Industry interview
Steve Chittim, CEO, NIBS Group
Steve Chittim discusses the world of distribution, from paint discounts to future challenges, as well as the past, present and future of the NIBS Group.
Could you give us a brief overview of the NIBS Group, how and why the group was formed?
The acronym NIBS stands for Nationwide Independent Bodyshop Suppliers and, as the name implies, we have a national network of independent distributors who specialise in the supply of paint and consumables to the automotive accident repair market.
NIBS Group was formed in 1990 by six independent distributors just prior to a national independent distributor group, (Tenco Industries limited) declared themselves bankrupt.
NIBS Group is the sales and marketing organisation by which national programmes are facilitated and centrally managed on behalf of the individual members. In essence, NIBS is the umbrella group and single contact point for national clients.
How is the NIBS Group business different today?
The market is so different today. In the early days a national deal could be done with a single paint brand returning 100% of the bodyshop business.
The complexity of work providers and car manufacturer approvals means that most bodyshops need to install a multitude of paint mixing schemes to adhere to each programme. At the same time, the bodyshop industry is consolidating and work volumes on the decline. The effect to members is reduced sales in shared accounts, increased commission costs to supply into the same customer base and greater financial exposure due to unforeseen bodyshop closures.
The role of a paint distributor has changed significantly over the years. Describe the role of the NIBS Group within the industry in just one sentence...
To gain and retain national business on behalf of our members and constantly deliver innovative support solutions to allow our members to offer cutting edge bodyshop profit enhancement programmes.
After being appointed as CEO in February 2009, what changes did you make to the business?
The business model had to change and we needed to look at other ways of supporting members to give them a clear advantage within the industry.
The main focus has been to develop a national offer of tangible support services with NIBS Spectrum. This has giving NIBS Group, NIBS Group clients, our members and their customers real USPs compared to the competition.
The introduction of the Castle Donington sales office has created the hub by which we have delivered numerous training programmes such as NIBS Mastermind.
How many bodyshops use NIBS’ services? Are you looking to increase this number to achieve a specific target?
Over 150 bodyshops are signed up to the NIBS Spectrum programme and our focus is on delivering value added services to each of them.
Quality not quantity is the objective.
Explain the NIBS Spectrum programme...
NIBS Spectrum is our customer support programme that delivers a real unique selling point. The programme is an online portal, designed uniquely for our industry with a wealth of business tools and support for our bodyshops. The programme is split into four areas and is designed to generate work volumes, reduce costs and in turn, increase net profitability.
Business Support is aimed at providing innovative solutions to drive down your costs, maximise profits and deliver huge time savings. Innovative training solutions focused on skills development and high quality coaching.
A marketing section is also included, which features the latest in visual communication, branding, social media solutions and design. Alongside this is N-Gage, a new, interactive community space for members to share views and communicate.
What about the NIBS Mastermind programme?
Our 12-month high level coaching and mentoring programme is aimed for delegates who are happy to have their current ways of operating their business challenged and who are hungry for new ideas and concepts.
The programme is headed by one of the Europe’s leading business coaches and is designed to look at key business areas such as vision and core values, the business engine, strategic marketing, systemised business growth and profit maximisation.
The strategic goal of the programme is to help NIBS registered bodyshops lock in customer loyalty in order to help them respond to the current market needs such as declining work volumes, reduced margin and overall profit pressure.
How successful are both programmes? How do you measure the success?
The NIBS Spectrum programme continuously goes from strength to strength, with over 150 bodyshops now signed up to the programme. Our key driver for measuring success is the number initiatives that members are taking up inside of the programme. This gives us a key measurement that bodyshops not only value the services it provides, but get a return on their investment.
At present we have implemented over 375 solutions this year and have plans to release some new solutions exclusive to NIBS Spectrum this year (so keep your eyes open for some announcements).
The Mastermind programme has quite simply been a revelation, with countless testimonials of how it has changed the lives of the delegates who took part in the first hosted programme.
We continuously measure the success of the delegates whilst the programme is running and we do this by:
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Flippen profiles, which are completed at six-month and 12-month intervals. This outlines the shift in mindset and change.
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Personal measures from the 121 coaching sessions.
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Evaluation throughout the 12 months.
In addition to this, the programme has been chosen as a finalist in the Innovation category at this year’s bodyshop awards. If you would like to see more about this programme, view our video on YouTube by searching ‘NIBS Mastermind’.
NIBS also measurers the success of the NIBS Spectrum programme by an annual CSI matrix and the twice yearly site visits made by NIBS spectrum programme support manager – Ben Tiffin.
In your view, what does the future of paint distribution look like? More consolidation? Bigger discounts? Direct supply? Solus paint supply agreements?...
Inevitably, as the bodyshop market consolidates so will distribution pro-rata, and it will be the strong and well managed distributors that will survive.
Unfortunately the market seems to be fixated on discount as opposed to what price is being paid for products and the true value of the support services supplied.
As I have said on numerous occasions, a lot of bodyshops know exactly what paint discount they receive but when questioned on how much they are actually paying for five litres of lacquer, they don’t know.
Discounts are at an all time high and trade paint prices are obviously directly driven by discounts and associated costs to supply the industry.
The direct supply of paint has been tried by most paint brands in the UK and results speak for themselves. Whichever way you look at it, there are costs such as warehousing, shipping, administrating and credit control that need to be taken into consideration.
The paint manufacturer’s financial balance is to either pay distributors an operating margin for selling and supporting their products or incur additional logistics/sales costs.
Solus paint agreements for distribution are a thing of the past in my opinion and distribution will need more than one brand to meet the needs of their customer base. However, it is without doubt that the all brands ‘stack it high sell it cheap’ distributor model will find it difficult to balance relationships, product knowledge and still achieve sales targets.
What do you consider to be the greatest challenges for your business over the next 12 months?
In line with the whole of the industry, the biggest challenge is continuing to offer first class service and support to our clients without being drawn into bottom of the barrel deals that are not sustainable in the long term.
If you could change one part of the industry, what would it be and why?
I read a lot of anonymous articles posted on industry websites and get very concerned at what level of professionalism is being portrayed to customers of the industry ie the paymasters.
Destructive criticism is common place and it is generally very unprofessional to post public ridicule.
The accident repair industry is a highly technical, specialist market and needs to be respected as such.
I would remove the destructive criticism within the industry and in turn, I’m sure the trade would be treated with a little more respect by the paymasters.