NACE/CARS Service Repair Leadership Forum urges differentiation and innovation
Detroit—The inaugural Service Repair Leadership Forum (SRLF), July 25, at the NACE/CARS show at the Cobo Center in Detroit, was one of many CARS-focused training seminars organized by the ASA to bolster the offerings for service professionals attending the show.
Co-Emcees Maylan Newton, CEO of Educational Seminars Institute (ESi), and Bob Greenwood, president and CEO of Automotive Aftermarket E-Learning Center, sketched out a bright future for innovative independent shop owners, as did leaders from nearly every segment of the automotive aftermarket.
The strength of the distribution channel, as the use of telematics plays an expanding role in determining parts proliferation for manufacturers and WDs, stands as pointed proof that innovation and differentiation will also begin to separate successful shops from the slow-dying ones, said Bill Long, president and COO of the Automotive Aftermarket Suppliers Association (AASA).
“The automotive aftermarket’s key drivers are growing, which should give shop owners confidence that they’re in a stable industry. Miles-driven has reached pre-recession levels, and the average age of vehicles on the road continues to increase,” Long said. “But there is no doubt that we are facing tremendous change agents in the industry.”
At one of the SRLF’s panel discussions, a group of supplier representatives answered questions from the audience, facilitated by ASA Chairman Donny Seyfer. The panel included Jim Gray, national account manager, Autozone; Robert Roos, vice president of sales and marketing for the National Pronto Association; Chris Chesney, senior director of customer training, CARQUEST; and Malcolm Sissmore, of Delphi Product and Service Solutions. “Parts proliferation isn’t going to get any better, so communication between all segments of the industry will have to,” he said. “Telematics is making the widest impact right now by breaking down the segmentation across the distribution channel.”
Roos said WDs still don’t have comprehensive data on what parts are actually being installed in shops, and continue to order from manufacturers based on sales data. “Communication with your suppliers is so important in determining inventory replenishment, failure rates, comebacks, and warranty returns,” Roos said.
And despite the quality of most parts increasing on a large scale, CARQUEST’s Chris Chesney said shop owners will continue to see manufacturers produce and market parts at “various levels of quality” because there is a demand for them. For that reason, he said, it is vital for shop owners to train service advisors and parts professionals on what quality parts they want sold in their shops.
“We’ve created online ordering systems so you can better control what you order and sell, but it’s up to you to train your people,” Chesney said. The same goes for marketing, Maylan Newton added.
“The suppliers sell us what we ask for, and a lot of what you’re able to sell is dependent on your marketing plan. If you advertise a $9 oil change, you’re going to get a $9 customer,” he said.
Newton said shops today should focus less on advertising price and more on value and benefits. “When you advertise price, it takes away the need for a customer to call your shop. Marketing should focus on one thing: Making your phone ring,” he said.
Overall, the market share for non-dealer service professionals is expected to increase by $14 billion in the next 10 years, but real buying demand is in fact slowing, Bill Long said. Post-recession growth in the industry has come from an increase in the price of parts, largely driven by innovations in technology.
So independent repair service professionals will need to reform their business model and adapt to the new technology-centric industry, Long said.
“The aftermarket is projected to grow at a combined rate of 3 to 4 percent over the next 10 years, but that will not necessarily be due to market demand,” Long said. “New technology offers tremendous opportunities to stimulate dialogue between a repair shop and the motorist through increased awareness of failure and replacement rates, location information, demand forecasting, impending failure alerts, and opportunities for prognosis that alert the driver. The manufacturers already know this and are working to capitalize on it. Independent service professionals need to follow suit.”