In our years of helping companies improve their success with their dealers and distributors, it has always been far easier to work with a company that has been in a slump. Their dealer network is begging for attention, new product, new ideas—the company’s employees are starved for fresh thinking, for hope. While it certainly is a daunting task to change the momentum for those brands, at least nearly everyone is pulling together.
A company with a tremendous history, iconic products and generations of dealers is a different story. If it suddenly focuses on changing products, the experience, brand and its relationship with dealers, it has its hands more than full.
How do you execute major change without insulting and disengaging the very people (dealers) who have played a major role in your success story? How can you persuade dealers to change course, including veering away from the very edicts you have been preaching to them for years? Does that make the brand disingenuous? Does the brand even have a right to tell dealers what to change? These are tough questions.
Think about it from the dealers’ standpoint. Let’s say they’ve realized great success, their family has become well-known locally and they have enjoyed the trappings and status of that success. To threaten that is almost unthinkable. Not only are they dealing with change, but also with a threat to their status. And if the dealer acknowledges they’re in trouble, they have to face the fact that they’re letting their family down, since many dealerships are still family-owned businesses. It’s personal, which makes it even more daunting.
If we reframe this, it becomes a little clearer. A successful brand or dealership must evolve or it will cease to be relevant. That’s why there are no more Oldsmobile products or dealerships. The leading buggy whip manufacturer is long gone. We no longer rent movies at Blockbuster, we download them or rent them at Redbox. We use smartphones as our cameras and don’t buy film anymore. This is market evolution, and we either get ahead of it or we get run over by it. We need to attack it and not waste time on blame or pity. These shifts happen and we have a choice to adjust or ignore at our own peril.
When we work with troubled brands and networks, they’re usually willing to change almost everything. We have to restrain them from that, because while change could solve some of their problems, changing the things that aren’t broken can result in new issues.
Conversely, when working with successful brands and dealer networks, they are focused on what they’re losing or changing and almost creating a battle zone between the brand and network. The brand wants more from the dealer, and the dealer wants the brand to provide customers so they can sell to them. Both the brand and the dealers fight over the customer—each feeling that they “own” that customer.
Truth is, consumers don’t separate the brand and the dealer—we buy an Audi from the Audi dealer. We buy a John Deere tractor from the Deere dealer. A good experience makes me loyal to the brand and the dealer. A bad experience makes me disloyal to both. It’s not a battle of brand versus dealer in the eyes of the customer; we usually reject the brand and along with it, the dealer. Both lose.
Another conflict in this battle is that dealers compete not only with rival brand dealerships but also dealers of their brand. They don’t want to see another dealer do well if it in any way adversely affects them. That means often dealers won’t share best practices because they view each other as the enemy.
So, what do you do when success is your biggest barrier? Hold on to that success and differentiation, but make sure it remains relevant. If you cater to primarily one demographic but that demographic is aging out, you likely need to take some time to reassess. While you need to continue to show the love to your core demographic, you need to reach out to other consumers who could be the future of your business. You did it once for the core customers, you can do it again by being sensitive to new types of customers.
We can often look at the past to help guide our future. When their stories began, the truly successful brands and dealer networks offered an experience that was unique, often bold and proud. As decades pass, however, those great attributes can become dated, watered-down and copied by the competition.
By the way, while the buggy whip manufacturers have all but vanished, some of them were more fortunate and perhaps more willing to realize they were not in the “horse business” but rather in the transportation business. Some of them, along with horse carriage makers, entered the auto market. As a result, one company had a nice 100-year run. We knew them as Studebaker.
Brands and their dealer networks need to constantly assess what business they are in and why their customers and future customers should be thrilled to buy their products. That takes a team effort, not a battle. The focus should be on maintaining and expanding your relevance and differentiation, not merely protecting turf. It’s about rekindling that passion and pride in what you offer and welcoming more people to experience your success story.
Rather than being a barrier, success is an asset to be shared between the brand and the dealer, to be protected together and allowed to evolve in order to continue well into the future.
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