Turn Your Bottom Line Greener How to Turn Sustainable Efforts Into Profitable Business

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2 Feature Turn Your Bottom Line Greener How to Turn Sustainable Efforts Into Profitable Business By Curt Knapp Part one of a two-part series As part of today s automotive marketplace, you re probably asking yourself why sustainability is becoming a critical element in long-term dealership success. After all, it s not by chance that the most successful brands in the world, including auto manufacturers and their dealerships, are building sustainability into their brands. In this twopart article, we will touch on what you, as a dealership Fixed Operations Director, need to know and do to capitalize on this growing opportunity. Sustainability isn t just about what s good for the planet. In today s boardrooms, companies are making decisions about sustainability based on what s good for the planet, its people and economics. These three cornerstones of sustainability are used to set the strategy, plan and tactics for the organization. The good news is that with over 40 independent studies to reference, time and time again it s shown that sustainability is not only good for people and the planet, but sustainability also improves your company s overall performance. This is partially a result of such things as process improvements and shifting to sustainable procurement practices. But your sustainable efforts will also lead to attracting and retaining more For example, auto manufacturers are going to great lengths to design, build and market more sustainable vehicles. They are realizing reduced costs and greater innovation by thinking sustainable on such things as raw materials, fabrication methods and how their waste streams are being handled. But they re also getting a return on their efforts by attracting and retaining more customers who want to do business with sustainable companies. This is not limited to the small portion of the market that views themselves as environmentally-conscious. John Gerzema, a pioneer in the use of data to identify social change, has determined that fully 63% of Americans now make it a point to buy from companies whose values are similar to their own and 71% believe they and their friends can change corporate behavior by supporting companies that do the right thing. By connecting to these consumers through sustainability, you can capture new customers and turn current customers into long-term loyalists. Consumer pressure is not the only influencer leading companies to become more sustainable. Dealerships direct association to auto manufacturers set the expectation that you will follow suit and be leaders in the field. While gov- ernment is dictating minimum requirements in some areas, more and more business partners are demanding that you support their sustainability guidelines. Corporate investors are now performing sustainability assessments as part of their evaluation of investment options, so more investors will be looking at your company through the lens of sustainability. All of these influences add up to a marketplace demanding sustainability be part of your dealership s value proposition. Before jumping in and painting a green recycling symbol on your dealership, let s look at the keys to successful sustainability in an organization. The goal will be to replicate the success of other dealerships that assimilated sustainability into high performing organizations. You don t have to look far to find them, including The Larry Miller Auto Group, Knauz Auto Group of Illinois or Auto West in Canada to name just a few. The three basic keys to success include the following: p. 10 July / August 2013 Fixed Ops Magazine

3 Internal Adoption Internal adoption begins with engaging the leadership of your organization and assimilating sustainability into your business. You must first define what sustainability means to your organization. This means deciding what pieces of the social, environmental and financial pillars you will focus on based on your industry and business model. For a dealership s Fixed Operations management this would start with such things as implementing sustainable procurement guidelines, implementing a comprehensive reduce, reuse, recycle program for all of your locations and offering environmentally-friendly Service options to your Once you ve defined sustainability for the organization, leadership must then develop, communicate and socialize your program. This requires informing each department in the organization of the importance of the program, its impact on the company and their specific roles and responsibilities for success. The program should include some simple early wins to satisfy primary customer demands externally while simultaneously creating momentum internally. The plan must be fully embraced at every level of the organization before being turned into external messaging to the marketplace. Collaboration Collaboration is vital to building a strong record of sustainability. Once you ve secured some of the easier, internal wins, you must attack the challenge by looking beyond the boundaries of your organization. Most new programs are not centered on completely new innovation, but rather the application and adoption of already tested concepts. Turn to outside partners, suppliers and business organization s to identify tried-and-true methodologies. Integrate customer programs that partners have available as well as team with them to identify new ways to leverage their experience and expertise. Select a world-class organization to perform your environmental services. An industry leader will not only provide the protection you need, but will also provide additional product and