AASA Marketing Executives Council June 24, 2010 Marketing Executives Council Mission To advance the automotive aftermarket supplier industry through collaborative marketing and communication solutions. Purpose Forum for aftermarket supplier marketing executives to collaborate in helping improve the state and image of the North American manufacturer base. The Council will serve a major role in helping AASA communicate to key audiences and develop communication strategies and action items. Marketing Executives Council Agenda Welcome & Introductions – Barry Harris Anti-Trust Guidelines – Sarah Bruno Know Your Parts – - Update since last MEC meeting – Brian Tarnacki - Quantify / survey results – Jack Cameron - Brief history on Supplier Image Initiative – Brian Altenberger - Supplier Evaluation Standards – Denny Welvaert Lunch - :30 minutes Know Your Parts - continued - 3rd Party Certification – Steve Handschuh, Jack Cameron - Logo/Trademark – Brian Tarnacki State of the Industry – Steve Handschuh (time permitting) Break Web Metrics: Measuring Effectiveness – Al Haberstroh, MontAd Council Updates (time permitting) Marketing Executives Council Anti-trust Guidelines It is the unqualified policy of the Automotive Aftermarket Suppliers Association to conduct its operations in strict compliance with the antitrust laws of the United States. AASA's antitrust policy prohibits any discussions which constitute or imply an agreement or understanding concerning: 1) prices, discounts, or terms or conditions of sale; 2) profits or profit margins or cost data; 3) market shares, sales territories or markets; 4) allocation of customers or territories; 5) selection, rejection or termination of customers or suppliers; 6) restricting the territory or markets in which a company may resell products; 7) restricting the customers to whom a company may sell; or 8) any matter which is inconsistent with the proposition that each manufacturer, wholesaler and distributor must exercise its independent business judgment in pricing its services or products, dealing with its customers and suppliers and choosing markets in which it will compete. Marketing Executives Council Know Your Parts Update • • • • New web domain name www.AASAKnowYourParts.com Stand-alone website being developed Logo trademarked and registered application MontAd pro bono work – Web Articles • “The Parts in Your Car Make a Difference” • “What’s in a Name: Generic vs. Brand Name Auto Parts” • “When it Comes to Auto Repairs, She’s in the Driver’s Seat” • Member Participation – 23 companies signed on • Quantify / Product Samples - Survey Marketing Executives Council First member ad to feature the Know Your Parts campaign. Many thanks to 4-SEASONS and Kevin Burton for showing us the way. Marketing Executives Council Know Your Parts Update • Quantifying and Demonstrating the Problem – Recommended by several breakout groups last MEC – Survey Developed to help quantify scope of problem • 10 questions looking for estimates to create anecdotal data i.e. – “A survey of AASA members suggests the problem is…” • Survey sent to MEC on April 20 – only 2 responses • Reminder sent May 5 plus to all AASA – to date 9 responses – Sample requests, also recommended at last MEC – Included in the survey cover letter above • Products and/or literature comparing low quality to premium • Received 2 products and 2 comparisons to date Marketing Executives Council Question 1 Question 2 What do you About how much estimate your does your company’s lost sales company spend of motor vehicle annually on component parts product research (OE and and development aftermarket) that including new can be attributed to product, short line, lowcontinuous quality, low-cost improvement, suppliers? etc? 11% 9% Avg Question 3 Question 4 Question 5 About how much does your company spend annually on technical support including in-field, hotline, troubleshooting and engineering support? Question 6 About how much does your company spend annually on product and quality testing? About how much does your company spend annually on customer and technician training programs? About how much does your company invest annually in obtaining and protecting patents, copyrights and trademarks? 