Tuesday, August 25, 2009

SOME AFTERMARKET BRANDS WILL LOSE SALES
AND CREDIBILITY AGAIN THIS FALL


It appears another cycle has started again.

Over the past ten years it has been discussed many times however it seems the industry is determined to do it their way with the quick fix method. They then will blame the poor quarterly sales and profits on something else instead of squarely on Management.

I am talking about aftermarket parts pricing as well as part function.

There are Aftermarket Brands that continue to fail to take their time to do their homework as they are not pricing themselves against OE parts. When a shop is loyal to their chosen supplier as well as a manufacturing Brand, and makes that first and only call to their jobber to purchase an aftermarket part to then find out, after the fact (the hard way), that the OE part from the dealership retails for less than his aftermarket actual part cost, all trust and credibility is destroyed between the Brand and the shop owner. The Jobber is caught in the middle of this storm as they continue to lose sales to the OE arena.

Shop owners will now start taking additional time to check OE cost for key parts because they don't want their clients to be over charged and potentially lose the customer/client over the price of a part. Trustworthy client relationships are critical today and especially during challenging economic times. The better shop owners are always looking out for their client's best interest.

How could our industry fall off the wagon so easily?

Now we are also starting to hear, once again, that the Aftermarket part function is not up to standard. Why are Name Brands sourcing parts off-shore without monitoring quality in favor of perceived quick profits to then have the part fail time and time again?

The aftermarket must continue to have a strong dialogue in regards to these issues and manufacturers must insert the disciplines to ensure they excel with their Brand. Let's face it, cutting corners for the quick fix today is costing everyone money, time and credibility in the long run. During these different economic times, quality, fair pricing and top level service is so necessary to maintain the shop and consumer's confidence and trust.

Let's keep the dialogue open.

Tuesday, August 4, 2009

AUGUST IS AN IMPORTANT MONTH FOR RENEWAL

As easy as it is to remain in holiday mode during the month of August, business owners should use this month to review all business processes within their operation to make sure the shop is primed and ready for the Fall service season.

Consider completing the following reviews and discussions with all staff members:

Initial Facility Image
- Is the facility clean and organized outside and inside? Review your processes to ensure the facility remains this way even during hectic days.
- Does the facility send a perception to the consumer that we are a professional organization? Consider that you are a mini dealership but with the Independent touch.
- Is the facility appealing to women clientele? (ask for honest feedback)
- Does the client waiting area contain current educational material and is it visually appealing, including the smell of fresh air?
- Is wireless internet connection available in the shop?

Front Counter Procedures
- Is the process of how clients are professionally greeted and acknowledged in place with a friendly voice and smile behind the counter?
- Is the vehicle service history always being reviewed and discussed with the client?
- Do you manage the vehicle on behalf of the client based on the clients use and expectations of their vehicle?
- Are all manufacturer recommended servicing being reviewed and discussed with the client?
- Are future appointment time frames being booked before the client leaves?

Back Shop
- Are clear and precise communications in place between the front counter and the technician?
- Are written vehicle inspections being completed by the technician and reported to the front counter on every vehicle?
- Is all maintenance and diagnostic time being captured and documented properly?

Office
- Are average billed hours per invoice being calculated daily and weekly and reported to all staff?
- Are billed hour goals being set for the day and week for the front counter and with each technician?
- Is the total shop efficiency being calculated weekly, compared to objective and reported to all staff?

Review what up to date courses are required in terms of technical and business training. Search the marketplace as to where the courses are being held and register the shop. There is a good possibility out of town travel will be required. Plan now to ensure training opportunities are not missed. Remember you are in the knowledge business.

These are not all the issues to be addressed however theses few items play an important role to ensure the shops bottom-line profitability is moving forward. August can be a month of internal renewal for the shop, so use it wisely. Make sure your business processes are in place and working seamlessly. It will be time and effort well spent.

Tuesday, July 7, 2009

"I Should'a , I Could'a, I Would'a"

These 20/20 hindsight expressions have ruined many businesses.

Today's business operations must have a Management capability and style that is focused on a tested and a definitive path that creates business net income along with future growth and security.

I find that too many shop owners are not willing to admit that they really don't know the detailed required to resolving shop issues affecting business outcome. Their attitude, actions and approach to issues confirms that. Their own ego, and in many cases their own insecurities, get in the way. It is later that they realized they were in error, too embarrassed to ask in the first place and they repeat the 20/20 hindsight expressions.

Today's shop business is complex and very detailed. No one really does know it all and therefore it is important to have key business resources to draw upon for continuous input and advice. Today's modern and successful shop owners have the contacts to seek out the right solution for a given problem. It is impossible to be an island and be successful in this day and age.

As a shop owner, consider your depth of skill and resource relationships that you have nurtured and where you have the ability to draw upon at the right time. Keep these relationships strong and never take them for granted.

