New Articles (Feb.2019)

The Leadership Challenge:

Taking Charge of Your Future in the Auto Recycling Industry

What is Leadership?

The charge of leadership in business is to see the landscape of opportunities and challenges in the marketplace where the business lies.Plot the course and vision that will allow the business to succeed and thrive. Set the attitude and be the example that dictate the tone of the company as it presses towards these goals.

This is a high goal for any leader to achieve and it is highly likely any person in the role of leadership is failing or will have failed to meet the demands of leadership at all times.Ultimately, that is why as a person in leadership, we must start with a healthy dose of self evaluation and thought about what we can do better and differently to benefit those who depend on us to lead.

Take Ownership

 Whether or not the business succeeds or fails, the responsibility falls solely on the leader.It is the task of leadership to OWN all successes and failures.Acknowledging mistakes and admitting failure, the leader can now press on to the new challenge.

While others surely contribute to the successes and failures of a company, ultimately it is the leader who has allowed these persons their opportunities and roles and failed to evaluate or equip them. Evaluating the task, the process, and assigning people to their best roles is the responsibility of those who lead.

Weak Link

At some point or another, every team has a weak link.This is undeniable and often common knowledge among the rest of the members of the team.There can be a number of reasons why someone is the weak link, whether they lack knowledge, experience, motivation or the proper attitude. It is the responsibility of leadership to respond appropriately to weaker members.

A leader must be present and aware, first and foremost, of each team and members level of performance and effects on the rest of the team and company.Something that is often missed by many leaders, is they clearly can see blame within a department or sector of the company and do not have the requisite numbers or data to indicate what individual(s) are having the most direct impact.Any team that fails to be able to measure or hold accountable each team member will end up floundering.

If awareness and accountability is available, the leader can proceed to response. What reason is there for the underperformance?Lack of knowledge or experience can be managed provided there is enough effort and time put forth to train the individual.Lack of attitude and motivation can often be papered over but are almost always going to lead to the parting of ways.One of the best things any leader can do for a team is to remove dead weight or a member who is actively hurting the performance of those around them.

Communicate

 Depending on the size of your team and company, this effort of leadership may require people of many levels from owner to store manager to department manager to team lead.The more levels of leadership in an organization the more standardized and specific the communication channels need to be.If you are a company with younger or newer leaders, do not be surprised that they struggle to communicate with the level of detail and frequency for you to effectively help them.

Companies that have more success developing leaders, tend to meet more frequently, spend more time discussing results and potential problems.This allows the entire team to be proactive and work from ahead instead of primarily communicating during emergencies.If the only time you are hearing from your leadership team is when they are in trouble then you are not able to lead because you have failed to develop proper expectations of communicating from your team.

Define the Mission

One of the more common frustrations of leadership is the failure of team members to carry the mission forward.It is not enough to announce a mission a singular time and expect that to stay at the foremost part of a teams mind.A mission is more effective when each team member has specific and measurable goals that are relevant to the job at hand each day.

How can teams effectively contribute to a goal or mission when they are not engaged and updated in the progress?How quickly do leaders lose sight of their primary goals?Usually, about as soon as the next problem or interruption comes up.So how can we be surprised when those who manage the day to day efforts lose sight of the larger mission.

Engagement, accountability and progress are needed at a more frequent level than most leaders realize. Lord knows, it’d be a real problem if our employees were too engaged, too accountable and making too much progress.Then we might really have a problem.



Growing the Auto Recycling Business

There is a business phenonium know as “Growth Stall”. It is when your company sales go flat or in many cases income drops for two quarters as compared to the same time in the previous year. Most companies have experienced this. Some data says that 80% of companies experience this and that a large number do not recover.

What can you do to avoid this or how do you get out of it? It is not unusual to hear that all the body shops or garages are just slow. But they haven’t closed their doors and even though they are slow they are still repairing vehicles. Also, we are talking about two consecutive quarters, not a month or two.

It’s the Customer

It is always about the customer or more specifically about the customers experience with your business. I found a few interesting statistics when I was thinking about this article. For example:

  • 75% of B2B companies said their experience with the supplier was the major factor in who they purchase from.
  • 86% are willing to pay more (up to 13%) if they have a great customer experience.
  • Customers remember the experience with a company long after they remember what they paid for the product

The first place to begin:How do you deliver a great customer experience?

