The company's mantra of service, products and financing has served it well for nearly a century.
"We perfected this business model, loaning directly to technicians, in periods of time like the Great Depression," says Ward. "We've been at this a long time, and a lot of those innovations we've brought to the industry were based on a credit environment that looks a lot like today than maybe the world looked five or 10 years ago."
Despite the gloom inherent in today's headlines, the repair industry is in a profitable position. "In 2008, what you saw generally across all the segments that you mention is innovation sells and productivity sells," Ward adds. "If you've got something that will help a body shop tech or a dealership technician or an independent repair technician do their job faster, that's good for them, good for their families and good for business. Innovation will continue to sell."The whole business structure of repair shop tool providers is unlike anything in nearly any neighboring industry. The repair business is on the upswing, and the words "credit crisis" are nearly nonexistent.
Talk to any technician, and they'll more than likely tell you they have no credit problems with their tool suppliers, whose vast U.S. reach approximates 3,400 franchisees. With its own financing arm, Snap-on is able to help its franchisees with the benefit of capitalization of a small business, a critical element to its success.
"Snap-on's in the repair industry, and the repair industry's fundamentally strong," says Ward. "We're seeing new vehicle sales continue to struggle in 2009. Clearly the January numbers were pretty dismal, but the long-term fundamentals for vehicle repair are positive."
He adds: "You've got a vehicle parc that continues to age — over 40 percent of the cars in the U.S. today are over 10 years old. Those vehicles break down and they need to be fixed. If people don't buy new vehicles they need to fix their family vehicles. This is an automotive-oriented society." And he doesn't see this focus changing anytime soon.
The franchise-fueled business plans allow each and every businessperson who joins act as proprietor of their own operation, yet behind the grass-roots business trappings are quality products, some of which have been known to last a lifetime.
The success of Snap-on also is centered around three points, says Ward: personal service (provided by the franchisee); innovative products and solutions (provided by Snap-on); and financing (supplied by Snap-on and the franchisee).
"It's really that unique combination of those three things at the place of work that's made this business model work for 90 years, and frankly, why it's still relevant and maybe even more relevant especially around credit in the 21
Productivity, convenience and innovation also are elements of this company's successful construction. "If you can beat the rate and do quality work in less time than some standard gives you, that improves the profitability of the entire chain," offers Ward, who adds that anytime a vendor can bring the store to its customers, convenience enters the picture.
"At the end of the day, innovation sells, and if you can help a technician or a shop owner improve their productivity, they are going to listen."
Uncompromising Conditions
To celebrate this unique relationship between Snap-on, its franchisees and their customers, along with general consumers, the company rolled out the NO COMPROMISE TOUR late last year, embarking on a one-year odyssey to further strengthen this professional supply chain and the unique business relationships forged at the local level.
The tour also affords attendees the chance to see some of the company's latest and greatest tool storage opportunities, products that won't fit on a tool truck, per se, like the EPIQ, a massive tool storage unit that acts as a digital docking station for computers, scan tools and other essentials of our digital age. The EPIQ helps maintain and organize tools and information.
The NO COMPROMISE TOUR was born out of its centerpiece: the 1957 Chevy "Glo-mad," which is customized using Snap-on Tools as part of its design. If you look closely, you'll find that undercar parts, body panels and other sections of the classic ride are embedded with tools made especially for the vehicle.
"Part of this process started out around the 50
"It's one thing to have a chopper or car that sits in a static display somewhere where you're not, and it's another thing to be able to experience the brand up close," he continues. "So the NO COMPROMISE TOUR is really a tribute to our customers that don't compromise and only use the best."
At any given stop, attendees are likely to rub elbows with franchisees, family members and even consumers. And to strengthen the local pull of the tour, attendees of the event can post photos at the Snap-on Tools fan site through the social networking Web site Facebook.
Though the methods for choosing each city in the tour are somewhat flexible, Ward states that the tour carved a trail through the southern states during the winter months for obvious reasons.
And the selection of tour stops are chosen on the grass roots level, Ward stresses. "The last thing we want is a corporate committee involved," he admits. "This is very much a grass roots program. It's the local franchisees and our franchise performance teams, which are our field associates, who work locally in the community to decide whether it should be with a large county fair or a standalone at a tech school or at a place of business in town."
In Las Vegas last fall, at the start of the tour, Snap-on executives were enthusiastic about its potential.
Eric Fernandez, director of marketing, power tools, holds up an MG72S impact wrench, like a surgeon handling a carefully calibrated instrument. "When a guy spends $400 on an impact wrench, he's interested in productivity," pronounces Fernandez.