Consider developing a coaching and mentor relationship as well. I have found the businesses today that have this in place are always above average in their business performance in every category. There has to be merit to this process or it would not continue year over year.

20/20 hindsight is not the way to move forward. A continuous knowledge and support structure in place throughout your business followed with confident execution will bring you the results you are looking for.

If you are unclear about how to create this environment, I would be happy to take your call to discuss and clarify it for you......1-800-267-5497.

Thursday, June 4, 2009

WATCH FOR THE NEW NEIGHBOUR ON THE BLOCK

The changes within the industry have been dramatic within the past 60 days. The Chapter 11 filings of both Chrysler and General Motors in the USA will change the automotive landscape forever.

It is imperative that every Independent shop keep their eyes and ears open to see which new car dealerships will be closing within their area. This is an opportunity to secure new business however, the shops marketplace profile has to be clearly focused on competency and professional execution in front of the new potential client.

What I find interesting is that some dealerships will disappear entirely, however others will go through a metamorphosis conversion into an all makes and models independent service centre. This transition will not be easy for them but it will also bring some serious issues to the entire aftermarket.

Consider that the branded dealership mentality is completely different from Independent shop mentality. These dealership owners still think like branded dealerships. They measure their business through cost accounting methodology and have not been exposed to management accounting measurement. They live for flat rate processes and the general attitude that comes with that type of thinking rather than securing and building a competent technical team through managed productivity and professional income stability as a key component to the profitability of the shop. They are, in general, weak at building one on one client relationships as compared to the true Independent shop. They have a focus on selling customer service packages rather than discover what the individual really needs and then manage their vehicle accordingly. They watch sales volume going through the service bays. They are more focused on an activity based business over a productivity based business. They sell a customer rather than counsel a client.

This is not to say all dealerships that convert will be like that as I have met some excellent owners in the past and I certainly welcome them and their entrepreneurship to the Independent sector. They will be good for us as they raise the bar in the marketplace.

The others however are my concern as they set the example once again in front of the consumer but now in the Independent arena and as a consumer perceived representative of our sector. Are they open to that re-learning attitude or will they hang on to their dealership attitudes? Time will tell.

Independent shops should welcome the better dealership conversions and build a professional relationship with them as you have with your peers. It will be good for the Independent shop and good for the Dealership, but most important, good for the consumer in experiencing professional service levels and the overall image of the Independent sector.

The Independent sector can move forward in this crisis but it will take everyone rowing together to capture the opportunities in front of us.

Friday, May 8, 2009

DON'T WASTE THIS CRISIS

The next 24 months will be the most important months of your shop's business life.

This year is not like any other in the history of our industry. This is not a time to accept the traditional Aftermarket summer shut down as we can not afford to lose any time. It is moving that fast.

With the demise of the "D-3" and the closing of dealerships, the Aftermarket shops and jobbers must aggressively get their Professional act together. We can not afford to take the summer off as the traditional excuse for inertia. The clock is ticking. The opportunity to greatly enhance marketplace image and attract new clients that traditionally used the OE dealers is here and now.

It is all about the client's experience!

Shop Business Management must be revamped and relearned as it is so critical today. Issues such as to how to protect core competencies while building shop bottomline profitability, discover and how to align your business resources, how to build collaborative business relationships, rethinking your business model to maximize marketplace penetration, how to leverage your market position, how to create and measure a professional shop team, what it takes to develop and how to measure client loyalty must all be addressed now, not sometime in the future. It will be too late.

DON'T WASTE THIS CRISIS.......

Thursday, April 30, 2009

Investment In Training & Development Must Be Sustained

Opportunity is knocking at the front door for every Automotive Service Shop. Is your shop taking advantage of it?

I am writing this article just after attending the "Lindertech North" technical training weekend in Toronto. I always like to drop into this event and listen to technicians and their issues. It seems the "elite technicians" of Canada show up for this conference each year and I really value their opinion.

I was amazed how many technicians were expressing to me this year about the shops in their area that were not taking Technical and Business training seriously enough and they were not investing in high-end equipment required to do the job right. They were telling me "these guys run a break down and repair shop and just don't get it Bob; they talk about everything as a cost and will not invest into their future; they have an excuse for everything. What do I do because their lack of professionalism reflects on our sector and marketplace which my shop is obviously part of?"

The answer I shared with each person was "Only you are responsible for the results that come out of your shop. No one else is. Today it is all about the "experience" the customer/client has while the vehicle is in the shop. You can not control what other shop owners do, only consistently send the message to them that they must get engaged with the new reality. If they so choose to not do that, then make sure your own back yard is in order at all times. Always set the example for others to follow."

