The Global Automotive Aftermarket Symposium promised a roadmap to success. What speakers delivered was indeed a roadmap–the problem is that no one really seems to agree on who is driving or where they’re taking us.
One overwhelming trend affecting businesses around the world is a change in the focus of many businesses from supply push to demand pull. This led the first speaker to talk about the importance of reaching the customer and finding out what he wants.
“Marketing is far too important to leave to marketing people,” says Roger Blackwell, Ohio State University. “The real emphasis is that marketing and selling are different things. My simple definition is that selling is getting rid of what you have. Marketing is making what you can sell.”
He says that it is important for everyone in an organization to understand that their job is to change the organization to meet customer needs. “The single most important question that needs to be asked is ‘what will people buy?'”
The critical factor in success, he says, is not just knowing what your customers want but what your customers’ customers want. Doing that enables you to enter the planning process a step ahead of your customer. “If 80% of new products fail, it’s not because they didn’t do what they were supposed to do. It was because they did something different from what the customers wanted done.”
The key issue is understanding that there will be demand, but demand for what?
John Smith, of GM Service Parts Operations, estimates that aftermarket sales in North America will top $315 billion U.S. by 2005, but that this demand mix will not be the same as the $275 billion of last year.
“The customer determines what the business is,” Smith says, quoting Peter Drucker.
Smith told attendees that customers have changed in the way that they buy and what they think is important. Accordingly, the vehicle service industry, which has remained largely unchanged in its practices for decades, must change. Projecting forward to 2005, he does not truthfully believe the independent can.
It seems quite likely that the independent service sector will continue to shrink, he said. “This has less to do with customers’ time squeeze and more to do with keeping up with technology.” Advantages will be accorded to the OES channel by telematics, “perhaps giving vehicle manufacturers advantages in (directing customers) to their affiliated service providers.”
Likewise, with the emphasis of speed over inventory, he sees grim days ahead for three-step distribution. “Three-step distribution will decline sharply and distributors will attempt to forward integrate so as to secure their end user customer base.”
While Smith predicted the end of the aftermarket as we know it, Steve Handschuh, president of NAPA, sees things a bit differently.
“In spite of how our business has been, I still feel that it is the best time to be in the automotive business and we have a promising future.”
He does see the need for change, though. The roots of NAPA are in distribution. Some 75 years after its creation, that legacy still exists. Genuine Parts Company and NAPA–virtually synonymous today since there are only three members of NAPA–are distributors at heart. “That’s why what we do well is distribution. We are trying to evolve into a sales and marketing oriented organization, but it’s not where our roots are. As we got into the era where the aftermarket attracted serious marketers, we had to change. We had to get better.” He says that the aftermarket needs to get away from old thinking.
“If we take it for granted that the customer wants the same thing they always wanted, we’re out of business, because they don’t.” He said that the challenge of change is not just figuring out a model to take you into the future, but being able to put it into action.
“Consistent execution of that plan, that’s the challenge. We can have that so-called vision, but if we can’t get the organization to buy in, then it doesn’t matter how good your model is.
“It doesn’t matter if our assumptions are absolutely correct if we can’t consistently execute.”
Nearly two dozen presentations made up the 2000 Global Automotive Aftermarket Symposium. Rather than an event that offers attendees conclusions, it offered them a context within which they could place their own experience. Answers were not the order of the day; questions were.
Speaking toward the end of the event, Tom Elmer, director of corporate marketing for Cardone Industries, quoted modern day animated philosopher Homer Simpson when he asked, “What’s the point of going out? We’re just going to wind up back here anyway.
“What’s the point of talking about all this when we’re just going to wind up back here anyway? We will unless we do something about it. We need to do it by working together. I wonder if we could get a service dealer summit put together. Our future and livelihood will depend on it.”