Leadership Forum Covers Aftermarket, Customer Engagement, Safety Inspections
DETROIT, July 24, 2015—Whether it’s inside or outside the shop, the automotive service industry needs leaders.
Those leaders come in all shapes and sizes, and many of them were on display Friday at the Service Repair Leadership Forum at the 2015 NACE/CARS Expo & Conference in Detroit, covering everything from the distribution of aftermarket parts, to selling customers on the value of your business, to the importance of establishing vehicle inspection programs.
Bill Long, president and chief operating officer for the Automotive Aftermarket Suppliers Association (AASA), prefaced the morning symposium with a speech on the overall state of the automotive industry—what to be optimistic about, and what should concern your shop.
“There is no doubt that our industry is facing tremendous changes,” Long said, "whether they’re political, economic, social, environmental, technological or demographic.”
Long ended his opening presentation with five key takeaways on the state of the aftermarket industry:
- We're a large, stable industry, but don't be complacent. The market is poised for growth.
- Innovation and differentiation are the drivers for increased profit. When all things are equal, price rules the day.
- It won’t be business as usual for independent service providers. Technology will transform how shops serve customers and work on vehicles.
- DIY will lose its market share, and aftermarket distributors and suppliers will be eager for your business.
- Legislative forces are impacting your business and profits. They want to hear from shops. Your voice really does make a different.
How the Distribution of Aftermarket Parts Affects the Consumer
Automotive Service Association chairman Donny Seyfer hosted the day's first panel, which was on the distribution of aftermarket parts. The panel consisted of Jim Gray, national account manager for Autozone; Robert Roos, vice president of the National Pronto Association; Chris Chesney, senior director of CARQUEST; and Malcolm Sissmore, director of Delphi Product and Service Solutions.
The panel discussed various strategies and dilemmas facing aftermarket distribution and how it affects shops, including the process of outsourcing parts overseas, how to predict product failure, and how to know which products shops should stock on their shelves.
Chesney said the focus has to remain on quality above everything when it comes to outsourcing parts overseas.
“You have to hold them to the same standards you would to your OEMs,” he said. “You need to have people on the ground, in China, India, Pakistan. You have to have people in those plants on a daily basis. That ensures a quality product.
“Price is also important. We ship into our own warehouse to save on shipping costs, and those savings go right on to you.”
Practice Your Benefits Speech
When it comes to your marketing strategy, Maylan Newton, CEO at the Educational Seminars Institute, said your main goal should be simple: Get the phones ringing.
It sounds simple, but when people aren’t calling your shop to inquire about your services, you won’t be able to sell them with what Newton calls a benefits speech.
“You take away the service writer’s ability to sell if they aren’t calling your shop,” Newton says. “If you advertise a $9 oil change, you’ll get a $9 customer. If you advertise price, they don’t need to call you. If you advertise that you’ll knock off $20 for an oil change, they have to call and find out regular price, and that’s when the service writer can sell the value of your services.”
When that customer does call, make sure your shop has put together a benefits speech that everyone can consistently use with customers. Since most service shops offer the same services—such as shuttles, rental cars, warranties—you really have to sell the benefit of those services to set yourself apart.
“We offer low cost rental car—but what’s the benefit? It’s mobility and freedom,” Newton says. “Every time we do marketing, we sell features and the benefit of going to you.”
Newton says to write down the features your business offers, and every feature should have at least five benefits you can sell to customers. Everybody in your facility should contribute to the list and understand those benefits.
The Future of Vehicle Safety Inspections
Bill Hanvey, vice president of AASA, started his presentation with an interesting statistic: Although 25 percent of shop owners claim 25 percent of vehicles are operating in an unsafe manner, only 16 states have implemented annual mandatory vehicle safety inspections.
“Around 77 percent of shop owners believe mandatory vehicle inspections reduce unsafe vehicles on road today. That same percentage said more education is needed about importance of vehicle inspection programs,” Hanvey says. “But guess what? We’ve lost ground over the last year. Four states have eliminated inspections.”
Thirty-two bills were introduced in 12 states last year regarding vehicle inspections, but most of those are either pending or have already failed.
Joe Battista, vice president of the Parsons Corporation, says the reason states have eliminated mandatory periodic vehicle safety inspections stems from a reduction in governmental oversight costs, inconsistent enforcement, poor record keeping, and fiscal budget cuts by states and provinces.
There are, however, trends in favor of increasing the amount of mandatory vehicle inspections, Battista says, including:
- More states considering implementing change-of-ownership inspections
- Stringent regulations in reconstructed vehicles and salvage title designations
- Many jurisdictions considering modernizing their inspections from paper-based or form-based programs
- Increased importance of training curriculum and certification of private industry tests and repair personnel