Jose Costa is Group President of Driven Brands, and one of the major speakers at next week’s #Portada16 (Weds, Sept. 14 and Thursday Sept. 15 co-produced with MediaPost). At Driven Brands, Costa leads brands with more than 1,000 franchises that provide automotive aftermarket services across North America and generate more than $1.2 billion in annual system sales. Marketing budgets amount to approximately US$ 70 million a year.
With 2500 stores across the United States, Canada, China, Mexico and the Caribbean, Costa’s work entails marketing automotive aftermarket services but also the relationships with and new acquisitions of franchisees.
Under the Driven Brands Group, auto body shop franchise brand Maaco is complemented by brands like CARSTAR, a network of collision repair professionals, and Drive N Style, a franchise chain that provides vehicle appearance and reconditioning in the automotive dealership, rental car agency, and warranty markets. Meineke, the franchise-based international automotive repair chain with more than 900 locations, is another of its most important units. Those are just three of the ten brands that Driven manages in its diversified portfolio, which focuses exclusively on the automotive franchise industry.
Traditional Media “Works Well” in Industry That Is Slow to Evolve
Speaking about the group’s marketing efforts, Costa highlights that the aftermarket space has not evolved as fast as the rest of the automobile industry. Almost 100% of their marketing efforts are local and pushed by the owners of the franchises. “It’s important to build trust,” Costa explains, and in that sense, traditional media like TV and radio have been found to work well.
After all, Maaco and Meineke were founded in 1972: “The companies were built around TV and price point advertising,” Costa reminds us. Now, the company invests between $65 and $70 million a year in marketing on the company level. Breaking it down, around 80% of their budget goes to TV, 10% to digital, 5% to print coupons, and 5% to radio. Four years ago, 15% of media buys went to yellow pages and 85% to TV, illustrating that even industries that are slow to evolve have made big shifts in their marketing budgets.
Driven targets middle-aged, urban and suburban blue-collar workers with a household income of between US $65,000 and $85,000 a year. The average customer will visit Meineke around five times a year for car maintenance, and Maaco once or twice in a decade for important and sometimes costly repairs. Consumers are sensitive to price and quality, and usually plan these types of maintenance and repairs carefully. Once their trust is gained, they are loyal, but still price-sensitive.
Coupons Still Essential to Business
Ideal for the price-conscious consumer, coupon drops — both print and digital — are still extremely effective in the sector. Driven has a database with a combined 1.5 million consumers that they use to organize campaigns like cross-promotions with movies and sweepstakes, and host most of the digital coupons on its own website.
Meineke’s team has observed that print redemption rates are higher than digital coupon redemption rates, but the opposite is true of Maaco, whose audience tends to be younger, with higher income, and more prone to operate digitally.
Additionally, Maaco’s average ticket sale is much lower than that of Meineke, so given that Meineke customers are more likely to redeem print coupons, it is possible that people rely more on print when planning for larger expenses.
Local Media Planning and Digital Investments Drive Growth
The franchise’s media plans are always executed locally, but Costa explained that “support comes from a marketing team with 25 individuals coordinating strategy and execution.” There are also local marketing managers designated to different regions of the United States. Driven Brands’ agency partners are Mythic (Charlotte, NC) and Nativo (Miami) for creative, New York-based Yodle for digital, and Dallas-based Camelot for media buying.
The group is also making the necessary investments to keep up with the digital wave, pushing hard on mobile marketing and geolocaton for coupons and scheduling services through the Meineke and Maaco apps. Costa said that they are partnering with YouTube and Twitter for online video, testing market data and creating video that will be accessible via mobile. Next, they are hoping to release an online booking tool.
Franchises Understand that Hispanic Targeting Is Critical
Driven’s multicultural efforts are focused on Spanish-language TV and radio on networks like Telemundo and Univision. They frequently shoot commercials for television and radio with Hispanic talent.
“Franchisees are understanding how critical it is to target the Hispanic population,” Costa asserted, as he added that many of Driven’s leadership positions are held by Hispanics.
For the past four years, their training manuals for franchise owners have been printed in English and Spanish.
Sports have also taken on an important role in marketing efforts, as Driven has sponsored the Maaco and Meineke Bowl events in college football, arranged Nascar sponsorships and even advertised in the Super Bowl through its insurance unit, CARSTAR. The Group hasn’t signed any partnerships with the NBA or NFL, as it would cost millions of dollars to come to an agreement, and “activation is even more,” Costa said.
Under Costa’s leadership, Driven is thriving in a market that does not behave like most others through catering to the particular preferences and lifestyles of its target audience.
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