Service Dealer held one of our regular video conference calls with a selection of dealers from around the country on Wednesday this week.
A mixture of domestic, commercial and agricultural machinery specialists joined us for a frank and open discussion covering topical issues faced in their dealerships - and we thank them all for their time and their candour.
Stock problems persist
It will come as no surprise to any dealer reading this today that the subject which is still primary in the thoughts of all, is the ongoing problems regarding supply of stock. It's a subject we've discussed many times, but the fact remains it's the single greatest hindrance to the running of businesses that dealers of all sizes and specialisms are facing right now - and unfortunately it doesn't appear to be reaching a resolution any time soon.
We were told that dealers are "fed up to the back teeth" with the whole situation. It is frustrating, time consuming and quite simply bad for business. We heard that whilst many customers are resigned to waiting, some orders are being cancelled. There were worries that the season would be over before kit that has been on order for months (since last year in some cases) arrives in store.
There's no doubt there's customer demand out there, with dealers having plenty of orders on file. Some we're told, had their largest ledger of orders they've ever seen - however the absolute bugbear, is turning those orders into invoices.
Some dealers told us they felt the situation had improved a little, with trickles of machinery coming through, but it was in no way ideal and definitely inadequate to meet the level of demand seen in store. We heard that sometimes when orders do arrive, they will be incomplete. Garden tractors without a deck for example. Chargers but no batteries. That kind of thing.
As ever, there's a clear understanding in the network as to why these problems are persisting, however when explaining to customers either face-to-face or over the phone, it is not getting any easier to keep them happy.
There seemed to be a genuine resignation amongst the dealers we spoke to that these problems will continue throughout next year. They felt they are going to be dealing with delays, and keeping up with rapid pricing changes, for some serious time to come.
Also as discussed before, communications from manufacturers and suppliers is seen as key to helping dealers through this tough time. And as also discussed before, some appear to be much better at keeping their network up-to-date than others. There were frustrations voiced at some suppliers for sending letters essentially saying 'we don't know when you'll receive anything' - which is not the same as a constant dialogue to make sure dealers are as informed as possible and able to update their customers.
Fixing the situation that appears to have been exacerbated by years of reliance on the 'just in time' production philosophy, is of course an ambition beyond the means of dealers. A suggestion that was floated though, to help avoid a similar situation in the future, was that government needs to aid UK manufacturing to enable the country to be less reliant on parts and components from abroad. If we as a nation were more self-sufficient in producing parts to keep machinery running, it was felt this would greatly help the situation.
Combating the crisis
The discussion turned to the hot topic of the moment, the cost of living crisis - and specifically if the dealers on the call were making any changes to their businesses in order to help combat its effects?
We heard talk of the continuation of digital marketing techniques that had been picked up throughout lockdown (don't forget you can access tips and advice along these lines in the Dealer Digital Toolkit) and of trying to go as paperless as possible in the dealership.
One dealer talked of how they had until now absorbed collection and delivery costs to their customers, but what with the increases in fuel prices this was something they could no longer continue. A surcharge was being added to cover these higher costs.
Also we heard of the adoption of more aggressive pricing policies. Dealers were not feeling the need to give discounts and were not being swayed in their decisions by what the online-only retailers are offering. As stock is not readily available anywhere, dealers believed that customers are learning it's worth their while to pay a premium for a premium service.
Conversely we were also told, that as business had been so crazy busy these past few months, being able to take a step back and look at where savings could potentially be made in the dealership, had not been a luxury that some had been able to afford. It was felt that if circumstances did slow down, perhaps through customers feeling the pinch not interacting with the business quite so much, this would then be a task worth spending some time on.
Future for shows
Finally, following mixed reports coming out of the recent LAMMA exhibition in terms of how valuable big national shows might be, a conversation around the future of trade exhibitions was held.
Whilst it was felt that it was important for major brands that dealers represent to be present at the large, national shows (companies are always more conspicuous by their absence than their attendance), what sounded of greater importance to our dealer panel was the desire for local county or agricultural shows to prosper.
Dealers on the whole still wanted to have a presence at these, both to perhaps sell goods, or more importantly to others, to raise their own brand profile locally. Flying the flag for the dealership at these events, was still seen as great PR. Also another key consideration was the offering of valuable support. Without dealerships championing them, there was a fear that these shows and societies could die off.
An interesting point raised was that there could be considerable pent-up enthusiasm from the general public to attend a local show this year due to their absence during the pandemic. It was perhaps felt this could lead to the showgrounds being absolutely swamped with potential customers this summer. So maybe this was a key year for dealers to attend? Although having stock to display and sell could be a real issue of course!
A possible way around this problem of having no machinery to publicise it was suggested, could be the holding of demo days at the dealers' own premises. If struggling for stock, machines could be borrowed from loyal customers to show off what hopefully would be back in stock at some point!
Again, Service Dealer would like to thank the dealers who took part in our discussion this week and we look forward to catching up again soon.