Closing the Circle

Ever feel that your operation stands alone in a sea of tough competitors? For the typical service business, that’s often the way it is, with Big Box retailers and specialty shops poised to grab the high-volume, high-margin business. If brand presence is an obstacle to generating the kind of sales per square foot needed to take a service business forward, there are options. One is to “join’em”, by becoming a franchisee. Another is to take a look at banner programs. Banners offer a unique way to gives a service business a “major league” presence without the control issues of many franchise businesses.

Why go with a banner? In a word, “Competition”. According to Pierre Desmarchais, national manager, development and installer programs for Uni-Select / The Specialist, “I don’t think that an installer can go it alone any more. With the competition out there, especially at the dealer level, everyone wants a piece of our action. In Canada, they’re not as well organized as they are in the ‘States, so we’re not feeling the effects immediately, but I’m sure that in the future they’ll do their best to get what we have right now. Getting aboard a banner means that you are a part of a group that can stand behind their promises and guarantees, and add everything that can go with that professional look. On the marketing side, as installers, we’re very good at fixing cars, but we generally don’t have the knowledge to put together a marketing program to go up against the monsters that are new car dealerships. Installers are busy doing daily business; it’s hard to adjust to the new business climate. People who join banner programs have a tendency to mature faster.”

Marc Alary, marketing and product manager, BestBuy Distributors Ltd. (Best Auto) agrees: “Some service centres want to join a big banner program where they feel part of a national chain. For some, at that point in time, I think that they are concerned that they may lose some of their independence. But for the owner that is an independent service station, they want to affiliate themselves with a name that’s known. And it’s very important for them to preserve their independence.”

So what’s in it for independents? Programs vary, and can include warranties, marketing programs, insurance, training, and equipment and transaction discounts. Underneath the benefits, however, major differences between banners and franchises involve money and control. According to Bob Bobert, general manager, AutoValue Professional Repair Network/ Certified Service, “A franchise offers a program, and then takes a piece of the action. We offer the program, and the business buys into it. There’s no percentage of sales that the heads office takes. That’s a big difference.”

Control of the business is as important, and sometimes more so to independents who have a lifetime invested in their operations. “Control is crucial”, adds Bobert. “If they want things dictated, they’ll go the franchise route.” Michel Rondeau, Director of Marketing, Carquest Canada/AutoPLACE, agrees: “Fees are different, and they have to go strictly by the book. The banner program means that they still have a great deal of freedom.”

The freedom to manage a business as the owner sees fit sounds like a poor fit for the development of a cohesive team, but in fact, independent thinkers are universally identified by banner programs as the best managers, a point stressed strongly by many program mangers. The notion that entrepreneurs are too independent to be good team players, for example, is refuted in no uncertain terms by Pierre Desmarchais: “Frankly, the statement is quite rude. It just doesn’t stand. We are looking for people who will be successful five, ten years and more years down the road. The installer who wants direct, day-to day involvement will benefit most.”

If banner programs are the answer, why do many independents resist? There are several reasons for independents to opt for the solo route, from fears about control to an unwillingness to subordinate a strong local brand to the banner. In many cases, however, it’s because independents are “spoiled for choice”, says Bob Bobert: “A lot of the installers are inundated with proposals from different groups. It’s like a restaurant with a large menu; everybody has a different twist to their programs, and installers have trouble choosing what they want. Some may than perceive that the only difference is pricing.” It’s unlikely that a commodity approach to selecting a banner will give the best results, declares Bobert. “A business owner should consider how the program makes their business unique from the guy next door.”

While making the move to a banner, service businesses need to remember that the basics of running a successful operation don’t change, and membership in a banner program doesn’t mean that owners can stop thinking about continuous improvement. Training, especially business management training, is as important for doing business under a banner as it is under the owner’s “shingle”. “It’s not easy”, states Carquest Canada’s Michel Rondeau: “It’s difficult to get them away from their businesses for even one or two days.” It’s a time commitment, however, that independents and banner members alike must make to get and stay competitive. That commitment also applies to other efficiency and marketing tools offered by the member programs. “Upgrade your image”, advises Rondeau, who adds, “bring employees together, and improve the image of your employees and customer service together. Tell the technicians why they’re in a banner program, and how they can benefit.”

Pierre Desmarchais also counsels a proactive approach. “It’s surprising how many banner members don’t use all the tools available to them”, adding, “Showing you how to work a calculator doesn’t make you an accountant the next day. To become successful, they have to mature as businessmen. In that path to success there’s training, and at some point you’ll find the value in your program, use it, and never want to get rid of it.”

Is a banner program right for you? If you’re looking for the marketing advantages of a name brand, yet need to preserve the independence that attracted you to business ownership in the first place, the answer may be “absolutely”.