Editor Mark Phillips was in Chicago May 17-19 for the 15th annual Global Automotive Aftermarket Symposium (GAAS). Phillips reported back from the two-day event, which offered presentations under the theme of "Aftermarket Next: Insights on a New Generation of Customers & Employees." Below are some highlights from the presentations.
Get Some Vehicles Owners to Come Back on Slow Days
In a presentation titled, “Why Do Automotive Service Providers Leave Billion's Unsold?” John Watt, national manager, CERTIGARD Franchised Operations, Petro-Canada, discussed ways for service shops to boost profits and get some vehicle owners to come in on slow days.
On certain days, shops allow too many vehicles into their bays for the number of technicians on duty, said Watt.
Using an example of five cars that need an oil change, two days a week, 52 weeks a year, Watt believes service shops are leaving about $234,000 of missed sales per year on the table.
Why is this happening?
"The first reason is at the shop level the auto service providers are not aware of what they are missing," he said. "It's an out of sight, out-of-mind sort of thing."
"Automotive service providers believe more customers means more profit, so they rarely say no to customers coming through the door," Watt said.
To the shop owner the consequences are not apparent. Why? The shop bays are full. "Why would he be unhappy?" he asked. "Plus, the five customers with their oil changes were happy because they got the work done."
Watt gave an example where a shop has 14 vehicles in the bays on a particular day, and five of them need only an oil change. Nine of the other vehicles produce $4,250 worth of work. The five with oil changes produce only $250.
Five vehicles were let into the shop to satisfy the customer's timing.
"The techs, busy with the other nine vehicles, had no time to do proper road tests and inspections," Watt said. "The customers left the shop thinking nothing was wrong with their vehicles." Five "less reliable" vehicles are on the road for the next three to six months and the drivers don't know it, Watt said.
If the scenario of $234,000 in missed sales is applied to only 80 percent of the country's auto repair shops, it adds up to $43.5 billion a year.
"What if I'm so far off base? Fifty percent off-base?" he asked. "If it's only half, it's still mind-boggling."
Watt suggests service advisors/managers need to develop the techniques and finesse of scheduling and re-scheduling customers.
Scheduling appointments for future service visits needs to become an industry norm, the way dentists do, not the exception, Watt said. "We should be doing this all the time."
Leadership 2.0 Team: There's a Lack of Involvement in the Legislative Process
Car dealers hugely outspend the automotive aftermarket in Political Action Committee Funds (PAC), according to a group of Leadership 2.0 students.
The team had the winning presentation, chosen from five teams of Leadership 2.0 students at the University of the Aftermarket. Leadership 2.0 is a two-week program for mid-level aftermarket professionals that takes place at the school's Midland, Mich., and West Palm Beach, Fla., campuses.
At left: Bill Johnston of Tenneco, Inc., Tom Myroniak of the Specialty Equipment Market Association, Ron Rossi of the Automotive Aftermarket Industry Association; Trevor Tennant of Piston Ring Service; and Tom Piper of Automotive Supply Associates Inc. were members of the winning team from the Leadership 2.0 program.
The aftermarket must get much more heavily involved in the political process to be able to compete, the team said.
Members of the winning team are Bill Johnston of Tenneco, Inc., Tom Myroniak of the Specialty Equipment Market Association, Tom Piper of Automotive Supply Associates, Inc., Ron Rossi of the Automotive Aftermarket Industry Association and Trevor Tennant of Piston Ring Service.
It's no surprise Cash for Clunkers legislation passed, Johnston said. Based on the most recent PAC funds report, the National Automobile Dealers Association raised $2.9 million; with 20,145 outlets, that comes to $144 per dealership. The aftermarket raised only $108,700, with that working out to 51 cents for each of the 213,150 service locations in the U.S.
The inability to stop "Cash for Clunkers," where nearly 680,000 older vehicles were replaced by new, more fuel-efficient vehicles, was a huge success for car dealers, Johnston said.
Today's legislative process gives the appearance of being gridlocked. The team proposed the establishment of “Tomorrow's Proposed Awareness Program” (PAP), which is designed to re-energize the process. It would consist of a website designed to showcase the aftermarket and would include a grassroots effort to mobilize the independent aftermarket.