service choices that you would not otherwise be aware of. Some partners will not only work with you, but will reward you for being more sustainable. Search out and participate in partner award and recognition programs that are sustainability-based. Third party recognition is a great way to quickly gain credibility with Customer Communication Customer communication actually starts with internal education of your Sales and Service force. Train them on a core value proposition around sustainability that they can easily deliver as part of their routine customer interactions. While your Sales and Service Team are becoming skilled at delivering a consistent message, develop some basic customer-facing materials to reinforce your sustainability message. Counter cards, brochures, bay banners and posters are inexpensive, productive methods to tell your story to the marketplace. Begin with telling the marketplace what you re doing. Whether it s providing a recycling center in your customer waiting room or offering eco-friendly motor oil that s been re-refined from used oil, speak to the various programs you have in place. As your program progresses, shift from providing program descriptions to showing results. Set up tracking systems to quantify what your programs have meant to the environment and the community. Use metrics that people can relate to, such as number of bottles or tons of waste recycled, number of trees saved, or greenhouse gas emissions avoided. Make sure you can back up your claims and continue to expand and change your communication channels and methods to make sure your message reaches customers and the community at large. Now that we ve outlined three keys to capitalize on the growing opportunity from sustainability, in the next issue of Fixed Ops Magazine we ll cover some executable steps to help jump-start your program. Curt Knapp is Executive Vice President, Marketing and Oil Re-refining Sales of Richardson, Texas-based Safety-Kleen Systems. Safety-Kleen is a leading North American used oil recycling and re-refining, parts cleaning and environmental solutions company that provides a broad set of environmentally responsible products and services that keep North American businesses in balance with the environment. Safety-Kleen is a whollyowned subsidiary of Clean Harbors, North America s leading provider of environmental, energy and industrial services. p. 12 July / August 2013 Fixed Ops Magazine

4 Feature September / October 2013 Fixed Ops Magazine Turn Your Bottom Line Greener How to Turn Sustainable Efforts into Profitable Business By Curt Knapp Part two of two-part series Part One of our series was about the role that sustainability plays in today s automotive marketplace and how it s not only good for people and the planet, but can also improve your dealership s performance. We outlined 3 keys to capitalize on the growing opportunity that sustainability provides: Internal Adoption, Collaboration and Communication. For Part Two of this series we ll cover some executable steps to help jumpstart your sustainability. These are immediate steps that can bring big impact, typically with short time frames and little investment. 1. Build your plan. Sustainability is not a collection of disparate activities that somehow blend together and lead to incremental improvement. It s a strategy that entails documenting your plan to ensure that your efforts are laser-focused, properly targeted and objectively evaluated. Focus your efforts on those aspects of sustainability that provide the best return on your efforts. For example, auto manufacturers focused initially on gas mileage and lower emission engines. As customers demand for sustainability increased, they started spending more R&D monies on such things as sustainable materials for interior parts and more sustainable manufacturing processes. Dealerships can initially focus on a number of products and services within the Service Department, including eco-friendly motor oils and using environmentally-friendly waste processes for such things as used oil and oil filters. These are areas that take little to no investment and can reap immediate results. For the sustainable steps you outline in your dealership plan, set goals and setup evaluation processes that allow you to objectively measure and tout your efforts to the marketplace. For example, if your used oil is collected and re-refined instead of being burned and ending its effective use, you re part of a closed-loop recycling system that directly reduces Greenhouse Gas (GHG) emissions. Work with an environmental services partner whose best practices include close-loop processes, thirdparty verifiable GHG reduction numbers and communications support for building sustainability messaging that your dealership can use with Develop similar evaluation methods for all of your program activities, from light bulbs and oil filter recycling, to dollars invested in community programs. 2) Enlist the support of your current partners. For example, the major motorsport groups have brought together huge sponsors to make the best sustainability team, including the largest environmental program in sports, NASCAR Green. Automotive dealerships can follow this same model. Safety-Kleen, for instance, provides the same service to local dealers as they do to racing partners. The same closedloop collection and re-refining process is used for oil collected at motorsports events as the oil collected at dealership Service Departments. The motor oil can be re-refined into new oil for oil changes that reduce your carbon footprint even further. Similar scenarios with other partners can lead to additional environmental benefits. Use the current sustainability efforts of partners and team with them to identify new ways to become more sustainable. Assign accountability to a single person in each portion of your operation to develop a comprehensive list of partner opportunities. Where possible, leverage your partner to help develop and deliver the sustainability message to your 3) Brand your sustainability commitment. By educating people about your dealership s efforts, you can improve the performance of your business by attracting and keeping eco-responsible p. 34

