Vertical Outlook 2017

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This past year has been nothing short of a whirlwind when considering the vast array of shocking events worldwide. There was never a moment to take a breath between the attacks in Aleppo, dealings with ISIS, natural disasters like hurricane Matthew, civil unrest and shootings around the world, skyrocketing healthcare prices and an election that brought out an interesting side in many no matter which side of the ticket voters supported. There were many things to smile about with the Rio Olympics, the Chicago Cubs’ world series win, the majority of the country being drought-free, unemployment rates have decreased and the economy is thriving. We had much to be thankful for in 2016, but now it’s time to turn our attention to 2017.

Operational Changes

With the changes in technology and the rapid expansion in the quick maintenance industry operational adjustments are sure to take place.

“Recognizing talent, developing talent and constantly educating each employee on our process has been key,” said Ryan Mendez, owner of Kwik Kar Marsh in Carrollton, Texas, our 2016 Best Looking Lube winner. “I’ve also learned to quickly recognize an employee who doesn’t fit within the team. The employee pool in this industry has been subjected to unscrupulous practices by many lube centers, and that’s unfortunate. The culture at our shop stems from a foundation of integrity, honesty and great service. Great service is the standard, and the team feels really good about doing what is best for the customer.”

NOLN published a number of articles in 2016 related to the change in the employee pool and the expectations many millennial employees have regarding work/life balance, instant gratification and a desire to learn, much of which comes through the use of technology at our fingertips. Customer experience and community outreach also continue to be key in the quick maintenance industry.

“We continue refining our focus on the value we add and the experiences we create,” said Mark Smith, owner of four Midas franchises across central Virginia. “Oil changes, brake jobs, tires — these are all commodities. What creates success for us isn’t in what we do; it is in how we do it. Over the course of 2016, we’ve increased the number of complimentary loaner cars we offer. We have also grown our community impact footprint with our efforts on behalf of the Virginia Blood Service, Feed More and area schools.”

Oil and Gas Prices

Oil and gas prices saw a slight increase during the summer months of 2016; however, they have remained low throughout the year. There appears to be mixed opinions on how oil and gas prices affect those in the quick maintenance industry. Many shops felt unaffected, while others expressed different opinions.

“Oil companies are the big winners whether prices are high or low,” Mendez said. “For an independent shop owner, big oil companies seem reluctant to drop prices, and when they do, it’s minimal. I started out with a rebate-only ‘contract’ from one of the biggest oil and gas companies in the world. The prices I paid for conventional, blend, synthetic, etc. were egregious now that I look back. I did some research and decided to switch oil companies. I cut my cost of goods by over 50 percent and still offer a great branded oil. After four months of making the switch, only one customer has asked for the previous brand.”

Technology on the Rise

Time and efficiency are the keys to today’s fast-paced environment. Keeping up with trends and up-to-date on the newest technology can truly be the difference between a successful shop and one that fails.

“Concepts like Bolt On and Auto Vitals are here to stay,” Smith said. “Those who plan to be successful in our world for the long run need to move past the pondering stage and decide when they are going to roll out programs like these.”

Other operators shared similar feelings and expressed that the industry as a whole not only needs more advanced technology, but that operators need to step up and take advantage of the technology that is currently available to them.

“Technology in the lube and auto repair industries is sorely lacking,” Mendez said. “It’s 2016, and if my mechanic can’t pinpoint the issue, he searches subscription-only websites that aren’t user friendly or mobile friendly, and lastly, he can talk to an ASE-certified mechanic over the phone for another fee. Seriously. The answer to diagnosis can not be a phone call.”

There is so much technology that shops aren’t currently utilizing. Is there a better way?

“Why can’t a technician remotely dial into my technician’s scanner, take over his screen and walk him through what needs to be done and what to look for?” Mendez continued. “The technology is available, but the industry isn’t using it. FaceTime and web cams could convey the data to the remote technician much better than using a telephone. The best mechanic in the world wouldn’t have to turn a wrench again — he just needs to pinpoint the root cause.”

Areas of Opportunity

Each year when operators analyze their business operations, there are always areas of improvement to be made and more opportunities to take advantage of.

“We will continue our efforts to develop, motivate and reward our people — they are the only unique variable we have,” Smith explained. “Anyone who has a check with the right numbers on it can buy anything else we have. Our people do, and will, continue to give us a compelling and unique offering. People will also be our biggest challenge. We have great crews in our stores, and we need several more to join our efforts. These folks are harder and harder to find. We are focusing our efforts on getting in front of people who haven’t realized they were looking for an opportunity until they hear about what we offer!”

While employee development is crucial, day-to-day operations are also important in providing optimal service to customers.

“We need to continue to get better at diagnosing vehicles,” Mendez said. “Electrical diagnosis and diagnosis in general is our single biggest opportunity. Pinpointing the root cause is the name of the game. Once the vehicle is properly diagnosed, the repair is straightforward. Any good mechanic can follow directions to remove and replace parts.”

Now that 2016 is in the rearview, we can replace the bad, improve the good and look forward to another great year full of wonder and opportunity. 

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