The Year Ahead
Four Steps for a Better Year
ELITE’S BOB COOPER SAYS THIS IS YOUR SHOP’S YEAR TO BECOME THE BEST BUSINESS IT CAN BE
Bob Cooper was asked one, simple question: If you were to open a shop—or rejuvenate a current repair business—in 2016, what would you do?
The industry has changed drastically during Cooper’s 40 years of working in, on and with shops in just about every capacity. As the president of national consulting giant Elite Worldwide Inc., it’s Cooper’s job to know what’s coming down the road— and formulate strategies for Elite’s repair shop clients to succeed amid myriad challenges.
So, what does a shop need to do in 2016 to be successful?
“The way I see it, 2016 is a starting point,” he says. “The struggles and challenges we see this year, they’re only going to grow exponentially from here. Shop owners need to make this year that starting point of preparing the business in a way that will be successful long term. This needs to be the year.”
While advancing in-vehicle technology and mobile, digitally connected customers make the day-to-day more challenging for the average shop, Cooper says the solutions are far less complex; he has four of them, and he says you better get started right away.
Step 1: Don’t Just Set Goals—Set the Right Goals.
Where do you want your business to go? How are you going to get there? How do you know if you fell short of, or exceeded, expectations?
Most shops don’t have the answers to those questions, Cooper says. But they all need to.
The simple solution is to set proper goals—but that’s not quite as simple as it sounds.
It starts, Cooper says, with a clear vision of what you want your company to be. You need clearly defined, realistic, tangible and measurable goals to achieve that. And break it down through the key performance indicators (KPIs) that give the pulse of your business.
“You need to have clearly defined goals broken down at every level,” he says. “I do this with my own business. Take the numbers that are most important to success, and break them down into goals for the year, for the quarter, for the month, for the week. Monitor it closely, and make adjustments based on whether you’re hitting the mark or not.”
Without being able to validate your business’s performance, Cooper says you’ll be lost in running it. The industry—your business—is too complex to run it blind.
“Without this approach, you’re just hoping to get lucky,” he says. “Take control.”
Step 2: Add Some Much-Needed Sophistication to Your Marketing.
It doesn’t matter the scale of your business or the breadth of your customer base, Cooper says every shop needs to have “world-class marketing.” Anything short is—well, it sells your shop short.
“Where most shops miss the mark is that they just market to everyone in their community,” he says. “They just saturate the market and hope it pays off.
“You need to work hard to identify your ideal customer, and then aggressively market to them.”
From examining your customer database and finding your “A-level” customer, you can then implement marketing strategies geared toward them. Say you find that your ideal customer is a 30–45-year-old female with children, living within 20 minutes of the shop and driving two vehicles that are between 5 and 11 years old—Cooper says to use that information to build your shop’s image around what that customer wants.
“And remember, today, you are what your Web presence says you are,” he says.
The image your brand displays on social media, review sites and your own site is what customers will expect of you.
“What is the consistent message that comes across in all those spots?” Cooper asks. “That’s who you are in the customer’s eyes. What I want in reviews is consistency, and to get that your team has to be consistent.
“Write a mission statement. Put it on the back of business cards, write it on the wall for your employees to see. Have them live that out each day and have it ingrained in each customer that walks in the door. If you want to be the family-first shop, everything you do should show that: the way you treat customers, having a kids play area, doing child seat installations, all of it.”
Step 3: Stop Your Technician Shortage.
Most shop owners look at the “so-called, ever-growing technician shortage” a bit backward, Cooper says.
It’s a blessing, not a curse.
“Think of it this way: If there were great technicians everywhere and anywhere, what’s going to separate my exceptional team from the guys down the street?” he asks.
“Every time I hear about the ‘ever-growing technician shortage,’ it frustrates me,” he adds. “Who told you when you came into the industry that they’d supply technicians for you? It’s up to us to do that.”
It might sound like a tired refrain, but Cooper says this is the year you must start growing your own “extraordinary” team members.
“If I started a shop in 2016, one of the first things I’d do is implement an apprentice program, and grow my own team,” he says. “You’re training them in the way you need them to work. They will understand your company, your culture, your goals, what it means to belong there.”
Programs can vary from shop to shop, but Cooper says there are certain criteria each shop should consider.
Start from the end result. Clearly define your “ideal” employee, and have that be the end goal for the program, and that description will formulate how the program is built.
Clearly define the career pathway for the apprentice. What are the skills required to advance? What tests, certifications and outside training is expected? And how does each achievement allow them to move up and earn compensation?
Identify proper mentors. The right mentor is critical, Cooper says, and identifying one can be difficult at the beginning, particularly with a smaller shop. But as apprentices move up, and the culture of your shop shifts, technicians will be more willing to pay it forward by helping those below them.
