2015 Vertical Outlook
In the last 365 days, we watched the Olympics in Sochi, Russia, acted like we knew a thing or two about soccer during the FIFA World Cup, worried over Ebola and ISIS, pondered over the location of a Malaysian flight, watched as King James (LeBron) reclaimed his throne in Cleveland with the Cavaliers and saw the Seahawks dominate Denver in Super Bowl XLVIII.
The words “selfie” and “YOLO” were used so many times we had to add them to the dictionary, we ate a lot of kale and Instagrammed about it (#superfood) and the hit animated film “Frozen” kept households frosty all year round.
In the midst of the mayhem, maybe you opened another location, added another service or implemented a new training program. Every year is marked by significant events, and regardless of what is making national or world news, there are always noteworthy happenings that mark the year in a more personal way. To kick off the new year at NOLN, we talked to operators around the country to get their thoughts on what could potentially be headlining in the fast lube industry during the months ahead. So now that we’ve ushered in January 1st with due fanfare, it’s time to turn our attention to 2015.
Attracting and retaining top-notch talent is something that continues to be a hot topic around the industry.
“I think one of the biggest issues is going to be employee retention,” said AOCA president Jimmy Grant. “More jobs are becoming available. People are going to go where they can make more money regardless of the job they are doing.”
To keep employees in your shop, Grant recommended offering competitive wages.
“You’re almost better off paying your employees one or two dollars more an hour,” Grant said.
On the flipside of the equation, retaining customers is equally as important.
“That’s the challenge,” said Matt Johnson, district manager for Jiffy Lube in St. George, Utah, our 2014 Best Looking Lube winner. “We have to keep meeting customers’ needs in this day and age while allowing that experience to be amazing.”
Trends come and go in every industry, but one facet of our business that remains constant year after year is the importance of communication with the customer. In 2015, there will be a new topic to discuss.
“The newer cars that are coming out, a lot are requiring full synthetic oil,” Grant said. “The communication between the lube tech and the owner of the vehicle, telling them that specialty oils are required for their specific vehicle will be highly important.”
Brad Phillips, general manager of Valvoline Express Care in Lubbock, Texas agreed.
“With gas mileage standards going up every year, more and more manufacturers are switching to full synthetic,” he said. “Also, we are finding out that the salesman that sold them the car didn’t tell them that, so we are having to educate them.”
A few states east of Phillips Texas operation, Brian Ross, operator of Mobil1 Lube Express in Crystal River, Florida, has similar expectations.
“One of main challenges is newer cars using synthetic oil and trying to convince the customer they need a $70 oil change,” Ross said. “I’m probably going to look for some better educational materials to be able to provide them with information.”
Customers have come to expect a little insight from the technicians who service their cars. They want to know what drives the vehicle that drives them.
“They want to know that their windshield wipers are torn, there was a nail in the left rear tire or that they need a cabin air filter,” Phillips said. “People are keeping cars longer, they want to be educated, they want to be told about what their car needs and what is going to keep it running the longest.”
A few minutes of education can go a long way when it comes to turning customers into loyal advocates for your business.
“There is a misconception out there that today’s cars are virtually maintenance-free, especially with extended oil changes,” said Dave Link of Oil Can Henry’s #42 in The Dalles, Oregon. “People are trying to push that. Nobody pops the hood. People just put gas in it, start the car and away they go. The challenge is you’ve got to let people know they have to check their vehicle on a regular basis. They don’t check the water in their batteries; they don’t check the windshield washer fluid. What customers need to understand is, an oil change at the 3,000-5,000 mile mark is also a safety check.”
Phillips put it another way.
“If you ask most people, ‘What is the one thing your car needs to run?’ They will say ‘gas.’ But it doesn’t matter if you have a full tank of gas. If there’s no oil in the car, you aren’t going anywhere. Oil is the lifeblood of a vehicle,” Phillips said.
Customers can be finicky and at times difficult to deal with, but Johnson believes what they’re looking for from the fast lube experience remains the same.
“I’m not sure customer expectations have changed,” Johnson said. “I think they still want fast and friendly service from well-trained, well-behaved team members who provide a great experience. I think back to when I was hired in 1983, and that’s exactly what they wanted then. It’s not about the money. It’s about the experience and whether or not they will be willing to come back to see you.”
The technology that rolls down the road in our vehicles is astounding and constantly changing, a challenge that techs like Jamie Bullis, the Bridgestone Retail Operations ASE Tech of the Year, look forward to facing with the 2015 models.
