With 3,400 franchisees and its own financing arm, Snap-on is able to help its franchisees with the benefit of capitalization of a small business, a critical element to its success.
A nationwide tour, the NO COMPROMISE TOUR, has been this year's pinnacle of the company's grass-roots efforts. And the tour is still connecting franchisees with their customers through interactive displays, tool demonstrations and a customized '57 Chevy Glo-mad that's adorned with customized Snap-on tools.
When held up against the backdrop of the automotive industry, the collision market is in good shape. Body shops predict favorable profit increases this year, some as much as 20 percent, according to our "2009 Outlook" (January ABRN).
But working in the collision market presents its own set of challenges and opportunities, as company officials and franchisees freely admit.
"The state of the economy has greatly affected the collision repair industry," says Aldo Pagliari, president of the Equipment Group, within Snap-on Incorporated. "Many people have raised their insurance deductibles in order to reduce their premiums. When those with higher deductibles are involved in an accident, and where their vehicle is still drivable, they question, 'Do I get the repair done, which will cost me as much as $1,000, or do I just cash in the claim?'"
This "cashout," says Pagliari, means some money does not make it back into collision shops, which depletes money that otherwise can fund capital projects for a shop. "Shops that are in need of equipment are holding off purchases until they see what the economy is going to do" he adds.
Dan Anderson, a Snap-on franchisee in Ocala, Fla., has seen this drop in large equipment purchases firsthand.
Although there appeared to be a big push in measuring equipment 10 to 12 years ago, the frame machines that form the backbone of many collision repair shops are sometimes provided by the dealers (in the case of dealership collision centers), and in other cases, there aren't enough new techs and owners entering the industry to warrant the sales of these higher-end items, Anderson adds.
And with the onslaught of dealership closings, the auto repair market in general will likely see an increase in the sales of used garage equipment.
"With the current collision market being so price point sensitive, and considering that there is a glut of used equipment entering into the marketplace, this is forcing many shops to question the purchase of new equipment," says Pagliari. "Snap-on has always been about productivity-enhancing tools for professionals. Consistent with that approach, Snap-on Equipment has focused on releasing product into the current marketplace that is both economically priced while being capable of providing for greater shop productivity."
As far as other offerings from the truck, Anderson doesn't see the same demand for diagnostics as he would in mechanical repair (unless the collision shop in question performs its own mechanical repair work), and because of the general decrease in body panel thickness, there is less panel pulling, thus less of a need for body-shaping hammers and dent repair tools.
Much of today's body shop tool sales center around a ¼ or ⅛ inch drive, as opposed to the larger, ½ inch drive found on impact tools used with mechanical repair shops, he notes.
To further offset this tight market, "Snap-on offers an array of solutions with the ability of servicing unitized through full frame vehicles, including buses and truck tractors whose collision service needs are met by products such as the Power Cage," Pagliari adds.
"The Shark Lite electronic measuring system was released into the market with the purpose of allowing customers to be able to purchase a full repair, multiple point monitoring and electronic measuring system," he says. "It has all the features and benefits of the Shark system and provides the customer the opportunity to add-on to the system as their needs grow. With the advent of new metals, such as boron and high strength steels, the importance of measuring, to both document the damage as well as validate the conformance of the repair to manufacturer's specifications, is as important as ever."
The company's Prism wheel alignment unit enables shops to keep their alignment business in-house. "Having the wheel alignment performed in the collision shop improves the work flow process, increases productivity and keeps the revenue in the shop," he says. The Prism wheel alignment system is an affordable alignment system solution, utilizing both imaging and Bluetooth technologies. The Prism is portable and can be used in any of the shop's work bays or collision racks, maximizing the shop's productivity."
Also, for lighter repairs, Snap-on Equipment selectively offers its Post Lift system, which Pagliari adds has attained success in markets where a product with a small footprint can be used for light duty situations where less pulling capacity is required.
The Big Show
To celebrate this unique relationship between Snap-on, its franchisees and their customers, along with general consumers, the company rolled out the NO COMPROMISE TOUR late last year, embarking on a one-year odyssey to further strengthen this professional supply chain and the unique business relationships forged at the local level.
