One-Liners for a Gray Day in December

It's grey, cold, icy and snowy here in NE Ohio and we're about to commence with a company Christmas party. So before I leave my desk and head down to the festivities, I thought I would share these one-liners from repair orders, courtesy of Andrew Markel at Brake & Front End. Who knew technicians had a sense of humor?

Service Advisor: Dead bugs on windshield

Tech: Live bugs on back-order

SA: Evidence of coolant leak found on passenger floorboard

Tech: Evidence removed.

SA: Customer can not turn on car.

Tech: Can I see the customer?

SA: Brakes make the car stop suddenly

Tech: That is what they were designed to do?

SA: Volume of tire noise unbelievably loud.

Tech: Tire noise volume set to more believable level.

SA: Suspect worn brakes

Tech: Suspect you're right.

SA: Driver says the engine missing.

Tech: Engine found under the hood after brief search.

SA: Vehicle handles funny.

Tech: Vehicle warned to straighten up and be serious.

SA: Heater fan hums.

Tech: Replaced with heater that knows the lyrics.

SA: Mouse in engine compartment.

Tech: Cat installed.

SA: Noise coming from under instrument panel. Sounds like a dwarf pounding on something with a hammer.

Tech: Took hammer away from dwarf.

(I just envision that little guy from the Blue Nun commercials hanging out under my hood now...)

Increasing Market Share - One Customer at a Time

There are examples of good marketers all around us. Some are in our industry, some are outside. Anytime you see an example of good marketing, I think you should take a minute or two to examine their success, and see if there is a way to turn their experience into something you can use in your own business.

Shaw's Auto Care, a little independent repair shop in Cuyahoga Falls, OH, has a nice little thing going. A Babcox colleage recently referred a friend to Shaw's for some minor automotive work. She needed a front exhaust pipe replaced. I don't even know if the invoice exceeded $250. But she received excellent service and came back to the office and reported her pleasure with the work she received.

Ok, end of story?

No.

Today, my colleage received in the mail, a $10 gift card for Wendy's (home of the old-fashioned hamburger). This amounts to maybe 4% of the total bill that Shaw was paid.

But what did Shaw receive in response to their 4% investment?

1 - 1 happy customer who told at least 1 other person about her experience.

2 - 1 happy long-term customer, who told at least 1 other person about the gift card

3 - 1 publisher who thought this was an inexpensive, but effective way to build customer loyalty.

In theory, if that 1 customer experience, combined with the $10 gift card, turns into one additional $250 sale......that's a 98% return on Shaw's investment. We should all be so market-savvy.

This experience reflects both excellent customer service and excellent marketing. Make your customer happy the first time with your service. Keep them coming back for more, by remembering their loyalty. How can you apply the same principles to your business to increase your market effectiveness?

Open Letter from a Ford Distributor

This Ford dealer (Pittsburgh region) really puts into words everything many of us are feeling…whether you agree with him or not, it's a great letter! Please share this with your friends and family. www.theintermountain.com http://theintermountain.com/page/content.detail/id/513450.html?nav=5011#

Editor: As I watch the coverage of the fate of the U.S. auto industry, one alarming and frustrating fact hits me right between the eyes.

The fate of our nation's economic survival is in the hands of some congressmen who are completely out of touch and act without knowledge of an industry that affects almost every person in our nation. The same lack of knowledge is shared with many journalists whom are irresponsible when influencing the opinion of millions of viewers.

Sen. Richard Shelby of Alabama has doomed the industry, calling it a dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the '70s, '80s and '90s. You and the uninformed journalist and senators that hold onto myths that are not relevant in today's world. When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world's No. 1 automaker beating Toyota by 3,000 units. When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers. Did you realize Big Three's gas guzzlers include the 33 mpg Malibu that beats the Accord. And for '09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford's Focus beats the Corolla and Chevy's Cobalt beats the Civic.
When you ask how many times are we going to bail them out you must be referring to 1980. The only Big Three bailout was Chrysler, who paid back $1 billion, plus interest. GM and Ford have never received government aid.
When you criticize the Big Three for building so many pickups, surely you've noticed the attempts Toyota and Nissan have made spending billions to try to get a piece of that pie. Perhaps it bothers you that for 31 straight years Ford's F-Series has been the best selling vehicle. Ford and GM have dominated this market and when you see the new '09 F-150 you'll agree this won't change soon.
Did you realize that both GM and Ford offer more hybrid models than Nissan or Honda. Between 2005 and 2007, Ford alone has invested more than $22 billion in research and development of technologies such as Eco Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen cars.

