AVB/BrandSource has long supported its servicing dealers — the 75 percent of the buying group’s members that operate in-house repair departments.
But for many it’s become an uphill struggle as servicing dealers find themselves beset by a rising array of challenges. These impediments include billing rates for OEM warranty repairs that no longer cover costs; finding, training and retaining qualified techs within tightened labor market; and the advent of sophisticated smart appliances with vendor-specific parts that often require costly multiple truck rolls.
As Steve Sheinkopf, CEO of BrandSource member Yale Appliance noted in a recent blog, those hurdles have only been compounded by the pandemic, which has triggered parts shortages, increased service calls, and the need for heightened safety protocols.
As a result, some service operations barely break even, if at all, and are maintained by dealers solely as a courtesy for customers.
In response to the industry’s mounting repair problems, BrandSource, the industry’s largest servicing buying group, formed a National Service Committee comprised of dealers and AVB staff. In quick succession, the Committee forged a series of strategic industry alliances and created and distributed a Service Playbook — a 32-page tactical guide — to help dealers meet the challenges of in-house repair.
Last week BrandSource General Manager Jarred Roy and Merchandising Director Paul Roth, both members of the Service Committee, brought all those tools together in special virtual presentation for dealers, manufacturers, parts distributors and service associations. Dubbed Service Day, the online event walked members through the just-released Playbook and introduced them to the group’s newest industry partners.
During the presentation, Roy described the service sector as a “forgotten segment” that’s written off as a cost rather than embraced as a profit center. “Service shouldn’t be the red-headed stepchild of the organization,” he said.
But turning a profit is difficult when the average reimbursement for a service call is $100 and the cost to a dealer can be $150, observed BrandSource member Scott Bekins, president of Michigan-based appliance, CE and custom install chain Bekins Appliance.
“As appliances become more complex and parts more customized, it often requires additional truck rolls,” he said during the live webcast, adding even greater cost to the repair.
Added BrandSource member Joe Legato, COO of Bill & Rod’s Appliance & Grills in Greater Detroit, “Repair charges have not kept pace with the rising cost of wages, insurance and other overhead. Service has worth and should not be given away for free.”
Roy noted that BrandSource’s National Service Committee has invested over 250 hours since its inception last year — the equivalent of $100,000 in consultancy billings. Based on input from more than 550 servicing members, it produced the comprehensive Playbook and created nearly two dozen partnerships with training academies, parts suppliers, trade groups, manufacturers and extended warranty providers to help reset rates, attract talent, and tackle other vexing industry issues.
The inaugural program, held Nov. 5, also featured a series of service partner videos with links to member-exclusive discounts and offers.
Service Day concluded with a combination question-and-answer session and social hour hosted by the United Appliance Servicers Association (UASA), regarded as North America’s largest appliance repair trade group.
“We certainly hit a pain point for our members,” Roy said of the social-hour discussion, which extended to 90 minutes. The Service Committee will use feedback from the session to help set its next round of initiatives.