“There are all kinds of new technology that, as a technician, keep my job interesting,” Bullis said. “There is always continuing education, things to learn and things we haven’t seen before, so it never becomes monotonous. I’m excited to see what they’ve changed, what they’ve kept the same and where they’re going.”
No two manufacturers are alike, and it’s reason enough to keep technicians on their toes with each model year.
“It seems like every manufacturer does it differently,” Bullis commented. “Even doing a simple oil change and resetting the oil maintenance light, every manufacturer has a different procedure. Keeping up with changing cars and the use of more and more computers can be challenging. The suspension is pretty much the same. The different options, different electronics and the ability to diagnose those things can be challenging for technicians coming in.”
The solution? Have a solid team in your corner.
“People can feel overwhelmed with this new technology, but you have to give it a try,” Bullis said. “Make sure you have a good group of people around you. I work with a good group, and we bounce ideas off of each other all the time.”
Looking Down the Road
Just as each year brings a new set of challenges, it also brims with opportunity. As they talked about the upcoming year, there was one common thread that tied this group of industry professionals together: optimism.
One contributing factor? Falling oil and gas prices.
“With the falling oil prices, that’s going to help us because people are going to drive more,” Link said. “When they drive more, they get their car serviced more often. I think that will make a difference.”
It’s something other operators noted as well.
“October isn’t typically a big month for us. People aren’t travelling, and there isn’t a whole lot going on,” Phillips said. “Our October 2014 was so busy we had to go back to 2010 to find a month where we did just as much. We had the biggest month in four years. What’s contributing to that is falling gas prices, which means more miles and oil changes. People also have more income because the people driving SUVs that used to take $100 to fill up can fill up for $65-70. It’s not as much of a budget killer.”
Several operators in the industry are experiencing a period of growth as we forge ahead in 2015.
“2014 was a bounce back year for us,” said Tom Chambasian, owner and operator of Florida-based Super Lube and National Oil & Lube News’ 2014 Operator of the Year. “I’m looking forward to continuing the increase in car counts and sales in 2015. We also have opened four new stores in the last eight months, and we’re excited about the growth in those locations.”
It may not be a completely new location, but others are adding new products, programs and services to their repertoire.
“I’m going to get more into tires,” Grant said. “I’m working on a partnership with Goodyear right now. Not all the tires in the shop will be Goodyear; you’ll be able to get any tire you want, but the house brand will be Goodyear.”
Chambasian added several new services in 2014 and is focused on improving the current offerings while launching a new program for the new year.
“We recently began a new leadership training program for up-and-coming managers,” Chambasian said. “This is a 12-week class that is specifically designed to enhance their skills to become effective leaders in their stores and the company.”
When asked if they had any goals for the upcoming year, responses varied.
“Rather than wait and see what the next great big service coming down the pike is, we’re just concentrating on educating our customers on the fact that they need the ones we already offer,” Phillips said. “We’ll just be trying to educate customers on what will keep their car running the longest.”
Link took it back to the principles the industry was founded on.
“Keep driving ahead without messing up on cars, which fortunately we don’t do,” Link quipped. “We’ve got a great crew. I think the future is bright. I think we’re going to get better.”
Bullis would like to continue teaching.
“I just want to keep going, working and taking care of our customers,” she said. “I want to keep mentoring newer technicians and make sure they have a good base because it comes down to the fundamentals. I want to make sure they have what it takes to succeed in the business.”
Johnson looks forward to keeping the pace.
“We look forward to continued success with car counts,” he said. “I think that’s truly where it all lies. So we are going to hit the ground running with advertising and couponing to get customers into the building. We also like to shoot for beating yearly trends, so we are going to try to stay ahead of customer and sales trends in the new year.”
And Ross would like to continue increasing the shop’s tune-ups, minor repairs and diagnostic services.
But all operators mentioned that continuing to provide outstanding customer service was high on the list.
“The customer expects excellent service, and employees expect to be treated fairly and with respect,” Chambasian said. “I think we have to continue to meet those expectations. We have and will continue to strive to be the preferred employer.”
We don’t have a crystal ball, but the undercurrents of excitement that seem to be rippling through the industry gives us some confidence in saying the future is bright. But perhaps it was Bullis who said it best.
“It’s a great business to be in,” Bullis said. “Cars are always going to break down. Regardless of the technology manufacturers put into them, they have yet to be able to make a car that can fix itself. We’re always going to be needed.”