It's 2008 and the quality of the vehicles coming out of Detroit are once again the best in the world. Perhaps Sen. Shelby isn't really that blind. Maybe he realizes the quality shift to American. Maybe it's the fact that his state of Alabama has given so much to land factories from Honda, Hyundai and Mercedes Benz that he is more concerned about their continued growth than he is about the people of our country. Sen. Shelby's disdain for "government subsidies" is very hypocritical. In the early '90s he was the driving force behind a $253 million incentive package to Mercedes. Plus, Alabama agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan the Big Three is requesting will be paid back, Alabama's $180,000-plus per job was pure incentive. Sen. Shelby, not only are you out of touch, you are a self-serving hypocrite, who is prepared to ruin our nation because of lack of knowledge and lack of due diligence in making your opinions and decisions.
After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus emergency vehicles to the recovery efforts. What was given to the 9/11 relief effort by the Asian and European Auto Manufactures? $0 Nada. Zip!
We live in a world of free trade, world economy and we have not been able to produce products as cost efficiently. While the governments of other auto producing nations subsidize their automakers, our government may be ready to force its demise. While our automakers have paid union wages, benefits and legacy debt, our Asian competitors employ cheap labor. We are at an extreme disadvantage in production cost. Although many UAW concessions begin in 2010, many lawmakers think it's not enough. Some point the blame to corporate management. I would like to speak of Ford Motor Co.
The company has streamlined by reducing our workforce by 51,000 since 2005, closing 17 plants and cutting expenses. Product and future product is excellent and the company is focused on one Ford. This is a company poised for success. Ford product quality and corporate management have improved light years since the nightmare of Jacques Nasser. Thank you Alan Mulally and the best auto company management team in the business.
The financial collapse caused by the secondary mortgage fiasco and the greed of Wall Street has led to a $700 billion bailout of the industry that created the problem. AIG spent nearly $1 million on three company excursions to lavish resorts and hunting destinations. Paulson is saying no to $250 billion foreclosure relief and the whole thing is a mess. So when the Big Three ask for 4 percent of that of the $700 billion, $25 billion to save the country's largest industry, there is obviously oppositions. But does it make sense to reward the culprits of the problem with $700 billion unconditionally, and ignore the victims?
As a Ford dealer, I feel our portion of the $25 billion will never be touched and is not necessary. Ford currently has $29 billion of liquidity. However, the effect of a bankruptcy by GM will hurt the suppliers we all do business with. A Chapter 11 bankruptcy by any manufacture would cost retirees their health care and retirements. Chances are GM would recover from Chapter 11 with a better business plan with much less expense.
So who foots the bill if GM or all three go Chapter 11? All that extra health care, unemployment, loss of tax base and some forgiven debt goes back to the taxpayer, us. With no chance of repayment, this would be much worse than a loan with the intent of repayment. So while it is debatable whether a loan or Chapter 11 is better for the Big Three, a $25 billion loan is definitely better for the taxpayers and the economy of our country.
So I'll end where I began on the quality of the products of Detroit. Before you, Mr. or Ms. Journalist continue to misinform the American public and turn them against one of the great industries that helped build this nation, I must ask you one question. Before you, Mr. or Madam Congressman vote to end health care and retirement benefits for 1 million retirees, eliminate 2.5 million of our nation's jobs, lose the technology that will lead us in the future and create an economic disaster including hundreds of billions of tax dollars lost, I ask this question not in the rhetorical sense. I ask it in the sincere, literal way. Can you tell me, have you driven a Ford lately? Jim Jackson Elkins

Why Advertise in a Recession

Well, now that the Senate has declined the opportunity to extend a loan to the Big Three, you may be wondering - what the heck will my business look like next year? As I've said before, I don't believe the future of the aftermarket is all gloom and doom. Yes, our economy is a little shaky, but people still need to get their cars fixed. And tools will break, and worn-out equipment will need to be replaced.

How do you get your share of the sales? Besides continuing to improve on your "blocking and tackling" I would put forth another recommendation: look at your advertising and improve upon it in 2009 to gain market share. It's easy for me to say - just advertise more.... but it is not that simple. You truly must examine your message. Is it still right for current conditions? Does it say what you want to express to your customers? Will it help sell more tools or equipment? Does it meet your needs? If not, you need to adjust.