4% 2% 4% 2% 7% 10% 10% 5% 10% 2% 5% 2% 5% 1% 5% 2% 2% 1% 1% 6% 12% 4% 1% 1% 1% 5% 1% 1% 1% 2% 15% 10% 1% 10% 6% 1% 5% 2% 1% 5% 2% 0% 2% 2% Ind 1 2 3 4 5 6 7 8 9 2% 20% 25% 10% 5% 10% 5% 20% 5% Marketing Executives Council Question 7 About how much has your company invested in obtaining and protecting patents, copyrights and trademarks in total since the inception of your company? Average Question 8 Question 9 Question 10 Please list the quality standards employed, or certifications earned, by your company. Have you seen, perceived or tracked a decline in sales of “A” popularity products as compared to previously considered slow moving parts? $3,402,158,333 -- 89% Yes Do you have any private label customers who do not purchase, or purchase too few of, what should be your most popular or fastest moving line items? 56% Yes $2,500,000 $200,000,000 ISO, TS-1649 TS16949 / ISO9001 TS16494 ISO9000 No Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No No Yes Yes No Yes Individual 1 2 3 4 5 $200,000,000 6 7 8 9 $450,000 $10,000,000 $20,000,000,000 ISO QS TS ISO, QS iso,ts,jsox, +++++ ISO9001, QS9000, HQS9000, TS14001, TS16949, Six Sigma Marketing Executives Council Know Your Parts Update • Historical Timeline • 2006: Exploratory meeting held of marketing executives to discuss issues of supplier image, trade shows and collaboration • 2007: MEC formed and held four quarterly meetings – Standards of Excellence agreed as way to recognize full service suppliers – Set primary target as Repair Professionals, secondary Channel Partners – Open criteria for all suppliers, AASA members get reduced fee • 2008: Business Case for Seal of Supplier Excellence – – – – Detailed document including governance, fees, etc., standards defined Code of Ethics that each supplier submits, maintained by 3rd party Presented to AASA BOG, rejected and told to develop marketing solution Developed creative brief, request for quote and solicited bids from firms • 2009: Development of a Industry Awareness Marketing Campaign – Three finalists presented concepts, all with steep price tags – Market Research project funded to support campaign – Know Your Parts launched at AAPEX Marketing Executives Council Supplier Evaluation Standards Concept Denny Welvaert, AASA Immediate Past Chairman Marketing Executives Council June 24, 2010 KNOW YOUR PARTS (How Does a Buyer Know the Parts) Bill Rhodes – CEO of AutoZone ◦ “We have 70,000 AutoZoners and not 1 engineer. How do we know if the parts are good?” ◦ “In addition to specific concerns regarding safety on performance of specific products sold through our industry, a broader concern was highlighted. That the entire automotive aftermarket’s reputation could be at risk.” 13 AASA “Know Your Parts” campaign was brought up as a positive example of an awareness improvement effort. Kathleen Schmatz was asked to review with her AAIA team to evaluate if AAIA should embark on a comprehensive evaluation. 14 SAY WHAT? 15 AASA is a manufacturer centric organization and we owe it to our customers to show them how to evaluate product performance and quality. 16 Independent Certifications ◦ AASA ◦ UL ◦ Even SAE 17 Is the certification testing truly indicative of part performance in the field? Even SAE is not specific to a particular vehicle need. ◦ Generic guide for materials or base level performance ◦ No OEM or Tier 1 will give the latest technical data to the Industry. SAE Any other method Certification will not get the support of the higher tech manufacturers. 18 So what do we do? How do we solve the question of, “Will the parts work?” 19 Real proof of performance is not assured via a UL certification. Proof of performance is supported by “Paying” customers that buy the product after validation. ◦ Part Testing ◦ Vehicle Testing ◦ Manufacturing process on-going quality “Lets Piggy back on the Automotive Industries Capabilities” 20 Develop a decision tree that can be provided to resellers. ◦ Ask the right questions ◦ Make informed decisions 21 Flowchart Example text This is an example text Example text This is an example text Yes Example text This is an example text Example text This is an example text No Example text This is an example text Example text This is an example text Example text This is an example text Example text This is an example text Example text This is an example text Example text This is an example text Example text This is an example text 22 OE’s have Supplier Quality Assurance Departments (SQA) ◦ Technical people but not experts in all products or technologies. ◦ Develop a process to assure that manufacturer’s meet acceptable level of quality. 