Independent garages are not your enemy, and in many ways, are not even your competitors; fast lubes and tire stores aren’t, either.
The customer-pay automotive maintenance and repair business is a $207 billion annual industry. Of that amount, $28.5 billion went to dealerships ($12.9 billion in parts and $15.6 billion in service) and the remainder to the aftermarket.
The real story though, is not how much revenue was produced, but rather how much money was left on the table. The Motor Equipment Manufacturers Association says last year service centers left $62 billion on the table; a statistic MEMA calls Annual Unperformed Maintenance. This represents low hanging fruit, work that should have been done but wasn’t. It was there for the asking, but no one asked; it was there for the taking, but no one took it.
My point here is that you don’t have to steal business from the aftermarket and they don’t have to steal business from you. I’ll bet there are several hundred thousand dollars of unperformed maintenance opportunities stored in your very own data base—service work that needs to be done but has been overlooked.
According to AutoInc.’s 2011 “How’s Your Business,” a survey conducted by the Automobile Service Association, 53% of garage owners said their revenue was up compared to 2010, 50% reported an increase in profits, and 45% said their car count was going up.
When ASA asked shop owners the main thing that impacted their business in 2011, 57% said it was customers regularly maintaining their vehicles. By the way, that doesn’t happen if the shop doesn’t ask for the maintenance business; the opportunity is there, but the shop had to ask.
I am certainly not the first Dealer magazine contributor that has suggested that dealerships can learn something from the aftermarket. Ed Kovalchick has written and taught classes about this subject for years. I simply want to pick up on that theme and add my own observations.
Garages don’t have large advertising budgets to bolster traffic counts. Therefore, they must build relationships with each customer and, hence, create loyalty via one-on-one contact. I recently had my vehicle serviced at a garage in Tulsa, Oklahoma. The next day, much to my surprise, the shop owner himself called me and thanked me for the business! He said he personally calls every customer who comes through the shop. Do your advisors do that?
Garages don’t have a multi-million dollar facility with a large retail footprint on a major traffic thoroughfare. Therefore, they have to depend heavily on word-of-mouth advertising from satisfied customers. They live and die by their reputation to do quality work. I know a shop in southeast Texas that is literally in the middle of nowhere; you go to the end of the earth and turn left. Yet this guy stays busy and his customers are the most loyal I’ve ever seen.
Garages are not hung up on some of the silly OEM maintenance intervals. Therefore, they recommend 5,000-mile oil drain intervals, rather than having their customers’ cars tell them when to change the oil. Whoever gets the oil change business will get all of the maintenance business if they ask for it. Oil changes are the key that unlocks the door to all other maintenance services. Since garages are getting 86% of the customer-pay service dollars, the plan is obviously working!
Garages don’t accept the notion of “filled for life, no maintenance required” guidelines on vital fluids such as transmissions, cooling systems, and power steering. Therefore, they can follow common sense maintenance recommendations because they know a car’s fluids are its lifeblood. They understand that the owners’ manual is not necessarily the absolute authority on proper car care. They realize the neighborhood technician knows the best way to service a vehicle according to the local climate and driving conditions…a generically written owners’ manual simply can’t do that.
Garages can’t rely on warranty income or labor hours generated due to a recall. Therefore, they have to dig deeply into each vehicle. After they address the primary repair item, they must thoroughly look the vehicle over for other maintenance needs. If they are not vigilant, they will starve. If they don’t recommend a needed service then somebody else will, and they’ll lose the revenue and maybe the customer, too.
I realize the aftermarket isn’t perfect; it’s far from it. You can also learn a lesson from the corner garage on what not to do. Let me leave you with this action point: mystery shop some of your local shops and see how they treat you. Check out the quality of work they perform. See if they offer additional maintenance services. For you dealers, general managers, and service managers, my guess is that you haven’t taken your car to “the other guys” in quite a while. I can assure you of this: whether the shop hits a grand slam or falls on its face, you’ll learn a lot from the experience.