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Setting a Marketing Budget for Your Auto Repair Shop

Posted by BayIQ on November 30, 2021 | 0 Comments

Having a reliable and accurate marketing budget is crucial for your tire or auto shop. Without one, it’s difficult to determine what you can and can’t afford and make your return on investment (ROI) challenging to calculate. 

With that said, rather than planning for the entire year, most shops create an initial budget and update it monthly or quarterly. Here are components to consider.

Consider Your Expenses

The amount of money you’ll be able to spend on marketing depends on the size of your business. To simplify things, we’ll assume you’re running a small auto shop that takes in less than $5 million annually. The U.S. Small Business Administration says auto shops–like any company of this size–should put 7-8% of their revenue towards marketing efforts.

At the same time, you’ll need to ensure your marketing budget doesn’t cut into other expenses, such as:

  • Employee compensation. Don’t fall into the trap of only budgeting for salaries - benefits and pension will make up nearly 50% of your compensation budget.
  • Rent and utilities. These expenses vary based on the size of your building, but they can cost you anywhere from $1,500 to $15,000 per month.
  • Maintenance. To simplify budgeting for this expense, allocate 1 percent of your monthly rent fees for maintenance.
  • Insurance. You’ll need to consider general liability, commercial property, workers compensation, and garage keepers liability insurance.
  • Taxes. Set 30 percent of your income aside for taxes, and be sure to pay taxes quarterly.


Analyze Past Efforts

If your auto shop has been open for a few years, this probably isn’t the first time you’ve built a marketing campaign. With that in mind, why not increase your chances of success by taking your previous wins and losses into account?

First, collect any data you can about how past marketing campaigns drove leads. Then, take a closer look at these numbers to determine what efforts had the most significant impact on your total revenue.

With this process, you can gain a sense of what is and isn’t working for your business in terms of marketing. You’ll also be able to determine how past marketing campaigns targeted customers and understand which tactics you should focus on going forward.

Identify Your Goals

When building a marketing budget, you should have specific, reasonable, and measurable goals in mind. You can begin by setting short-term and long-term goals for your shop as a whole. Some good examples of marketing goals include:

  • Increasing customer participation in your loyalty program
  • Reducing customer churn by a percentage
  • Boosting your shop’s car count
  • Turning a certain number of accounts repeat business

Set Benchmarks

Generally speaking, you won’t be able to achieve your goals immediately. Since it will take time and effort to accomplish them, you’ll want to know you’re on the right track in the meantime. Benchmarks can help you figure out where your auto shop’s marketing campaigns stand.

When you have benchmarks to measure your marketing strategies against, it will be easier for you to check on the performance of these strategies. If a tactic isn’t delivering the ROI you had hoped for, you’ll know about it early on - and you’ll be able to make adjustments in response. For example, if you have an email newsletter with low click-through rates, you could run A/B tests to figure out if a different version of this campaign would lead to better results.

Prioritize Your Budget Allocation

Building a marketing budget isn’t as simple as putting the same amount of cash into every marketing channel you’d like to use. Some channels are simply more effective than others. Consider the following and then review your own results:

  • Email marketing is a straightforward, reliable, and affordable way to reach potential customers. Most people in the US check their email multiple times per day, so well-thought-out (non-spam) content is ideal for grabbing their attention.
  • Website development makes a more considerable difference than you might think. Most web users will immediately leave a site if it’s ugly and poorly laid out, but a great online experience can turn interested people into paying customers.
  • Content creation is gaining popularity these days, and for a good reason. A steady flow of content can give people a reason to visit your site and come back later on. It’s important to make sure you’re consistently adding quality content as this can help improve your search engine rankings.  

As you may have noticed, all these channels have something in common–they have close ties to digital media. Traditional marketing methods like TV and print can still be valuable, but it’s essential to make sure you’ll get your money’s worth before investing in these channels. They can be pricier than digital alternatives, and they don’t provide tracking or targeting capabilities.

Save Marketing Dollars Where You Can

Of course, no one wants to spend more on marketing than they need to. One highly effective way to maximize your marketing spend is through automation. BayIQ is the ideal automated software platform for your business since it’s designed specifically for tire and auto repair shops like yours.

With BayIQ, you’ll be able to simplify and improve your marketing strategy while saving money on manpower. The platform can automatically handle email and SMS text marketing, create and track reports, ask customers for online reviews, and has a built-in loyalty program. Take the first step towards saving marketing dollars by checking out BayIQ. 

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