Remain committed—to the apprentice and the program. Building and growing your own team is a long-term project. But, once running at full speed, Cooper says that fearing that “ever-growing technician shortage” will be a distant (and laughable) memory.
Step 4: Embrace Technology, and Adapt.
Technology—both in vehicles and in repair and diagnostic methods—isn’t going to stop advancing. So, Cooper says, stop fighting it. Instead, embrace it and use it as a key differentiator for your business.
“Cars are turning into smart vehicles, and infotainment features are only increasing,” he says. “[As a shop owner,] I’d be all over that component.
“The Tesla has proved that advanced vehicles aren’t a gimmick. The Tesla is an omen, a precursor of what’s coming. We need to embrace that this is what our industry is, and we need to make the adjustments for our businesses so that we aren’t left behind.”
2016 will not be easier than 2015, or any year before it, for that matter, Cooper says. But that’s a good thing. The shops that adapt and find innovative ways to be successful are the ones that will thrive. That has to be you, Cooper says. The steps to success are not as daunting as you might think, and with the start of a new year, this is your chance.
“It’s only going to start coming at us harder,” Cooper says of the changing industry. “Don’t waste any more time. 2016 should be your year to prepare yourself for the long haul. This industry is still great, and your business can be too. Let’s get started now.”
The Industry’s SOS
MIKE DANIEL’S BUDDING REPAIR GIANT IS GAINING MARKET SHARE BASED ON THREE LETTERS, SOS; SPEED OF SERVICE IS THE FUTURE, DANIEL SAYS, AND 2016 NEEDS TO BE THE YEAR YOU ADOPT A CUSTOMER-FIRST, CONVENIENCE-OF-SERVICE APPROACH.
It almost has an infomercial ring to it: The seven-minute oil change.
And Mike Daniel says it will change the industry—or at the very least, it’s allowed his now 17-facility repair chain to grow exponentially in recent years.
“This is a new industry,” he says. “Our customers have changed, and their needs have changed. In our experience at our shops, it all comes down to time and communication. Nothing is more important than those two things in setting yourself apart.”
Quality work should be a given, Daniel says. It’s the bare-minimum point of entry in winning over a customer. It’s not a differentiator.
Speed of service is, and it allows your team more time and opportunity for communication and customer service.
“So, if that’s what today’s customer cares most about, speed of service, then why wouldn’t your entire business plan be built around that?” he asks.
That’s what Daniel has done with Austin, Texas–based Driver’s Edge Auto Repair, which after doing nearly $17 million out of 14 stores in 2015 (one location in Plano, Texas, operates as Car Care Central), opened an additional three locations in the past three months. Daniel says the company should easily surpass $20 million in 2016.
So, about that seven-minute oil change …
“That’s the one thing I’d focus most on starting a business today—it’s what we focus on in our new shops,” he says. “The days of a 30- to 45-minute wait for an oil change, that’s not good enough anymore. Customers expect more.
“Oil changes are your best marketing strategy, and that’s how we look at it. We get them in, turn it around quickly, do an inspection, and we hook them. Once they’re hooked, the rest is simple.”
The One-Stop Shop
Daniel thinks of his shops as two businesses under one roof—mechanical repair and quick lube. Many of the shops push up to 1,000 vehicles through their doors eac
h month. To do that, he often has them broken down to two lanes for lube work and four for mechanical.
The dedicated bays for lube are equipped with in-ground oil change pits. As the majority of Daniel’s shops are six-bay facilities, the pits help save space.
More importantly, though, they make those seven-minute oil changes possible.
“That maintenance work are things customers think they can get done everywhere,” he says. “So, if we want them for their larger work, we need to show that we’re a one-stop shop, and there’s a benefit to using us for everything.”
Scheduling can be difficult with the work volume, Daniel says, but speed makes up for that.
And it takes a team of technicians and service advisors that appreciate urgency to make it possible. Attitude is the number-one aspect Daniel looks for in hiring—and he says he’s always hiring.
“It has to be a relentless pursuit,” he says. “We think that sense of urgency equals exceptional customer service. You can’t teach that sense of urgency to people. You need to hire it and grow them into their positions.
“If you want to grow, hiring has to be relentless. If you think you’re staffed, you’re not. Always be looking for good people.”
Driver’s Edge is a “customer service company first. The byproduct of what we do is auto repair,” Daniel says.
And to maintain that, Daniel says he and his team try to look at every aspect of the business through “the customer’s lens.”
“How do they view this? How do they look at this or that? What’s most important to them?” he says. “This business isn’t about us. It’s about the customers.”
That’s why all Daniel’s shops have convenient hours, 7 a.m. to 7 p.m., Monday through Saturday. They have Wi-Fi in each lobby and work stations for customers who need to wait on repairs.
