Clinging to the old ways of doing business–slashing margins constantly to unprofitable lows trying to build volume for their business and hoping the marketplace will bite–not only does incredible damage to a jobber’s business and his attitude towards the installer business; it constantly sends the wrong message to the installer.
There are only three things that the jobber and installer business can run their businesses on: price, service, and quality. Pick two. To be the cheapest one must sacrifice service to the installer customer or the quality of the products being shipped. Sacrificing service and/or quality in today’s business atmosphere is a recipe for disaster. If the average installer is purchasing only $2,000 to $4,000 per month from the jobber, how can the jobber be the cheapest and make a proper return on investment, considering the average jobber will make 40 to 60 deliveries per month to this one installer?
The message being sent by these jobbers to the installer is that margins are fat enough in your sector of the industry and that there is always room to go lower.
It is time for a reality check. It is damaging your own company, your company brand associates, and our industry as a whole.
It makes more business sense to sell at a price that will earn the business a respectable return on its investment. To do this the jobber must add enhanced added-value services that really assist the installer client to grow a business and make it exceptionally profitable. The cost of adding value to your services is far cheaper than reducing overall margins in your business. This change in mindset will serve the jobber business and the installer’s business well.
To set up enhanced services, the jobber must first decide what type of installer business does it wants to sell to, and then what the acceptable volume from these shops should be, in order to provide a competitive price for the installer and a decent margin for the jobber, based on the service and quality delivered.
It is truly time for all jobbers to realize that they cannot sell to every installer who calls.
The same message holds true for the installer; he must realize he cannot sell to every customer who walks through the door. Let’s show some consistency with messages to this industry at all levels; otherwise it is perceived that we don’t practise what we preach.
The next step is to determine what value-added services these installers require. How can the jobber really assist these installers to produce a profitable business? What are the top three items they need most that you know you can help with?
From there, it is necessary to put together a training budget to insure that the counterpeople and sales representatives are thoroughly trained on the installer client’s business. This brings into play the mindset of how the jobber is going to go to market and what importance each staff member in the jobber store brings to the table to secure the installer’s business and the important first call.
The counterpeople are involved in this training because they are the ones who speak to the installer two to five times a day. A poor counterperson can lose many clients, no matter what quality or enhanced services you put out there.
These may be new skills for the average jobber store, but they are very important skills required to capture the best installers in the marketplace.
The jobber owner and sales reps in the field should be informing and counseling installers on industry issues and installer business profitability.
Industry topics may include how to handle emission issues, finding and keeping good technicians, creating the right technical training classes to enhance skill levels, and creating and sustaining a positive business perception from the installer’s customers.
Business issues may include how to maximize sales with the right vehicle inspection procedure in the shop, how to calculate labor hours produced per invoice to properly measure productivity, how to manage sales and gross profit mix of the shop, and what and how to use office technology to inform and grow the installer business.
When an installer purchases the minimum of $8,000 to $15,000 per month they are capable of from their chosen jobber, the jobber is most likely doing his job to his fullest extent with this installer, have a trustworthy relationship in place, and be considered an important value to that installer. Anything short of this attests to the fact that there is lots of room for improvement on behalf of the jobber.
When the installer becomes productive and profitable, the monthly statement will be paid on time, and in full, each month. A further 5% price discount on the parts is not an issue as it will not save the installer’s business, because these installers realize, and know, that it is the labor component of the shop that makes the bottom line in the installer business, not the pricing on parts.
The installer’s parts volume with the jobber will go up in direct proportion to the quality of the relationship the jobber builds with the installer.
The jobber owner and sales representatives today are in the relationship business, not the parts business. It is the volume of parts from the installer that measures how well the relationship is going. Low volume, no relationship; 85% to 90% percent of the installer’s purchase volume, excellent relationship.
Installers need this relationship in place, and they need it now to ensure success in their business; however, they are nervous about going there because of the mistrust in this industry, just as jobbers are nervous about the mistrust in this industry with installers. Trust must be earned.
I encourage jobbers in this industry to take that bold step. There are many good installers looking for this type of business relationship, but as suspicious as the jobber may be of the installer, the good installers may appear initially to be just as suspicious, but will come to the table when you have earned their trust.
If you’re not satisfied with what is, then you need to get busy and visualize what can be. Replacing or improving the undesirable is much more effective than just rejecting it. Working toward something is infinitely better than just complaining. Rather than waste your time and effort on useless complaints, invest your labor in improving the situation. Moving forward will get you much farther than moving against. There are those who see the enormous opportunity that comes from making a situation better. Which approach makes the most sense to you? If there’s something you don’t like, make it better. It’s not that big a step from seeing something as undesirable to visualizing how it can be better. Put some effort behind your vision. Don’t just stand there complaining. Make it better.
Robert (Bob) Greenwood is president & C.E.O. of E. K. Williams & Co. (Ontario) Ltd., which has six offices across Ontario specializing in business consulting and training in the independent installer sector of the automotive aftermarket. Bob also works with jobbers to understand the installer side of the industry and address what is required from both parties to set up a relationship that grows future business. E. K. Williams (Ontario) Ltd. is on the Internet at www.ekw.ca. Questions and inquiries can be made in full confidence via fax c/o Jobber News (416) 442-2213 or via e-mail to firstname.lastname@example.org.