What Can Shops Do to Better Navigate Down Markets?

with Mike Anderson

This month, we “Ask Mike” to share his thoughts on marketing strategies shops can utilize to thrive during lean times. We at Hammer & Dolly hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.

Hammer & Dolly: Based on what you’re seeing in your work as an industry consultant, how “down” is the national collision repair market right now? What strategies can shops use when they experience a declining market? 

Mike Anderson: I’ve been to 32 states already this year. Except for Nebraska or Indiana, where they had some hailstorms, most larger shops can take in a car right now, and smaller shops might be booked out for only a week. I’ve heard many numbers discussed out there, but some people say they’re down 20 percent. It’s important to consider whether accidents are down or insurance claims are declining. I think the situation we’re seeing is a combination of both. 

There are fewer accidents because of ADAS, but fewer insurance claims are being filed for various reasons. Number one, the average consumer has had a 48 percent insurance premium increase over the past few years, so they’re reluctant to file new claims. I’ve also seen data that suggests that 27 percent of consumers increased their insurance deductibles last year. There’s no doubt these factors are contributing to shops being slow. 

Is this the new norm? I don’t think that’s necessarily the case; I think we’re just back to where we were before COVID. Back then, most shops only had a weeklong backlog. Obviously, there was a lot of work once people took to the roads again. So, this is more of the old norm than a new one. I suspect this is the way it’s going to be. Barring a severe weather event in a particular market, I don’t see shops going back to having a two- or three-month backlog. 

That said, if there are shops in your market that do have work, can you really say you’re slow, or do you just need to develop new marketing strategies to attract more customers? In the past, shops only spent one percent or even less on marketing. The shops I see that are still doing well and maintaining profitability are spending four to six percent — and making sure they use their marketing efforts to inform customers of who they are before they wreck their vehicles. You could argue that DRPs can rely on insurers to send work to them, but many of those shops are seeing work slow down as well. It’s time for shops to double down on their marketing. 

Fundamentally, your ideal marketing strategy is based on where you live. You may live in a small town where a billboard would be very effective or where it would be affordable to advertise on local TV. Conversely, you may be in a city where that kind of marketing would be cost-prohibitive. Also, as more people move away from traditional TV to subscription-based services, you need to be modern in your approach and consider advertising on those platforms. It comes down to determining which strategy would work best for you within your market. 

If you’re OEM-certified, research whether car clubs devoted to that make and model are in your area. People who belong to car clubs are more willing to pay out of pocket if their insurer doesn’t cover something, and they’re more apt to want things done properly. Perhaps consider hosting a car club or an open house yourself. People in these clubs are enthusiasts who love their vehicles, so it’s a good idea to tap into that consumer base.

When shops were busy a year or two ago, many of them lost the ability to be salespeople and instead became order-takers. When I first started in the industry, we’d try to upsell all the time by offering to fix door dings and anything else we saw. If we want to increase our sales, we must get back into the habit of being salespeople. 

These days, it’s also worthwhile for shops to consider offering financing, which 71 percent of mechanical shops already do. This can significantly improve customer satisfaction and increase sales. There’s a company called Sunbit that partners with merchants to allow credit-approved customers to pay off their purchases — such as auto body repairs — interest-free within a certain period. Financing options can make essential services more accessible for customers who might otherwise delay going to you. If you do offer financing, that’s something to include on your website and Google Business listing to attract potential customers searching for affordable repair options. 

Additionally, it’s always smart to have a system in place to track your referral sources. Be specific when you ask for this information. Don’t just ask your customers if they found you online; ask them if they found you through your website, your Google Business listing or some other site. The more you know about what led your customers to your door, the more customers you can attract by targeting more of your marketing in that direction.

Want more? Check out the August 2025 issue of Hammer & Dolly!