23 Resellers do not have the best ability to make informed decisions on: ◦ ◦ ◦ ◦ ◦ ◦ Product Technology Product Quality New Part Introduction Application Engineering Cataloging Coverage Don’t know how they make decisions on those criteria. Currently, resellers make informed decisions on: ◦ Price ◦ Terms ◦ Delivery 24 Product performance determined by the OE Design Engineer. ◦ Real World Testing ◦ Form, fit and function Basic product design is done by the manufacturer’s engineers. ◦ Basic Product Design and Engineering ◦ Test prototype parts in the lab on a test stand ◦ Test prototype parts on an engine or a vehicle 25 Springdale Tech Center Occupied in 2 phases of consolidation from ’07 – ’09. Brown-field, 10 year lease, with ongoing investments. 35,000 ft2, split physically as 40% Rigid & 60% flexible. Synergies of flexible and rigid products in one site. TS16949 Certified jointly with North American mfg. sites. Fully capitalized for all customer testing. It runs all year, 24 / 7. Locally houses 30 Full Time Employees. ◦ Certifications include PEs, 6σ Black belts, Green belts and more. ◦ Engineers, Designers, Technicians, Chemists, Machinist & Metallurgy. 26 OE’s require a rigorous prove out procedure on a new part launch. ◦ ◦ ◦ ◦ ◦ PPAP Process Production Tools Production Machines Production rates and quantities Statistical process control of current characteristics to show ,”Process Capability” 27 Factory must be certified by independent auditing firm. ◦ QS 14001 OEM SQA department certifies the factory ◦ Ford Q1 28 OEM’s require their suppliers to have a disciplined standardized problem solving regimen. ◦ ◦ ◦ ◦ Root cause identification Containment action Corrective action Institutionalizing the fix Ford’s 8D process 29 Not much except, price, terms and delivery. Not surprising that the Aftermarket part has a “reputation” for lower quality than an OEM part. 30 Aftermarket has a wide range of parts available from a number of different manufacturers. This results in the potential for extreme differences in product performance and product quality. How Does A Reseller Know What To Choose? 31 Role play using extreme examples. ◦ Company A – A global manufacturer of OE and Aftermarket product supplying many OE’s in Europe, N.A. and Asia Factories and Tech Centers in many countries. Engineers, Tech people, Sales and Marketing, and Distribution capability ◦ Company B – A regional redistributor with ties to low cost country manufacturer. It has no factories and few Tech people. It has Distribution, Purchasing, Product Management and Selling capabilities. They offer similar product categories. 32 Question 1: ◦ How do you design parts for the Aftermarket? Company A: ◦ We utilize our OE technology to design both the parts we manufacture for OE and the ones we don’t for the Aftermarket application. Company B: ◦ We buy the most popular parts, 80/20 rule, offered in the Aftermarket, send them to our LCC manufacturer contact and tell them to duplicate them but don’t violate any patents. 33 Question 2: ◦ How do you add new parts to line? Company A: ◦ Being an OE supplier, we know what parts we are designing for the OE application and have an Aftermarket version ready. On parts we are not the OE supplier, we buy the part from service to test it for function and design it using our technology. Company B: ◦ We wait for the part to be sold in the Aftermarket. If it is high volume we add it to the line, 80/20 rule, by sending it to our LCC manufacturer and asking them to duplicate it. If it is slow moving, we don’t add it. 34 Question 3: ◦ How do you assure ongoing product quality for Aftermarket parts? Company A: ◦ Our factories are all QS14001 certified. We are also Ford Q1, Chrysler Penta Star, etc. We do periodic audits to test individual parts per the production assurance plan. We use statistical process control and are 6 sigma capable in all processes. Company B: ◦ Our supplier tells us they are high quality and it is up to them to make the parts right. 