5 September / October 2013 Fixed Ops Magazine Develop a central repository of information. Collect descriptions and background information on all of your sustainable initiatives and their performance metrics and utilize the information to develop compelling and engaging messages to your Build your messaging into your customer experience, whether it be in person at the dealership, over the phone or online. Leveraging your current advertising and marketing resources will help control costs and ensure that messaging is in line with your overall brand and value proposition. Initially focus on communicating your company s actions, then shift to sharing results as they become available. Point-of-purchase materials and website information are two areas to focus on initially. Make sure you can back up any claims and continue to expand and change your channels and methods of communication to reach more customers and the community at large. 4) Institute the most environmentalfriendly products and services that match your business needs. Consumers want environmentally responsible products and they view companies that offer them more favorably. But there s a catch. Consumers demand as high (or even higher) standards for green products. So like NASCAR, your business must use only the best suppliers. For help recycling bottles, NASCAR partnered with one of the world s largest soda makers, while race tires are recycled by their tire sponsor. By following motorsports lead in offering only the best products, dealerships can confidently position themselves as a sustainable business. With the sophisticated and proven rerefined oils that exist today, there s every reason to add them to your menu of oil change offerings. Participating and offering oil products from a closed loop system is simply the right thing to do for the environment -- and a great way to differentiate your dealership in a crowded marketplace to generate and keep more According to a recent national online study by Maslansky, Luntz and Partners, eight out of ten consumers who buy green products state that they would choose an oil change that s been recycled and re-refined, if given the option. Consumers are not just curious about the service; they re willing to pay up to approximately $12 more per oil change, if they re properly educated about the product. Our company, a maker of one such rerefined motor oil, returned more than 110 million gallons of re-refined motor oil to the marketplace last year. And the process of refining used oil consumes up to 85 percent less energy than producing motor oil from virgin crude, helping to conserve our country s limited natural resources and reducing our dependency on foreign oil. There s no question that motor oil refined from used oil is good for the environment, but you may be surprised to learn how good it is for vehicles. Consumers who opt for a green oil change make no sacrifices when it comes to engine protection and performance. Large fleets with vehicles that see many millions of miles rely on motor oil re-refined from used oil. Some of the largest fleets in North America use re-refined, green motor oil, including the U.S. Armed Forces and its vehicles on critical missions all over the world. 5) Walk the walk. Just offering ecofriendly products and services to your customers isn t enough. Customers want to do business with companies that show a deep commitment to doing the right thing 1This means showing sustainability in all areas of your operation. Develop and post a sustainability policy for your dealership. Along with including re-refined oil as a product option, find a partner that collects your used oil to be re-refined and collects parts washer solvent and antifreeze and recycles it using a similar closed-loop process. Your partner should also collect used oil filters using a process that breaks them down to recycle their raw materials, including extracting as much used oil as possible from each filter. In your fleet, consider fitting low-rolling resistance tires to corporate vehicles. And throughout your business, enact policies that require employees to recycle at work and showcase any effort to go paperless. All of these practices lend credibility to becoming a more sustainable business and build a great story for the marketplace to help capture and retain more In conclusion, sustainability can play a major role in building your business. Though individual dealerships may not have the marketing budget or clout of automotive manufacturers, a few initial steps can make your sustainability program a reality. If you ll follow a few simple rules for success and begin with small initiatives, it will pay off in numerous ways, including attracting and keeping Curt Knapp is Executive Vice President, Marketing and Oil Re-refining Sales of Richardson, Texas-based Safety-Kleen Systems. Safety-Kleen is a leading North American used oil recycling and re-refining, parts cleaning and environmental solutions company that provides a broad set of environmentally responsible products and services that keep North American businesses in balance with the environment. Safety-Kleen is a wholly-owned subsidiary of Clean Harbors, North America s leading provider of environmental, energy and industrial services. p. 36