Studies of the independent sector of the automotive aftermarket industry are confirming that independent shops are losing the struggle to retain the consumers’ on-going business versus the growth in bay service business that new car dealerships are experiencing as they start to focus on “all makes and models.” In close examination as to why this is happening, the main reason is due to a lack of business focus by management of the independent shop. Too many business owners and managers are “too busy” not making money instead of slowing down and preparing their business to meet the customer/client’s real needs and wants in their market area.
Consider that weak shop owners focus on cost to save money, whereas the most successful shops focus on delivering value to make money. Consider that new business standards are required for this new service on need era that most shop owners/managers have not addressed within their business operation.
It is time to “Re and Re” the independent shop.
Review each of these items within your own operation to ensure your business is heading in the right direction to retain all your customer/clients business. If you ignore these items, there is a real possibility that you are already, or soon will, lose clients to the dealerships within your area.
Renew the Business Format
The “same old, same old” does not work anymore. Shops cannot “bang them in and bang them out” to create large car count numbers. The math does not work anymore with that format. In fact, independent shops that concentrate mainly on volume to keep “the boys busy in the back” do not know that, on average, 60 to 65 percent of the work that they do does not create net profit for their business. It only creates sales and gross profit.
They do not know how to measure this. They are working very hard to stand still and, in many cases, actually move backward in their business. Today, your business must be very focused on each individual client, one customer/client at a time and deliver value.
Management’s No. 1 job is to build relationships; therefore management must slow down at the front counter and take the proper time to meet, understand, and counsel individual clients as to what the manufacturer recommends to ensure safe and reliable driving with their vehicle. Customer/client vehicle technology and maintenance education is more critical today than ever before. The average consumer is not stupid, they are uninformed. Slow down and define the value you are prepared to deliver to each client.
Relearn the Business
Continuous technical and business training and development is required today. Professionally operating an independent automotive maintenance and repair shop is the most complex retail business in the retail world, requiring not only a great deal of capital, but also higher in-depth skills than ever before. Consider technical development of the vehicle now requires highly skilled technicians who embrace vehicle knowledge with a tremendous amount of personal pride. These technicians are highly skilled professionals. The depth of knowledge they must completely understand, and stay on top of, is mind boggling, and it is the shop management’s responsibility to ensure these professionals have all the right training and tools to execute their skill. Consider a competent technician today requires 100 hours of training per year just to stay level in their knowledge.
Management (shop owners) must also continuously visit classrooms a minimum of six to eight days per year now to stay on top of all business issues, and there are many. It is a new world order today, and this new order affects the very profitability, and potential future viability, of an independent shop. Management must learn and measure the business in a totally different format today. Just measuring parts and labor sales and following the shops bank account up and down, doesn’t work. Management must stay on top of the business numbers to ensure they are measuring net profit on each invoice before the invoice is closed off, one invoice at a time. Businesses that are only interested in sales and price of commodities don’t get it yet. The question that must be asked is “do these shop owners have any desire to get it?
Retool the Business
Management must ensure the business is profitable enough to have available the funds for continuous investment in the right equipment required for today’s vehicles. As an example, consider basic equipment required to properly execute all vehicle fluid maintenance today such as a system flush, carbon clean, oil flush and transmission flush to name a few. Equipment and tool requirements are higher today than ever before in the history of our industry. Without the right equipment shop inefficiency settles in affecting the profitability of the shop, but ultimately the most important, is that the shop is not servicing its customer/client base in its most professional manner. This, over time, will affect the relationship of the client with that shop, potentially driving the client right back to the dealership.
Recertify the Business
Management must establish standards of execution throughout the shop. Define your standards in print. Each staff member from the front counter, to the back office, to the back shop must completely understand, believe in and know how to execute their function that in turn exceeds the customer/clients expectations. Certification today is just not a piece of paper or experience. Certification is a daily attitude. “We will not let the client down.” “We care!” “We will take the responsibility” to make sure your vehicle maintenance and your experience within the walls of our shop, exceeds your expectations.” “We will be second to none.”
Re-professionalize the Business
Management must establish on-going reviews with each staff member to ensure they are continuously aware of the importance of their personal day-to-day execution of their particular function within the shop and how it affects the customer/clients perception of the shops professionalism. Management also must continuously review the systems within the shop. These systems not only are the software systems, but also include the processes in how the shop delivers its services to the consumer.
To “Re and Re” your shop today is simply not knowing what to do. You must become proactive. Consider this statement; “It’s not what you know, it is what you do with what you know”.
Too many shop owners today are very apathetic and act like deer staring into the headlights. Their actions seem to be advertising, “I don’t care about that stuff (above) and I have no desire to get it.” It is very unfortunate that these shop owners insist on hanging around in our industry as they are definitely affecting the image of the independent sector which in turn hurts the best independent shops within each market. Consider also that these weak shops work to the benefit of the new car dealers in that consumers do not enjoy the experience at the weak shops and too many consumers start assuming all Independents must be the same.
The challenge in front of the independent sector is not an easy one; however, it is possible to turn things around when all Independent shops start to communicate with each other about the importance of raising the shop operation bar. Consider discussing the above issues with your parts supplier who sells to these weak shops and arrange to get together with all of your shop peers to see if your market area is interested in “taking the market back.”