Page 244 - Performance Leadership

Chapter 12 Performance Networks • 233

The key to success for EnGen is to realize that most independent
garages are small businesses, run by excellent mechanics, but lack-
ing professional marketing. This is something EnGen can offer
through its economies of scale. EnGen created a marketing program
for the independent garages. When a garage guarantees a certain
amount of business, it can apply for membership with a trusted third
party, something the company charges the garage for. The third party
runs a marketing factory to produce mailings and a customer data-
base to analyze and benchmark information. All customer-facing
activities are done under the label of the garage, which basically out-
sources its marketing. The result is a “double whammy” loyalty pro-
gram. Loyalty between consumer and independent garage is
increased by reminders from the third party to have the oil checked,
tires changed, and so on. The consumer is more likely to come back
to the same independent garage for maintenance, probably before
any problems arise. And, perhaps such a visit is a good trigger to
see if the customer is interested in buying a new car as well. At the
same time, EnGen creates a much more meaningful relationship
with the garage that is based on process integration (through the
trusted third party) instead of pure price negotiations.
Success is primarily measured in terms of return on investment
for the garage. This produces a triple win: The garage increases its
business performance, EnGen secures its revenue stream and can
improve its market share through better service, and the trusted
third party is paid per subscription, so it needs to keep the garages
happy.
The next step in the program is to move beyond just marketing.
Through a Web site, powered by EnGen, customers could directly
book appointments in the calendar of the independent garage. By
using purchased data and data from the garage itself, the Web site
allows customers to see an estimate of the costs, based on what the
customer selects from a wide range of maintenance activities. For it
to be worthwhile, this system contains much more than just EnGen
products.
EnGen’s focus on what it can contribute to the success of its chan-
nel partners, the garages, instead of just optimizing its own perform-
ance, has created a competitive advantage.