| M.D. Holloway |
11-28-2007 11:37 AM |
first of a couple pages - a good read
Quote:
How Snap-on Tools Ratchets Its Brand
By Glenn Rifkin
The way to create a world-class brand is to give customers what they need, when they need it, and never let them out of your sight.
Radical marketers have a lot to teach their more traditional big-business cousins.
The Snap-on Tools Corporation, for example, has created a business model that combines the top-drawer cachet of a Louis Vuitton, the credit philosophy of a Wells Fargo and the convenience of the Good Humor Man, an odd but compelling amalgam that has put the company at the pinnacle of its market, significantly distancing it from the competition.
And though Snap-on's legendary brand status in the $20 billion automotive tool and equipment business is the result of a decidedly offbeat marketing approach, the company's experience offers lessons about quality, distribution and customer loyalty that apply as much to selling watches, shirts and computers as they do to selling tools.
From its base in Kenosha, Wis., Snap-on has ridden America's love affair with the automobile to solid sales and profits since getting its start 78 years ago, racking up record earnings of $131 million in 1996 on revenues of $1.49 billion.
Its history of success is replete with the usual mix of serendipity, good management, savvy financial decisions and a dedicated and motivated work force. But Snap-on traces its good fortune to three other key ingredients: an unwavering commitment to high-quality, premium-priced products for a large but clearly defined marketplace; an unusual credit system that gives its customers access to those products; and a well-oiled delivery system, employing an army of franchise dealers, that takes the product right to the customer's door.
Though Robert A. Cornog, Snap-on's chief executive, insists that the company is a conservative Midwestern operation, it has thrived while many of its rust-belt brethren have struggled. The difference, many say, is its highly unusual marketing. To sell their wares, Snap-on's 5,700 franchise dealers and sales representatives steer their ubiquitous white vans -- actually rolling retail stores stocked with more than $100,000 worth of inventory -- to 335,000 automobile dealerships, service stations and independent garages around the United States and abroad. Another 325 vans are driven by Snap-on technical representatives, who back up the dealers and their increasingly complex product line with training and expertise.
Each franchise dealer owns his own truck, combs his territory and vis-its his 200 to 300 customers every week, on a rotation as regular as clockwork.
"The whole corporation is based on one thing: all the dealers getting up in the morning, getting behind the steering wheel and seeing that first customer," said Joseph Holmes Van Mater Jr., a veteran Snap-on dealer in Atlantic Highlands, N.J. "It's all face to face, one on one."
Like many of his peers, Mr. Van Mater is the son of a Snap-on dealer. Even third-generation Snap-on dealers are not uncommon, a testament to the company's strong commitment to its sales channel.
With this time-tested formula, Snap-on embodies the coveted tenets of customer intimacy and consistency, building a strategic web of individual relationships over nearly eight decades that is as complex as a global computer network but as simple as its core selling proposition: providing products that help customers make money.
Well before its competition realized it, Snap-on understood that its main customer, the successful independent garage owner, was an astute businessman. To him, time literally was money and if he could get reliable tools without having to leave work to buy them, he would gladly pay a higher price and become a repeat customer.
In consistently placing a premium on quality and keeping nearly all of its production in United States factories and under tight controls, Snap-on has built up valuable equity and fashioned a case study in successful brand management.
To tool lovers, Snap-on is the gold standard, not unlike Rolex, Rolls-Royce or Chivas Regal in their respective markets. Snap-on offers cachet, credibility and a mark of unspoken excellence that draws mechanics to spend thousands of dollars on its tools and another small fortune on the storage cases, carts, chests and wall units that it also makes.
The average auto mechanic will accumulate $20,000 to $30,000 worth of tools in a career, and many spend far more. Most covet and care for their tools in the same way as gunslingers in the Old West treated their pearl-handled pistols. It isn't unusual to find mechanics who quietly wax and shine their tool cases and etch their initials into the tools themselves.
Snap-on makes "the best stuff," said Ray Magliozzi, an auto repair shop owner in Cambridge, Mass., and co-host with his brother, Tom, of "Car Talk," the popular auto repair call-in show on National Public Radio. "They charge the heck out of you, but it really does work better." Mr. Magliozzi said that he has purchased more than $100,000 worth of Snap-on tools in his 25-year career and still uses the ones from his first toolbox.
Like the more highly visible Federal Express or United Parcel Service, Snap-on is essentially a composite of routes and drivers and deliveries, put together with the goal of bringing products and services directly to the customer on a regular basis. In its bare-bones essentials, the company is a throwback to the era of the neighborhood ice cream truck, milkmen who delivered before dawn and physicians who made house calls.
But it would be a mistake to conclude that Snap-on has a throwback mentality. Like other thriving marketers, Snap-on has built on its platform of success, making a series of acquisitions over the past decade to extend its reach into such businesses as software-based diagnostic systems and management information systems. Mr. Cornog points out that more than 40 percent of Snap-on's products now have a software component imbedded in them.
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