35 Question 4: Company A: Company B: ◦ How do you develop your catalog data? ◦ Our application engineers survey all the vehicles launched every year by working with dealerships, fleets and OE service and develop a data base of every vehicle and engine combination and understand what part goes on which vehicle. We use vehicle registration data to determine when enough vehicles are on the road to add the part to the line. Our catalog reflects that information. ◦ We wait for our competitors catalogs to come available and use that data in conjunction with our LCC reverse engineering approach. We follow the 80/20 rule and select the information appropriate to our line from our competitors catalogs and print that information with some slight change to the part number to make it look like our own. 36 Pretty tongue in cheek exercise but it is closer to the truth than we would like it to be. How does a “Full Service” supplier compete with a manufacturer that buys and resells only or a manufacturer that doesn’t employ any of the afore mentioned techniques but offers an Aftermarket line? 37 Not implying that a company that is not OE can’t make good quality parts for the Aftermarket. Not implying that all OE suppliers use that technology in the Aftermarket. 38 Offering a list of questions to be asked to help the reseller make an informed decision. Decision tree and appropriate questions to help the reseller address: ◦ Product design ◦ Aftermarket product offering Parts already made for OE Non-OE source parts ◦ ◦ ◦ ◦ Ongoing product quality Application engineering New part launch procedure Catalog data 39 Review Aftermarket manufacturers for sales mix. ◦ OEM Sales ◦ Aftermarket Sales Draw some basic conclusions about those companies capabilities to use sophisticated OE technologies. 40 AASA Top 100 Automotive Aftermarket Suppliers Listing: 41 42 Manufacturers with significant OE sales. Global Automotive Global Aftermarket N.A. Aftermarket Denso $32B $2.5B $345M Tenneco $4.7B $1B $562M Gates $1.9B $948M $515M Federal Mogul $5.3B $2.3B $1.8B 43 Manufacturer without significant OE sales. Global Automotive Global Aftermarket N.A. Aftermarket Affinia Group $1.8B $1.7B $1.2B Standard Motor Products $775M $775M $722M Centric Parts $185M $185M $185M Motor Car Parts of America $134M $134M $134M 44 A different line of questions might come from this data: ◦ What OE’s do you supply? ◦ Do you use the same specs and design criteria for Aftermarket parts as OE parts? ◦ Do you build the Aftermarket parts in the same factories as OE? ◦ Do you use the same equipment as OE? ◦ Do you use the same tools as OE? 45 Non-OE manufacturer questions should be different and much more basic to explain capability. ◦ Where is your Tech Center How many people? How large? Describe technical equipment ◦ How many degreed engineers/chemists on staff? List degrees and people ◦ What design criteria and methodologies do you use in the design of Aftermarket parts? ◦ Where is your factory? Size Headcount Factory certification rating, i.e., QS14001 ◦ What test equipment do you use to validate your designs? ◦ Do you use a vehicle test fleet to validate parts in real world conditions? 46 An OE supplier, most likely, has the ability to supply parts with adequate product performance and quality. ◦ It doesn’t mean that it will! A non-OE supplier may have the ability to supply parts with adequate product performance and quality. ◦ Ability to design and manufacture with on-going quality must be established. ◦ Does it use that ability to supply these parts to the Aftermarket? 47 Being an OE Supplier helps understand capability for product design, manufacturing quality and problem solving. Being an OE supplier provides no benefits for the following: ◦ ◦ ◦ ◦ Full line offering Applications engineering Timeliness of addition of new parts Catalog data 48 Sample decision tree questions for all manufacturers on application engineering and cataloging ◦ Do you have an application engineering group? Location of facility Number of people Degreed/non-Degreed ◦ Describe the application engineering process. ◦ Do you consolidate product designs? If so, how do you assure form, fit and function? ◦ How do you determine when to add a part to the line? ◦ Do you have an internal catalog department? ◦ Are you PIES and e-Cat qualified? 