyer includes a coupon for $10 off a professional headlight restoration and each coupon has Referred by ABC Auto Repair printed on it. Every time someone presents you with that coupon they receive $10 off their final bill and ABC Auto Repair receives $10 for the referral. Now just think about how many auto repair shops, automotive supply stores, radiator shops, brake and muffler shops, lube shops, tire shops, detail shops, glass shops, etc., there are that might be interested in getting $10 every time one of their customers uses your service. They don't have to do anything except point out that their customers headlights need to be restored and hand out your flyers. In a town of 100,000 people you can have a virtual sales force of 1000+ that you never need to pay unless they get you business!

We use tri-fold brochures that are inexpensive to print in bulk and hand print the shop's name on them so we can distribute in small quantities to anyone we want. We also do the same for the customer so they become part of our sales force as well. Consider increasing the referral fee to $25 on the first few flyers you give a business as an extra incentive to hand out the flyers to their customers or tell them that you will pay them $25 for every 10th coupon you receive with their name on it. Also consider hand delivering their first "referral check" so you can personally thank them and encourage them to keep up the good work.

Regardless of how you market your business I recommend that you always have with you a really badly damaged headlight with 1/2 restored. There is no better business card in my opinion and the flyers are cheap advertising when you consider the potential return on investment. We charge $100 for the restoration so if we give $10 to the business owner and $10 to the customer we still receive $80. If you hand out 10 flyers to each of 1000 shops and 10% or 100 of those actually hand out the 10 flyers you now have 1000 flyers in the hands of prospective customers. Now if only 10% of those customers who received the flyers actually use the coupon you have 100 customers or $9,000 in sales, or $8000 in sales after paying the referral fees. 100 shops could easily hand out more than 10 flyers a week so using the calculations above that $8000 could be a weekly income if you could keep up with the volume. And if you only get 1%, which is really low in my opinion, you could still be looking at $800 a week from this one idea alone. Your cost for 10,000 flyers is about $500 but remember you won't need to give more flyers to any of the 900 shops that did not hand them out the 1st time. It's a numbers game so the more shops you can get to hand out your flyers the more income you will receive. The biggest hurdle her is convincing shop owners they can trust that you will pay them but once they receive their first check they are hooked!

This is just one of many marketing ideas but one that has worked well in my experience and one that is very simple to implement. Tracking results is simple as well.
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Re: Marketing Strategies for Startup

Post by HW Miles » December 10th, 2015, 2:54 pm

Thanks Brent, That is very encouraging. Before I open for business, I intend to refine my skills at salvage yards until I am very confident in the quality of my work. I just figure that If I am a dealer or fleet manager, I would want to know that my suppliers have been in business for a while, but I suppose you just have to approach them with confidence.
One thing to keep in mind with fleets however, is that for the same reasons the OEM lights don't hold up very long the restored lights will also not last as long as they would in a passenger car before needing to be restored again. Adjust your warranty accordingly.
This makes sense, but didn't Old Blue say that he puts on 2 coats of Infinity 4.1 and offers a 5 year warranty for school buses and big trucks?
I read about your flyer referral program in another thread and I appreciate the detailed description. I was going to ask you how that was working out. It seems like a great way to target advertising to prospective customers. If someone they already trust with their car delivers the message it gives me credibility. Thanks again for your advice. I have so many more questions, but my priority right now is assessing the market potential. I don't think I can get a real view if my competition until I go try to sell my service.

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Re: Marketing Strategies for Startup

Post by Brent Deines » December 10th, 2015, 5:31 pm

I suppose someone may have asked me how long I been in business but if they have I can't remember it. I think you are right, confidence sells!

I'll let Old Blue chime in on the warranty issue. He has a lot more experience with restoring headlights for truck fleets than I have but 5 years is a very long time to warranty something you have very little control over. I'm not sure some of the new headlights are lasting that long under certain conditions.

We actually had to curtail most of our active marketing in our local area because it was working very well. I know that sounds odd but being a mfg/distributor we sell a fair amount of product in our local area and started receiving calls from product customers who were trying to market to the same customers we were for service work. We still use the flyers and still offer referral fees to service customers but we no longer solicit new businesses for our referral program. I think it is still the most successful form of marketing we have used to date however, so I still highly recommend trying it.

I'm with you, I think the best way to assess the market is to start making cold calls and see what kind of reception you get. Just don't let yourself get discouraged too quickly, sometimes you hear no quite a bit before you hear a yes but if you are persistent enough they will come. It's just a numbers game so don't take rejection personally and you should be fine.

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Re: Marketing Strategies for Startup

Post by Old Blue 66 » December 13th, 2015, 9:19 am

HW Miles wrote:Hello, this is my first post. I am researching the market in anticipation of entering this business full time. I would like this business to work, but I am beginning to have some doubts. Once I have decided to proceed I will commit 100% to building a business, so I first need to be sure the market is viable. There is clearly a need but it appears the demand for the service is weak especially retail. Most of the sales/marketing discussion on this board is focused on dealers and fleets. However, I expect I would need to gain some experience in retail before successfully selling to fleet accounts since the dealer/fleet customer would only deal with an established business. Therefore, the retail market would seem to be very important in the startup phase and It appears that there are few retail customers to be found. What are your thoughts?
Seems as though you might be making this a bit more complicated than it is. Here area few questions:

Do you have a website?
Do you have a tri-fold brochure and biz cards?
Have you listed on Craigslist yet?
Have you connected with local car dealers?

If your answer is no to any of the above, change it to a yes as all above are the most critical things in selling.I make a killing off several listing on CL.
If you have a website, get set up with Google adwords. They make a big difference when starting up. BY any means do not pass them out on cars in parking lots - HUGE waste of time.

Also, when making a presentation to a client, my closing percentage went way up after I bought an iPad for before and after pics.

As far as the warranty for retail customers, I offer a lifetime warranty (two years at no charge and $30 service fee there after to the original owner for life) all for $99. The warranty sells!!!I have yet to get a retail customer take advantage of it after four years. Warranty for fleet is another story and something Im struggling with after having done hundreds over the last two years.
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Re: Marketing Strategies for Startup

Post by HW Miles » December 14th, 2015, 4:22 pm

Thanks for the insight Old Blue 66, I have not yet decided to enter this business but, if I do I will tackle the items on your critical list first.

I saw your lifetime warranty on you website and I really like that idea. No claims after 4 years? That speaks well of the warranty and of Infinity 4.1. For fleet trucks, can you tell me what your experience has been and what you are thinking going forward?

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Re: Marketing Strategies for Startup

Post by Old Blue 66 » December 16th, 2015, 6:34 am

No claims after four years?

1 Retail cars - Never had one.
2. Trucks - Not sure yet.
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Re: Marketing Strategies for Startup

Post by kevinsoupy » December 16th, 2015, 9:00 am

Hey Old Blue 66 I have a few questions for you about a school bus. I can not pm on here for some reason. They are working on it. I have tried to reach out to you. Could you possibly give me a few tips on what you have learned about doing school buses? Thanks

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