More than anything, partnerships should be mutually beneficial to everyone involved. When good partnerships are formed, the whole should be worth more than the sum of its parts.
Why Should Your Auto Business Partner with Other Brands?
For example, McDonald’s burgers make you thirsty enough to want a Coca-Cola, and sodas have a high margin. By partnering up, McDonald’s can lock in their costs on soda and improve their profit margins for the long term.
On the other hand, not all partnerships are beneficial. Partnerships can expand your opportunities but can also force you into making decisions you never intended to make. When McDonald’s decided to partner with Coca-Cola, they had to exclude other soda brands from their locations.
This exclusivity may have been worth it, but it meant removing options from customers, such as Dr. Pepper and Pepsi products. What may have made the partnership intriguing for McDonald’s is the fact that Coca-Cola owns a variety of beverages, including Diet Coke, Fanta, Sprite, Powerade, Minute Maid and Pibb Xtra.
Thanks to a variety of options, McDonald’s is able to satisfy most customers who ask for a Dr. Pepper by saying, “Will Pibb Xtra be okay?”
Partnerships in the Auto Repair Industry
In the auto repair industry, we face similar challenges when it comes to partnering with other businesses and brands.
Potential partnerships may include teaming up with parts suppliers, software companies, marketing and trade show affiliates, and any other service, resource or tool that could potentially improve your shop. In some cases, these partnerships will help shop owners enhance performance, save costs and drive revenue.
For example, Tekmetric has partnered with BG Products, making it easy for shops to sell additional BG products with simple canned jobs built right into the repair-order process within Tekmetric.
Other times, auto partnerships may bind you to an agreement that doesn’t pay off.
Here are some questions you can ask yourself to determine whether a partnership is mutually beneficial or if they’re asking you for more than you’re getting in return.
1. Are You Free to Choose the Tools and Solutions You Want?
One sign of a bad partnership is being forced to do something you don’t want to do. If partnering with another company means taking valuable options off the table, then you may be at a disadvantage.
If your partner implies or directs you not to do business with their competitors because they would like for you to instead use their services or their partner’s services, think it through.
Before officially entering a partnership, imagine your shop one year, five years and ten years down the road. Where will it be then? What will happen if your shop grows? What if innovation has slowed down with your partner? Will you be allowed to innovate your business by using new tools and solutions that become available in the future?
If you’re restricted in a way that prevents you from innovating or adapting to market conditions by testing other products, tools, solutions, and software, you may be handcuffed and unable to compete with other shops.
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