49 Aftermarket needs high performing, good quality parts or it will lose its business to the OES. Aftermarket does not have an effective, organized evaluation procedure to determine serviceability of its parts. Certification by outside agencies, i.e., UL, SAE or Industry Associations will not gain the support of the industry. Manufacturers are best positioned to explain what is critical in the design of parts AASA is ideally positioned to provide a list of key questions that can be provided to resellers to help them make an informed decision 50 Supplier / Product Certification Discussion • The Know Your Parts campaign has caught a lot of attention… – Suppliers: Senior executives warming to the idea as a way to combat off shore competition and direct imports – Channel Partners, Repair Professionals and Consumers: Want to know how to determine a premium from a low quality product other than marketing claims – International: Europe is launching a Know Your Parts campaign. AIA Canada wants to. • Know Your Parts is gaining traction, is it time to reconsider 3rd party certification? Marketing Executives Council Know Your Parts Update • Know Your Parts Logo / Trademark – The phrase “Know Your Parts” will soon be a registered trademark of AASA (not the logo) – The current logo also contains the AASA logo: • Limits global application • Limits support from other trade associations – The current logo is only 8 months old and was rushed to market without a creative brief • Question: Does the logo need to be changed? – Creative Brief (handout) Marketing Executives Council KYP Logo Considerations • Current logo was created to help launch the campaign at AAPEX last year. – Any continuity to this logo would be helpful but not mandatory. • Red and black color will create a link to the AASA logo. – AASA membership is a common thread through full service suppliers supporting this initiative. • The logo does not contain language that conveys that we are referencing auto parts. Any visual cues to make that connection would be helpful. – The imagery should be higher tech, stylized, modern, etc. Do not want to perpetuate the old stereotypes of our industry. – Options without imagery are worth considering since logo is used in context (member ads, AASA website, industry communications) – Consideration of a tagline is also an option. • Universally accepted and global in reach. Marketing Executives Council Current Marketing Executives Council Modified Marketing Executives Council Traditional Option Marketing Executives Council ® KNOW YOUR PARTS A REGISTERED TRADEMARK OF AASA Stylized Option Marketing Executives Council Current ® KNOW YOUR PARTS A REGISTERED TRADEMARK OF AASA Modified Marketing Executives Council Stylized Option Tagline Options: “Quality Matters” “Quality Auto Parts Matter” “Quality Auto Parts Make a Difference” “Do It Right the First Time” Marketing Executives Council Marketing Executives Council June 24, 2010 Detroit, MI Steve Handschuh Automotive Aftermarket Suppliers Association Topics to be Addressed • AASA Supplier Barometer • Key Issues for the 2010 U.S. Automotive Aftermarket • Vehicle Safety Initiatives • “Know Your Parts” AASA Aftermarket Supplier Barometer Quarter 2, 2010 SUMMARY Business conditions rebounded significantly this quarter. Only 7% indicated that they are pessimistic about business conditions while 78% are optimistic. This is much better than the second quarter of last year, when only 33% were optimistic about the outlook. Price pressure has improved from last quarter with 37% reporting modest price increases (vs. 26% in Q1) and only 7% reporting cuts (16% in Q1). For the fifth straight month, sales have continued to grow, and an unprecedented 81% reported some sales growth in the second quarter. Accounts receivable activity is average for 78% of companies taking the survey, but this quarter slow paying customers have apparently caught up, and faster paying customers now outnumber them by almost 5 to 1. Employment cuts were reported by just 4% of companies and 4% reduced capacity. However, 51% reported making cuts in inventories compared to 21% reporting inventory cuts in the first quarter. Average new order volume for the quarter was down for 10% of companies participating compared to 41% in the second quarter 2009. 6 AASA Aftermarket Supplier Barometer Describe the general twelve-month outlook for your business. Over the past month, has your opinion become: 80% 70% 60% 50% 40% 30% 20% 10% 0% Significantly more Pessimistic Q1 09 Somewhat more Pessimistic Q2 09 Q3 09 Unchanged Q4 09 Somewhat more Optimistic Q1 10 Q1 Q2 09 10 Significantly more Optimistic Q2 09 Q3 09 Q4 60 AASA Aftermarket Supplier Barometer How significant are these issues facing your company? 