How is this happening you may ask? Here are some survey insights:
- About one fifth of customers already go online to search for Aftersales related information.
- Customers that are online are about evenly split between dealer loyalists and aftermarket workshop loyalists (independent workshops and fast-fits).
- Prompts from the independent aftermarket tempt them to try a different repair provider (25-45% of online customers change repair provider based on what they find on the Internet).
- The prompts typically come from fast-fits. They are sucking dealer customers and independent workshop customers in to try fast-fit services.
- A sizeable portion of self-declared “dealer loyalists” are already defecting to Fast-Fits.
- This issue is big enough to notice in Europe, and huge enough to panic in the United Kingdom.
“Why didn’t I know about this?” may be the next question. That’s mainly because we underestimated Fast-Fits in the past and their ability to evolve and re-invent themselves. This is happening below our radar. And if we look back we can understand how we underestimated Fast-Fits.
Let’s backtrack a bit, to the way it used to be…
Fast-fit chains like ATU, Speedy, Midas, and Mekonomen grew to a significant presence in Europe with many hundreds of outlets. Private equity firms saw a good business model and many fast-fits were bought by private equity investors that loaded up the capital structure with debt. Fast-fits became marketing masters – bombarding consumers with low price messages in print fliers, TV, and radio. They pulled a lot of customers into their workshops and then bungled things up by not delivering service quality. Worse, poor employee compensation plans ensured that up-selling glided into phony repairs and rip-off territory. These plans would have made Amway proud.
As a result, Fast-Fits were like jet engines – they sucked in a lot of customers, squeezed them, burned them up and spewed them out at high
The recession was like a near-death experience to Fast-Fits:
- Customers clenched up and spent less, delaying service and repairs
- Older cars were being pulled off the road by cash-for-clunkers programs
- Rolling over large gobs of private equity debt became tricky
Fast-fits are back and are snapping away at our “dealer loyalists”. The enabler for this is the Internet. A brilliant and comprehensive plan to take advantage of the Internet is helping fast-fits back from the brink of destruction. We underestimated the fast-fits. The experience shows that they are damn good at evolving. If it’s survival of the fittest out there, fast-fits may be fitter than we think.
Let’s compare some of the DNA of fast-fits and OEMs. Two very different animals, but wouldn’t it be nice if we could splice out some of those fast-fit genes and integrate them into our OEM genome? Especially the genes about Internet strategy and speed to evolve?
There’s lots more interesting aspects to this story – ask us for the details or a look at some of the scary survey data.
P.S.: Oh, and how did fast-fits fix the customer perception problem with workshop quality so quickly? Wouldn’t we love to splice out and implant that gene into our DNA?