I was also thinking about calling this article “Crossing the Line,” but that may present a negative connotation.
What caught my eye recently was the announcement that AAA bought the 30 retail locations in Ohio of Bob Sumerel Tire.
In this case, the buyer is AAA-Allied Group Inc., which has 1.4 million members in Ohio, Kentucky, Indiana, Connecticut, Virginia, West Virginia and Kansas. AAA-Allied Group says they are looking at a fast, multi-state expansion of this concept and will add traditional AAA travel and insurance services to the stores.
This change for AAA from certifying shops to operating shops is a significant move in a new direction for them. But, we have all seen other businesses move in new directions too, like when Midas expanded its service offerings away from just mufflers to total service.
Several months ago, AAMCO launched its new initiative as the place to go for total service, not just transmission work anymore. And the word on the street is that your local new car dealership (and especially the now-closed new car dealer that sells used cars and service) is fixing all makes and models, not just the ones they sell.
While these are all examples of expansion and additional services, I have talked with shop owners who are changing to reduce the number of services offered because they can operate their businesses more profitably in this manner. One shop owner told me, “We don’t open the hood anymore.” This also reminds me of a shop owner who told me about seven years ago he was going to service only GM makes. I wonder how that turned out.
I’m sure you evaluate your parts suppliers all the time to make sure you’re receiving the best service, brand selection, etc. It might also be time to review your business affiliations to make sure the shop you were sending business to has not changed its stripes and become one of your competitors.
Take the example of the transmission shop. In the past, you may not have done this type of work and sent it down the street. Today, that shop is now full service, which leaves you with the decision of keeping the relationship, finding another shop to do it or starting to offer this type of work in your shop.
Sumerel Tire has been in business for more that 40 years and probably never imagined they would sell to AAA, but you never know what’s going to change around you and how that can impact your business. Some have said AAA is crossing the line by operating shops, but obviously that is a change they feel they need to make to stay prosperous.