1= Not important 5 = Very important - Ranked by Quarter 2 2010 5 4 3 2 1 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q1 Q2 09 10 Q2 09 Q3 09 Q4 64 0 AASA Aftermarket Supplier Barometer How significant are these issues facing your company? Second Quarter, 2009 Second Quarter, 2010 Weak Sales 4.23 Supplier margin erosion 4.12 World economic conditions 4.02 Availability/cost of raw materials 4.12 Healthcare costs 3.72 Healthcare costs 4.00 Supplier margin erosion 3.71 World economic conditions 3.68 Availability/cost of raw materials 3.56 Lack of Pricing Power 3.62 Lack of Pricing Power 3.52 Globalization 3.32 Availability/cost of credit 3.47 Product returns 3.20 Excess inventory 3.33 Excess inventory 3.12 Globalization 3.12 Weak Sales 2.93 Product returns 3.02 Availability/cost of credit 2.56 6 Key Factors Driving the 2010 US Automotive Aftermarket • • • • • • Industry Rate of Growth Dealership Closings Vehicle Age Miles Driven Unemployment Recession - Economic Outlook U.S. Aftermarket Growth • • • • • • 2008 2009F 2010F 2011F 2012F 2013F -2.0% +1.8% +3.1% +3.3% +4.0% +5.0% 67 Size of the U.S. Automotive Aftermarket $250,000 Millions $200,000 $150,000 $100,000 $50,000 $0 *= AASA Forecast Source: AASA Automotive Aftermarket Status Report Primary Components of the U.S. Automotive Aftermarket Purchased Labor 25% Aftermarket Parts 54% Tires 12% Specialty Equipment 9% 2007 2008 Source: AASA Automotive Aftermarket Status Report Primary Channels of the U.S. Automotive Aftermarket OE Service 30% 2007 Independent Aftermarket 70% 2008 Source: AASA Automotive Aftermarket Status Report and NADA Data Dealer Closings • As many as 3,000 by end of 2010 • Independent Aftermarket (IAM) Impact: • Roughly $23 billion of wholesale parts into IAM through OE dealers; $2-2.5 billion available due to closings • As much as $5 billion in service work available to the IAM 71 U.S. Light Vehicles in Use 245 240 235 230 Millions 225 220 Light Vehicles in Use in the U.S. 215 210 205 200 195 2001 2002 Source: R.L. Polk & Co. 2003 2004 2005 2006 2007 242,081,704 light vehicles in use in 2008 2008 U.S. Light Vehicle Population Growth 20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 Total Lt. Veh. Sales Source: Ward’s Automotive Reports and R.L. Polk Scrappage Average Age of Light Vehicles in Use (Years) 9.6 9.4 9.2 9.0 8.8 8.6 8.4 8.2 8.0 2002 2003 Source: Registration Data © R.L. Polk & Company 2004 2005 2006 2007 2008 U.S. Automotive Aftermarket by Vehicle Age $18,000,000,000 $16,000,000,000 $14,000,000,000 $12,000,000,000 $10,000,000,000 $8,000,000,000 $6,000,000,000 $4,000,000,000 $2,000,000,000 $0 Source: Maintenance Data - IMR Inc. and Registration Data - R.L. Polk U.S. Automotive Aftermarket Five Year Outlook By Vehicle Age $250,000 Millions $200,000 $150,000 $100,000 $50,000 $0 New to 5 Year 6 to 10 Year Source: AASA Automotive Aftermarket Status Report Over 10 Year DIFM Repair/Maintenance Cost by Vehicle Age 1050 950 850 750 650 550 450 350 Source: IMR Inc. Continuing Consumer Auto Maintenance Tracking Study Vehicle Miles of Travel 3,100 3,050 3,000 (Billions of Miles) 2,950 2,900 2,850 2,800 Every 1% decline in miles driven reduces aftermarket volume by approximately $500 million 2,750 2,700 2,650 2,600 2,550 Source: US DOT 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 2,500 Economic Outlook New Privately-Owned Housing Units Started 2,000 Thousands of units, seasonally adjusted annual rate. 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Source: U.S. Census Bureau U.S. Unemployment Rate 12 10 8 6 4 2 0 Source: Bureau of Labor Statistics, US Department of Labor National Average Retail Price One Gallon of Regular Gasoline All Formulations $4.25 Every one penny change in prices at the pump moves $1 Billion into or out of vehicle owners’ pockets. $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 Source: Energy Information Administration Jan-10 Nov-09 Sep-09 Jul-09 May-09 Mar-09 Jan-09 Nov-08 Sep-08 Jul-08 May-08 Mar-08 Jan-08 Nov-07 Sep-07 Jul-07 May-07 Mar-07 Jan-07 Nov-06 Sep-06 Jul-06 May-06 Mar-06 Jan-06 Nov-05 Sep-05 Jul-05 May-05 Mar-05 Jan-05 $1.50 Average Gasoline Expenditures Percent of Median Household Income 8.5% 7.65% 8.0% 7.5% 6.71% 7.0% 6.5% 6.91% 6.0% 5.5% 5.07% 5.0% 4.5% 4.0% 5.27% 4.98% 4.44% 4.32% 4.93% 6.42% 4.77% 4.33% 4.63% 3.5% 3.0% 2.5% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: US Department of Labor, Bureau of Labor Statistics Indexed Aftermarket Comparable SSS vs. Gas Prices 7.5% $4.00 $3.80 6.0% $3.60 $3.40 4.5% 3.0% $3.00 $2.80 1.5% $2.60 $2.40 0.0% $2.20 -1.5% $2.00 $1.80 -3.0% $1.60 SSS - Parts Retailers Source: BLS, Company filings, BB&T Capital Markets SSS - Professional Installers Avg. gasoline price Q2'09 Q1'09 Q4'08 Q3'08 Q2'08 Q1'08 Q4'07 Q3'07 Q2'07 Q1'07 Q4'06 Q3'06 Q2'06 Q1'06 Q4'05 Q3'05 Q2'05 Q1'05 Q4'04 Q3'04 Q2'04 Q1'04 Q4'03 Q3'03 Q2'03 $1.40 Q1'03 -4.5% Avg. gasoline price Yr/Yr Change - SSS $3.20 Average Number of Repair Orders Each Month 80 75 70 65 60 55 50 45 40 Source: IMR Inc. Issues Impacting Vehicle Repair • • • • • • • • • • Economy, unemployment=decrease in spending Improved vehicle reliability and longer service intervals Owners relying on vehicle service reminders rather than scheduled maintenance Service model: break-down repairs vs. preventive maintenance Increasing vehicle complexity requiring increased investments in tools, information and training Competent and qualified technicians Access to diagnostic and repair information Remote vehicle diagnostics Regulatory (environment, business) compliance Increased focus on ROI Vehicle Safety Initiatives • In view of Toyota safety issues and criticism of NHTSA, vehicle safety is going to be a hot topic for some time to come • Only 17 states still require mandatory safety inspections • Grassroots campaign to lobby US Congress on the need for nationwide mandatory safety inspections Web Metrics: Measuring Your Company’s Effectiveness Al Haberstroh Erica Eischeid Rita Siedlaczek Marketing Executives Council Web Metrics: Measuring Effectiveness of Digital Marketing June 24, 2010 Digital Marketing It’s not about you! It’s about THEM! Gaining an Understanding of Your Customers How they search… • Can they see you now? Why they search? • What they are looking for in your products? What they think about you and your competitors? • Are you controlling the message or are you being controlled? Insight anyone? How Customers Search Words Matter • Keywords and phrases are essential to prospects finding you • It isn’t always how you see yourself Search – Keywords Matter How Customers Search Are your customers searching for Service Centers or Repair Shops? Keyword US Monthly Searches auto repair shop 450000 auto repair shops 90500 transmission shop 60500 auto service center 27100 car body shop 22200 car repair shops 18100 car repair shop 18100 auto body repair shops 12100 automotive service center 6600 Search – Keywords Matter How Do You Compare to Your Competitors? Are You Being Out-Flanked and Out-Ranked? How Businesses Measure Social Media Success - B2B vs. B2C Digital ROI Measuring the TRAEL Traffic Rank Awareness Engagement Lead Generation Online Traffic There are many ways to measure traffic and evaluate site performance • Alexa Rank, Compete, Google Page Rank, Etc. AASA Content Marketing Results AASA Site Metrics Date Page Rank (Google) Traffic Rank (Alexa) 2/3/2010 3 3,788,694 2/11/2010 3 3,418,751 2/26/2010 3 3,067,856 3/4/2010 3 2,722,006 3/10/2010 3 2,352,924 3/15/2010 3 1,920,835 3/23/2010 3 1,878,970 4/8/2010 4 1,749,131 4/13/2010 4 1,681,917 Online Traffic Does traffic matter that much? Will web traffic really grow my business? Cost of Customer Acquisition Traditional Marketing vs. Social Media Use of Social Media for Business Information – B to B Automotive Industry Cost Per Lead: Social Media Marketing Distribution of Content = Links Backs and Web Traffic Article: The Parts in Your Car Make a Different Date Google Yahoo Bing 3/15/2010 2,530 396 34 3/10/2010 2,150 403 25 3/4/2010 2,310 444 26 2/26/2010 1,620 186 27 2/11/2010 2,340 284 40 2/3/2010 1,620 169 31 1/28/2010 1 1 1 Delivering Content that Customers are Searching For Create content that is keyword rich with the words and phrases that customers are using for search Keyword US Monthly Searches car repair 823000 automotive repair 368000 brake repair 165000 collision repair 135000 auto repair service 90500 auto repairs 60500 vehicle repair 40500 automotive repairs 6600 auto body repairs 5400 AASA Article: Auto Repair – She’s in the Driver’s Seat Grabbing the Low Hanging Fruit raybestos AM Retailer 268 egr valve Keyword Monthly Searches Pages indexed RS Ratio 90,500 506,000 6 867 246,000 1,710,000 7 2 201,000 1,710,000 9 brake caliper 1,358 246,000 2,250,000 9 exhaust manifold 1,014 301,000 3,080,000 10 master cylinder 5,789 368,000 4,140,000 11 brake pads 10,663 823,000 10,900,000 13 power steering pump 82 246,000 3,520,000 14 brake lines 226 135,000 2,460,000 18 brake hose 9,271 60,500 1,700,000 28 brake shoes 