MYOB: Are You Reaching a Crossroads With Your Business and Your Customers?

Do we get involved with our customer’s business, or should we just sell them parts and collect money? This is the crux of the changing role of the jobber. How you respond is perhaps the most critical decision you can make for your business.

Have you ever thought, “Why can’t those damn shops just get their act together so we can sell them and get paid?” Well, I’m finding more and more jobbers have admitted that they have said this to themselves many times. These jobbers have been in the business of selling for more than 10 years in this industry. These jobbers love to sell and they want the world of 10 to 15 years ago to return so they can finish up their career with a lot less stress in their lives and have more fun in their day-to-day routine.

Sorry, but I don’t think that is going to happen.

Consider that running a shop from a business perspective is a lot different than it was 10 to 15 years ago. The capital requirements are substantially higher, the shortage of competent personnel is huge, the technology of the vehicle is extremely complex, and shops are dealing with a consumer who is largely ignorant of how the automobile works. Today, the trust relationship between the shop and its customer is more important than ever before.

Now, consider that you, like many jobbers, measure your own business in terms of sales. Consequently, jobbers speak with their service provider customers in the same context as their jobber business. They talk about sales rather than understanding the shop’s business and terminology of measurement and discussing things in the context of a shop, such as productivity percentage or hours billed per work order.

It seems that many of these jobbers want everyone else around them to go through the pain of change instead of them.

This not an option. In fact, if a jobber does not commit to change, the very survival of his store could be in jeopardy.

The more progressive jobbers have committed to taking their stores to a higher level than what was considered normal a few years ago. They have an internal drive to be the best in their marketplace. They are very comfortable now in discussing shop business issues with their customers, earning their customers’ respect and trust, and working with them to take their customer’s shop to a higher level within the marketplace.

Moving to this format of conducting business took a major decision by these jobbers, but after doing the math they realized this was, and is, a smarter way of working with their customers. Said one jobber: “When our customer is more efficient and productive in his business, more parts sales can be made per customer location. Thus our actual jobber cost/maintenance per location drops dramatically, because we are now delivering more parts volume to the same location with approximately the same number of deliveries per month. This leads to higher profitability on an individual account basis for our jobber store.”

It did mean that they had to go through a learning curve of their own and understand how a shop should be run today to maximize profits and cash flow. They then looked at their own internal processes to examine if their actions, and business processes as a jobber, supported the shop’s efforts to maximize its efficiency and profitability and, consequently, the profitability of their jobber store.

This sounds great, but in reality how was it really done?

The first step is that the jobber had to actually admit that the old ways of running a jobber business are far less effective today. It is like an alcoholic admitting to his drinking problem; nothing can be done until this first step is clearly acknowledged.

The second step is to learn exactly how a shop is supposed to progress today, by fully understanding the numbers and business processes that maximize efficiency and profitability.

The third step is to dramatically slow down and set the time aside to open communications between the individual shop owner and the jobber. This is a one-on-one meeting, away from the customer’s shop, in a quiet environment where both parties can clearly acknowledge and understand the conditions and problems that are affecting shop profitability in the independent sector today.

The fourth step is to clearly define a goal to be achieved by the shop, within a reasonable time frame, that adds net profit to the shop’s bottom line. This must be something that is definitively measured, such as discovering that the shop’s current average hours billed per work order are 1.3 hours and work together to move it to 1.6 hours per work order, even though the final target is 2.0 to 2.5 hours per work order.

The fifth step is to define the role of the jobber’s business in assisting the shop to reach this objective, such as stocking the right parts, fine-tuning on-time deliveries, or ensuring that the shop itself is stocking the right inventory for the customer base being served.

The communication and interaction of the jobber and shop owner is continuous, and not a one-time meeting. Problems, objectives, and solutions become the norm of discussions rather than the rarity.

Imagine if you will this level of understanding by the jobber and shop owner and what the financial results could be to each party’s business if they mentally partnered together to enhance each other’s profitability. If you can see this happening with many of your current customers, you have an opportunity to really enhance your store’s bottom line and change your business activity to interacting and counselling with a client-based business rather than selling to cherry-picking customers. Your stress level would be substantially lower, sales per shop would be up, the day-to-day interest of challenge would re-enter your life to the point where the business becomes interesting, and more importantly, fun again.

If you can’t see this happening with you and your customers, examine clearly who may be the problem here. Perhaps it is you. Are you thinking “I don’t want to change,” “Impossible,” “Smoke and mirrors,” or “The shops I have couldn’t care less”?

Okay, I accept your comments, but prove to me mathematically where you and your customers are going to be in five years’ time if you keep doing the same things you are doing today. Have you ever heard the terms “buying yourself a job” or “bankruptcy”?

Robert (Bob) Greenwood is president and CEO of E. K. Williams & Co. (Ontario) Ltd. and Automotive Aftermarket E-Learning Centre Ltd. Bob has more than 27 years of business management experience within the automotive industry, counseling individual shops in Ontario, and has developed business management courses for the independent maintenance and service sector proven to enhance the shops’ profitability and grow the business. Bob has also worked with wholesale jobbers on how to do a better job for the service provider by providing valuable insight as to the real challenges faced by the retailer today.

Bob can be reached by e-mail at greenwood@ekw.ca or greenwood@aaec.ca.