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Page 1 of 3 The major paint companies, struggling to overcome federal charges of price-fixing and their largely unsuccessful and expensive "shop investment" programs of the '90's are now focusing on "value added" shop management programs to attract and retain customers.
While the paint companies have offered management tools for many years, they took a back seat to "investment" programs in which the paint companies helped a shop purchase new equipment in return for a multi-year paint contract. The investment programs were expensive, however, and did not have the intended results. A district manager for Finishmaster, the largest paint distributor in the U.S., said, "those programs were losers for the manufacturers. All the (paint) companies did was trade business. The so-called investments didn't make customers more loyal, they just made every shop owner go looking for the best deal. And when the contract ended, if the shop was still in business, they'd be out looking for someone else to make them a deal." With the new emphasis on working with their customers to improve profitability, the paint companies hope to build long-term loyalty. "Not only will we encourage these programs, but you're going to see the paint companies get pickier about who they do business with," said the Finishmaster manager. The manufacturers are concerned that with collision industry consolidation, shops that don't take advantage of educational and management offerings will find themselves unable to compete and will close their doors. "Why invest time in a customer who isn't going to be around?" the Finishmaster manager asked. Programs aren't all new It's been almost a decade since Akzo Nobel, BASF, PPG, and other paint companies began trying to build customer loyalty and grow their market share by helping shops to better manage their businesses. One by one in the early and mid-1990s, the paint companies introduced 'partnership programs' designed to show shops that they offered more than just paint. Akzo Nobel Akzo Nobel in 2001 celebrated the 25th anniversary of its international "Acoat selected" program, although Acoat didn't make its way into the U.S. market until 1992. Current participants use a standardized chart of accounts that allows easier side-by-side comparisons to other participants in their Acoat '20 groups'. The program's other offerings include management seminars, on-site assistance from Akzo's staff business development managers; and marketing assistance such as in-shop courses that Acoat shops can offer insurance agents. The courses can be used for insurance continuing education credits required by many states. But Mike Sillay of Akzo Nobel said the annual fee for the Acoat selected program, $5,500, and the travel costs for '20 group' meetings and management training have meant the program was beyond the reach of many Akzo users. That's why Acoat is changing to becoming less of a bundled set of services to a program with a lower annual fee and an a la carte menu of service options - some fee-based - that should allow the program to benefit more Akzo customers. One new item on that menu will be "Collision Force," a package aimed at addressing workforce shortages for Acoat participants. Collision Force includes three elements, Sillay said. The first is designed to assist Acoat participants with the professionalism and effectiveness of their employee recruiting efforts. This includes a toll-free number (866-FIXACAR) that allows technicians and others seeking employment in the industry to participate in an 8-minute survey of their interests and experience; at the end of the survey, callers can choose to have the information they shared submitted to any or all of the Collision Force participating shops listed. These shops receive an email that contains much the same information as a job application, including the caller's years of experience, contact information, etc. The second element of the program, aimed at attracting and training new entry-level employees into the industry, will be a partnership between Akzo and Mentors @ Work, a recently-launched web-based system designed to assist shops with the mentor-apprentice training process. The third element of Collision Force, Sillay said, is designed to help Acoat shops retain employees. Information gathered through several focus groups of technicians will help Acoat participants better understand what drives employees to leave, what attracts them to other shops, and how best to reach those looking for a new employer. Acoat shops wishing to participate in Collision Force will need to meet certain requirements, Sillay said. For example, focus groups have found employer-paid tool insurance is important to technicians, yet only about 20 percent of shops offer it; it will be required for Collision Force participants, Sillay said. Also required is a written policy explaining how work is allocated among technicians, another source of frustration for industry employees. Sherwin Williams adds to program With 620 participating shops - doing an average $1.6 million in annual sales each - Sherwin-Williams' "A-PLUS" is among the largest of the paint company value-added programs. That size is giving the company some advantages as it works to secure new benefits for its members, Bruce Cooley of Sherwin-Williams said. One of the unique elements of A-PLUS, he said, is "Lasting Impressions," a program that enables participating shops to give customers a card good for a 20 percent discount on all purchases at any of Sherwin-Williams' 2,400 paint and wallpaper stores for a two year period after having their vehicle repaired. The shops can also provide their employees with a similar discount card good as long as they are employed at the shop. |
