How to Determine the Value of Partnership Programs
In business, partnerships matter. Businesses can use partnerships to achieve synergy by finding ways to maximize different combinations of talents, skills, and resources with other companies. More than anything, partnerships should be mutually beneficial to everyone involved. When good partnerships are formed, the whole should be worth more than the sum of its parts. For example, McDonald’s burgers make you thirsty enough to want a Coca-Cola, and sodas have a high margin. By partnering up, McDonald’s can lock in their costs on soda and improve their profit margins for the long term.
On the other hand, not all partnerships are beneficial. Partnerships can expand your opportunities but can also force you into making decisions you never intended to make. When McDonald’s decided to partner with Coca-Cola, they had to exclude other soda brands from their locations. This exclusivity may have been worth it, but it meant removing options from customers, such as Dr. Pepper and Pepsi products. What may have made the partnership intriguing for McDonald’s is the fact that Coca-Cola owns a variety of beverages, including Diet Coke, Fanta, Sprite, Powerade, Minute Maid and Pibb Xtra. Thanks to a variety of options, McDonald’s is able to satisfy most customers who ask for a Dr. Pepper by saying, “Will Pibb Xtra be okay?”
In the auto repair industry, we face similar challenges when it comes to partnering with other businesses and brands. Potential partnerships may include teaming up with parts suppliers, software companies, marketing and trade show affiliates, and any other service, resource or tool that could potentially improve your shop. In some cases, these partnerships will help shop owners enhance performance, save costs and drive revenue. Other times, partnerships may bind you to an agreement that doesn’t pay off.
Here are some questions you can ask yourself to determine whether a partnership is mutually beneficial or if they’re asking you for more than you’re getting in return.
Are You Free to Choose the Tools and Solutions You Want?
One sign of a bad partnership is being forced to do something you don’t want to do. If partnering with another company means taking valuable options off the table, then you may be at a disadvantage. If your partner implies or directs you not to do business with their competitors because they would like for you to instead use their services or their partner’s services, think it through.
Before officially entering a partnership, imagine your shop one year, five years and ten years down the road. Where will it be then? What will happen if your shop grows? What if innovation has slowed down with your partner? Will you be allowed to innovate your business by using new tools and solutions that become available in the future?
If you’re restricted in a way that prevents you from innovating or adapting to market conditions by testing other products, tools, solutions, and software, you may be handcuffed and unable to compete with other shops.
What’s Your Time and Resource Commitment?
A good partnership, like any good relationship, takes time and commitment. Effective collaboration means spending some time up-front so that everyone can get on the same page.
But your time is valuable, and the time you put in up-front may not always be worth it on the back end. Some programs may require significant time dedicated to training, process adjustments or brand initiatives that don’t fit into your current business model. That time could be spent pursuing changes that truly enhance your business performance and align with your goals.
If it feels like you have to change your ways to be a member of an exclusive partnership program, you may be sacrificing more control for the benefit of your partner without an equal return.
Will Your Guests Care?
If your guests get something out of the partnership—whether it’s convenience, savings, or confidence in your products or services—then you may be getting real value out of the relationship as a shop owner. After all, a good relationship with guests is a critical factor when it comes to improving your bottom line.
Sometimes, partnerships such as parts programs can appear more powerful than they are because shop owners may see them as a seal of approval. A banner with a logo from a well-known brand in front of your shop may make you and your employees feel confident, but consider if it really impacts your guest experience.
We see this dynamic play out in gas stations and convenience stores. It may make gas station owners feel good to have a big Phillips 66 sign or a Chevron logo above their pumps, but most drivers could care less and just need to top off their tanks. Partnerships that require certifications for auto repair shops may give you a feeling of officialdom or accomplishment, but the guest simply needs their car fixed at an affordable price and by a trustworthy crew.
If the majority of customers see no value in a branded partnership, and there are no direct enhancements or savings that can be passed on to them, the program may be lacking and not worth your time or resources.
Will Your Partner Truly Care About Your Success?
When assessing a partnership, part of the analysis rests on the bottom line. Will your metrics improve thanks to the partnership? Or will your performance be negatively affected by the program?
A good partnership is based on trust and a mutual commitment to success. You can usually tell right away if your partner is truly committed to your shop or if your shop is just another tally in their sales ledger.
If a partner implies that it’s on you to reach a certain standard before they’re willing to consider working with you, or threatens to end the relationship without trying to help you overcome a hurdle, it might be in your best interest to reconsider or renegotiate partnership terms.
In 2019, Tekmetric was selected by Christian Brothers Automotive to be their shop management system for all their locations. Christian Brothers took partnerships very seriously. After a grueling assessment of the top management systems, Tekmetric was selected. When our team asked what helps them finalize their decision, they said it came down to this notion that they felt Tekmetric truly cared about their success.
“Every time we walked away after talking to the people at Tekmetric, we would just say, ‘Man, this is awesome.’ We never had that with a lot of the vendors we worked with in the past. The potential in our relationship is what I hang my hat on because of the level of care and attention to detail they took in the process. The extra steps they took showed that they valued our input, our relationship, and saw the potential in what we could accomplish together. I felt like there was a lot of humility in the way they operated.
They took extensive trips to visit with us and franchisees. They coordinated with so many of our other vendors. They acted like they really wanted to be that partner for us, and not just say that, but show it.”
Director of Strategy & Innovation, Christian Brothers Automotive
Learn More About Repair Shop Success
As an auto repair shop management solution, Tekmetric has long realized the importance of mutually beneficial partnerships. We strive to give shop owners the freedom to integrate their marketing, communication, parts ordering tools and more directly into one management system because that makes it easier and more efficient for shop owners to run their businesses.
If you’d like to learn more about what it takes to run a successful auto repair shop, check out some of our other resources:
Why Now is a Great Time to Tune-Up Your Auto Repair Business
8 Ways to Adjust Your Auto Repair Business Strategy for COVID-19
How Tekmerchant Text-to-Pay Saves Your Shop Time & Money
