LG Auto Body Digital Marketing Case Study

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LG Auto Body Digital Marketing Case Study

How LG Auto Body Is Growing Over 40% With Digital Marketing

AP Media’s #1 passion is in helping its clients achieve their dreams.

LG Auto Body had a vision to grow 50% in one year. Industry advisors told them it was impossible, but we knew it was an attainable goal. After all, we’ve helped others accomplish similar things. Eight months later, LG Auto Body is well on their way to achieving that goal.

 

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Luis Gonzalez, Owner of LG Auto Body in Silver Spring talks to Lee Emmons, AP Media’s Chief Marketing Officer about choosing AP Media and setting a goal of 50% growth despite opposition from industry consultants, and answers some of our questions:

  • How did you overcome your fear/ the risks?
  • How did you know you were setting the right budget?
  • Why were your advisors so opposed to your plan?
  • How is this new marketing strategy working? How has it changed the shop?

 

Choosing To Work With AP Media

Lee: Were you doing any form of marketing before working with AP Media?

Luis: I was posting to social media on my own, working on my website myself, acting like I was a marketing expert. But I wanted to find a professional to put together a real marketing strategy, so I contacted a number of marketing agencies. AP Media was always in the back of mind because I followed the shops that I knew that you worked with.

Lee: What appealed to you about our work with other shops?

Luis: I saw the videos that you made for shops like K&M Collision, Performance Auto Collision, and Mark’s Body Shop, and I could see that great things were happening for those shops. So, I looked into who was in charge of their marketing and that was the starting point of my interest in AP Media. When I found out the same company was in charge of the marketing for all of these shops I admired, who were obviously doing very well, it made me really interested in AP Media. It really got my attention.

…I looked closely at the shops I admired and found they worked with AP Media, and I also started reading your articles in the Body Shop Association magazine WMABA and could see that you were the experts in marketing for our industry.

Lee: You’ve looked at a few different shops, a few different marketing companies?

Luis: Yeah, a few different marketing companies, and I had a number of different recommendations. But I looked closely at the shops I admired and found they worked with AP Media, and I also started reading your articles in the Body Shop Association magazine WMABA and could see that you were the experts in marketing for our industry.

Lee: You admired

[our clients] K&M and Mark’s Body Shop, right?

Luis: Yeah, and others. I liked their independent philosophy, and their focus on quality. That’s the type of business that I want to be. And I liked that AP Media helped them to create a marketing strategy to serve that kind of independent philosophy. Of course, I could see they are larger shops, and I worried that I wouldn’t have the resources to pay for the same marketing strategy.

Lee: But when we started with them they were around the same size businesses as you. And you’re pushing very quickly to their level.

Luis: Well, that was one of the main reasons I was interested. I don’t want to be just another shop, you know what I mean? We want to be next shop that other’s look up to. We want to be known for our independence, integrity. And we want to have control over the quality of the work that we do. We aspire to what those shops have created.

Internet Marketing is an Investment That Pays Back

Lee: But that wasn’t enough to compel you to make a decision to hire us. We did go back and forth quite a bit and it was a long decision making process for you. What was your thought process or what were the hurdles?

Luis: Well, it’s not an easy decision to make when you aren’t used to the internet being a significant investment.

Lee: So you considered it a large long-term commitment?

Luis: Well, you laid out the strategy that you thought would be most effective, and it was a higher cost than other marketing companies were proposing for us. I think other companies were more focused on closing the sale, whereas you’ve always been about strategies that provide the best results.

Now I realize it was your strategy was a 4% investment that would pay back in a 40% or more increase in revenue. As a business owner, you see every expense as something you have to manage, but then I saw the value when we started working with you. It wasn’t an expense, it was truly an investment.

Lee: But you had some advisors telling you not to go with us and I even found an email during our negotiations where you basically said: “We can’t do it.” You basically shut us down. So, what was happening around that time?

Luis: Well, I work with a very widely-used consulting company who provided financial and production advice, and they advised me against you.

Lee: They also had a different vendor that they preferred, right?

Luis: Yeah, they definitely were pushing somebody else whose proposal was cheaper. They advised me that I should be investing a certain percentage on marketing.

Lee: And what was that percentage?

Luis: It was 8%.

Lee: But even at our highest cost strategy, which you are using now, we’re at 4% of revenue. We’re nowhere near 8%.

Luis: You’re at half that. I think one of the things on the coaching company is that they want to put you also in a safe place. They don’t want to risk negative growth.

Lee: Still doesn’t make sense that they would be so opposed to us despite the fact we were half of their suggested marketing budget. Maybe they saw the other company as more familiar to them. I don’t know if they have a partnership with the other provider. The thing for me is that I also see that attitude with shop owners themselves.

Luis: Well, shop owners are always afraid of the change, especially creating new risk by adding expenses. When we see money coming out of the business, we see an expense. It takes a little bit longer to realize if it is an investment. It’s like when we buy equipment. When we’re going to spend $10,000 on equipment, we see the $10,000 going out. It takes a little bit longer to realize that $10,000 is going to bring you revenue by making things more efficient.

