Issues Archives: Volume 4 – Issue 5

Where is our Industry Heading?

I recently made a trip to the Florida Tow Show to gather Intel on a variety of topics that pertain to the towing industry. I was curious to see how tow operators were responding to the industry change, or if they even knew some of the changes that were taking place.

The show appeared to be successful and vendors selling products went home happy. There was a golf tournament with great weather and a chance to make new friends, but let’s look behind the surface of our industry and see what is really going on.

State Regulation:

Several years ago when I owned and operated a business in Texas there were laws passed that had a major effect on the industry. One association wrote a law requiring:

  1. All tow operators be certified
  2. All employees be drug tested
  3. Criminal background checks on employees
  4. Required certain size lettering on trucks
  5. Required signs posted at your storage yard
  6. Surface requirements at the storage had to meet certain standards

There were financial penalties if you did not meet the requirements. These changes cost the tow company thousands of dollars in licensing their company, their employees, and their trucks. Not to mention the thousands of dollars in fines that was issued by the state for not meeting the standards of the law.

Now let’s fast forward seven years and see where we are now. Many companies sold their business or just closed the doors. It’s tough for the tow company to constantly fighting with the state day in and day out over how to operate their business. The association I belong to hire a lobbyist to constantly watch the new laws that are trying to be implemented every session. Not every association can afford a lobbyist so they are stuck with the laws that get passed for our industry.

This just happened in Ohio where legislation passed laws that had a major effect on the industry in Ohio. The association was not aware of the laws and now has to live with the results. This will become the norm when other states start passing legislation effecting our industry.

In Texas the two associations worked together during this legislation period to make sure there would be no surprises with new laws. Unfortunately this is the only time the two associations work together.

Investors Taking Over

It did not take long for outside investors to see the money that could be made in our industry. Outside operators are coming into cities with a suite cases full of money and offering deals that are hard for cities to turn down. They look at our industry and see the expense side;

  1. Owning trucks
  2. Truck Ins.
  3. Fuel for the trucks
  4. Truck Operators

Then they look at the revenue side of the industry:

  1. Vehicle disposal
  2. Vehicle release
  3. The tow fee

The investor takes the expense side of the industry and passes it on to the tow company. Then they take over the storage yard and dispose of the vehicles while contracting with local towers to perform the tow. They pay the tow fee to the tow company and they make their money on vehicle release or disposal.

I know of at least two other outside companies ready to get into this type of business, and I’m sure more will follow when investors see the money. I am working on a solution that will help the tow company save part of their business.

Tow Companies Selling Out

If I had a pocket full of money I could have purchased no less than four tow companies while I was in Florida. It was sad because they were in the business for over 25 years and now they wanted to give it all up. I asked them what the problems were and why they wanted out. Here are a few of the reasons:

  1. The cost for equipment is going up and the tow fee is going down
  2. Technology is taking over, they are now good with computers
  3. Laws and regulations at a local level are impacting their business
  4. Cut-throat competition
  5. It’s not fun anymore

In the April issue of Tow Times an interview was conducted with the president of one of Michigan’s largest tow companies. The company has been around for over 50 years.

The following questions were asked:

What are the problems does our industry face today? Outside investors are going to take over the industry.

What role does the government play in the future? The government is influenced by insurance companies, and insurance companies don’t like tow companies. Need I say more?

What can an owner do now to save their business? Get educated on the business; learn more about the financial side of the business. The owner cannot continue to do what they are doing today and surviving.

What will the industry look like in 10 years? The big guy will buy out the little guy.

This is one person’s opinion. The answers given I think are correct, however I don’t see the little guy going away. I will tell you how to save your business in next month’s article.

Nationwide Regulations

Several years ago I attended a national association meeting and there were discussions about national certifications for our industry. As a person who lived through it in Texas we do not want that to happen. When Texas implemented the driver certification program; the test to be used in Texas was the national association test. When our association asked if we could use their test for our members we were told no. The national association had an exclusive agreement with the other state association that only they could use the national association test. FYI there were over 17,000 tow operators in Texas who paid $125 for the test. That money was going somewhere.

At the meeting in Florida a national association held a meeting to discuss testing nationwide. I was told there were several state associations that were not happy with that meeting. I hate to see where this might go, but my experience tells me that all testing should be done at a state level and if there is money to be made let the state associations make it. State associations should keep an eye on what is trying nationwide and how it will affect their business.

So here is my trip report and there was a lot more details but I didn’t want to use up the entire magazine on this trip. Watch for the solutions to the future in next month’s magazine.

