1-800-Radiator, the biggest supplier of automotive radiators in the United States, has always relied upon technological innovation to outmaneuver smaller, more nimble Mom & Pop competitors as well as auto parts giants like Pep Boys and Carquest.
1-800-Radiator, the biggest supplier of automotive radiators in the United States, has always relied upon technological innovation to outmaneuver smaller, more nimble Mom & Pop competitors as well as auto parts giants like Pep Boys and Carquest.
“Going up against the retail auto parts giants was hard enough, but competing with small businesses who have known every customer personally for 30 years forced us to get smart or die.” says Mike Rippey, CEO of 1-800-Radiator.
In an industry where less than half of the companies use a fax machine and a “database” usually means an old file cabinet collecting dust in a corner, Rippey, who bought the company 12 years ago from his daughter’s best friend’s father, saw technology as his opening to compete.
Using digital mapping software on cell phones to make faster deliveries, sophisticated telephony technology that auto-routes calls to top salespeople in 16 call centers nationwide, and internally developed CRM (Customer Relationship Management), the company has grown from $ 2 to $70 million in revenue over 14 years.
This January, as 18 new 1-800-Radiator franchisees celebrate their second year, sales in franchised territories are up 40% over last year, whereas sales in company owned territories are up just marginally.
Rippey, for one, is not entirely surprised.
“We knew the owner-operator model provided hands-down the best customer service.“ But being the 800 pound gorilla has its advantages too. Along with all their franchisees, 1-800-Radiator forms the biggest radiator buying group in the country and gets the lowest prices from suppliers. And as a big corporation they can buy top of the line technology systems a smaller firm could never afford.
“Franchising should be a killer combination for us and as it turns out, it is, though we never expected it to be this big,” says Rippey
The company web site, www.radiator.com brings in $8-10 million a year. 1-800-radiator employs 22 programmers and 18 IT staff and almost 100 marketing staff.
“The epiphany of the franchise opportunity came when I realized that we’d really become a technology company with these supplier relationships that let us buy parts for 10-20% under industry average. The only thing missing was having real ownership at the street level. It made perfect sense.”
The Franchisees wholeheartedly agree. Most are profitable in the first year, and many are already working on expanding their businesses even further. “It was a quality of life issue for me,” says Tim Keel, who owns a franchise in Long Beach, perhaps the most competitive market in the country. “No other business opportunity to make this kind of money owning a franchise let me actually see my family. I work from about 8am to 6pm during the week and 3 or 4 hours on Saturday. You can’t beat it.”
Says San Francisco Franchisee Todd Robertson, “The support and training I’ve received from the corporate office has far exceeded my expectations. They are always willing and ready to help and their response time is spectacular.”
To ensure that each franchise has its own protected territory, 1-800-Radiator is limiting the number of franchises available in the United States to 250. There are already 58 locations throughout the United States and 1-800-Radiator expects to award the remaining 192 within the next three years.
