Dealers continue to report that “support from manufacturers” is a top critical issue regarding their business. As a passionate business owner or manager you have high expectations. Trusting a manufacturer partner to help sustain your business is sometimes a leap of faith, especially when partnering with a smaller, lesser known manufacturer. While speaking with peers and researching companies online are recommended practices before selecting the product line(s), nothing beats the firsthand experience—for better or worse—of forging a new business relationship with that manufacturer.
Does the manufacturer understand your business’ needs? Will it be available when most needed? Does it have the technical know-how and customer service expertise to keep your customers satisfied? These are just three of the many questions to ask and get answers to during the initial stages of a new relationship. For existing relationships, these questions should have been answered long ago and proof should be validated in your partnerships’ successes or failures.
Is communication too clear?
Communication is a primary factor in whether or not a dealer-manufacturer relationship will succeed or fail. In fact, according to Scott Batiste, CEO of Puronics Water Systems Inc., it is the most important part of any dealer-manufacturer relationship.
“There will always be issues that come up in any long-term business relationship, but if there is ongoing communication, these issues can almost always be resolved. If there is poor communication, the dealer is going to have an adversarial relationship with the manufacturer and will not be able to grow the business,” Batiste explains.
Clearer lines of communication, due to advanced technology, often come at the expense of the “personal” relationship experience. For instance, in your business life as well as in your personal life, how many people do you communicate with via email on a regular basis but have never heard their voice before? Information exchanging trends over the past 15-plus years in business have forever changed supply chain relations.
“It really is best to use a mix of methods when communicating with manufacturers or suppliers,” says Bob Boerner, president of Culligan Southwest Inc. “There’s nothing like getting to personally know your reps to help build a long-term effective relationship with them. [However], for day-to-day, business phone calls and emails will be easiest in most cases. Having established something of a relationship beforehand if possible always seems to help in communication later on.”
Lack of communication could be one reason why Water Technology’s survey during this time period has supported the fact that dealers’ continue to require and emphasize the importance of more support and value-added services from manufacturer partners.
In our 2012 Benchmarking Survey, “getting support/value from suppliers” was the number one important industry issue among our sample of respondents. In 2013, respondents ranked the same issue as a top three concern.
|Importance of industry issues*|
|Pct. of respondents ranking issue “very important”|
|Issue||2012 (& rank)||2013 (& rank)|
|Hiring/training good employees||62% (3)||64.2% (1)|
|Professional education||59% (4)||60.4% (2)|
|Getting support/value from suppliers||68% (1)||59.4% (3)|
*Multiple responses allowed.
As referenced before in this publication, our editorial staff validates the trends we notice in the market in three strategic ways. First, we use surveys, such as our annual Benchmarking Survey, to gauge the modern day trends and issues that dealers notice in the field. Then, we validate these trends during reader and manufacturer visits. Next, we have formal conversations with our magazine’s technical editors, advisory board members and other respected industry professionals regarding these critical industry issues.
We also rely on internal research, such as studying the topics that leading organizations such as the Water Quality Association (WQA) cover on an annual basis.
In addition to this year’s survey results, these efforts have confirmed dealers’ needs for solid supply chain support. But, why do some water treatment dealers feel they receive inadequate support from their manufacturer partner(s)?
“We believe technology advancements both in the sciences of water treatment and technology available to consumers, [such as the] Internet, have changed the landscape. Combine these factors with increased legislative pressure against some of our core technologies and without support from major industry players with significant resources, the dealer business can be a lonely place,” notes Karla Turcotte, marketing and events coordinator for EcoWater Systems LLC.
Right price, wrong support system
With the advent of the Internet, dealers now have the ability to purchase products and equipment from all over the globe. While some of these products’ durability, credibility and performance may be in question, the low price is what dealers have been most attracted to in recent years. However, Batiste questions the overall cost impact to participating dealers’ businesses.
“The primary reason that you are seeing this continuing issue (of getting value/support from manufacturers) is that [too many] dealers in our industry are purchasing their products from low priced local assemblers,” says Batiste, adding that many of these products are generally not certified and the local assembler does not offer much support to help a dealer grow the business. “Products that are certified and that are sold by ‘full service’ manufacturers are generally going to be more expensive than what is sold by the local assembler.”
According to Batiste, dealers need to be educated to understand that while the full service manufacturer product may be more expensive, there is added value to help build a more stable, more profitable dealership. For example, investments to ensure product quality in the marketplace, such as certification, cost manufacturers money, but these investments provide customer confidence and other important benefits.
Training and value-added support
The employees that you hire based on specific skill sets must effectively complete tasks based on their experiences and talents. For employees who exceed performance expectations, you may decide to add more responsibilities to their positions or even promote these valuable employees. And, an important part of your job, deciding which employees are worthy of advanced training is a variable that has short- and long-term impacts on the business. When it comes time to train new or current employees, manufacturers can play a pivotal role in employees’ learning and development.
For perspective, we asked Turcotte and Batiste to provide examples of ways their companies offer value-added benefits, including training, to dealers.
According to Turcotte, her company offers its dealers sales and technical training through monthly webinars, online training, factory training and a one-on-one basis. Additionally, the company conducts an annual meeting to share with the dealerships their latest news, technology and training tools.
“[We also] partner with an advisory dealer team to discuss and design programs based on dealer best practices to better support their needs,” explains Turcotte, adding that the company leverages its financial stability to continually re-invest in the dealer business.
Batiste’s company also provides value-added dealer support programs. He points out the company’s vast offerings of training, such as technical training, installation training, sales training, lead generation training and general business consulting to help with setting up and running the business.
“In addition, [we] provide sales and marketing materials that enable the dealer to present the product to the end user in a professional manner,” he says, reiterating the importance of quality products with certification as a means to stabilize profits and offer a value proposition to end users.
If you are a dealer that is in a difficult relationship with your supplier, it might be time to reevaluate. Dealers that stay in a bad business relationship any longer than they need to might be putting their business at risk. And, when starting a new manufacturer relationship, there are best practices to follow.
For example, says Turcotte, it is important from the start to establish and clarify expectations. “Dealers should let the manufacturer know what the issues are as it may be possible to resolve the issues. We rely on the constant feedback, either informally or through our continuous dealer survey programs, to receive feedback from our dealers to improve ourselves, our products and our offerings. The key here is constant, clear, honest communication,” she asserts.
As mentioned in the earlier pages of this issue, it is important to invest in the extra efforts of visiting manufacturers’ headquarters, warehouses and manufacturing facilities for an inside look. Consider the manufacturer’s goals and objectives, and are these in line with your company’s? Most important, do not rely on occasional emails as a means to maintain the relationship. Take advantage of web conferencing, phone calls, trade show booth visits and any and everything the manufacturer offers as value-added.