Every industry has its 500-pound gorilla. Many in the auto recycling industry point to LKQ as a factor in losing business., Yes, they are a very big presence in most markets and they have a very wide and deep inventory offering.

However, I can look at Amazon and Starbucks and still see small business successfully competing against these very large competitors. A lot of the ability to compete with the goliaths is through a better customer experience. Many people still like to see and handle what they are going to buy and thus don’t shop for everything online.

When Amazon purchased Whole Foods most of our local grocery companies stepped up their deliver options and expanded the times they would deliver. They also offered free deliver if you purchase over a certain amount.

One of the things that the independent auto recycler has and is doing is joining trailer systems that allow them to have more to sell and a bigger market to sell into. This increases the ability to compete on volume.

However, the independent auto recycler will have to compete on service more than on price and availability. Being smaller and local allows the independent auto recycler to be able to customize their service, delivery, discounts, etc.

Undercover Boss

As a checkup from the neck up you need to know that what you think is happening on the sales counter, in production and delivery/shipping is actually happening. The Undercover Boss often discovers that the customer is not experiencing what they the company is supposed to be delivering. A bad employee attitude usually results in a bad customer experience.

Ebay

For those of you who deal with Ebay you know how much that sales platform is tilted towards the customer. You know how much a bad review drops the listing of your parts down. This is a real example of what is going on undetected with many of your customers.

In conclusion make sure your customers experience is what you want it to be. Secondly ,try expanding what you offer through use of other auto recyclers parts, aftermarket and remanufactured parts. In almost every case you will find it easier and cheaper to keep your best customers and increase what you have for them to buy.

 


 

New Services

Make sure your sales team is capturing warranty sales


I recently started to train a team of salespeople, at a medium sized yard, in a major metropolitan area.During an initial analysis of untapped profit centers, I was surprised to find zero warranty sales from the previous 90 days.Most of us know the importance of taking advantage of these sales, here are some things that all sales managers should take into consideration as they try and lead their team to capture more warranty sales.

After training hundreds of auto parts salespeople, the most common factor I see causing poor warranty sales is simply that the salespeople do not offer the warranty.The first step to improve these sales should be to ensure your team is simply offering warranty options. The second most common mistake is that salespeople are offering warranties as menu options -- “Would you like this engine with our standard 30-day, one-year, or lifetime warranty?”Better than offering the customer options, is making sure that your team is simply rolling a mid-tier warranty into the price every time they quote a price.Before your team begins including a warranty rolled into their pricing, you should make sure that they are properly prepared.

All salespeople on your team will need a thorough understanding of the warranty policies.Not knowing these policies is what typically leads to not offering the warranty at all.Do they know the caps on labor payouts?Are labor payouts different for engines, transmissions, or rear ends?What is the price percentage increase for each tier of coverage?Are there other specific yard policies that might influence a warranty sale? Usually, I’ll entrust veteran salespeople to put these details to memory and have less experienced team members create a quick-reference cheat sheet that stays on their desk.Once all the policy specifics are known, the next step in the process is to create a value statement.

Sometimes sales trainees misinterpret the idea of “rolling the warranty into the price” as a deceptive technique to pull a fast one on the customer, this isn’t the idea at all.A step, that can’t be skipped, is to let our customers know about the value we are providing by including a value statement.The explanation of the value the warranty provides should be delivered before giving the customer a price, it should be a succinct summary of the warranty details, and it should adapt easily to describe all of the warranty tiers.It could sound something like, “With our one year, parts and labor warranty, that will replace the engine should there be any mechanical failure, and pay up to $500 in labor to have it reinstalled, it will be $1200…”

Once salespeople know the warranty policy details and have crafted a solid value proposition, the final step is putting it into action.I encourage salespeople to shoot for the stars and then come down -- warranty options should always be offered highest to lowest.When the warranty is offered, it must be accompanied by an ask for the sale.This ask for the sale is key, as it will catch the customer before they can end the conversation -- ““With our one year, parts and labor warranty, that will replace the engine should there be any mechanical failure, and pay up to $500 in labor to have it reinstalled, it will be $1200.Does that fit your budget?Is that where you need to be?”These types of asks for the sale allow your customer to choose a more cost-effective warranty tier and it allows the salesperson to be the hero that offers a cheaper option.

If warranty sales are a pain point for your team, are they being incentivized enough to sell more in this profit center?Are they being coached in effective and practical techniques?Do you need help aiming them in the right direction?Let us know!