Successful shop owners embrace technology and an education-first policy.
As the automotive aftermarket industry continues to grow in 2021, many shop operators are looking to ride this wave of opportunity to scale their business. They are jockeying to maximize the earning potential of their business, which is part of a global industry that is growing at more than 5 percent annually and is expected to hit $1.1 trillion globally by 2026.
What should motivate shop owners keep in mind as they pursue increased profits? Well, they should consider more than the industry insights they consume from their association memberships, publications, and even the proven playbooks of franchise systems. Rather, to ensure the business is ready to scale, shop owners need to focus on four key tenets of successful shops today: embrace technology, an education first policy, work for the long term, and work within the automotive community.
The influx of technology will only increase
There are two sides to the current conundrum technology is causing in the automotive aftermarket industry, and it isn’t about the raging debate between fuel and electric cars. Rather, the two sides are: 1) How technology interacts with customers, and 2) How to train technicians to repair hybrid and electric vehicles. As more and more automotive companies commit to hybrid and electric, it’s not a matter of whether these cars will be on the road, but whether the technicians will be able to repair them and how capable they will be to communicate needed repairs to the customers.
For shop owners to stay relevant and competitive, they must embrace technology on both sides of this quandary. Within our Meineke and Maaco brands, top-performing automotive shops are all communicating effectively with customers by leveraging innovative, tech-enabled communication strategies. Because they foster efficiencies through streamlined communications tools and automation, powerful technology-driven tools are only going to become more prevalent in how shop owners interact with customers. From scheduling appointments, sharing inspection details, and providing suggestions on the next steps, everything related to customer interaction is moving to a digital platform. In many ways, it is already here.
To support this influx of technology, dedicating yourself to detailed training for your technicians is a must. It stands to help shop owners twofold. First, it will increase employee retention as your technicians will endear themselves to shops that build their modernized skillsets to meet the evolving needs of the automotive industry and customers. Beyond the retention and educational benefits of training technicians on the most current car trends, your shop becomes synonymous with caring for the most current automotive models, which can position it favorably for generations to come. Volvo, Ford, Jaguar, General Motors, and more are all committing to shift to electric-only cars in the next few decades. With these changes, technicians need to adapt to meet this need to maintain their relevancy without becoming obsolete.
Shop owners must realize they are in the education business, more than anything else. However, they often struggle to bridge the gap that exists between their know-how and the lack of knowledge their customers have about cars. Naturally, there is an expanse that divides shop owners and most of their customers; the typical customer doesn’t know much about cars. So, the first step is to break down these barriers by educating your customers. By taking an educational mindset, you can explain to your customers how you inspect, assess, and decide on the next steps.
Thankfully, educating customers is becoming easier for shop owners because of the impact of technology on customer communications. Unlike previously, technicians can instantly incorporate photography and graphic imagery into their customer communications, illustrating car problems, providing a digital inspection, and highlighting the aspects of the car needing work done. Depending on the software, these digital inspections can automate repair descriptions and also incentivize technicians and shop managers to provide thorough, easy-to-understand reporting. Through educating customers from start to finish, you can facilitate customer decision-making, which in turn creates expanded opportunities to earn their trust and a larger part of their future automotive aftermarket expenditures.
Short-term vs. long-term
Many shops and independent owners view their service as a transactional event that ends when someone walks out the door. But your automotive aftermarket business isn’t going to thrive if you treat each customer as a one-off engagement. At every level, relationships drive our industry, and that is especially true for shop owners and their customers.
While in the short-term, the customer who spends a lot of money may seem like the one to attract, you scale your business when you build relationships and trust to establish a sustainable, long-term customer. That can come down to something I’ve mentioned before, which is how you present the information to them. By educating the customer, you build that trust and help them know more when they come back in the future.
Additionally, it might seem more advantageous to pick the automotive technician who is the absolute best at his job and then turn over shop operations to these types of talented techs. But, in the long-term, that can become problematic. By remaining at the helm of your business, you are in a better position to leverage everyone’s strengths at your shop, allowing technicians to focus on building upon their skills.
Don’t do it alone
Use existing resources. The automotive industry is not new – there is a whole community around it. As I mentioned above, there are many resources easily accessible to shop owners. From publications to proven business operations manuals, these assets can help shop owners learn more about the industry, implement best practices, and create processes and systems for everything in the shop.
It can be difficult to step away from the desk, not answer an employee who has a million questions, or let someone else greet the customers. Still, the owner doesn’t have to carry all the weight, either – they can hire people to help out, as well. While difficult, it will become essential to step away from one location to work on the next one.
Here are my top four tips for how to scale your business with additional resources:
- Hire a location manager
- Implement technology to streamline the POS system, how you inspect cars, and even customer relationship management software
- Establish goals with managers and provide incentives
- Have a growth goal and timeline to get there
The future of the industry
The automotive aftermarket industry has several factors working in its favor to sustain its growth. The average age of cars on the road is increasing, and the pandemic has led to a jump in used car sales and less use of public transportation and ridesharing services. For owners who are looking to scale amid this rising tide, they need to utilize technology, keep educating their customers, look at the long-term advantage, and work within the automotive aftermarket community to grow.
The future of the industry isn’t in question. But what needs to be contemplated is how shop owners evolve to meet all the needs of the customers, while scaling at the same time.
Featured in Vehicle Service Pros.