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Vying for Value

Paint companies update partnership programs to maintain loyalty and offer new business help for their shop customers

The paint companies say they are adding even more value to their ‘value-added programs’ for shops.

It’s been almost a decade since Akzo Nobel, BASF, DuPont, PPG, Sherwin-Williams and others began trying to build customer loyalty and grow their market share by helping their U.S. shop customers do the same. One by one in the early- and mid-1990s, the paint companies introduced ‘partnership programs’ designed to show shops that these companies could offer more than just paint but also valuable business tools.

While all of the programs have changed in the years since INSIGHT last took an in-depth look at this ‘value-added’ concept, the changes have been little more than additions to the laundry list of offerings included in the programs. Those types of changes continue to occur - a sneak-preview of some of these changes is included here - but there also appears to be some movement toward larger scale changes in the structure and scope of the programs.

This month INSIGHT looks at what lies ahead for the Akzo, BASF and Sherwin-Williams programs; watch for more on the DuPont, Standox, Spies Hecker and PPG programs - including PPG’s recently-established CertifiedFirst network - in the next issue.

Acoat Overhaul

Akzo Nobel last month 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 in their area that enable agents to get the continuing education credits required by many states.

But Mike Sillay, North America Services Manager for 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; there are currently about 180 Acoat selected shops - with average sales of $2.2 million - and about 200 Akzo users that participate in "regional performance groups," a scaled-back version of the program. But Sillay said that this spring Acoat will evolve from a more or less bundled set of services into 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 eight-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 aimed at helping 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, according to Sillay. 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. Also required is a written policy explaining how work is allocated among technicians, another source of frustration for industry employees.

Collision Force is expected to debut this month as the first in a series of new offerings for Acoat participants rolled out in the next year.

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.

"We don’t look at A-PLUS so much as a way to get shops to switch from another paint company as a way to help our customers differentiate themselves in the market," Cooley said. "The program really is run by those customers, the shops that participate. If there’s something they need or want us to initiate in that market, we try to do that."

Many of the program’s offerings - including management training courses - are included in the $895 initial annual fee although some - such as collision repair facility design services - are fee-based, Cooley said. But, he said, many A-PLUS shops "pay" the program’s $295 renewal fee out of their "A-PLUS Points" account.

"All of our members are entitled to a 2 percent rebate on the shop’s annual purchase of Sherwin-Williams products," Cooley said. "That comes in the form of A-PLUS Points, the first 295 of which can be used for the renewal fee each year."

The points can be used to offset fees for other A-PLUS program services, such as CSI, he said.

Sherwin-Williams has also teamed with ADP, Ensera and AutoVista to "web-enable" all of its A-PLUS shops. The partner companies can help A-PLUS shops with everything from basic dial-up service to website hosting and third-party claims assignments. The launching of this effort coincided with the unveiling of Sherwin-Williams’ "e-store" designed to simplify on-line purchasing through the paint company.

BASF Heads to the Web

BASF believes its new set of web-based business analysis tools unveiled at NACE will become a cornerstone of the value-added services it offers its customers.

The goal of the new offering, according to the company, is to move away from just handing participants in its partnership program a thick book of financial analysis of their businesses, but to actually make it easy for the shops to get the specific and current statistics they are looking for - along with easy-to-access tools to improve those numbers.

Here’s a summary of how the site works and some of what it offers:

The shop owner enters some initial shop data and completes a "self-evaluation" of how he or she views the business’s performance in a number of areas. A shop owner wanting a quick overview of the business’s performance can start with the one-page summary which includes key indicators about the business: annualized sales, sales per estimator, sales per administrative data, staffing density, etc.

At the bottom of the page are some projections regarding the shop’s potential performance based on changes in staffing, productivity, etc.

In between are a list of eleven aspects of the business - parts, sales and marketing, awareness of financial measures, etc. - showing clearly which the shop owner felt were areas needing improvement.

A single click on any of these topics brings up a checklist of items the shop owner can use to improve the business's performance in that area, including ready-to-use forms or worksheets.

"Here’s information to solve the guy’s biggest headache, and he got to it at the second click," Chuck Kelly, special project manager for BASF, said. "He didn’t have to dig through a 36-page report just to find some number that confirms what he thinks his biggest problem is, and still might not offer any solutions. He just says, ‘This is the thing that’s driving me nuts every day,’ and click, here’s the solution."

The website will give BASF customers 24/7 access to a wide range of information, Kelly said, from examples of employee pay plans to a dozen (and growing) plans for shop layout designs with interactive tools that allow the shop to determine what type of production it could generate in each plan.

By entering the shop’s financial data each month - a process Kelly said will probably take less than 15 minutes - the shop has immediate access to financial analysis, graphs, tools and comparisons.

The system in its beta form also includes a vehicle tracking and cycle time analysis tool to help keep everyone in the shop updated on production, and to also assist the shop in tracking reasons for delays.

More to Comes

But could more dramatic changes in the programs lie ahead? Could, for example, paint companies in the U.S. - as they have in the U.K. - establish call centers to take first notice of loss calls for insurers, making claims assignments to shops in their program or network and offering the insurer central billing?

Next month…INSIGHT will examine this question – as well as provide updates on other paint companies’ value-added programs.   o

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