The most progressive automotive service providers (ASPs) in Canada have made tremendous strides to reshape their business format and their personal mind-set. Parts distributors must learn to do the same.
What is at stake is your ability to attract and retain these excellent business operators as first-call clients.
Consider that many of the old terminologies used throughout the aftermarket industry over the past 25 years have truly defined who and what shop operators are, and how our sector of the industry sees itself. It is time to move forward and leave the past where it belongs.
Many parts distributors are clinging to the past. You can be assured that the best ASPs can clearly see this.
This image of old-fashioned parts distributors influences the ASP’s decision as to how much business he really wants to do with them, as the best shop owners understand a solid and comfortable business relationship with the right supplier must be forged in order for their shop business to succeed.
Consider that trustworthy, loyal business relationships must be earned; they are not bought.
There are five terms that all parts distributors across Canada must make a concerted effort to change in their day-to-day vocabulary.
When these new terms are embraced, small things will start to happen within a year. You will feel the tide turning in your business relationships as well as the level of respect given to you from the best shops in the marketplace. You will also notice increased purchase volumes from key shops that you deal with.
Perhaps, just perhaps, they are testing you as to how much you truly believe in the terms you are using. They are prepared to give you a chance, but will evaluate your efforts and results with the test of time.
Installer: This truly is the worst term a distributor can use today to describe the shop owner. This term is an insult to his ability and his competence. If you want to shut down the best shop owner’s ears, stick with that old term. Today the best operators are service providers; consequently they have become known in industry terms as automotive service providers, or ASPs. Service providers must clearly understand what type of person they are selling to. Once this has been determined, they set up a proper maintenance schedule to manage the customer’s vehicle, based on manufacturer recommendations and the expectations of the client. These shop owners have set up the business processes to provide an in-depth service for their clientele. This is not an old-fashioned parts installer. This professional is a true service provider.
Mechanic: In the 1930s right through to the late 1980s, a mechanic was required to fix mechanical vehicles. Today, however, one is dealing with an extremely integrated electrical and computerized vehicle. Today, diagnostic ability is the talk at the shop level, not mechanical ability. Today, ASPs are looking for competent technicians. These are competent, highly skilled individuals, and it is important that the parts distributor recognizes and acknowledges this skill level. When you, as a distributor, refer to the number of technicians in a shop, you are acknowledging that you recognize the skill difference from yesterday. Also remember that the license these individuals worked hard to achieve reads “Automotive Service Technician.” It does not read “mechanic,” which was the term on the old-fashioned licenses.
Trade: Our industry has always seen itself in something of a lesser position in society. We fail to educate society as to what is required to maintain vehicles today. This lack of self-confidence has led many people in our industry to only receive substandard incomes compared to other jobs in society with comparable skills. It comes from the days when, if an individual was not that good in school in languages or sciences or mathematics, the school guidance councillor recommended that the individual be put into the trade program, to learn how to work with his hands. This term “trade” must leave our industry!
We require the brightest of minds from schools for every level of our industry, not the slow learners. They must be sharp at math, electronics, computers, and have the ability to understand how to interact with people on a mature level in order to accomplish the desired goals of the business. This individual today is a professional. It is time that all of us used this term to describe our segment of the industry. We are a profession today, not a trade. Consider talking with young people about entering our profession, which truly is one of the most exciting and challenging in today’s society.
Labour Rate: Shops that work on one catchall door rate do not understand how their business must work today to maximize profitability. They live in the past and, consequently, will not capture the best clients in their marketplace. They attract price shopper customers. They are not profitable, cannot pay bills when they come due, and have bought themselves a job.
In today’s shop a minimum of two rates are required. They are called the Technical Service Rate for basic maintenance and service, and the Diagnostic Analysis Rate for diagnosing driveability problems or interpreting computer information from the vehicle. Consequently the terms have been shortened to the shop’s Technical and Diagnostic rates. They use different mathematical formulas to calculate what they should be billed out at, and they require different skill levels to accomplish the desired results.
While a minimum of two rates are required in a shop today, many of the better shops have moved to a third rate called the Maintenance Diagnostic rate, which uses a third mathematical formula to establish its billing rate. The old labour rate refers to working hard; the technical and diagnostic rate represent competency, or working smart.
Programs: Manufacturers, warehouse distributors, and parts distributors have been guilty of overusing this word in their day-to-day vocabulary. The best ASPs hear them loud and clear and simply shake their heads. The best shops in this country do not want another program with a predetermined set of measures and benefits and a defined end date. They are looking for long-term value. To drive the profitability of a shop, value received is the challenge of the day, and the best shops are seeking it out. The parts distributors that deliver long-term value to the shop business earn long-term first call loyalty. The best ASPs understand this win/win business relationship.
Many parts distributors across the country must learn to change their ways of doing business. Many refuse to, or just don’t want to. The unfortunate fact is that it is these parts distributors that complain first about all the problems with shop owners today. These businesses love to point the finger. It is a shame that our industry does not, or cannot, recognize the difference in how the best distributors secure first call and long-term loyalty. Everyone else seems to live for the moment. The best parts distributors set up the right business processes to deliver value to their clientele, which in turn financially secures their business for the next five years.
As I have mentioned in many previous articles, the very best questions a parts distributor can ask himself are: “Are the top 10 shops in our marketplace making us first call always? If not, then why not?” Don’t blame the ASPs. Look internally at the details of your business.
Perhaps part of the problem is simply the terminology used every day throughout the business. Terminology truly does define the business mindset, and perhaps more importantly, the business culture.
Are you guilty of sticking with yesteryear? Leave it in the past where it belongs, and regroup to move your business forward for the next five to seven years.
Robert (Bob) Greenwood is President and CEO of E. K. Williams & Co. (Ontario) Ltd. and Automotive Aftermarket E-Learning Centre Ltd. Bob has 28 years of industry-specific business management experience. He has developed shop business management courses for independent service providers recognized as being the most comprehensive courses of their kind available in Canada. Bob is the first Canadian Business Management Consultant and Trainer to be recognized for his industry contributions when he received the prestigious Northwood University Automotive Aftermarket Management Education Award in November 2003. E. K. Williams & Co. (Ontario) Ltd. offices specialize in the independent sector of the automotive aftermarket industry preparing analytical operating statements for management purposes, personal and corporate tax returns and business management consultation. Visit them at www.ekw.ca and sign up for their free monthly management e-newsletter. Automotive Aftermarket E-Learning Centre Ltd. is a leading edge company devoted to developing comprehensive shop management skills through the E-Learning environment. Visit AAEC at www.aaec.ca . Bob can be reached at (613) 836-5130, 1-800-267-5497, FAX (613) 836-4637 and by E-Mail: firstname.lastname@example.org or email@example.com.