Today, there exists a large body of data that clearly shows there is a direct cause and effect of increasing or decreasing advertising during recessionary periods. In summary, they show:
• Advertising builds brand strength: Companies that invest more in advertising over a period of years experience faster growth than those that spend less.
• Advertising speeds recovery: Companies that have increased their advertising during a recession have recovered more rapidly than their counterparts that have maintained or reduced advertising.
• Advertising affects sales: Organizations that have continuously increased their advertising investment have enjoyed similar increases in sales. For example, Meldrum & Fewsmith Advertising and the BPA studied 64 business-to-business companies that advertised during a recent recession. Thirteen firms cut advertising an average of 20 to 50 percent during the two years of recession, while the remaining firms increased their advertising investment 30 to 70 percent during the period. Those firms that increased their advertising stance not only continued to grow but also grew at a more rapid rate when the country's financial picture improved. This growth was achieved in both sales and net income. The results have been similar in every advertising investment study conducted since the 1920s.

The first study, conducted by Roland S. Vaile, covered advertising and sales of 200 firms between 1920-1924. He concluded that a definite spread occurs between sales of firms that increase their advertising and those that decrease it. He added that, when intensive advertising during the depression was part of the sales technique, sales were maintained in better volume than when advertising appropriations were cut.

Recessions and Competitive Edge
For more than 80 years, advertising agencies and publications have been telling client management that a recession provides a unique window of opportunity for those firms that are market driven. Marion Harper, former president of McCann-Erickson once said, "A time of recession is the most favorable time for a change in competitive positions. Companies that are second in their fields, by applying extra pressure and devising creative strategies, can gain advantages that they can carry into times of prosperity. Whatever their position, if companies wish to be growth companies, they must certainly behave like growth companies." Charles Brower, former president of BBDO, stated, "Instead of waiting for business to return to normal, you should be cashing in on the opportunity your overly cautious competitors are creating for you ... the fact that your competitors are pulling back can make your advertising dollars look and act even bigger. There are few things as detrimental as a lapse in advertising. It costs much more to get advertising momentum up than it costs to keep it going. Once you let momentum die, you must start almost from scratch again."

The producer who maintains his or her normal level of promotion when competitors have reduced theirs soon finds that they gain a similar increase in competitive share of market. It provides a rare opportunity for management to change market position. Then when business improves, they will grow at a much higher and more profitable rate. One of management's most important roles is to exploit competitive opportunities. While most management teams tend to hold off on being aggressive until all of the marketing variables are favorable, this action puts you right back in the middle of the pack so that you are competing with all of your competitors.

Taking this approach, some of your advertising investment is an expenditure since you have to vie head-to-head and toe-to-toe with your competition rather than taking advantage of opportunities. In today's refinement of marketing warfare, the winner is the one who takes optimum advantage of every strategic and tactical marketing blunder by his or her competition. The smart marketeers acknowledge that economic cycles are elements in the marketing battlefield that have to be used to advantage if the firm is to improve its position and increase marketshare.

Back To Basics

The Smith Center High School football team has won 51 games in a row and has outscored opponents this season, 704-0 (2007).

Blocking and Tackling. Blocking and Tackling. If you have a team that can conquer the basics of blocking and tackling, chances are you'll win most of the games in which you compete.

When we talk about the basics of marketing and selling strategies, we begin with research and planning. My dad used to say, "you'll never know where you're going without a roadmap." It's the same for sales growth, and marketing research can help you determine your path.

Your research should help you:

• find out what customers want and expect, in both a product and a purchase experience


• find out what customers like and don't like about your company, product or services


• find out what they would like to experience in a product or purchase


• determine what is working/not working


• determine the age, gender, lifestyle etc. of your customer


• determine what is working/not working for your competition


• determine who your competition is different from you


• determine your competitor's long-term plans

As part of your research, do an internal SWOT analysis with your management team, and with your sales and marketing team.

With your research completed, you should be able to assemble your sales and marketing team to review the results, and then write a marketing plan that addresses your customers desires and competitive issues against your company goals. The physical action of writing a marketing plan requires your team to think about your overall sales, marketing and profitability goals, and determine the best way to meet those goals. This research and planning period will also provide direction as you consider the tools you'll need to use to meet your goals: advertising, sales promotions, POP materials, employee training, PR and community relations.

Use your marketing plan to outline how to leverage what your customers want against what you want (increased sales and profits). Your marketing plan should help you determine if you need to target segments of a market or investigate new markets. It should help you understand the best approach you should take to build your brand in a market.

After the marketing plan is complete, the next step is to outline your communications plan, and the budget required to support it. This budget should include marketing communications such as advertising, promotion, publicity, and trade shows.

Marketing plans should be carefully planned to acheive both your short and long-term sales goals. They should be flexible, so they meet the changing needs of your customers' needs and wants. But they should also be fairly well fleshed out, so you guidelines that are easily understood and undertaken by your entire sales and marketing team.

Once you've finalized your plan, communicate it to your team. In an average economy, this time of year can be challenging in our business. Given our current economy, now might be the right time to upgrade your sales team. I've heard many manufacturers and distributors are letting sales people go and not replacing them. I think that's a big mistake. (You needed sales people last week, but all of a sudden today you don't?) I wouldn't advocate keeping someone on because they've always worked for you. You need the right people on the bus, and they need to be able to perform the right functions. If they can't, stop the bus and ask them to get off......With the average cost of a business-to-business sales call costing over $500 (double the cost of 5 years ago), and on the average, each sale requiring at least five sales calls* - you need to be confident you have the right salespeople in position. *info courtesy of b2badvertising.org

In today's industry, advertising is being used to assist in reducing the overall cost of doing business. The average cost of a business-to-business sales call has risen to over $500 (double the cost of 5 years ago), and on the average, each sale requires at least five sales calls. If advertising can substitute for one or more of the personal sales calls, the effect can be accomplished for pennies.

Perspective on Salaries

In 1815, U.S. senators made $6.00 per day, representing their constituents. By 1817, their salaries were raised to $1,500/year. By 1983, the salary was $69,800, and by 1993 it almost doubled to $133,600. Today it stands at $169,300. The 100 U.S. Senators represent the entire U.S. population of 305,835,798 (living in the U.S. and abroad).

In the last period reported (2007), GM's G.R. Wagoner Jr., was paid $1,558,333 in salary, and an additional $12,857,581 in stock, options, and incentives, for a total gross income of $14,415,914. I think he'll be ok with making $1 in salary next year. He (and G.M) represent hundreds of thousands of working, middle-class Americans, that are manufacturing stuff. Not just cars of course, but they represent machinists, and printers, and parts manufacturers, etc. With all the tier one and tier two suppliers underneath the car manufacturing industry, newspeople tell us one out of ten people's lives are touched by these guys.

The top 3 highest paid celebrities made $410 million last year. Oprah Winfrey grossed $275 million. Tiger Woods made $115 million and Angelina Jolie made $20 million. Oprah and Tiger represent themselves. Angelina represents Brad and her 6 kids.

And let's look at Forbes' Top 50 Wealthiest people in the U.S. With a net worth of $59 billion, of course Bill Gates still tops the list. He develops software and hardware and has most of it made overseas. Number two is Mr. Warren Buffett, at 77 years old he's worth $52 billion, all made by investing. Number three is Sheldon Adelson, worth $28 billion. At 74, he's Las Vegas's biggest bigwhig (though I guess not so big since the stock market tanked and he's having trouble filling his Venetian hotel with guests, even at $149/night). In the entire top 50 list there is only ONE MANUFACTURER represented, and it's Nike at number 30. Mr. Philip Knight is worth a paltry $9.8 billion. (And where does NIKE make most of their stuff?......)

My point is this - in the tool world, and even more specifically in the automotive tool world, there aren't many of us who will ever be "rich rich". There's no question you can make a great living in this business. We'll do well. We'll raise families, send our kids to school. We're all pretty much workers, trying to get ahead in this world by providing a product to a technician or shop that we feel will help them do their job faster, better, safer or more efficiently. You won't read about us in the gossip pages, and you won't see us hanging out with Paris Hilton or Barack Obama or the soon to be former Governor or Illinois.

But if you look at the people mentioned above, where does their value to the American people truly lie? And are they compensated justly for the "job" they hold? What are your thoughts?

(I apologize for the weird layout of photos. I have not mastered the art of dropping photos in throughout the posting. Need an advisor for that.)

A Smart Start to 2009

As we have all heard and all said, these are unprecedented times in business.
We all read the news about how bad business is and hear about budget cuts and layoffs.
It makes us think about our approach to selling ads and how aggressive we should be in asking for the order.

In Today's Ad Age email was a guest article from an agency exec to other agencies.
I thought the following words could/should be adapted for any of us who write orders and sell stuff. (Italics and bolds are my edits.)

He writes, "Don't be afraid to sell stuff. Our clients sell stuff. Our job is to make sure they sell more of it and sell it more profitably. Retail drives the sales. Branding drives value and profit -- it's really that simple. It's your job to be nimble and savvy enough to see what's not working, pull it and replace it with something that does work, and you do it as many times as necessary to serve your client. If you are embarrassed to admit you sell stuff, you may as well get out of the business because my agency -- and those that think like us -- will run your ass over. The common logic right now is to retreat. And the common result is decreased budgets and, in turn, decreased sales, share and profitability. If you get caught in this downward spiral instead of working to stop it, you're finished. "

I'll repeat his words, Branding drives value and profit.

