The Great DividePosted 6/11/2009
By George Witt, AAM
The shops that survive will be the ones that adapt to the changing marketplace.
There are some who will argue that there is a Great Division now forming in our industry between the shops that don't attend training, don't buy tooling and don't stay current in the business and those shops that do.
They say the untrained shops will finally fade away, unable to perform the most basic repairs. The trained shops will survive and prosper. The day of reckoning has finally arrived, they conclude.
I've been hearing this for decades and, so far, nothing's really changed in our industry.
However, current economic conditions have now led me to a new belief, that there is a "Great Divide" coming. A Great Divide between those shops that can survive by adapting to the new marketplace and those that can't or won't.
First off, let's cover the first point - shops that can fix cars will prosper. Just because you can fix a car doesn't mean you can get people to come in and pay for it. The old days of hanging out a sign and having cars fill up your bays are over for most of us. It's been proven over and over that a good front counter can overcome the worst back end shop. However, the best shop operation can't overcome a hostile front counter. People just don't buy from people they don't like. So, we have to focus on the front counter operation as the key to our survival.
Next, we have to look at our industry business model and realize that we're one of the few industries whose way of doing business is pretty much unchanged for decades. Sometimes the changes required by an industry are so subtle that they are missed by many.
Right after World War II, grocery stores were all over the place, since most people had to be able to walk to them. Mom and Pop had little stores about the size of today's convenience stores. In the 1950s came the dawn of the "supermarket," which offered much bigger stores, lower prices and a much greater variety of products. They quickly swept the market and Mom and Pop were all gone within 10 years. The grocery stores had regular 9 to 5 hours, just like Mom and Pop.
In the 1960s, somebody had the brilliant idea of little "convenience stores" with long hours, so you could get bread and milk after hours. They put in gas pumps to drive more traffic to the stores and focused on high-profit items like pop and chips and thrived. There are convenience stores all over the place now.
The key to survival today is to be flexible, adaptable and work smart. The mass of car dealership closings has opened up a whole new array of potential customers for us. These are people accustomed to paying for car service and getting the car fixed. This potential benefit is offset by the number of good techs suddenly unemployed, some of whom will take up operations in the backyard. Suddenly, we have a new generation of "Backyard Bobs" to compete with us, good techs who can fix cars. Well, with every asset comes some liability.
The first thing we need to have to survive is an understanding that we're not shop owners, we're business owners. We have a business and we happen to fix cars. In one sense, business is more important than cars. It doesn't matter if we can fix the car or not if we can't generate the revenue to make the business model work.
For business survival, we must have vision and belief. If you can't see yourself as successful, it's going to be difficult to be successful, since you lack the belief to carry it out.
So, your first objective is to either change your thinking or reinforce it, as the case may be. Visit any bookstore and go to the self-help section. Start looking at motivational books. Pick them up and open to any page. Read a few paragraphs and see if it charges you up. If it doesn't, keep looking and if it does, buy the book. The idea is not to read the book, it's to use the book to get into a positive frame of mind. Reading a few pages every morning can get you excited about the day and positive about progress. This is necessary because the shop owner or manager sets the tone for the rest of the team. Negative leadership gets negative results and positive leadership can bring out the best in people. Lead from the positive side.
Next, consider how you and your team dress. If you have sharp uniforms for your crew, good for you. If not, you have a new objective, especially if your crew looks like they just got off a pirate ship ...
Far too many of us wear tool company T-shirts and hats when off work. This can cause us to feel out of place in some social settings and make us think we're not getting the respect we deserve in our community.
Buy some nice clothes to wear socially. You don't have to buy a lot, but nice clothes can make it easier to maintain a positive self-image. Remember, you're now a successful business owner (not just a mechanic or shop owner).
You're now thinking about positive success and looking like it. It's time to act like it.
See how your shop fits into the new American value system. We're making a change from "conspicuous consumption" as an admirable trait to being practical and making things last. It would appear that the latest bubble to burst is the "car bubble." It's not likely that people will begin to buy new cars at rates previously enjoyed by the car companies. The current economy has many people very reluctant to borrow money, particularly for a depreciating asset like a car. This means that maintaining the car they have will become more important to many people.
It's important that you have a good maintenance system to keep the car reliable and that this system is value oriented and cost effective for the customer. In other words, the money they spend should yield good results, not just produce sales for your shop. You must review the maintenance history on every car every time, or you won't deliver the value these people want.
It may be desirable to create several levels of service or quality that people can choose from, in order for your shop to appear to be priced competitively on many of the things people call and ask prices about. We've had good luck at our shop in offering three levels of oil changes, with the difference being the quality of the motor oil. Many of our customers are now spending more on oil changes than before and opting for better motor oil. Simply offering a low price on many of these items will be enough to satisfy most customers. They may not ever buy the low end, but knowing you have it will be enough for them.
We've tripled our tire sales by presenting people with a choice of five or more different tires so they can choose the one that fits their needs the best. This seems to have ended the price shopping we use to get when we just told them how much a set of tires would be. We instead get them thinking about which tire they should choose and having choices causes them to feel like they're getting better value.
Finally, you must continue to market aggressively. This may not mean spending a lot of money, but it does mean you'll have to work for business. One shop owner got tired of standing around for two weeks and started calling his customers to see if he could get them to make an appointment. It worked so well he got almost a week behind!
Your customers may be out of time, they may be concerned about conserving money or both. You'll have to reach them through service reminders, postcards, newsletters or phone. Stay in touch and educate them about their cars and the importance of regular maintenance.
Hold car classes for women or educational seminars on how to get better fuel mileage or the future of energy. Promoting an event is far different than asking for money, and it might also be a better way to get referral business. Talk to your better customers about their thoughts and needs and be prepared to adjust your shop operations to fit them. Obsess over details and deliver what they want.
Many of those dealership customers who said the dealer was too expensive weren't complaining about the price as much as about how they felt when they left. You might even charge more and deliver better, more personalized service, causing them to comment on how much less you charge than the dealer. I've actually heard these comments before in some cases.
In summary, we must think successfully, dress like it and act like it. We have to be flexible and ready to adapt as needed in our own market. General Motors Corp. and Chrysler LLC should prove to us all that, in business, it's not the big that eat the small. It's the fast that eat the slow.
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