Is Centralized Bicycle Service Really Better?

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We run one of the country's only centralized bicycle service departments WHY??


The short answer is because it works awesome and allows us to deliver much higher quality work to our Guests.


The long answer requires me to take you on a bit of a journey. It was several years ago back in late 2012. We found ourselves in quite a dilemma. Which kept getting worse the more we looked for answers. One of those proverbial “take one step back before you can take two forward” kind of things.


The U.S. bicycle industry by Wall Street’ standards was and still is considered a hobbyist industry. It hasn’t grown to a point where it can easily attract investment money. Mostly due to it’s poor returns. Code for it doesn’t make much money. In large part it’s still run by many old school people who love cycling. Unfortunately, this doesn’t always translate into creating a profitable business.


The industry does excel at product development and is able to pump out some pretty awesome product. When it comes to business development however, it falls flat. The retail arena is probably the most antiquated part of the industry. Here too, it’s crowded with many old school cycling enthusiasts and again this doesn’t translate into running a profitable and sustainable business.


In today’s environment it’s even more imperative to be an awesome business operator. No matter what side of the wholesale/retail fence you are on, business’ and entire industries are being upended and even toppled. New technology being applied to even the oldest tried and true environments is delivering a staggering blow to those who sit on the sidelines thinking they will wait it out.


This is where we found ourselves even back in late 2012. All 7 of our stores had a typical industry bike store layout. The front two thirds of the store was our sales floor and back third was our service area. We operated our stores for 20 years with this layout and got the same average results that is normal in our industry.


The catalyst for us to change came in fairly dramatic fashion. Through natural attrition of people leaving and moving on in life we found ourselves needing to hire 4 bike mechanics all at the same time. Pay for bicycle mechanics is pretty dismal compared to the auto industry and alike. Making it difficult for mechanics to achieve a good living standard. These positions even today are the hardest to fill in our industry. Finding 4 highly qualified mechanics at the same time would be nearly impossible.


Typically a bike service department isn’t even profitable. Largely due to giving away too much service for free. Another one of those hobbyist industry elements. So there we were in a perfect storm asking ourselves “crap, now what do we do?” Even if we were fortunate enough to find 4 highly qualified mechanics we’d be putting them into a business model that was still unprofitable.


So we decided to start from scratch with a blank white board. We brain stormed out all kinds of ideas from getting rid of the service departments to becoming a service only company. We started looking outside of our industry for inspiration and ideas. Everyone within the industry said a store without a traditional service department can’t work.

We analyzed Walmart, dry cleaners, new car dealerships and alike. Why Walmart? Because they sell more bikes in the world than anyone else and they don’t have any service departments. Why dry cleaners? Because many outsource their work. Why new car dealerships? Because they have one of the most successful service business models out there.

Before we could start borrowing ideas from other industries we needed to really be clear about what we wanted to accomplish. Wouldn’t it be wise to check in with our team and our Guests to see what they wanted? As we asked people what they wanted they said things like “a relationship with the mechanic”, “the ability to come in and talk parts and bike spec”. If we ran with this info we would have been creating a service center more like Joe’s Corner Repair Garage. While there’s nothing wrong with Joe’s business it isn’t duplicatable across multiple stores.


Then I remembered a quote from Henry Ford the inventor of the automobile. He said “if I asked people what they wanted they would have told me a faster horse”. Taking this to heart I decided to take a really risky move and ignore what everyone was telling me.. Instead we made a list of what we felt people really needed versus what they said they want. I know pretty crazy. Kind of like salmon swimming upstream.

"If I asked people what they wanted they would have told me a faster horse" Henry Ford

We designed our service center to satisfy 3 basic needs people have for most all repairs including bikes.

  1. They want to know “can you fix it?”
  2. They want to know “how much will it cost?”
  3. They want to know “when can I have it back?”