And I have to rephrase his comment - History has shown that if you foldup your tent during tough economic times, chances are you won't have a place to unfold when good times return. Why? Because the people who push forward, the people who don't give up, and the people who advertise, are the ones who will be successful. And they will take market share from those who hide behind budget cuts.

(Classic historical example is Post cereal v. Kelloggs in the 1930's. One was the premier cereal company in the world. One was number two. Number One quit advertising during the depression. Number Two did not. By the end of the Depression, Number Two had risen to become the Number One cereal company in the world, and the former number one? Well, they never fully recovered. You can tell which one won the fight by checking out the cereal aisle the next time you're in the grocery store.)

Tool & Equipment Trends - According to our Readers

A couple of weeks ago I reported on the "lifestyle" of today's technicians. Today, I can share the results of our survey on Tools and Equipment. These results reflect the shop owner's experience, not the technician. I have to apologize ahead of time for the manner in which I'm sharing this info - it was a little tough to pull into a cohesive format.


We surveyed the readers of our TechGroup magazines: Underhood Service, Import Car, and Brake & Front End in order to collect up-to-date information on the types of tools and equipment found in independent repair shops. This is another important distinction to make - this information all comes from independent repair shops - no dealerships. We also measured the importance of various attributes affecting tool purchases and the sources of information that shop owners use when they make their purchasing decisions.



Surveys were mailed in September, 2008, and the responses were compiled in October. Once again, I'm just going to share the highlights. A complete copy of the survey results can be made available on request. Of course, I can never resist editorializing as I go....

• 86% of our respondents were either the owner or partner, 12% were managers
• 81.4% have complete purchasing authority on new auto service equipment, 12.2% share the authority with others
• Average dollar value of all personal tools used professionally is $65,300
• Average amount spent on tools each month is $455

We asked, "where do you receive the MOST information on new tools?". 73% said from Trade magazines. The next largest percentage was 17% from mobile distributors. Websites only scored a 2%, and the manufacturers' website scored 0%. I found that VERY interesting. On one hand, good for me because it means our readers still find quite a bit of value in our magazines, and (hopefully) so do our advertisers because their message is being sought out in trade magazines. On the other hand, possibly bad for the manufacturer who has invested quite a bit of $$ in their website, and they may or may not be getting a good return on their investment. You decide.

What makes a technician or shop owner buy a tool? Do you think it's brand, where it's made, price?

According to our readers, the BRAND drives their decision most often. Our readers specify a particular brand frequently or always 73% of the time. If they don't specify, it's because 77% know the brand the vendor will supply.

What helps drive a tool-buying decision? Number one answer is warranty, followed by brand, then availability.

When asked what the 3 most important purchase factors were after brand, 92% chose quality, followed by warranty and then competitive pricing.

Where do they buy their tools & equipment?
57% of their purchases are made from mobile distributors, 14% are purchased from tool & equipment WDs, and the other 29% is dispersed amongst retailers, full-line WD, online, direct from the mfg, and from dealerships.

Have their purchasing habits changed? For a few - yes. 17% have decreased their purchases from the mobiles. While 33% have increased their purchases on-line. (I would still guess that on-line purchase amount is small compared to the rest of their purchases, but can't substantiate my gut feel.)

Specific Product info

• Battery chargers, compressor, tool box/cart - in 90% or more of the shops
• Pneumatic tools, test equipment, shop lights - in 82% - 86% of the shops
• Lifts, specialty hand tools, specialty sockets/wrenches and diagnostic tools are in 79% of the shops surveyed
• 23% had hybrid specialty tools and just
• 19% had flash reprogrammers

And the answer to my favorite question, "Would you find a Buyers Guide of Tools and Equipment useful? 87% said yes, and most said they would hold onto it for 6 months or more. Music to my ears, because we're getting ready to go to press with our 2nd annual Buyer's Guide early next month. And we're the only publisher in the industry that has a printed (as well as on-line) version. After all, our customers are still finding most of their product information from the printed page!

One last comment about this segment of our readers, they reported that they typically spend 46% of their time diagnosing and repairing vehicles. Even though they own multi-bay shops, and they employ 2 or more technicians, they are still spending an incredible amount of time IN the business, versus working ON their business. Only 8% of their time is spent meeting with suppliers. If you are a supplier to this market, you need to understand that as you go forward in your marketing plan. They see a supplier less than 40 minutes/day - and that "supplier" could be a sales rep, a mobile distributor, or a factory person. Ask yourself this question, When you are not in front of them, what have you done to make them remember you?