With many acquisitions there are problems that consistently occur as a result. How does that affect car washes?
It seems like with many acquisitions there are a lot of problems that consistently occur as a result of the transaction. Many of these issues are outlined here. These issues include Value Destruction, Unrealistic Expectations, Lack of Communication, Poor Integration Processes and Misunderstanding the Company, to name a few. In the car wash industry, there’s lots of consolidation going on, and it’s a good idea to keep a sharp eye out for these issues – and a couple others.
Consolidation is occurring on the retail side of the business, with wash owners and investors purchasing other locations and in most cases, updating equipment and technology to better serve customers. That’s a good thing.
Consolidation is also occurring on the car wash equipment manufacturing side of the business. The reasons for this are more traditional. And according to the article at orgmapper.com, those reasons are generally “…to benefit from synergies. The expected benefits are generally to reduce financial risks, diversify the portfolio, increase plant capacity, gain a larger market share, growing the utilization of expertise and R&D.”
What are the vital words missing from these benefits?
To improve the service and support we give customers, so they can better build sales and profitability.
Having been around companies going through a lot of acquisitions, we know these words are seldom really part of an acquisition strategy. Here are some things you can usually count on as the result of an acquisition.
Big Culture Trumps Small Culture
The big company – the acquirer – always dominates the culture assimilation that has to occur in order for an acquisition to happen; whether it is successful or not. Small companies that created a niche for themselves by answering the phone and responding to problems can quickly have their personalities and great response culture lost in big, impersonal call centers; budgets focused on rapid growth instead of customer service, and dwindling budgets for customer response due to a primary focus on return on assets.
Becoming Forecasters and Historians
Next, the company divides itself in two camps: the Forecasters and the Historians.
The Forecasters spend all their time thinking about the next quarter’s earnings and getting reports ready for exactly how the results will look, why they will look that way, and who is to blame if they don’t meet expectations. The Historians keep the flame of the old company(s) alive; reminding everyone of the good old days, while expressing dismay over the loss of what once was.
Decisions Made from “On High”
In the new company, decisions are being made further up the ladder, farther away from the actual customer and customer support people. This is necessitated by the fact that the acquiring company is larger, has a larger staff and decision-making chain, and has made the investment to purchase the smaller business, and needs to control decision making. Even one additional layer of management away from the customer is enough to dramatically impact the quality of customer service. Customer contact folks lose the authority and autonomy (and accountability) to make the decisions to keep customers happy. The downward service spiral can begin.
Nobody is Answering the Phones
In the new environment, everyone is REALLY busy. Busy being a Forecaster or Historian; busy making financial projections for return on investment; busy consolidating manufacturing facilities to lower costs; and busy trimming customer service support to meet new budgets. Frequently, the entire focus of the company – and everyone in it – is on accounting, reporting, and expense control.
The car wash industry is very attractive for investors. It provides a basic service which millions of people need on a daily basis. The delivery of a car wash service provides recurring revenues once the initial capital investment is made. And, there are always technological breakthroughs that provide opportunities for operators to improve service and gain competitive advantage – keeping the marketplace dynamic and competitive.
Working hard to keep a culture of customer service front and center is critical to long-term success and building business. This is where small suppliers to the independent car wash owner/operator have a huge advantage over larger organizations. Keeping customer service and response at a high level, and the best interest of car wash owners front and center, is a critical component of long-term success. And car wash owners, who stay in touch with their customers and really hear and understand their desires, can compete with big-company competition any day of the week.