This brought us back to the new auto dealership service design. They use professional friendly service writers who are what I call “a people person ”. They’re nicely dressed, well spoken and can provide a high level of Guest service. They are not the actual person that ends up working on your car. That’s left to the mechanics behind the magic curtain. The service writers satisfy your 3 basic needs of assuring you they can fix it, giving you the cost and giving you a completion time. They even offer you coffee and a ride to work. All in a relaxed comfortable environment.

 

Bingo, that’s what we decided to copy. The only problem is that we couldn’t figure out how to create one of these in each of our stores. The economics of hiring new service writers and mechanics for each store didn’t work. What to do? We kept looking at other business models for ideas. We found it in the Dry Cleaning industry.


Did you know that most dry cleaners don’t actually do the dry cleaning on site where you dropped off your clothes. They send your clothes off site to an industrial cleaning plant. It’s then delivered back just in time for you to come pick it up. Most people we ask if they knew this say no. When we ask if they care, they also say no. The only important issue for most people are; will it be done properly, how much will it cost, and when will it be done.  


We then needed to figure out how to combine these different industry ideas and meld them into our business? Got it, we’ll create one really awesome service center and deliver bikes back n forth. The economics work because we can piggyback on our centralized inventory management system that was already in place. We were already delivering new bikes and product to our own stores from our central warehouse. Once we drop off the new product we’ll pick up the service bikes and deliver them to our new awesome Bike Tech Center. 


A cool new idea was born and it worked on paper. Then we were left with the hard part..Executing the idea and making it happen. We designed it all out and started using our new process. But wait, it’s not a great story unless you have to overcome insurmountable obstacles. Ours came in the form of a mass exodus of team members. Within a couple months of implementing our new design two of our top salespeople and all but one of our remaining mechanics left. WTF!! They all decided that the change was too big and that it would fail.


Remember I was the guy who decided to ignore all the input. Now all eyes were on me. Time to pull out a bigger hammer so I can jam this big square peg into this small round hole. I know, not the best leadership style to use but I’ve got an old school military background that’s hard to deprogram. By sheer will and constant force we were able to build our team back up. One step back in order to take two forward. It took a couple years to get all the wrinkles out to where it’s now a solid foundation of our company.


We have our team doing what they do best. Our tech’s are awesome at making bikes 100% and our sales team is awesome at creating Raving Fans of our Guests. It leaves our sales team members to do the service writing in each store. Which is perfect because they are our best “people persons”.


Jeff Miller leads our tech’s to jump into action so we get every bike back to 100%. With all of our tech’s in one central location, it allows us to train constantly to keep current on all new developments. We are also able to achieve a 3 layered QC (Quality Check) process to ensure we get it done right the first time.


Our Bike Tech Center platform is also allowing us to add building blocks on top that provide even more service. We are now at a huge competitive advantage because we can easily provide pickup and delivery services to your home, office, even trailhead. We can even send our tech’s somewhere to work on bikes (although, we prefer not to because their time is better spent making your bike 100% versus traveling). It essentially allows us to be mobile which is imperative in today’s environment.

 

But wait, there’s more……….. We also added something called our Free 50 point check to the service writing process. The auto industry has the disadvantage of not being able to really see what’s wrong with your car until an actual mechanic looks at it. Too many times after you drop off your car you get the dreaded call “oh, by the way we found out you also need xxx, which is going to cost $$$”. We hate that and wanted to avoid it at all costs. Our process allows us to show you everything going on with your bike ahead of time. Then you can decide what you want to have done. It pretty much eliminates the “oh by the way” call.


We are proud to report we do much more service work with about half the techs we used to have. We are more prosperous (code for profitable and growing), which allows us to pay our tech’s much more. Giving them a much better standard of living. But most of all the quality of work that we give back to you is the best it’s ever been.


There must be something to it, Others in our industry are reaching out to find out how they can do the same. I guess it’s ok to swim upstream sometimes.


We look forward to making your bike 100%


“It’s your world, Ride it”


Mike S.
Bicycle Warehouse
(aka: Debbe's husband :)

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