Updated: Jun 20, 2020
Your path to business success doesn't need to be this extreme.
In the automotive aftermarket, performance talks. The best engineered specialty parts will win the race, win the show, and win the customers.
As new cars get more expensive and more advanced, the aftermarket will have to evolve. Companies that are successful today will have to aggressively learn, develop, and innovate to keep their engineering success.
Engineering alone, however, does not create a successful automotive aftermarket company. The business side of the company must also be robust. Marketing, data, strategy, and finance all continue to play a large role in a growing business. Driven Performance Advisors is here to help automotive aftermarket companies handle the business side, so they can focus on making popular specialty products for decades to come.
Automotive aftermarket companies all reach an inflection point, where the founders must make a decision: grow, maintain, or sell. All of these decisions require a strong business side of the company. This inflection point plagues businesses to the point of collapse, private equity acquisitions, or years of frustrating, potentially frantic action while the business struggles to find direction.
Maybe these situations sound familiar.
I propose a simple solution. A strategic vision, which serves as the introduction to successful implementation and execution of the business side of your automotive aftermarket company.
Many automotive aftermarket companies began accidentally. Someone started building engines out of their garage. Someone started reselling wheels on another continent before they created their own manufacturing.
These companies often reach high levels of success without much structure to business strategy and operations. Things just “work” and the company grows its sales. You may be able to implement good processes and continue to grow.
However, at some point in the growth of many automotive aftermarket companies, they reach an inflection point. Sales may stall, private equity starts investigating, processes don’t withstand the growth, and your frustrations rise.
Perhaps you find yourself scrambling to fill roles that have been vacated, helping ship out orders or finish projects, and working long hours to ensure the day-to-day tasks of the company get filled. You started out doing this type of work when the company was in its early stages, but you were supposed to be past this!
New opportunities may present themselves. Perhaps a competitor or complementary product manufacturer approaches you for a collaboration. Maybe you have the chance to work with prominent media producers who would drastically grow your brand visibility.
At the end of the day, what direction do you take your company? How can you get relief from the day-to-day grind and uncertainty towards the future?
Developing a strategic vision will give you the chance to think about your business, its direction, and your role within it.
The basic structure I recommend my clients use to create their strategic vision is this:
1. Describe the desired effect of your company on the future of the industry
2. Structure the sentence in such a way that it can be followed by “which creates value for customers, owners, and the industry.”
For an example, I’ve taken Fitment Industries’ (a distributor and media producer covering wheels, tires, and suspension) vision statement and converted it into our format for a strategic vision:
Original: Lead the wheel fitment revolution on a bad ass LIFE journey!
DPA Format: Perfect wheel fitment for every car and truck, past, present, future (which creates value for customers, owners, and the industry).
The DPA format allows leaders to employ one very powerful practice. Leaders can use this practice each time they are confronted with a major business decision. Ask yourself: “Is this decision aligned with my company vision, and creating the right value for customers, owners, and the industry?”
The wheel fitment revolution appears to have a limited life. Are we leading the revolution on a bad ass life journey if we take on a project to make YouTube videos covering all the memes made about Mustang owners and the story of the development of the latest generation? Hard to say. They are certainly appealing to pop culture for today’s aftermarket, but I’m not sure what it has to do with wheel fitment.
Was this video brand-building for Fitment Industries? Maybe, but it was probably confusing to a lot of viewers. There wasn’t a lot of coverage of wheels, tires, or suspension in the video.
Now, approach the decision to take on the project again, but this time use the DPA-format vision. The video would be nixed. A video about the development of the 6th gen Mustang has nothing to do with perfect wheel fitment. Viewers could instead get a better understanding of how to calibrate their air ride, or learn why they’re spending $1,100 more for KW Suspension Coilovers over BC Racing. Fitment Industries have done this sort of videos before as well, but the aftermarket industry is still starving for reliable technical information to help enthusiasts achieve perfect wheel fitment.
For another example, consider a hypothetical scenario where the owners of an up-and-coming turbo manufacturer are approached by a mid-sized recreational performance brand distributor (historically selling parts such as replacement air filters, muffler deletes, and lowering springs) to distribute their turbos. The manufacturer has historically sold on a direct-to-consumer basis and is growing due to the simplicity of installation of turbos that create reliable, flexible power gains.
The owners of the company are looking to grow the brand in the direction of racing sponsorships, rather than recreational enthusiasts, due to their affiliation with the racing industry and the ease of installation and maintenance of their turbos. Their strategic vision could be: “One turbo, one engine, 10 seasons.” This reflects the company’s ability to create reliable power that doesn’t require a lot of maintenance, and would work great for the cost-conscious enthusiast racer that participates in SCCA or NASA.
The owners would therefore reject the distributor’s offer, understanding that affiliation with the distributor’s brand might confuse its customers. If the owners hadn’t taken the time to develop a strategic vision, they may have accepted the distributor’s offer because they saw it as an opportunity to increase sales. The company would have strayed from what they really wanted to accomplish. A major recreational distribution undertaking could have derailed the company’s overall goal of sponsoring racing championships and teams, and put the company in competition with different businesses than intended. Instead, they can focus on building relationships in their target industry and growing the company organically. They may even get favorable terms on a different distribution deal down the road.
This is why your automotive aftermarket company needs a strategic vision. Without one, the risk is too great. With one, you will lead your company into a strong future.
I’d love to hear from you! Do you think a strategic vision is important? What did I miss?
 E46 – KW v3 ($2,179.00) vs. BC Racing BR Series ($1,050.00)  SEMA Market Research Report 2019: 38% of consumers use word of mouth to find information about parts, the 2nd highest-used source behind search engines, at 43%.