Accelerating Growth Beyond Expectations

Lee: Now that we’ve been following this marketing strategy for 8 of the 12 months, we’re spending 4% percent and achieving over 40% growth, on track for 50%, right?

Luis: We’re comfortably above 40%, and as we continue to improve operations, we move closer to 50%. In August, we had our best single month ever, at $148K. May was $140K. It continues to accelerate.

On top of that, we can’t even fit here anymore, so now we’re going for an expansion. It was a year later after doing the change on the marketing.

Lee: After one year of this marketing strategy, a second location is on the horizon?

Luis: Second location. This location is 5,800 square feet. We project the next location to be between 12,000 and 15,000 square feet.

Lee: What was your original time frame for your second location before you started doing this new marketing strategy?

Luis: I think we only had that as a wish. I don’t think we had the mentality to expand. I mean, everybody wants to expand.

Lee: Yeah, I mean you had the vision, obviously, but you probably didn’t think it was going to happen in a year.

Luis: Our focus was on keeping this shop full of work, often taking work we didn’t want to do. There wasn’t any time to think about expanding. Why would I expand if I still have spaces here to fill?

Lee: Of course.

Luis: Well, now it’s different since we’ve started using this marketing strategy. Before we used to have more spaces open, we had to take work that we didn’t really want because it wasn’t profitable. Now, a year later, we don’t have to worry about that. We can say, “We don’t do that over here.” Or we can say, “Please take it to the next shop.” Because we can pick and choose the quality of work that we want to do.

“What are we gonna do if nothing else comes in, we’re thinking what are we gonna do if a lot more comes in?”

Lee: And that wasn’t the case before?

Luis: We would get really into these low paying, no margin jobs just to keep the guys busy. We’d take our extra time and do extra things to make our customers happy. But, now we can pick, “I want to work on this because this is my most profitable opportunity.”

Sometimes I can say, “This week I’m totally full,” but because the people have been exposed to the branding we’ve done, they’re confident with the shop and are willing to wait.

Before – we’d be in the middle of the week to the end of the week, and we’d be thinking “it’s not looking good for next week. We are good right now, but we don’t know what’s gonna happen next week.”

Now – we look at next week and we’re full, and we still expect more. Instead of thinking “What are we gonna do if nothing else comes in, we’re thinking what are we gonna do if a lot more comes in?”

Digital Marketing Opens the Door for Bigger Goals

Lee: A much better problem to have.

Luis: At the beginning, as probably any other business owner, I will start a small risking the less, and that’s how we started. The first step that we did it was, you know, redesign the website and all that. So I had to start small. We only did like probably three or four months of low budget ad work, but when I started seeing that it worked immediately, I started setting bigger goals…

Lee: Well, you set quite a gigantic goal.

Luis: When we first started, we were hoping for a million in sales when the previous year we probably did like $850. And we reached that million mark very quickly. We did $1.1. When we saw that, we decided to go more aggressive into the marketing because it clearly worked.

Lee: You got way more aggressive.

Luis: Yes. I went to my advisors or coaches and told them I was going to set a much more aggressive budget for digital marketing. And they were, again, very opposed. They said, “You can only hope to grow the industry average, which is 5% or 10%, and that is pushing it.” And I told them, “No, I wanna grow 40%.”

Lee: Nice. What was their reaction?

Luis: They said, “No, you’re crazy, you’re not gonna do that! Maybe you can do it over three or five years, but won’t be able to grow that much in one year.” But, I asked Lee and he did some forecasting and said, “Yes, we can grow 40%. I think I can get us more.”

Lee: We will get more than 40%.

Luis: We set the goals, we set the numbers, and we set the marketing. And so far, it’s on track.

Lee: On track for 40%?

Luis: It’s achieved 40% and the rate is increasing. Last month was $148K, so it should end up closer to $1.5 million, possibly more.

Lee: Right. So, almost 50%.

Luis: It’s almost 50%. When I say 40% as of today, we’ll be there at least. And the coaching company – they can’t even believe it.

Making an Impression on Other Body Shops

Lee: When other body shop owners call you and ask you about the success you’ve had, what questions do they ask you?

Luis: They ask me what marketing company I’m using, and then they have the same questions that I had at the beginning.

Lee: Right.

Luis: Are they good? Do you think I’m gonna get my money back from the investment? Do you think I should do it? And how many cars do you make a week?

There are also people that are really not interested in growth, and are okay where they are. They say they don’t want to be busier, and they’re complacent. I think that’s a dangerous way to run a business, because you’re going to be left behind.

Lee: The biggest question then was, “Am I going to get a return on this investment?”

Luis: Of course. Every business owner wants to know what they’ll get out of the money they invest. I can tell them, without question, from my own experience that this is working for me. For my market, for my company, it’s working. I don’t have any reason to lie about this, and I’m not paid to say any of this.

There are also people that are really not interested in growth, and are okay where they are. They say they don’t want to be busier, and they’re complacent. I think that’s a dangerous way to run a business, because you’re going to be left behind.

By | 2017-09-21T15:56:11+00:00 September 1st, 2017|Case Studies, Collision Repair Industry|

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