2,770 74,000 2,190,000 30 brake pad 4,378 368,000 13,800,000 38 brake master cylinder 54 90,500 7,180,000 79 transfer case 381 368,000 33,100,000 90 brake master 637 110,000 11,300,000 103 autometer Search Ranking What is your rank for targeted key words? Term Date Google Rank “Power Steering Pump” 10/9/2009 37 “Power Steering Pump” 11/9/2009 32 “Power Steering Pump” 12/9/2009 25 “Power Steering Pump” 1/9/2010 17 “Power Steering Pump” 2/9/2010 12 “Power Steering Pump” 3/9/2010 11 “Power Steering Pump” 4/9/2010 1 Keyword Phrases Keywords Keywords oxygen sensors o2 sensors oxygen sensor lambda sensors dissolved oxygen probe o2 sensor wideband o2 oxygen probe bosch oxygen sensors lambda sensor wideband o2 gauge o2 wideband wideband o2 sensors denso oxygen sensors dissolved oxygen probes ngk o2 sensors denso o2 sensors oxygen probes discount oxygen sensors bad oxygen sensors universal oxygen sensors replace oxygen sensors ngk oxygen sensors wideband o2 meter air fuel sensor a/f sensor postcat sensor Online Competition 93.00% 80.00% 100.00% 66.00% 66.00% 86.00% 66.00% 60.00% 73.00% 80.00% 40.00% 33.00% 40.00% 60.00% 53.00% 26.00% 46.00% 46.00% 46.00% 33.00% 46.00% 46.00% 46.00% 26.00% 53.00% 0.00% 0.00% US Search Volume: April 33100 27100 450000 590 1300 246000 12100 3600 1600 3600 880 12100 210 390 260 73 260 720 170 -1 320 720 140 140 22200 2400 -1 Global Monthly Search Volume 49500 27100 550000 8100 1900 301000 18100 6600 2400 90500 880 18100 390 880 480 140 480 1300 210 260 480 880 210 210 18100 3600 -1 Awareness Who controls your brand message? Over 80% of application specific aftermarket product searches wind up on re-seller sites Monitoring: What is the Level of Your Online Brand Awareness Motorsports Conversations by Series Conversation by Keyword: Driver NASCAR Conversation by Sentiment Conversation Breakdown by Medium Monitoring tools Measuring Engagement How engaged are visitors to your site? • Are they looking at multiple pages? • How long are they spending on the site? • Does your site have a high Bounce Rate? Online Listening Are you listening? What is being said about you? About your competitors? If you don’t listen, you can’t learn If you don’t listen, you can’t react Online Listening Listening helps you measure the level of engagement your brand has achieved Listening helps you react to negative comments Listening allows you to answer questions and follow-up on leads Listening allows you to take advantage of opportunistic conversations Leads Valuable, but easy to measure? • Product inquiries • Direct Communication with your company ROI Analytics Traffic and Conversions by State Region Visits Conversion Rate California 116 8.62% New York 93 12.90% Florida 79 7.59% Pennsylvania 54 12.96% Illinois 53 1.89% Michigan North Carolina 51 51 0.00% 1.96% Texas 43 0.00% Ohio 38 15.79% Georgia 36 8.33% Traffic Source and Conversions Source/Medium Visits Conversion Rate online-sweepstakes.com 343 0.29% direct traffic 306 12.42% fye.com 119 16.81% facebook.com 36 2.78% sweepsadvantage.com 33 3.03% Site Visitor Browser Usage Browser Visits Visits 553 55.08% sweepstakeslovers.com 32 6.25% Internet Explorer bigbigforums.com 25 0.00% Firefox 293 29.18% freestufftimes.com 20 5.00% Safari 83 8.27% twilightexaminer.com 17 0.00% Chrome 64 6.37% Google / organic search 15 13.33% Mozilla Compatible Agent 4 0.40% foryourtwilight.com for your twilight for your twilight eclipse sweepstakes http://www.foryourtwilight.com/ twilight web page Keyword Search Terms Social Media Marketing Success Of the companies who ranked in the top 20% of social media marketing users: • 93% improved ability to generate customer insights that drive new product/service development • 72% improved customer advocacy Illumination! Al Haberstroh 800-395-5430 / www.montad.com ahaberstroh@montad.com / @AlMontAd Council Updates • AAPEX – Number of exhibitors up 121 (16%) year to date – Number of booths sold up 688 (19%) year to date – Booths sold to date 4225 exceeds total sold ‘09 of 3776 • Market Pulse • • • • Q2 2009 = 32 respondents Q3 2009 = 39 respondents Q4 2009 = 20 respondents Q1 2010 = (extended to June 25) 10 respondents to date • Patent Marking Trolls – Update by Arent Fox, Sarah Bruno • Membership – List of AASA prospect companies for MEC Marketing Executives Council Thank You! Next Meeting November 4 from 10:00 – 2:00 with working lunch last day of AAPEX Marketing Executives Council