The tour also affords attendees the chance to see some of the company's latest and greatest tool storage opportunities, products that won't fit on a tool truck, per se, like the EPIQ, a massive tool storage unit that acts as a digital docking station for computers, scan tools and other essentials of our digital age. The EPIQ helps maintain and organize tools and information.
The NO COMPROMISE TOUR was born out of its centerpiece: the 1957 Chevy "Glo-mad," which is customized using Snap-on Tools as part of its design. If you look closely, you'll find that undercar parts, body panels and other sections of the classic ride are embedded with tools made especially for the vehicle.
At any given stop, attendees are likely to rub elbows with franchisees, family members and even consumers. And to strengthen the local pull of the tour, attendees of the event can post photos at the Snap-on Tools fan site through the social networking Web site Facebook.
Anderson said at one of the Florida stops, he saw an "astronomical" response from attendees. So much so, in fact, that he personally sold at least six battery reciprocating saws. "I sold several pieces of merchandise from people seeing it there on display."
Following the grass roots foundation of this tour, Snap-on is able to continue and build on the momentum generated by each visit, so each stop is a chance for the tour to build onto itself, evolve and learn from each installment to become tailored to attendees' needs.
And franchisees are able to market each tour stop to suit their demographic, whether it's taking out ads in the local paper or promoting the event on the radio.
"This is very much part of our corporate culture, one of our core beliefs is in rapid continuous improvement, so the idea that no matter how good you are today, you can be better tomorrow," says Tom Ward, president of Snap-on Tools Group, within Snap-on Inc. "This tour is the epitome of that. The way we're doing it today versus the way we did it a month or a quarter ago, we're doing it much better today and we'll probably do it better a quarter from now."
The NO COMPROMISE TOUR is both professional and enthusiast, as techs mix and mingle with avid performance buffs to balance out the tour's demographic.
Don Cunningham, a Snap-on franchisee based in Lubbock, Texas, was still effusing over the tour fresh off the heels of the Texas stop. "I had a very good sales day, and I think all the customers that came really enjoyed it."
He mostly caught up with regular customers, but Cunningham also met some new potential customers as well. "It's just very good customer relations," he adds. "It's something our competition doesn't have."
Ward describes the NO COMPROMISE TOUR as a family event that's been successful beyond his expectations.
The tour continues throughout the year. For cities and dates, visit http://www.snapon.com/nocompromisetour/.
Franchise advantage
The selection process for franchisees has evolved over the years, and each franchisee gets a protected list of calls and a host of training options.
"These are people that are in shops five or six days a week for many hours every day," says Ward. "And they're calling on technicians and shop owners, they're in body shops, they're in the municipal garages, they're in independent repair and dealerships all day long."
Franchisees applaud the independence their jobs offer them. Many of them come from the repair or tool market, but some enter the Snap-on fold from other industries entirely. They all love being their own bosses, and stand proudly behind this established brand.
Other components of a franchisee's constitution are the amount of physical work and the strong work ethic that are part of the job.
"There's a lot of physical work that goes on and off the truck, in and out of stops," Ward continues. "We send them to training to Snap-on University for a week's worth of very intense training from early morning till late at night, and then we support them directly in the field for weeks after they originally start in their protected route. And we work with them, and we spend as much time as we need to make sure they're up and running and successful; and then on a regular basis we continue to spend time with them both in their route and in their training."
In spite of the evolving methods of ordering and distributing tools, what initially attracted techs to the mobile van delivery system still rings true today.
Ward says this system is convenient for techs. Additionally, "It's convenient for them, it's productive for them and so the personal relationship between the franchisee and the technician is what makes this business model successful and has made it successful for over 90 years."
Building confidence
Despite the challenges of doing business in today's collision repair marketplace, franchisees like Anderson are confident in the products themselves.
"We're a different breed than a Home Depot or a Lowe's," he says.
"We go to our customer. We don't get the benefits that some of our other businesses do with that type of advertising.
"What we have is far superior, we have body stuff, we have frame equipment, we have information systems, there's just so many things that we have to offer that none of the other competitors have," he adds. In addition, Snap-on's programs for service writers and management are much more supportive than those from competing tool distributors, he says. "And you've got a name that everybody would like to have. You have a premium product that has a good customer name and history."