Auto Service World
Feature   January 1, 2001   by Auto Service World

MYOB: FOCUS ON VALUE ADDED

IT'S WHAT INSTALLERS WANT


Our industry is constantly changing, and will continue to change rapidly, and significantly, for the balance of our careers. To keep up with competition and the best installers, the individual jobber must learn to change, too.

It is a given that having the right number of installers in the paid-in-full, $8,000 to $20,000 monthly volume category, at proper margins, makes for a jobber business that is very efficient and very profitable. The question that begs to be asked then is, “What, and how, does a jobber change in order to attract, and keep, the best installers?”

Consider that a very effective way to make an impact, and be distinctly different, is how the jobber interacts with its installers. The better installers expect the jobber to change and offer more and better value if first call status is going to remain in place. To the better installers, the price of the part is far less important than the value the installer perceives he is receiving from his jobber. The reason for this is that the better installers have a mindset that sees their jobber as a partner in their business, who assists them in growing a healthy, profitable shop.

The fact is that it is the better installers who bring the most profit to the jobber business–the old 80/20 rule–and it is the better installers who bring one drop purchase volume to the jobber business (the 80/20 rule again). It is also the better installers who pay their statement in full each month and who are willing to display trust to their chosen jobber. And it is the better installers who will still be here five years from now!

Perhaps, then, it makes sense to seek out these better shops and bring a very comprehensive, distinctly different, value-added package to them, to earn and keep their purchase loyalty.

Consider, if you will, that in our industry the term loyal often means “lack of a better alternative.” When you’re the best, and there isn’t a better alternative, the installer is very loyal.

You want the best installers as customers, but please understand that you must continue to earn their business, and continue to earn their loyalty, and you must display your trustworthiness to keep it.

Are you ready to change your approach to business? Or are you going to remain inefficient, sustain weak profitability and thus be vulnerable to financial failure by continuing to sell to shops that purchase ridiculously low volumes from you and insist you drop everything and deliver that one item now? Are you going to cater to installers who shop all over town for their parts, always arguing over price, price, price, and then take forever to pay their statement?

Many jobbers say that describes their typical installer customer. The problem is that there are too many jobbers around for the number of good installers in the marketplace, so if you’re going to be one of the jobbers that survives and grows a profitable jobber business, you had better understand that change is not an option for you.

Consider how a typical day could be spent for yourself and your representatives if all of you were thoroughly trained and understood the details of the installer’s business.

Consider that, instead of spending all day out traveling to 10 shops selling parts to customers based on the cheapest price–and hoping to sell enough to make a day at the store–you were spending the day with two clients as a business mentor; discussing, and resolving, business problems with a client who gives you all his business paid in full each month.

Instead of spending time on the phone trying to collect the receivables from shops that you really despise doing business with but a sale is a sale, would you rather be assisting a client in the new design of his facility? These are just two examples of how the challenge, interest, fun and profit can be put back into the jobber business.

But do you truly understand the installer’s business?

There are jobbers who have stepped out of the box and made the necessary mindset changes for their store, trained themselves and their people, and brought real value to their best installers. Consider these examples of value-added services:

Assisting the installer in calculating the installer’s shop’s true dollar potential and analyzing the shop’s capabilities in reaching its potential in the installer’s marketplace.

Assisting in gross profit analysis of each revenue category of the installer’s shop and designing solutions to improve the weak categories.

Setting up the system and looking after full inventory management to ensure all the installer’s hard goods categories and lines are turning within agreed guidelines.

Assisting the installer in evaluating the profitability of accounts receivable and eliminating accounts receivable to improve his cash position.

Assisting in building a Business Operation Profit Plan for the installer.

Assisting in calculating and monitoring the installer’s technician efficiency.

Assisting in creating a technician productivity bonus plan.

Assisting in analyzing the installer’s labor rate and establishing the maintenance and diagnostic rates for his shop.

Assisting in producing marketing tools to educate the installer’s clients on what diagnostic labor is and its value.

Assisting in helping the installer design a professional client invoice (work order).

Assisting in employee analysis and designing a comprehensive, individual employee training program.

Assisting in developing marketing brochures and flyers customized to the culture of his business.

Assisting in evaluating various business software for installers to make them more efficient and professional with their clients.

These are examples of a different kind of value-added component. All require jobber and jobber staff training, all bring value to the installer, all contribute to the growth and prosperity of the installer’s business, and all require that the installer trust and respect his jobber’s thoughts and opinions.

Many jobbers may think that all this stuff is for the installer’s accountant to look after. Firstly, the fact is that 95% of all accountants out there do not understand this industry and how it really works, let alone this sector of our industry, and especially the installer’s business. Secondly, the jobber owner should be doing these things in some form or another for his own business to help it prosper and succeed. So now he just has to get focused and learn how these things apply to the installer’s business.

The successful jobber lives and breathes this industry, and has tremendous insight that can be shared with installers. However, too many jobbers have lost good installers’ business because they themselves are not willing to keep up and learn about their client’s business. They are not willing to change their way of thinking about how their jobber business can contribute to the prosperity of their installer client’s business. They have not displayed trust and earned their installers’ trust. Too often, they either don’t understand or seem to have no desire to understand relationship value in today’s business.

I know this to be true. One case happened last summer where I had the privilege of interacting with jobbers at a WD weekend function for their jobber clients. A jobber approached me and said, “Bob, you scare me, you want me to change too much.” I simply looked him in the eye and answered, “What is your alternative?” His face went blank; he didn’t say a word for about 15 seconds as he stared at me. Then the reluctant simple response came out of his mouth: “Damn.”

The best installers see this. They are very aware of what is out there and they are very loyal to the jobber that has kept up with them, contributing to their shop’s success.

In the jobber business, and our industry as a whole, the people who succeed are the few who have the ambition and the willpower to develop themselves. Develop your jobber business through the development of yourself and your people, and the best installers will probably discover you before you discover them. Now you’re making progress.


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