“Customers are more mobile now,” he says. “It
used to be that a two-hour repair meant bringing them home. Now, if you have Wi-Fi and space to work, they’re often fine sitting right there and working, but your waiting area has to be conducive to that.”
Understand your customer, Daniel implores. Know what matters most to them. That is the key to success in today’s modern industry. That’s how you’ll grow your business in 2016.
Concepts like the seven-minute oil change are tools to do it. But this isn’t a hard sell on a silver-bullet product. Changing your business requires work and difficult decisions, Daniel says.
“There’s a lot of opportunity still out there,” he says. “And we’re working to put ourselves in the best position to take it on.”
Top Trends to Watch
LONGTIME INDUSTRY ANALYST JIM LANG, PRESIDENT OF LANG MARKETING, BREAKS DOWN FIVE TRENDS TO WATCH IN 2016
Trend 1: A Changing Work Mix.
According to Lang’s 2016 The Lang Aftermarket Annual, a 310-page, data-intensive report detailing the current state of the automotive aftermarket, foreign nameplates accounted for 42 percent of all vehicles serviced in 2015. By 2020, that will climb above 50 percent.
Foreign specialists were the fastest growing service center demographic in Lang’s report. From 2004 to 2014, total bay count for repair and maintenance facilities specializing in foreign vehicles grew by 20 percent.
“This means that independent operators are going to have a different nameplate mix to deal with, if they haven’t already,” he says.
There’s opportunity there, Lang says, for shops to reach a new demographic of customer, especially considering the increasing age of vehicles on the road.
Lang said the average age of vehicles “scrapped” in 2015 was 16; 10 years ago it was 13.
“There are many more older vehicles in operations, and that should only go up as vehicles continue to make improvements,” he says. “Now, as more consumers are looking for a reliable place to have service performance, it means shops need to be sharper with competitive strategies than in the past.”
Trend 2: Your New Competition, Part I: Dealerships.
According to Lang, 2016 could be the year that dealerships become an increasingly serious competitor for repair and maintenance work on out-of-warranty vehicles. More than 50,000 dealership service bays have been shuttered since 2008, Lang says, but dealers are now looking to reposition themselves as a quick, convenient and affordable alternative to independent shops.
“I saw an ad for a Toyota dealership on TV advertising their deals on tires,” he says. “That would’ve never happened five years ago, 10 years ago, 20 years ago.
“Dealerships traditionally aren’t looking to capture work on older vehicles. If you need new tires, you’re likely driving a car more than 5 years old—that’s over their old cutoff.”
In recent years, dealerships have seen their profits on vehicle sales dwindle, and now, Lang says, the majority of their profit comes from service and parts.
Many dealerships are adopting “quick service” branding for their service centers, and Lang says to expect it to increase this year.
“We see dealers becoming much more aggressive in the future, especially with quick service lanes,” he says. “For them, this is a new approach to maintenance. And for [independent shops], it means you have a serious competitor.”
Trend 3: Your New Competition, Part II: Quick Lube and Tire Shops.
Just as dealers are looking to adapt to capture market share, Lang says service specialist facilities are doing the same. Both quick lube and tire shops have increasingly added services to their menus, he says, inching them that much closer to being a true competitor for the traditional repair facility.
“We’ve seen specialists become much more aggressive in recent years as service intervals have gone down for vehicles,” Lang says. “These types of facilities are now doing everything that isn’t considered ‘heavy’ work—they change brakes, air filters, all these items that used to go to independent operators.
“Competition is very strong for independents right now, and it’s becoming more competitive than it ever has. And you have to balance that with these competitors that are open seven days per week and 12 hours per day. It’s a different marketplace.”
Trend 4: Changing Consumer.
It’s not a secret to any shop owner how the digital age has changed consumers.
“Many customers come into a shop thinking they know what’s wrong and already have an expectation of cost based on what they’ve researched on the Internet,” Lang says. “That’s only going to increase.
“The younger generation is a large group that will make up the majority of drivers in a very short time. Our research shows those under 30 are much more likely to do that research before coming in—but one-third of all consumers, regardless of age do that as well. This is your new customer.”
Trend 5: The Technology Explosion Continues.
Think back to Lang’s comments about the changing demographics of your work mix. Now throw in the ever-increasing amount of in-vehicle technology that is becoming more and more common on vehicles, and, well, things get complicated for independent, general repairers who try to be a “fix-it-all” shop.
“It’s becoming a much more attractive option for smaller, independent shops to begin specializing in a number of brands, rather than trying to fix everything,” he says. “It largely depends on your market and the region you are in, but technology is expensive, and it’s more difficult to be everything to everyone.
“Those shops that are able to invest and increase volume without increasing overhead are the ones that will find a lot of success.”