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.
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.
2. What’s Your Time and Resource Commitment?
A good partnership, like any good relationship, takes time and commitment. Effective collaboration means spending some time up-front so that everyone can get on the same page. But your time is valuable, and the time you put in up-front may not always be worth it on the back end.
Some programs may require significant time dedicated to training, process adjustments or brand initiatives that don’t fit into your current business model. That time could be spent pursuing changes that truly enhance your business performance and align with your goals.
If it feels like you have to change your ways to be a member of an exclusive partnership program, you may be sacrificing more control for the benefit of your partner without an equal return.
Look back at our own BG Canned jobs -- there's no extra work on your end to include these products in your repair order process, making it a seamless and simple way to boost repair order value for both your business, and your partner.
3. Will Your Guests Care?
If your guests get something out of the partnership—whether it’s convenience, savings, or confidence in your products or services—then you may be getting real value out of the relationship as a shop owner. After all, a good relationship with guests is a critical factor when it comes to improving your bottom line.
Sometimes, partnerships such as parts programs can appear more powerful than they are because shop owners may see them as a seal of approval. A banner with a logo from a well-known brand in front of your shop may make you and your employees feel confident, but consider if it really impacts your guest experience.
We see this dynamic play out in gas stations and convenience stores.
It may make gas station owners feel good to have a big Phillips 66 sign or a Chevron logo above their pumps, but most drivers could care less and just need to top off their tanks. Partnerships that require certifications for auto repair shops may give you a feeling of officialdom or accomplishment, but the guest simply needs their car fixed at an affordable price and by a trustworthy crew.
If the majority of customers see no value in a branded partnership, and there are no direct enhancements or savings that can be passed on to them, the program may be lacking and not worth your time or resources.
4. Will Your Auto Partner Truly Care About Your Success?
When assessing a partnership, part of the analysis rests on the bottom line. Will your metrics improve thanks to the partnership? Or will your performance be negatively affected by the program?
A good partnership is based on trust and a mutual commitment to success. You can usually tell right away if your partner is truly committed to your shop or if your shop is just another tally in their sales ledger.
If a partner implies that it’s on you to reach a certain standard before they’re willing to consider working with you, or threatens to end the relationship without trying to help you overcome a hurdle, it might be in your best interest to reconsider or renegotiate partnership terms.
Auto Partnerships Support Your Success
In 2019, Tekmetric was selected by Christian Brothers Automotive to be their shop management system for all their locations. Christian Brothers took partnerships very seriously. After a grueling assessment of the top management systems, Tekmetric was selected.
When our team asked what helps them finalize their decision, they said it came down to this notion that they felt Tekmetric truly cared about their success.
Take it from the Christian Brothers Director of Strategy and Innovation:
Every time we walked away after talking to the people at Tekmetric, we would just say, ‘Man, this is awesome.’ We never had that with a lot of the vendors we worked with in the past
Learn More About Repair Shop Success
As an auto repair shop management solution, Tekmetric has long realized the importance of mutually beneficial partnerships.
We strive to give shop owners the freedom to integrate their marketing, communication, parts ordering tools and more directly into one management system because that makes it easier and more efficient for shop owners to run their businesses.
Although our goal is to help you determine the best ways you can enhance your auto repair shop profit margin, we’re still going to shoot straight with you: opening a shop isn’t easy. You’re going to have to put in some hard work, but exceeding your goals will be well worth it. Along the way you’ll learn new things through trial and error and encounter some unexpected challenges, but who doesn’t when they step outside of their comfort zone, pursuing something they’re passionate about?
One question you may have is, "Is it even a good time to start an auto repair business?" That's a tricky question to answer. Coming off the heels of a pandemic in an economy that has seen better times might scare any new business owner. But remember, some of the most long-standing businesses were started during economic recessions.
Although there’s been better times to start an auto repair business, your shop can still be successful. And it’s clear that the demand for automotive repairs isn't going anywhere.
Take a look at these statistics on the latest automotive repair trends:
In 2022, there will be an estimated 76 million vehicles aged 16 years or older in the United States.
It’s estimated that by 2022, 18% of American households will use an auto repair service at least once a year.
The number of vehicles on the road that are 12 years or older is anticipated to increase by 15%.
In the past decade, the average length of time that drivers own their automobiles has increased by 60%.
As you can see, the need for vehicle repairs will likely increase due to the fact that drivers are choosing to stick to their trusty ol’ vehicles rather than opting for a shinier new ride. But regardless of whether the auto repair industry’s profit trends are growing or plateauing, making smart business decisions will not only prepare your shop for future transformation but also help your shop survive disruptive trends in the future.
Let’s get to boosting your shop’s short and long-term profits.
We’ve listed each of these tactics in the order you should take during each of your business growth phases: the seed stage, the start-up stage, the established stage, or the expansion stage. The order of these 10 tactics does not determine their importance; each tactic complements one another to put your shop in the fast lane to success.
Fast Facts
Industry size and past growth: The U.S. auto mechanics industry is worth more than $68 billion in 2022 and has seen steady growth the past five years.
Growth forecast: The U.S. auto mechanics industry is projected to experience continued growth in the coming years and expand by more than 10% by 2026.
Number of businesses: As of early 2022, 264,121 auto mechanic businesses operated in the US.
Number of people employed: As of early 2022, the United States auto repair industry employed about 561,359 workers.
The holidays are a special time of year when we make memories with the family, give thanks, and spread joy. However, with social distancing guidelines still in effect, this holiday season will look a little different. Because this year has been challenging for many people, it’s more important than ever to stay positive and spread cheer to past, current, and prospective customers.
Making people feel warm and fuzzy this holiday season will get them to remember you, leading to more business immediately or at some point in the future. And even if not every person you positively impact comes to your shop, it’s okay! You’re still paying it forward to your community, which bolsters your shop’s reputation and can lead to more referrals down the road.
Here are ten ways you can connect with guests this holiday season.
If your customers don’t understand their estimate, their repair order, or the progress of their repair, they may become frustrated or even decide to take their vehicle somewhere else.
But when service advisors communicate effectively with customers, they’ll increase the likelihood that each customer will become a repeat customer who will refer their friends and family to your shop. In other words, clear communication with your guests can exponentially improve your profits.
Everyone at your shop has their own responsibilities, but they all need to be skilled in communicating effectively with each other and with your guests.
Your service advisors in particular need to be great at communicating with your guests because they are the ones who will set the stage for your guests’ experience at your shop.
Here are three service advisor tips for assessing and upgrading communication with your guests.
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