I know the frustration that is out there from the better techs and shop owners. These "other guys" who "play mechanic" will always be there. In the past I have used the term "cockroaches" well it still seems to apply. They just don't go away. They are a nuisance to deal with. Interestingly have you ever noticed that these poorly run shops are fortunate to have a spouse who works outside the business because the business can not provide enough income to look after the family and provide a great lifestyle? These shop owners buy themselves a job, and a lousy one at that, and they think they are running a business. These shop owners are contributing to the problem for our sector, certainly not providing or being part of the solution.

I encourage the better automotive shop owners and technicians to keep pressing hard in your market that competency and professionalism is everything today. Keep blasting the message. Who cares if they criticize you for always pushing competency and professionalism? What are they pushing? Complacency and mediocrity? Keep the talk up too with automotive parts suppliers and Associations that they also must apply pressure on the weaker shops. We are all in this together. Our actions and results collectively set the image for the consumer. If more and more shops keep raising the bar, the consumer will see the difference and more importantly "experience" the difference. I think at this time in our Aftermarket history this is the best we can do. It would be nice to have accreditation standards to open up a shop in the first place but I think that will be for the next generation to tackle. The best we can do is through setting the best example at all times and never let our guard down.

Business and technical training must be an on-going investment in the automotive service and repair industry. Budgets must be set in place each year to ensure competency is sustained. Dates must be set aside and times booked to attend the necessary functions. No training today is a one time visit. Constant revisiting is a necessity. The reality is that in many cases over-night travel will be required to attend the right course to obtain the right knowledge. I know many shop owners that have sent their technicians to the USA for important training because it was not available in Canada. There never is any compromise. The technicians can easily be gone for 4 or 5 days on some of these courses. I know many shop owners that have traveled great distances to enroll themselves in the necessary courses that provides the management solutions that need to be addressed. This is the level of thinking and professionalism that is required today.

To give you an example, shop management should now be planning for a minimum of 100 hours of technical training per year per technician. That is what it will take to stay up with current technology. Automotive management should also set side at least 10 days a year for up-dated management training and development as many different issues and topics must be revisited.

Equipment must be constantly reviewed and examined to ensure the right equipment is in place allowing for the right diagnosis and therefore providing the right solution. Short-cuts due to a lack of proper equipment does not serve the consumer professionally and should not be tolerated by professional automotive technicians.

Perhaps many who are reading this article may perceive that I am pushing the bubble and stirring up the waters. Well what is wrong with that? Discussions must now start to become intense as too many people have been sitting on the sidelines watching the show and neglecting their responsibility to their business and ultimately to the consumer.

Let's talk this issue up because incredible opportunity is here today for the Aftermarket to take back market share by developing trustworthy relationships with the other consumers who have been dealing with the OE Dealerships. To retain their trust and loyalty, the Aftermarket must be very competent with each visit the consumer has with us.

Let's fully commit to getting focused now and really start making a difference. We can do it!! And deep inside, I know you want to do it. Take one step at a time and start to make the next 365 days a real adventure in your business.

Wednesday, April 1, 2009

Billed Hours, Then Car Count. The right order of analysis

Across the country everyone talks about needing more car count in their business and the shops that say this are already are doing $500,000 to 700,000 per year in annual business or even more. In my Management classes when further analysis of invoices takes place we find that shops are averaging 1.6 to 1.8 billed hours per invoice on basic consumer maintenance, 2.1 to 2.4 billed hours on diesel work, 3.0 to 3.5 billed hours on mid duty vehicles and 7.0 to 8.5 on heavy duty work. Do your own analysis and compare.

The numbers get skewed because shop owners don't break out their mix of work coming in the bays, so when all invoices are combined and averaged they see 2.8 to 3.2 hours as an average and conclude they are doing a great job but things are still slow. They conclude they need more vehicles in the bays. I respectfully disagree.

When the math is completed the average shop in Canada requires only .5 to 1.0 more vehicles per day over what they currently have coming through the door IF they were managing their clients vehicles professionally. The facts are the industry is not breaking out the right measurement of its business and the current internal procedures and processes are not addressing the true problem.

Consider that basic consumer vehicle maintenance should average a minimum of 2.0 to 2.5, diesel work 3.0 to 3.5, mid-duty 4.0 to 6.0 and heavy duty work should average 10.0 to 12.0 hours per invoice. If a shop has a mix of work, break it out and measure it accurately. It is imperative as Professionals, to ensure that the current business is being managed correctly first before we go after any new business.

Once the internal processes and measurement are accurate, then a shop can determine exactly how many more vehicles are required per day in the shop based on the facts of their business. It is a mathematical calculation and measurement. Just saying "we need more" is not accurate....exactly how much more based on the facts of our business is the right question to determine.

We must ensure we grow the business in such a way that our current clients receive a consistent experience each time they receive services from us so they won't feel they are not a value to the business or the business does not care about them as much "as they used to".

Slow down and do the math of your business first so you can determine exactly what is right for your shop. I believe you will discover some "diamonds in the rough" that have been overlooked instead of increasing the shop and client stress levels with assumptions.