National Service Alliance (NSA). A consortium that brings smiles of contentment to some, and raging fury to others. What is it? How does it - or might it - affect you in the service business?


By Wallace Harrison

We hope to answer those questions for the many people who have been seeking more information on this topic. But, before we can talk about what NSA is, we will first have to explain how - and why - it came about.

A LEGACY SET IN STONE
Immediately after an enterprising cave dweller invented the wheel, three new industries were born: (1) wheel manufacturers; (2) wheel re-sellers; and (3) wheel servicers. Not long after that, each industry segment more than likely tried to increase its level of profitability at the expense of the others. And within each segment, the entrepreneurs looked for ways to gain a competitive advantage to either help ensure its survival, or increase its level of prosperity. The wheel had to be built progressively more round, wider, stronger, with more features. The price had to come down to allow Og to outsell Groof, and get more people to buy more wheels. And once the wheels were sold, someone had to grind the rough edges, patch the holes and cracks, and help consumers attach them to their various carts or barrows. The segments had to find ways to work together while fiercely competing, both inter-industry, and intra-industry.
Some of that Neanderthal mindset is alive and well today.
The electronics industry of today is far removed from the birth of the wheel. It is also far removed from the electronics industry of fifty, twenty - or even ten - years ago. With the evolution of the industry, the battle for business survival and profitability - among and between manufacturers, retailers, and servicers - becomes more intense each year.

THE BATTLE OF THE TITANS
Manufacturers battle each other over brand image, market share, product price points, service cost containment, and other issues affecting their profitability. Retailers battle each other over roughly the same issues. However, where once upon a time, manufacturers could dictate terms and prices to retailers, that is no longer the case. The growth of mega-retailers and their clout with consumers, and their intense competition with each other, means their demands for the lowest possible price point will be heeded, if not by that manufacturer, then by the next. This competition among manufacturers also fuels their extensive efforts to minimize the costs of in-warranty service.
Caught in the middle (or out on the exploding fringe) of this phenomenon, is the independent service community. Also enter into this equation the realization of the long-sought-after national service company, and it becomes obvious that the pressures on independent service are tremendous.

WHITHER NATIONAL SERVICE?
Better than half a century ago, the first lasting national trade association was formed to enhance the lot of radio and television servicers. But the fierce independence of those in the industry, and even of those who saw value in association, kept it from realizing its promising potential. The associations could never attract anywhere near even 10% of the eligible professionals. Many of those who did join were subject to perpetual infighting. Factions broke off to form new "national" associations, which further diminished the industry's effectiveness.
The National Electronics Service Dealers' Association (NESDA) is the oldest and arguably the most successful of these organizations. It and the others provide numerous avenues for members to work together and gain professional self-improvement. But it, too, is limited in what it can do for individual member-businesses.
These limitations provided an incentive for some of the largest and most successful of the independent service companies to band together in different kinds of groups. Most often, their purpose was to obtain knowledge and gain concessions they couldn't get from within the existing trade associations. They sought group purchasing advantages or exclusive product lines, petitioned for favorable warranty business, bargained for discounts, and pushed for better warranty reimbursement rates and amenities that might not have been available to the average independent.
One of these groups of servicers was called "The Dirty Dozen" (TDD). Over time, TDD matured and expanded to accommodate changing business conditions (and eliminated the parameters of being merely a dozen). In the mid-1980s, it became the Service Advisory Group (SAG), and included several members of the existing national associations, including NESDA. It was a prestigious, self-help group that allegedly did not seek and would not accept special favors from manufacturers or distributors. This group found advantage in discussing industry issues and trends, as well as sharing their own "confidential" management and financial information.

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