Growing the Automotive Recycling Business

Growing the Automotive 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% more) 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 is by asking:  How do we 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 businesses 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 delivery 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 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.


Robert Counts     Chad Counts        Rich Tyler                     Emily Kirk          Johnny Logel

 

 

 

 

Robert Counts, robert@countsbusinessconsulting.com; 512-693-6915

Chad Counts, crcounts@countsbusinessconsulting.com; 512-963-4626