This article is the first in a series focused on how collision centers can benefit by working more closely with their PBE distributor to meet the demands of consumers and insurers. And, how distributors will benefit by more effectively responding to the needs of their collision customers.
PBE distributors must change. Having the best products, people and service is not enough. The landscape of the collision repair industry continues to change at a rapid rate with advancing automotive technology, collision center consolidation and PBE distribution, the ongoing challenge of attracting capable people and the ever-increasing need for training. Everyone is scrambling for market share while trying to maintain profitability. How can PBE distributors, collision centers and other industry partners continue to grow, prosper and differentiate themselves from their competitors?
Despite paint manufacturers increasing their direct involvement with end-users, especially the national consolidators, PBE distributors still have an important role to play in serving both collision repair facilities and paint manufacturers.
Most distributors will claim that they sell the best products, have the best people and offer the best service. One key to successful marketing is to differentiate yourself from competitors. PBE distributors are no different than any other company in a highly competitive market. “How are we different?” “Why are we better?” Having the best products, people and service are not differentiators because we all have those…or think we do.
Most PBE distributors serve other markets including marine, aircraft, heavy-duty transportation and industrial, but serving the collision industry is their core business, so I will focus on that segment. The other markets have different needs, and distributors should target those markets separately. This series is intended to address a dual audience of both PBE distributors and the collision industry as we work together to meet the needs of a rapidly changing industry.
Myth No. 1: We Have the Best Products
Most PBE distributors sell essentially the same products.
The manufacturers that PBE distributors represent are all excellent companies that constantly work to keep pace with technology and continually develop new products to differentiate themselves and grow market share. The point is they all do it. One may develop a better primer; another has a killer clearcoat. One may have better color match for a particular brand or color, but the others will soon catch up. In the big picture, “they all work,” and regardless of the brand, someone somewhere is using it successfully. To a great degree, “Paint is paint.” The same is true for allied products such as abrasives, tape, fillers, sealants, etc. Success or failure resides in the process in the collision center.
All manufacturers have good-better-best product attributes and performance characteristics. It’s up to the manufacturer rep, distributor and collision repair facility to determine what product(s) best fit the needs of the repair facility and their clientele.
Having the best products alone is not a differentiator.
Myth No. 2: We Have the Best People
Have you ever met a company that did not have “the best people”?
Too often, we think the best people work for our company and the competitor’s people are the ones nobody wants. Sorry to break it to you, it’s not true.
Most companies have their share of stars, poor performers and ordinary Joes. The challenge is attracting and retaining a team that can deliver their capabilities and “do the right things well.”
While people very much matter, process and culture enable people to excel. Simply having the “best people” is not a differentiator. Having the vision to address true customer needs and the ability to put people in a position to excel through effective processes and systems is the differentiator.
Myth No. 3: We Offer the Best Service
This is where matching expectations and deliverables becomes challenging. It’s an area where the PBE business and the collision repair industry are not asking the right questions, say nothing about providing the right answers.
Is it “fast delivery”? “Prompt technical support” (when you have a problem)? Or, is it just getting the best price or deepest discount and delivering the product? Or, is there more?
Most distributors and their employees (counter and sales personnel) will bend themselves into pretzels to do what a customer asks and meet their perceived needs. However, in my opinion, we all need to step back and uncover what collision center managers truly need and how we can develop a consistent process that fulfills those true needs and build ongoing, mutually beneficial relationships.
Collision centers and their distributors together must define what “service” means to them through a written service-level agreement so that both parties can be held accountable. Reliably and consistently implementing agreed service commitments is a differentiator.
“But I always want the best price.”
Of course you do. We all do. But, whether it’s the unit price, a discount or other financial incentive, all major paint manufacturers and their distributors are “competitive.” Based on the value and certainty of future purchases, they want to do business with you and are going to be within a few percentage points one way or the other. If one party ends up in an untenable deal, it is not good for the relationship and it is doomed to failure. A “good deal” is no longer a differentiator.
My research over many years shows that the most efficient collision centers use 20 to 30% less paint liquid than the average shop in any given market, while the most wasteful shops use up to 50% more. We also know that the wasteful processes (redos, over-mixing, over-application) also waste time, lower production and create the paint department bottlenecks that every manager abhors.
This is the “proof in the pudding.” A PBE distributor that can help a collision shop achieve consistent quality and maximum output while generating less waste is much more valuable than one that simply offers a few percentage points of additional discount but does not have the ability to offer unique value.
As the collision industry evolves to a more proactive, structured and scheduled environment with fewer “surprises,” the PBE distributor/collision customer relationship must also evolve to a more proactive, less reactive relationship that is more efficient and cost-effective for both parties.
Consolidation and competition are squeezing waste and cost out of the system, so we must all participate. Margins are declining, which means reducing overhead cost – not by reducing service levels but by providing better service more effectively and efficiently.
Distributors and collision centers working together can create efficiencies, lower costs and enhance production by standardizing paint and material SKUs (stockkeeping units), utilizing predictable inventory replenishment schedules, delivering proactive technical support and training, and providing business support to measure and benchmark paint and material usage and daily output measurements such as booth cycle time (BCT):
- Standardized SKUs, tied to shop SOPs, enable management to strive for consistent quality and uniform output.
- A predictable inventory fulfillment process means always having P&M products at hand, limiting stock-outs and the need to interrupt production to await a delivery.
- Proactive technical support assures that the facility and equipment are properly maintained, that offline processes such as color mixing and matching are completed in a way that workflow is not adversely affected, and that the prep, paint and completion process flows smoothly with maximum output each day and no bottlenecks.
- By measuring outcomes (i.e. P&M cost per paint hour, booth cycle time), collision center managers can easily manage both cost and output, set goals for improvement and monitor performance.
Distributor Core Competencies
While a few PBE distributors excel in providing additional business support services to body shops, this cannot be at the expense of what I consider PBEs’ “core competencies.” These are the values, attributes and deliverables that are the core of their expertise and are directed at bringing the greatest value to their collision center customers. PBE distributors must master the following:
- P&M profitability
- Inventory fulfillment
- Paint department productivity
- Information transparency
We will explore each of these in more detail later in this series. In a later issue of BodyShop Business, we will explain why inventory fulfillment is job number one.