Guides · Marketing

How much should an auto repair shop spend on marketing?

Someone told you 5% of sales. You're not sure if that's too much or too little. Here's how it played out at our sample shop, the way a mechanic works a car: concern, cause, correction, verification.

1

The concern

Nate didn't know if $2,400 a month on marketing was smart or a waste.

Nolavi calculation of what a new auto repair customer is worth over two years from the shop own repair orders
Worked out from your own repair orders.
2

The cause

Nolavi worked out what a new customer is worth to his shop: about $1,140 over two years, from his own repair orders. Each new customer was costing him $63.

Nolavi idea to raise an auto repair marketing budget on the sources that pay back best
More budget only where it pays back.
3

The correction

With that math, we raised the budget on the two sources that were paying back best, and capped the rest.

4

The verification

Marketing went to $2,900 a month and new customer sales went up $6,800 a month. The Monday report shows the payback every week.

Auto repair marketing budget results showing higher sales from a small budget increase
Checked every Monday.

Example shop. Nate's Auto Repair is Nolavi's sample shop with made up numbers. The steps are exactly how Nolavi works on a real shop's data.

Questions

Quick answers.

What percent of sales should a repair shop spend on marketing?

Many shops land between 3% and 7%, but the right answer is whatever your numbers show pays back. Start with what a customer is worth to you.

What is a customer worth to a repair shop?

Add up what a typical customer spends with you over two or three years, then subtract parts and labor. That's what you can afford to pay to get one.

Keep reading

See it on a sample shop.

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