With the economy the way it is all small businesses are struggling to survive. As I travel around the U.S. I talk to towers that get creative and come up with additional ways to generate revenue.

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Growing Your Business with “User-Friendly” Techniques

Have you ever asked yourself, “When will my business finally take off? Newsflash!! Most towing business owners would admit to asking similar questions before they finally made it. When you first started your business, whether you inherited it or not, your goal, no doubt, was making it successful and watching it grow. There were things you did at first that sprouted your business. You got excited because you saw some results. You focused on getting customers in the door because you needed continued growth. You tried different techniques. Some techniques worked and some didn’t.

There are some simple and “user-friendly” techniques that you can do to generate sales and growth. Some of my favorite ones are listed here. Bear in mind that this list is only a snippet of what could help you increase your sales volume and are being discussed to get your “towing” creative juices flowing. What works for you might not work for someone else. Before introducing my short list, let’s review some activity that you might have done in the past to jump-start your business.

No doubt when you first started, you probably spent money carefully, rationing dollars between marketing ads, discount coupons, banner ads, giveaways, cold calling, etc. You purchased pens in bulk and your towing company’s name and phone number printed professionally. You had to get your name out there, and you did whatever it took to make it.

Now your situation has changed. You’ve had some success but you still want to more growth. You’ve discovered that your attention needs to be focused on building and maintaining relationships while you’re attracting new customers. A faithful clientele is always important for maintaining consistent sales. Keep building RELATIONSHIPS. Are there techniques that will keep your customers coming back in today’s market? Absolutely! And they’re easy to do too. How long has it been since you took pizza to a local company that gives you ALL of their tows? It really doesn’t have to be pizza each time. Donuts and coffee work well too! Maybe a small dollar amount gift card would be more convenient for them to get something between tows.

At one time my daughter managed a swimsuit store in a local mall. I questioned how they would make any money since the season for needing a new swimsuit is a short one. As she explained their sales process, I quickly discovered that they still sell swimsuits when snow blankets the ground. Besides selling swimsuits, the store offers other year-around goods. Every time she made a sale, Erin was required to ask a question or make a suggestion. Every sales associate was required to get each customer to buy 2 extra items for each purchase. Erin would comment, “You know, this swimsuit would look great with these sunglasses and this a cover would finish your beach ensemble.” They were making suggestions that the customer could ignore but most didn’t. I call this sales technique, UPSELLING. Open all year long, there were always customers buying something in that “seasonal” store. Erin had built a wonderful rapport with her customers and they trusted her judgment. Even fast-food restaurants use the UPSELLING technique with their questions that you’ve obviously responded to at some point. Familiar with these? “sandwich or meal?” or “want fries with that?” I personally know a towing company that towed everything for a landscape company as a result of their quick conversation with the landscaping firm. When the landscapers realized that the towers could pick up and deliver sod to their customers’ fasters than they could, it was a “no-brainer” for them to adapt to this technique. The sod was placed where it needed to be and the job was done faster. That proactive tower had found yet another way to utilize their assets to their benefit.

Some of us may not be a Fortune 500 company yet, but there’s no reason why we can’t use their Fortune 500 sales techniques. Consider running a Customer Reward Program where you give your customers a card to attach to their keychain. Every time they tow something, they receive more points toward spend-able dollars from the retailer. CVS uses this technique quite nicely along with retail stores, such as Carters and Kohl’s.

LISTEN. God knew what he was doing when He gave us 2 ears and only 1 mouth. We’re supposed to do more listening than talking. Use this technique to your advantage when your next customer comes into your store. Ask questions to find out what they really need so you can give the best possible advice. That way you’re perceived more as a consultant instead of a salesperson because you’ve listened, discovered what they need and offered a suggestion on what’s best to fill that need. The next technique is you’re not in this alone.

Your EMPLOYEES are in the business with you, so treat them right. Making them feel that they’re co-workers instead of employees. They buy into your company’s success because they feel more appreciated and valued as a co-worker to the company. Having a co-worker vs. employee mentality creates a safer, more effective environment for selling product or services. Being a co-worker empowers your team to do a better job. Reward co-workers for meeting a daily or weekly goal. The prize could be leaving work early on Friday or a gift card to a favorite restaurant. Overall, the next technique is probably the MOST important technique anyone can do but it takes work.

