Service Dealer held one of our regular calls yesterday, with some senior representatives of the manufacturer and supplier side of the industry.
As ever we thank them for being generous with their time and for taking part in a frank and open discussion. Again we will be keeping the identities of who joined us anonymous, in order to help facilitate this openness.
Barometer reading
We began yesterday with a barometer reading of how circumstances are for their businesses at the moment. All seemed fairly positive, with supply sounding like it's improving and freight costs coming back down from the silly heights they reached during Covid - not to their pre-pandemic levels, but certainly much better. Also in terms of shipments, we were told that port congestion is easing up.
The larger concerns now of course, are much more to do with the economic situation. From the value of the pound, to record high inflation, to costs rising across the board - there is an awful lot of negativity in the air at the moment.
And those on the call acknowledged how these worrying circumstances that we all find ourselves in, are of course having an impact on their dealers. They believed dealers might be nervous about investing too much in stock right now, with the uncertainty of just what the next year might bring.
One of the panelists described the dealer network as being "battered and bruised" having been put through the mill these past couple of years. However hard it's been though, there has been this feeling up until now that whatever dealers could get their hands on, they knew they could sell. Looking ahead however, that confidence has perhaps ebbed somewhat.
We heard a supplier say they felt the dealer network was currently in a "reflective mood". In this period where perhaps the business isn't quite so busy, they are taking the time to analyse the dealership and work out the best way to progress.
For the domestic sector considering the year ahead, the feeling appeared to be that the low and high ends of the market would not struggle too much. At the lower end, mowers and the like are a necessity purchase and people would still need to re-buy, replace and fix their machinery. Whilst at the higher-end, wealthy customers would continue to be wealthy and the fact that their heating bill had gone up wouldn't affect their decision to purchase an expensive machine.
It was also agreed that professional users and farmers will still need the machinery, either new or fixed, to do their jobs. However, it was that swathe across the mid-range domestic where it was felt that the market could feel the pinch.
But as ever, what would dictate the state of next season more than anything was the weather. It was felt that a good growing season where the grass continues to need cutting, will dominate over any economic situation.
To this end, our panelists appeared to agree that to describe their dealer networks as "cautiously optimistic" about next year would be fair. There is a natural nervousness about what lies ahead, but this is more to do with the overall pressures of running a small business they said. There does not appear to be any overly dramatic fear of the bottom falling out of the market or anything like that.
Trade shows
Having just come off the back of SALTEX, the discussion turned to trade shows and whether the industry needs more or fewer of them in a given year?
What was actually quite interesting, and probably not what the organisers of national shows want to hear, was that our panelists seem to give a higher regard to spending their marketing budget on supporting their own dealers when they appear at regional or county shows - rather than taking their own stands at more and more trade shows. They seemed to feel this offered them a greater return on their investment. This, as well as organising their own roadshows for dealers and targeted events for key customers, was seen as money well spent.
Appearing at trade shows is a lot different now to what it was 20 or 30 years ago we were told. People don't tend to wonder onto stands and place large orders - those days are gone. Shows today can be much more about flag waving - however flag waving just for the sake of it, isn't enough. There needs to be a value there for these manufacturers to warrant committing their staff, time and money.
An opinion was voiced that if there were to be fewer shows, that would be better for exhibitors as a larger number of visitors would likely be delivered. It's extremely difficult to quantify how successful an appearance at any show has been, but what is crucial we heard, is that there's enough of a captive audience to make the endeavour worthwhile.
Recruitment challenges
We finished by looking ahead to next year and this notion that dealers should be cautiously optimistic about their businesses was raised again.
A panelist told us that dealers need to be looking to maximise each and every opportunity that comes their way. Focusing on the whole deal, including extras, accessories and up-selling will be more vital than ever.
It's easy to be pessimistic we heard, with the all noise around, but it's a new year and a new season coming up. If dealers were go into it with their heads already down, that could be self-defeating. If the weather plays ball, demand will be there.
The biggest note of caution we were given though, was around the whole area of recruitment for the dealership. These suppliers felt some of their dealers held real worries regarding these challenges. They weren't looking to simply fill a position, they wanted the right people with the right attitude and skills - and these are becoming increasingly to hard to find. And then once found, hard to retain.
A panelist told us they were aware that several of their dealers were particularly interested in coming to the Service Dealer Conference next week, specifically to hear what our expert speakers have to say on the subject.
It's clearly a very real problem across the country and one that dealers are looking for advice on. Hopefully everyone who comes next Thursday, will leave with inspiration.
