MYOB: Do Your Customers Have the Right Customers?

A critical item for the success of any jobber business is to move the right volume of parts to a chosen shop, followed by full payment. It doesn’t have to be a pipe dream.

Having customers that can operate this way makes perfect sense. However, there are many shops not paying their bills on time, not improving their facility, not training their people effectively, and not staying up with technical equipment that is required to execute future services. The question that must be asked is “Why?”

It is very easy for business owners to get into a rut. It can happen to any businessperson, but it is especially easy for an automotive aftermarket service provider. The rut is the process of drudging out a daily routine of selling to regular customers whom you have come to know over the last five to 10 years.

The shop owner in question has never taken the time to examine whether the customer base he currently serves can ensure the future prosperity of the business. In many cases, the business has changed but the customer base has not, and that is where the problem can lie.

Consider the following:

The vehicle has become more complicated, but the shop’s customer just enjoys his new toy and expects the shop to look after it as always at the shop’s very best price because “I am a long-term customer.”

The relationship between the service provider and the customer is very good, but the shop owner is reluctant to charge this well-known person the required price today for fear he may offend the individual and lose him. The shop owner has not taken the time to educate longterm customers to today’s realities; therefore they are stuck in the price rut.

In other cases, the vehicle has been well maintained, and because of the good service there aren’t high levels of aftermarket work required.

Many shops also have an aging customer base that requires little work because they don’t drive their cars much, and the vehicle is lasting longer, too, causing the volume of work to be done to decline.

These are not all the points, of course, but they do bring to the surface the fact that many shops don’t look beyond today’s, or this week’s, business.

As a jobber who wants to secure a future of paid-in-full volumes with the right shops, it may be worthwhile bringing this topic to the table.

Consider challenging your service providers with the following questions, and listen carefully to their answers, which in turn could allow you the opportunity to enhance your business relationship further.

–Where are you going with your current customer base? Is it the right customer base to secure your shop’s financial future?

–Should re-tuning the customer base begin today?

–Where is the type of customer that you want and need located in the community?

–Are you marketing to this type of customer?

–Is the marketing message focussed on the shop competency, quality, personal attention, and value that you can offer them, or are you just sending out the message of cheap price? What makes your shop distinctly different from the dealerships in this marketing material? Are you marketing the fact that as a licensed shop you are authorized to do maintenance work on new vehicles as well? Are you communicating the fact that you can be the one-stop solution for the entire family’s fleet of vehicles?

For a jobber who wants to secure

his future with the right shops,

it may be worthwhile bringing

this topic to the table.

Once you, as their jobber, get a feel for the discussion and situation, you can assist in bringing solutions to the table.

Too many shops are only concentrating on this day’s, this week’s, customer volume, and jobs at the cheapest price, rather than focussing on developing long-term client retention by developing the right relationship with the right customer. This, in turn, develops the customer into a client where the shop gets all the maintenance work at the right price.

When a shop is under financial siege due to management malpractice of the past, it is very difficult for the shop owner to maintain the proper focus required to turn things around. The stress levels are high. The shop is past due on your jobber account and perhaps other jobbers’ accounts as well. Their receivables are out of control as they wait for Peter to pay, so they can pay Paul. That is how they can fall into the price and car-count volume rut, which only gives some very short term immediate cash flow relief, but no long-term profit solutions.

Taking an approach like this with your customer may sound a little different than normal jobber practices, as it would now call for the jobber to qualify his customer base. This now forces the same question to your business as to the service shop. Namely, is your current customer base the right customer base? Is it capable of providing for your business’ future financial success? If not, what are you doing about it today?

Perhaps, as a value jobber, you can bring this understanding to the discussion and put together a plan where you can work with the shop on this issue in exchange for all the shop’s aftermarket business. Yes, it will take time and you as the jobber may only see small immediate financial cash flow rewards.

However, with the right focus, tremendous change in the financial appearance of a shop can occur in a six-month period, and you could be a big winner.

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.

E. K. Williams & Co. (Ontario) Ltd. offices specialize in the independent sector of the automotive industry, preparing analytical operating statements, personal and corporate tax return completion, business management consultation and employee development. Automotive Aftermarket E-Learning Centre Ltd. is devoted to developing automotive shop business management skills through the e-learning environment of the Internet at www.aaec.ca.

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