Pride of Ownership
The world in 1920 was a far different place. America was moving forward into what they thought was a world without war, and one filled with the promise of prosperity. Nine years later, they would face the Great Depression and see 20,000 companies go bankrupt and disappear. Some things are meant to survive, however, and great ideas are one of those things. At the time, Joseph Johnson and William Seidemann had one of those ideas, and founded Snap-On Tools.
Snap-On was created with the innovative idea that interchangeable wrench sockets should be able to “snap-on” and off from a universal handle. The simplicity and usefulness of this concept has led to the expansion of Snap-On into more and more markets. It is a testament to the quality of the idea that two years into the Depression, in 1931, the company had expanded its brand globally. It was also still able to offer its customers credit, a dangerous thing at the time, allowing them to purchase the very tools they needed to keep working. Snap-On then introduced the concept of mobile vans that bring the product to the customer – this image has become iconic for the company as well as becoming a different way of looking at franchising.
It is now 93 year later, and Snap-On is still one of the most recognisable brands in automotive tools in the world, expanding its offerings into digital diagnostic tools, and emission testing equipment. Their success is testament to not only the idea that geminated a world class brand, but their ability to adapt to the changing market place and needs of their customers.
What a Name Can Mean
Nick Hudson, the Franchise Manager for Snap-On Australia, has been with the company for a quarter of the brand’s existence. Beginning his career in the UK, he started as an apprentice in the motor industry.
“That’s when I was introduced to Snap-On, that job eventually took me around the world and I ended up in Australia,” says Hudson.
“Our customers are professional tool users – you simply can’t buy Snap-On Tools in Bunnings or Repco or any other hardware store. They aspire to own Snap-On because of capabilities it gives them, as well as the quality and certainly innovation that is associated with it.
At 166 active franchises in Australia and New Zealand, the Snap-On brand has established their mobile franchises in a big way. And because these are mobile franchises, it means that every van has the potential to service a larger geographic area than a stationary location would. That is one of many significant factors that attract owners to the brand.
“Our franchisees operate in customised display vans which are effectively a shop on wheels,” Hudson says.
Hudson says that another attraction for franchisees is Snap-On Tools history of seemingly being recession proof.
“I am not saying that it is recession proof, but if there is a business model that is, this is it. I think that has been substantiated throughout our history.”
Interested Parties Please Apply
Hudson believes that the amount of work and the specialisation that the franchises require does make this an industry that is suited to only certain individuals.
“But if this does appeal to you, the training and the support is there. The basic concept of the business is it’s a one man operation, and you do not need to have staff. For a lot of people, that’s extremely appealing. Just the earning potential makes it an attractive franchise,” he says.
On the other side of the coin, what Snap-On is looking for in their franchisees is “the interest.” Hudson says that applications are not required to have a mechanical background, as long as the franchisee is willing to learn.
“You need to have an interest in tools and in what I call ‘bloke things’. Certainly if you do not like things to do with cars or DIY projects then this probably isn’t the business for you.”
One of the other attributes the brand looks for in their potential franchisees is their “people skills.”
“This is because we call on our customers each and every week, on the same day and as close as we can to the same time. We build relationships with our customers,” he says.
“Franchisees also need to enjoy the outdoor life, because they are not in an office behind a desk, they are driving a truck. So that for a lot of people is a very attractive element – they are out and about, and every day is different.”
Snap-On’s business model itself guarantees quality products because they own the production process. “We are not first and foremost a franchisor, we are a manufacturer, we just happen to use the franchise model to get out to market,” he says.
Making the System Work
The model of franchising has been a part of Snap-On Tools since the 1930s, and as Hudson admits, that was before franchises where really considered a business model. In-fact their resilience to economic woes seems to stem from the fact that much of their business model was formulated during the Depression. Even their scheduled visits to customers and the way that they build their relationships comes from the ground work that was laid in the Dirty 30s.
“A good franchisee is someone who is seen as a solutions provider to their customers. Typically we are a little bit reserved and cautious when we come face to face with the sales person, and of course we are. But we want to build that relationship between the franchisee and the customer. It is based on trust,” says Hudson about the way Snap-On works.
Because it is meant to be a long lasting relationship there is an onus placed on the franchisee to deliver the best value for money on each sale, and find the right tools. Only in this way can a relationship be forged that is dependent on repeat customers.
“We have had some franchisees operating in the same territory for the last 20 years. So it is not unusual for a franchisee to start working with someone who is an apprentice at a work shop that has then gone out on their own to start up their own workshop,” says Hudson.
Once a franchisee is recruited into the Snap-On family, they are sent to the training centre in Dallas Texas, there they receive intensive training. Returning to Australia they are sent to the national distribution centre in Sydney where their training continues. After that is completed they return to their designated territory, where – for an additional three weeks – a Franchise Developer rides with them and helps them apply the knowledge they have gained. When this final step is completed, the franchisee is then partnered with the Sales Development manager who helps continue their training and create new relationships with customers within their given territory.
Letting the Secret Out
When it comes to getting the word out about the quality and application of Snap-On Tools, the brand’s attention is mainly focused on the everyday individual rather than those involved in the aviation and automotive industries – where, as Hudson says, you would be hard pressed to find someone working in those industries who does not already know about the company.
“The everyday person may have seen our trucks, but it has been said we have been the best kept secret in franchising,” says Hudson.
To help people discover their business, Snap-On has created an online initiative known as the “Discovery Tour,” where prospective franchisees can go through the various steps involved with becoming a partner with Snap-On. This is done at their own pace and convenience. Hudson says that this allows the candidate to self-determine their level of interest, and only asks for contact information near the end of the process. This means that unlike other sales pitches, it is the client who has much of the control of the conversation and that any usual pressure that franchises my place on interested parties simply does not exist.
“We are not a fee based franchise, we don’t charge royalties or advertising levies, the fact of the matter is that we are the manufacturer. We make our money from the sale of tools to our franchisees and they make their money by selling their tools to the end user,” he says.
“Because of this, we spend more time than most making sure our franchisees have the right business opportunities to continue to be successful.”
With Snap-On’s more technical products, such as their diagnostic tools, the manufacturer supports their franchisee with Diagnostic Tools Specialists, who will accompany the franchisee and demonstrate the equipment to the end user. The franchisee puts the sale together with the assurance that the support for the software and hardware will always be there for the customer.
A Busy Future
Hudson says that Snap-On Tools has a huge potential growth market, and that in no way have they reached their peak. With 166 franchisees working in Australia he reports that they are forecast to have a 174 by the end of this year. He believes that this number is conservative, and says that he will be looking for them to hit at least 200 trucks on the road.
“Right now we have more customers than we can service,” he says.
“We have expansion opportunities in most states,” he adds. “Since we came into Australia when we were largely unknown we have become much more recognised. Our product has become something that our customers aspire to own – there is pride in ownership.”
The future of Snap-On is in the hands of their franchisees, as the brand’s tried and tested sales methods seem to continue to be resilient to market challenges. There is little doubt that as the company expands, more and more people will see the advantage of tying their fortunes to the brand.
For more information, please visit their website at: Snap-On Tools Australia
Preferred Vendor of Choice: