Independent Automobile Service Company

Challenges

This independent, multi-location automobile service brand in Colorado was quietly in trouble. The owner had been distracted away from the business for four years with a vision to develop a consulting company, and his two other struggling, unrelated investments. He had turned control of his auto service company (which he was using to fund his other ventures) over to unprepared managers, and they had gradually lost control over the business fundamentals. Loyal customers had stopped bringing their vehicles for service, and traditional marketing campaigns had not replaced these disappearing high-value customers. The company was bleeding cash, and a Herzberg Smith expert was asked to bring his expertise. Initial review of the data revealed that prior loyal customers, once representing more than 70% of work performed, had fallen to under 25%. What happened? Three years before, the company’s primary operating focus had been recast to maximize daily ARO’s, and a “sales culture” was institutionalized company-wide. As would be expected, the short-term “success” of this revenue strategy eventually boomeranged… while revenues had increased temporarily, long-term customer loyalty had quietly faltered. The company was literally now in existential financial trouble.

Solutions

Our expert’s advice was holistic, across all 12 functions of their auto service business. We recommended replacing the sales-culture with a more comprehensive high-performance culture. We suggested that the owner dismiss some faltering senior leaders, and elevate a single new acting-CEO from within. We conducted a Leadership Intensive for the location managers, and helped the new acting-CEO to implement a comprehensive new strategic plan. Two location managers soon departed, and another followed within a year, replaced by more competent leaders. New operational standards common across locations were collaboratively developed by the location managers, a common POS system was implemented, and new high-performance HR programs were implemented.

Results

This multi-shop auto service company now achieves consistent profitable growth, including some of their highest-revenue months of all time. Employee turnover is at record lows, and loyal customers have begun to return. The owner recently offered to sell the company for $6.4 million USD, an average of almost $1.3 million per location.