It’s Your Business
- Author: Terry Greenhut, Management Editor
One of the most basic of all human instincts, it dates back to when man faced his first predator – be it an animal or another man – and had to make the decision: Do I stand my ground and fight, or do I run away so that, I hope, I live to gain strength and fight again on another day?
Many shop owners are faced with that question today. In light of strong competition from within and outside the transmission-rebuilding industry, what to do? How do you go about fighting to hold your ground, or do you – can you?
The answer is that you can hold your ground. You can even increase market share, but you have to work harder to do it than you have ever had to in the past.
Many transmission-business owners who run traditional-type shops with lifts and installers are complaining that the car dealers and remanufacturers are out there grabbing up a substantial amount of what used to be their business. The remanufacturers are sending in very well-trained outside salespeople who know how to close and are taking their garage and service-station business away. They’re using long warranties, a promise of speed of service and, sometimes, even price to lure customers.
When I ask shop owners what they are doing to secure their share of the market, quite often the answer is not awe inspiring. Young owners, new owners who are just starting out, can’t see any difference between this form of competition and any other. They can’t make a comparison with the so-called “old days” because they weren’t around. Many of them are willing, if they know or can learn how, to do whatever it may take to go out and get new customers while salvaging those who might already have been convinced to go another way. They desperately need the weapons to fight with, the outside-sales training, and the marketing and advertising materials and concepts that give them a chance to compete for the business. These owners will stand and fight as hard and for as long as they can.
The seasoned veterans of the industry have more of a problem. It’s called “entitlement.” Many of them believe that they are entitled to have and keep their longstanding accounts because they have been servicing them for the past 10 or 20 years. They think that time is supposed to count for something. Unfortunately, unlike the good old days when friendships were actually formed from business relationships, they aren’t too often anymore, so time doesn’t count for much if anything. Today it’s about the money and what you can do for them today. Your account will be your “friend” as long as you make or save him money. When you can’t do that anymore, you’ve lost your value and it’s time for him to move on.
When veterans lose accounts they thought they were entitled to have, they go through a process that can take quite a while. During this time they can be losing considerable business and, therefore, money.
First, they have to realize that they have indeed lost the account. In a business in which you may not get a job from a customer for days, weeks or sometimes months, it’s hard to tell when you’ve lost one unless you have an outside salesperson who is out there continually visiting and making sure they are always happy.
Next comes the response to finding out the account is lost. At first it is usually denial. The business owner can’t believe that this great account that they’ve serviced for so long would even think about leaving them and going with somebody else. They expect the new vendor to screw up really bad and that their customer will come back begging for their service. Nice dream, but it isn’t about to come true.
At some point, when it sinks in that this account is gone, the next phase kicks in: anger. They’re angry with their competitor for poaching on their territory and with their ex-customer for being so disloyal. They forget that when they started they poached on someone else’s accounts to get where they are today.
Phase three is the “So what?” or the “They’ll be sorry” phase. That’s the one where owners tell themselves it doesn’t matter because they have lots of other customers or they believe that no one does as good a job so the customer can’t possibly get as good a service as they were giving. (This is also known as the “sour grapes” phase.)
Depression is next. If enough accounts are lost and the business begins to shrivel up, the owner can fall into a state of depression. This is really bad, because once you’re in this state it’s very hard to recover and try to rise like a phoenix from the ashes. Even though the business may still be salvageable, in the owner’s mind it isn’t. He may have invested all that he is willing to or doesn’t think that after all these years he should have to dip into his savings to reinvest any amount in what should have been, at this point, a successful business. Depressed people generally feel as if they are done, that there is nothing they can do to better their situation. Sadly, many shop owners feel that way even if they haven’t tried many lifesaving measures on their business. They are in flight mode, meaning that they have given in and given up.
Understanding that the business atmosphere is not nearly as stable in the beginning of the 21st century as it was at the end of the 20th is just a part of what today’s entrepreneur needs to deal with. As customer needs change and as the competition discovers and is willing to implement new technologies and marketing and sales techniques, so does the “mom-and-pop” business have to keep up or be pushed aside.
Reaction time is critical. Although it is totally understandable that no shop would want to increase the length of its warranties, deliver its services any faster or be more price competitive than it needs to, when challenged by a competitor it has to respond with those changes or make new and even better offers promptly, if not immediately. Once a competitor offers a better deal and grabs a customer, it’s hard to undue the damage and get that customer back.
Survival and growth in the transmission business today depend on how willing shop owners are to adapt to the new business climate. They must initiate an outside-sales program, even if they’ve never had to before and even if they don’t want to. It’s no longer a question of choice. The only real question is whether they will do it themselves or hire an outside salesperson. And the answer to that for most owners is that although they have the best of intentions they will rarely, if ever, hit the streets to do sales. They’ll talk about it, they’ll produce materials, they’ll map out the route, but they won’t physically go out and do the calls. At best they’ll go around the area once, but once doesn’t get it.
A successful outside-sales campaign is one in which customers and prospects are visited over and over again. Most owners just don’t have that kind of time. They need a person who is dedicated to that task only, someone who enjoys it and can be good at it for the long term. After all, if a competitor took the account from you, how many times do you think their salesperson had to visit to get that job done? It probably didn’t happen on the first visit, maybe not on the second or third, either. It might have taken seven or eight visits spread out over a six-month period. And if it did take that long, what would have happened if the salesperson had given up after the second or third visit? You might still have the account. But he didn’t give up, and you don’t any longer have the account.
So I guess the bottom line here is, when the competitors come are you going to give up and take flight or stand up and fight them on their level or an even higher one? If you think you build better transmissions than the competition, are you ready to back it up with a better warranty? Do you think you can diagnose, remove, rebuild and install a transmission more quickly than a competitor can ship one in? Can you come up with a financial-enrichment program that will allow your accounts to benefit more from your service than from the competitor’s without necessarily meeting or beating their price? Can you handle problems more quickly and with a better resolution? And can you add enough value to your service to make it even more desirable than the competition’s? If so, let the fight begin!!
Visit www.TerryGreenhut.com.
