In a recent interview on our e-news daily aftermarketNews (AMN), Affinia President and CEO Terry McCormack made some very poignant comments regarding the interaction between customers and channel partners in the automotive aftermarket. Terry is a distinguished and respected aftermarket leader, with more than 30 years of experience. So, when he speaks, he’s drawing from a wealth of knowledge, wisdom and a record of success.
Throughout the interview, and during a recent speech he gave during AAPEX this past November, much of the emphasis was on the health (or lack thereof) of aftermarket parts manufacturers and suppliers. Terry portrayed a very real and somewhat stark picture of the aftermarket supply base, noting that he has heard similar accounts "voiced by members of the reseller community." Thus, he’s not alone in his analysis, and I wholeheartedly agree with his comments and identify strongly with his perspective.
Any reseller of products – from large WDs and big box retailers to independent parts stores and car manufacturers – is 100 percent dependent upon the health and effective support of its supply base. Without an effective supply base, they have nothing to sell. It’s that simple. Some resellers, like Wal-Mart, feel they have the size to create and grow their own suppliers. In some instances, mostly where products are commodities or mass-consumables, that model can work. But here, in the technically challenging, application crippling world of the automotive aftermarket, that philosophy is still wildly inefficient.
Thus, resellers and suppliers must learn to co-exist, and subsequently co-succeed. In fact, Terry is quick to point out how important it is for "channel partners" to work together to ensure their mutual success. And, he’s absolutely right.
It’s always curious to me, though, how enamored and overzealous many "channel partners" have become in chasing the end-use customer, often tripping over themselves with divergent tactics and disconnected strategies in an effort to win more business. The result is that they manage to cancel out each other’s effectiveness because they never truly work together in a cohesive, well-defined and well-communicated manner. Terry’s words are never more true than when he says, "We cannot serve our customers (repair shops and DIYers) without channel partners."
Parts manufacturers that chase after service dealer and DIY business without involving, coordinating and communicating the effort effectively and thoroughly with their resellers (and vice versa) risk expending huge resources with little or no gain. In fact, customer losses are a very real consequence. Often justified as "pull through" marketing, these well-intended efforts are doomed to fail because complete and full implementation of the "channel partner" concept isn’t thoroughly employed.
As we enter a very pivotal year for our market, on the heels of some very significant supplier bankruptcies in ’05, I implore all of you to read our interview with Terry. It’s some pretty strong medicine in the form of very sound advice. What could be better for nursing an ’05 hangover?
Editor’s note: You can read the Terry McCormack by clicking on "Interviews." Counterman readers can also sign up for a free two-week trial subscription to aftermarketNews by visiting www.aftermarketnews.com.