Tuesday, February 16, 2010

Baseball and Auto Pie

Very interesting views from a dear friend of AutoMax's Mr.Tom Wiegand.

Baseball & Auto Pie

The professional franchise retail auto industry and the professional franchise baseball industry are my two all-time favorite franchise systems. Why are they so obviously different in structure and customer retention?

The professional franchised baseball team industry is structured:

The professional franchised auto dealership team industry is structured:

Wouldn’t the success of one structure convince the poorer performing industry to convert to the successful one, become part of the same excellent tasting pie? If the auto dealership structure is better, then auto leaders should convince the Steinbrenner family and management to eliminate the coaching level the auto industry avoids. In other words, convince the New York Yankees to eliminate their third base coach that has his hands and fingers moving everywhere in signal calling, that first base coach that typically has his hands in his back pockets, that bullpen coach that wears shin guards and watches pitchers prepare for entering the game; that bench coach that I think is primarily responsible for warming the bench for players coming off the field; and those other coaches that chew, spit and scratch. Convince Yankee management to take their suits and ties off and get into those player uniforms for every game and have them coach on the field instead of paying for that extra level of coaching the auto industry avoids. Or, is it that this level of professional coaching better improves baseball team performance, profits and customer retention compared to our auto industry?

Why does professional baseball exist with the absolute resolve that professional coaching will help players and teams become much better and win a strong customer base, while our auto industry exists with the absolute resolve that manager roles include coaching responsibilities that they have no expertise in, and customer base erodes? Why does baseball separate management and coaching while the auto industry combines these two responsibilities?

What about retention? The Yankees fill their stands for nearly every game. People wait in line to pay to watch a game live. Retention and loyalty in the auto industry is so weak that the aftermarket owns the majority of service and parts work. Go figure! Can the weak franchise system learn something here from the stronger one?

The auto industry has always operated within a “Push/Pull” business model; pushing product from the factory to dealers, from dealers to our driveways with the hope of pulling us back to dealerships for service, parts and accessories. Did you know that better than 70% of customers who get all their service performed at the dealership that sold them their vehicle buy their next vehicle from them? Likewise, customers who don’t get any service done at the dealership they purchased their vehicle from represents less than 20% of those who buy their next vehicle from that dealership. What a great divide! Or, what a great opportunity! Which do you see it as?

The baseball industry operates in a “Pull/Push” business model; constantly pulling more and more customers into their stadium and into their fan base with the intent of pushing them to accessories and more ticket sales – you get the idea!

Do you think our franchised auto dealers will better their business and industry converting their business model to a successful franchise structure like baseball? Would a synergy coach in franchised auto dealerships prove to similarly better the customer experience by coaching better attitudes, performance and results in dealership players that interface with customers? You don’t believe more training is needed, do you? A synergy coach is what fills that all important gap between training and where a dealership wants to be for very high customer retention and loyalty.

There are only three Gross Profit Generating Engines that power a dealership, any and all departments, any business. These are: Transactions, Dollars Per Transaction and Margins! A “training” focus typically centers only on the processes that drive Dollars Per Transactions and Margins. A synergy coach is responsible for creative teamwork that inspires action in revving up the Gross Profit Generating Engine of Transactions through bettering relationships that profoundly improve and power dealership business long term.

If the auto industry centered its rebound not on focusing on the estimated 9% possible new vehicle industry sales improvement for 2010, but on powering the Gross Profit Generating Engine of Transactions through a synergy coach effort, dealers may sell more than their fair share the better and far less costly way! A “Pull/Push” business model will prove far more effective and likely win fans and loyal customers! Is not insanity defined as doing the same things over and over again expecting different results? Isn’t it time to expect better results through a synergistically coached dealership powered by the Gross Profit Engine of more Transactions, yes or yes? Thank you baseball for showing us the better way to structure our industry!

Think about it! “Put me in, Coach; I’m ready to play today!”

Tom Wiegand; “A Synergy Coach”
tjwiegand@comcast.net; 443-910-7702

AutoMax 800-878-5090