Also at the stop, Las Vegas area franchisee Dave Ruskowitz points out the aforementioned EPIQ tool storage unit. "We're the first to have anything like this," he adds. Snap-on's EPIQ is indeed the touchstone of technology and wrench-turning, which meet at a crossroads that could even be mistaken for art.
Franchisees applaud the independence their jobs offer them. Many of them come from the repair or tool market, but some enter the Snap-on fold from other industries entirely. They all love being their own bosses, and stand proudly behind this established brand.
Three of Ruskowitz's competitors had gone out of business when Motor Age last spoke with him. "My customer base is a lot stronger than some of my competitors," he notes.
And following the grass roots foundation of this tour, Snap-on is able to continue and build on the momentum generated by each visit, so each stop is a chance for the tour to build onto itself, evolve and learn from each installment to become tailored to attendees' needs.
And franchisees are able to market each tour stop to suit their demographic, whether it's taking out ads in the local paper or promoting the event on the radio.
"This is very much part of our corporate culture, one of our core beliefs is in rapid continuous improvement, so the idea that no matter how good you are today, you can be better tomorrow," continues Ward. "This tour is the epitome of that. The way we're doing it today versus the way we did it a month or a quarter ago, we're doing it much better today and we'll probably do it better a quarter from now."
The NO COMPROMISE TOUR is both professional and enthusiast, as techs mix and mingle with avid performance enthusiasts to balance out the tour's demographic.
Don Cunningham, a Snap-on franchisee based in Lubbock, Texas, was still effusing over the tour fresh off the heels of the Texas stop. "I had a very good sales day, and I think all the customers that came really enjoyed it."
He mostly caught up with regular customers, but Cunningham also met some new potential customers as well. "It's just very good customer relations," he adds. "It's something our competition doesn't have."
Ward describes the NO COMPROMISE TOUR as a family event that's been successful beyond his expectations.
The tour continues throughout the year. For cities and dates, visit www.snapon.com/nocompromisetour.
The franchise advantage
The pleasure of operating as your own small business while taking advantage of Snap-on's unique market range is but one of many advantages that being a franchisee holds.
"I think we have the biggest market share here, there's no question about that," says Cunningham.
And market factors, as mentioned earlier, are not hindering the company's growth, as indicated by the decision to forge ahead with the NO COMPROMISE TOUR, with perhaps more tours to follow in subsequent years.
"Traditionally, the economy hasn't really hurt our business all that much," Cunningham adds.
The selection process for franchisees has evolved over the years. "Now the process is a lot more detailed. They give you a psychological profile test, they make you go out and ride with three different people and they give you a series of interviews."
Each franchisee gets a protected list of calls and a host of training options.
"These are people that are in shops every day five or six days a week for many hours every day," says Ward. "And they're calling on technicians and shop owners, they're in body shops, they're in the municipal garages, they're in independent repair and dealerships all day long."
Other components of a franchisee's constitution are the amount of physical work and the strong work ethic that are part of the job.
"There's a lot of physical work that goes on and off the truck, in and out of stops," Ward continues. "We send them to training to Snap-on University for a week's worth of very intense training from early morning 'til late at night, and then we support them directly in the field for weeks after they originally start in their protected route. And we work with them, and we spend as much time as we need to make sure they're up and running and successful; and then on a regular basis we continue to spend time with them both in their route and in their training."
In spite of the evolving methods of ordering and distributing tools, what initially attracted techs to the mobile van delivery system still rings true today.
Ward says this system is convenient for techs. Additionally, "It's convenient for them, it's productive for them and so the personal relationship between the franchisee and the technician is what makes this business model successful and has made it successful for over 90 years."
New tools for a new age
Along with the staid standby wrenches that do the heavy lifting for any technician, today's techs also require sophisticated digital technology, and even "intelligent" tool storage units that are equipped to accommodate laptop computers and digital tools that are every bit as robust as the tech's favorite wrench.
With more and more vehicle components assuming digital form, something as innocuous as a loose gas cap can trigger a dashboard warning light, says Chris Brown, diagnostic sales developer for Snap-on. "Now, to roll down a window, rather then relying on a motor, a switch tells the car's computer to roll down the window," he adds.
This digital revolution has indeed changed the way Snap-on operates — hand crank amp machines have been replaced by computers — but it's also opened a number of doors for new products and training.
This franchise encourages grass roots marketing and sales on a local, DIY level. Perhaps this setup best mirrors the rugged individualism that is inherent in the spirit of automotive technicians.
The entire philosophy behind this tool franchise's success can is summed up by Cunningham. "It's basically a people business. It's not really a tool business; if you treat people right, they're going to take care of you."