UNDER PROMISE AND OVER DELIVER. That’s right, “Under Promise and Over Deliver.” This phrase should definitely be part of your daily routine. In fact, post it on a BIG SIGN in DISPATCH as a daily reminder. Customers remember when they get LESS than they expected. If you feel you can’t deliver what you’re promising, it is better to promise less than deliver less than promised. Be on the lookout for unique ways to offer a customer more so they realize they’re getting more than what was expected. Maybe it’s only a matter of towing 2 vehicles at the same time rather than one.

Here’s a technique I’ve used for years. Most businesses thank their clientele at least once a year. It’s usually done at the end of the year with a New Years card. They’re already expecting those cards during those holidays but not Thanksgiving. Let’s surprise them by changing when we send “thank you” cards. Focus on being thankful for your customers during Thanksgiving instead of Christmas. You’ll beat other companies to the punch. I started this practice many years ago and haven’t changed it.

The Thanksgiving cards are bought in bulk and come pre-printed with my company name. I pick a nice short poem about customers. The envelopes are hand-addressed. No labels, please! Hand-addressing is more personal than slapping a label on the envelope. Furthermore, the customer is more likely to open the envelope when it’s hand-addressed because they think it’s a personal invitation to a party or an event. You might ask your sales consultant to add a special thank you to the cards of those customers they know personally. They should address them too.

Literally, hundreds of sales techniques are available at your fingertips to increase your sales volume. Be on the lookout for new suggestions. If you have a special sales technique that has helped you in the past, please share it with me. In the meantime, if you aren’t using any special sales techniques such as we discussed here, try at least one. You’ll be glad you did.

Until next time

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Towing Industry Innovation: New Products from AW Direct

AW Direct’s goal of “helping you help them” involves providing a wide range of products that can help you get the job done faster, better and safer. Naturally, this means keeping up to date with new advances in towing product technology. Today’s towing industry, like many industries, is seeing the introduction of more and more innovative new tools. With many of today’s products, a tower can complete tasks much easier and safer than towers of previous generations could, and the better you can do your job, the better you can help those who need it. AW Direct is excited to offer an array of new items that reflect the innovation seen in the towing industry today.

Certainly, one area of increased innovation in the towing industry over the years has been lighting. Older lighting styles like rotators and strobes have essentially been replaced by the largely superior and somewhat revolutionary LED technology. Whelen’s new Mini Liberty™ II IT9 Series LED Lightbar, now available from AW Direct, is one example of how far lighting technology has come. The Mini-Liberty Lightbar is an extremely bright lightbar that features improved optics and linear LEDs for a superior light output. It also features a low profile design that is sleeker and less conspicuous when off than older style lights. Its compact size makes storing the magnetic mount option easier as well. The mini lightbar also offers 58 Scan-Lock™ flash patterns to choose from.

Often, a product can be called innovative not because it is entirely revolutionary, but because it is a basic necessity that exemplifies the gradual improvement brought on by years of hard work using the tool. B/A Products’ Super Swaged IWRC Rope with Self-Locking Swivel Hook is an example of a basic towing product that is engineered to solve or alleviate a number of difficulties that have frustrated towers using wire rope. Super Swaged Rope is designed for strength as well as compactness, as it is stronger than standard winch lines of the same diameter and has a design factor ratio of 3.55:1. The larger surface area of the outer wires also provides better resistance to wear and tear, and its compactness helps it to resist drum crushing. The swaging process used in manufacturing the rope helps it to resist abrasion, bird nesting and kinking.

Of course, increased innovations are welcome not just because they help get the job done faster and more efficiently, but because they can also help get certain jobs done safer and more carefully. An example of a product that can help towers do a dangerous job more carefully and precisely is B/A Products’ Gradual-Release Ratchet. The ratchet reduces tension one gear at a time instead of allowing a tightly bound strap to go flying the second it is released. The ratchet can also help you put greater tension on loads when securing them for transport, and it features a double locking mechanism for added safety.

Change in techniques and procedures can happen just as assuredly and naturally as changes in tools sometimes. If we allow our experiences to improve the tools we use, it makes sense that we would do the same with the methods and procedures we use on the job as well. Thankfully, the towing industry today is attempting more and more to provide training materials for towers that can help them learn from others with experience in the field. Wreckmaster has been a source of information for towers since its inception, and its newly released Recovery Handbook is a 136-page compilation of up to date towing procedures and techniques. The handbook covers topics ranging from traffic control, winching, rigging, car carrying, recovery engineering methods and more.

You can find all of these new products and more at AW Direct. We are committed to offering you as many of the best new innovative products as possible and to being a resource of information about how you can use those products effectively. We look forward to working with you in seeking to make the towing industry better and safer for those within it and for those who need its services.

AW Direct
Helping You Help Them
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