It’s Your Business
- Subject: Increasing your market share
- Essential Reading: Shop Owner, Center Manager
- Author: Terry Greenhut, Transmission Digest Business Editor
Increasing Your Share
I’ve fielded way too many phone calls lately from shop owners who tell me that their wholesale and fleet business is off.
As Bob Cherrnay always said, “You don’t have to be an Indian to read signs.” The reasons should be obvious. The problem is that too many owners have had their heads in the sand for too long.
The simple facts are that transmissions last longer, manufacturers’ warranties are longer and their dealers don’t farm out as much work, remanufacturers are selling to your wholesale and fleet customers (and they do a bang-up job of outside sales), and many extended-warranty companies would rather see you install what they call “Like Kind Quality Parts” instead of the good and more-expensive rebuilts that you want to sell them. You can figure out what “Like Kind Quality” means, but I’ll give you a clue: It starts with the letter ”J.” Did I miss anything? Oh, yeah, your competitors are out there low-balling prices because they think that’s the answer to everything. The only thing that’s the answer to is going out of business before anyone else.
The first concept is that business is based on simple mathematics. If it were complicated, not too many people would be in it. When you have 10 customers and each gives you 10 jobs every month, you have 100 jobs. If one stops sending you work or all 10 of them send you one less vehicle you have only 90 jobs, but if you still need 100 you have to replace those numbers. It doesn’t get much simpler than that.
What’s difficult is that you may need to replace them with several customers, each of whom gives you smaller amounts of work. That will take more commitment and energy to accomplish. You’ll have to increase the size of your customer base by going out and beating the bushes, something that you probably should have been doing all along but may not have thought you needed to do for a long time.
One owner called the other day to complain about business and got very upset when I turned the tables on him and asked, “Well, what are you doing about it?” He thought I would have the magic answer, that I could wave a wand or he could write a check and all his problems would go away. I told him that if he still wanted to be around next year he would have to get very serious about an “outside-sales” program. He got even more upset when I told him that he would be the best one to actually go out knocking on doors because he was more familiar with what his shop could do for customers than anyone else could be and that when he made promises he would first be sure that he could fulfill them. By doing this job himself rather than hiring anyone he would never have to worry about a loyalty issue or a salesperson quitting and taking accounts with him to his next job.
This owner’s contention was that after 15 years of being in business he was “entitled” to have work continuously flowing through his shop. He believed that his great reputation for honesty and his technical skills should be enough to bring customers to his door. My contention was that you don’t always get what you deserve; you get what you can sell.
He said, “Sounds like you’re asking me to start over, to build my business the way I did 15 years ago by knocking on doors and begging for work.”
“You’re right and wrong,” I told him. “Right about knocking on doors, but wrong about begging. There are far more-professional ways of doing it.”
The point is that you are not entitled to anything in business. Every day is like starting over. The only difference is that you’re older; wiser, one hopes; and have more experience, so you should know how to do a better job of it. Other than that we are starting over every time we put the key in the lock.
I actually like the concept of starting over each day. It gives you a clean slate and a reason to get out of bed in the morning, something to look forward to: What wonderful thing is going to happen today? Maybe I’ll sell a whole bunch of good, profitable jobs, or maybe I’ll land that new account with the 200 trucks.
The idea is to broaden our perspective. When our accounts give us less work, we need more accounts unless we can provide additional services that they now may be going somewhere else to get. For the purpose of this discussion, though, let’s assume that you want to stick with your specialty and provide only transmission repairs and services.
In that case you will need to do some research, even if that means physically going out and pounding the pavement to see who your potential clients might be and which of your competitors already has their business or is at least stopping in to see them. Driving by at 40 mph doesn’t give you a good feel for all the businesses in your area that might be able to supply you with work. Walking around and asking questions can be an eye opener many times.
Often, those smaller businesses that own only one vehicle have employees and customers you can market to as well. We need to broaden our scope along with our search. Instead of thinking, “What big customer can I land?” think, “How can I get a customer that I can branch from?” or “How can I use this potential wholesale account to build my retail business?”
Broadening our search might mean venturing out farther than we’re used to. In the past you may have considered your marketing area to be a five-mile radius from your shop. Now you might have to think one and a half to three times that amount. The question of how far you are willing to go to pick up and deliver vehicles or to tow them will come into play then. It will be another cost of doing business and will have to be factored into your selling price. You may think that’s hard to do when you have competitors low-balling you, but be creative. Offer services that don’t allow for too much comparison whenever you can. Most shops won’t pick up and deliver vehicles.
You should. Offer to pay a penalty if you can’t deliver when promised. That will build trust. If you want bigger money you’ll need to offer more conveniences.
Worried about warranty? Don’t be. How long do you warrant a transmission? 12,000, 24,000, 36,000 miles? None of those will do you any good if your biggest competitor offers 75,000. You’ll have to ask yourself whether you can build a transmission that will last that long, and if the answer is yes you’ll need to compete in that arena.
Although you might get a few comebacks toward the end of the warranty, most will be at the same lower mileages at which you now experience them.
The one thing you should sell above all others is the fact that you will install the units for less than it costs them to do it and at the same time free up their bays for the gravy work that they do so well and so quickly. You will need to give examples of how they can make money on both at the same time.
When you hear of a competitor going out of business or one who is on the verge, go into that area and market like crazy. If you don’t, someone else will. It’s a case of the early bird catching the worm. You need to get your foot in the door before others even realize there is a door. That’s a tough concept for busy people who have to run a business on a daily basis. They tend to take a wait-and-see attitude or an “I’ll get around to it” point of view.
The trouble is, while they are procrastinating someone just a little hungrier than they are is out making the sales calls. As they say in boxing, “Always get off first.” It’s hard for anyone to hit you after you’ve just hit them. The proof that this is true lies in the fact that when you go out selling you continually run into the customer who tells you they already have someone doing their work. Instead of just proving how good you are, you now also have to show how much better you are than that shop. That means the other shop has the advantage by already being there. It needs to be you who that customer is telling other salespeople is already doing his work. The incumbent is always harder to kick out.
Speaking of getting around to it, a salesman friend of mine had hundreds of little round plastic disks about the size of a quarter made up. On them was printed “TUIT.” When someone would say to him, “I was going to call and give you an order when I got around to it,” he would hand them one and say, “Well, now you’ve got a round TUIT. Let’s get that order going!” It always got a laugh and usually an order.
I can’t overemphasize the importance of aggressive marketing in these challenging times. Be first, be fast about changing to meet your consumer’s needs and be out there in the streets constantly if you want to maintain or, it’s hoped, grow your market share.
Visit www.TerryGreenhut.com.
