The success rate of companies that specialize primarily in oil changes is much higher than small businesses as a whole. That makes the sector an attractive option for entrepreneurs. Still, profit margins can be tight, especially when a company is still becoming established. Let’s explore proven strategies for increasing profits among oil change service providers.
Table of Contents
Offer Mobile Services
Mobile oil change service is the area experiencing the greatest amount of growth in the sector. In fact, it’s so profitable that many new businesses offer it exclusively. That lets them start the business with significantly less overhead. If you have a brick-and-mortar shop, not offering mobile services is a missed opportunity to expand your customer base. Mobile services have the added benefit of providing your business visibility. Potential customers will see your truck or trucks in their neighborhoods, at their workplaces, and near where they shop.
Seek New Customers Among Local Businesses
A common mistake among oil change companies is a narrow perspective on who they should serve and how. Market to local businesses, including those that may only have a handful of vehicles or less. The profit margins may not be as high per vehicle, but you’ll provide services more often per commercial customer, and there’ll be much more room for growth. You can also explore cross-promotional opportunities with certain car dealerships, rental agencies, and other related businesses that don’t offer oil changes as well.
Expand Business Hours
Another prevalent mistake among auto service providers is operating on banking hours. The problem with this approach is that many of your potential clients are working during these hours as well. Open on Saturday, and at least consider Sunday. Offer early bird hours Monday through Saturday. Stay open late as often as possible and certainly on Friday and Saturday.
Add Upsell Opportunities
If the only service you sell is basic oil changes, your profit potential will always be extremely limited. You’ll also be highly susceptible to market factors, such as increases in oil wholesale rates. If applicable and you have the option, offer state inspections. While the profit margin isn’t significant, inspections are a big driver of new oil change business. Offer as many related additional services as you can. Notable examples include car washing, wiper blade replacement, tire rotation, and fluid top-off. Also, consider selling relevant accessories, such as auto cleaning products, tire pressure gauges, and air fresheners.
Implement a Loyalty Program
Provide existing customers with increased motivation to stay loyal. Even drivers who get one oil change a year are more likely to come back if there’s a free oil change in the future. There’s also a lot more you can do with a loyalty program if you offer additional services, such as wiper blade replacement, and additional products, such as premium oil and other fluids.
Increase Prices and Employ Tiered Pricing
Don’t set unrealistic pricing to entice customers and match competitors. It’s not a sustainable approach. There are, however, opportunities in creative pricing strategies. Those include bundled services and tiering, such as basic, standard, and premium pricing.
Use the above ideas to increase profits at a business specializing in oil changes.