Dealers today seek any advantage over their competition, and sales reps scream for a real differentiation that would allow them the advantage over competitors – and yet few have any sort of marketing plan in effect to aid their desire. In the last seven years, I’ve worked with many dealers; surprisingly enough, more than 70% run their business on a day-to-day, crisis-to-crisis basis, and seldom do I find any market strategy or execution plan in play!
How many times have you heard of a NASA astronaut jumping in the capsule and yelling, “Light-em up fellas, and let’s see where she goes!”? How about never! Their strategy and destination is crystal clear: to accomplish their mission’s goal. Everything is planned, from mission control down to the janitor; everyone knows his or her part in delivering a successful flight, but without a plan, it’s like shooting an arrow into the night – no telling where it will end up.
My point is this: if you haven’t defined your key business objectives, and no one in your organization knows your destination, most likely, you won’t get there. Setting up a market strategy with key business objectives is the DNA of a profitable and long-lasting sustainable business.
Experts claim that our industry is racing to the services business model, and often this information causes dealers to jump forward without proper thought and planning. Some state that if you’re not in the services game yet, you’re way behind. However, changing the profile of your company shouldn’t be haphazardly thrown into motion; even if you’re late to the party, acting without a strategic plan can be dangerous. Many dealers describe having suffered costly, and sometimes harmful mistakes that resulted from pushing their company into the future without an appropriate marketing and execution plan.
Defining business objectives for today that carry you into a successful point in the future isn’t easy. Setting up the right market strategy – by determining who you are today, who you want to be tomorrow, what values you provide, and who your appropriate targets are – can be a difficult process. Whatever the answers are, you must dig deep; it’s an intense plan that must be created. You must ask yourself: what in your company needs to change? What external talent is missing? How will you attract and pay them? How will you differentiate your company? Are your sales and support team models correct? How will your story be delivered into your marketplace and account base – and what does your market say you are today? What is the cost of transformation, and when will it produce a return? You have to work the hard numbers; it’s part of a successful transformation plan. There is a lot to consider, and yet, once your plan is created, successful execution comes easily and can propel you ahead of the competition.
So where does an appropriate market strategy come from? It may be easier to ask: where doesn’t it come from? If your dealership operates on a crisis-to-crisis basis, as mentioned before, then it’s not too hard to believe that some of your execution or bad habits can be created or influenced by outside relationships that can significantly influence or strongly override any plans you may have, and prevent you from finding an appropriate strategy or plan. Your market strategy for daily execution and or transformation to a services model should come from YOU and from within your business – not from outside.
A familiar and simple example of this is the hardball play that exists today with some vendors who entice dealers with rebates and other benefits to get you to purchase inventories possibly larger than what’s manageable. If you participate in these types of programs, it should be a part of your strategy, because one of the largest deterrents of change is “the inventory that owns you!” As the year comes to a close, it takes all hands on deck to drive a crazy Q4 campaign to free up your cash from inventory. Many dealer principals then abandon any operational plan they’ve implemented, and go into a “save the ship” frenzy to unclamp that vendor’s choke-hold on your business; consequently, your objectives suffer. I’m not saying vendor programs and rebates are bad. I’m saying those inventories should be part of YOUR PLAN. If running the race towards the services sales model is your intent, then all outside influences should contribute to that destination, and not be a distraction from your key business objectives.
Outside influences aren’t necessarily harmful or negative. The value that vendors bring to the table can be great additions toward driving success; however, they should not alter or derail the progress of your key business objectives or execution plan.
Some agent-based sales organizations in our industry today force an old school, high headcount sales team model where one outside sales rep is placed on top of each geographical territory. Due to the high payroll expense, the learning curve and training timeline required with this plan, it rarely answers the call of successful sales attainment – not to mention that it seldom nurtures a platform for positive steady execution in support of your business objectives. Additionally, the turnover that’s associated with this strategy becomes one of the largest distractions from accomplishing your business objectives, and has been referred to as the “revolving door syndrome.” Trying to balance your bottom-line and the happiness of your up-line is in itself an enormous distraction from successfully executing any plan that supports what you want.
Situations that prevent change are not limited to outside influences only. An inside influence that I encounter often during our discovery process is one that completely destroys any momentum and all possibilities of positive change. This common discovery is the rogue sales team: when the sales reps own the owner, so to speak. Usually associated with a lack of planning and proper team management, rogue sales reps typically have “a great thing going on,” and don’t want anyone to mess with it. This situation is like having your feet in hardened concrete. Every day you’ll see the same thing; changing your company model and setting a new direction becomes very difficult, if not impossible.
I can’t emphasize enough that your business objectives must be YOUR business objectives; how others contribute to your success would be based solely on how you laid the puzzle pieces down. Make sure you consider all paths and contingencies to get to your destination. Ask and answer all questions and work through every scenario: if a part of your plan fails, what do you do then? Have an answer for every most likely outcome.
So what is the process for developing your key business objectives?
- Establishing an honest and accurate profile of “what and where you are today” is mandatory.
- If you are not in a strong financial position, acknowledge the need for short-term business objectives and set a primary Phase One Objective to fix the cash issue, whatever it takes. Once you see a solid foundation, start building long term.
Here is the language we use for this short-term objective:
Phase One: Establish a bold and short-term plan to get your company to a sustainable cash flow and a business process level that promotes a proactive business planning and strategy environment. (Do the math, be specific, and make sure your calculations to achieve this milestone are right.)
- Identify the management’s personal and business objectives, taking into consideration the disposition of the business. Is there an exit strategy? What happens to the business when it’s through with you? (This knowledge is a mandate, as it guides everything for the future.)
- Figure out your place, your offerings in the marketplace, what you want your company to be known for, what’s unique, what your value proposition is, and who your competition is.
- Define your value from a customer’s eyes – this is a great exercise for producing an accurate profile and zoning in on the specific value you’ll deliver to your clients.
- Then build the marketing, strategies, and execution plan that gets you there – and don’t be afraid to waver a little as long as you stay on track.
- In your marketing processes these are some primary categories that you should consider:
- Company profitability
- Sales and market trends and diversified revenue sources
- Competitive positioning and differentiation
- Account penetration and client retention
- Market penetration and growth
- Organization, team, and talent
- Compensation and rules of engagement
- Internal training and execution
- ROI and timeline
It’s not hard to manage your business when driven toward specific objectives, and when everyone on your team is engaged and driving to the same destination. It’s hard to hold onto smoke! So be specific, set your objectives, build them from reality, and out-plan and out-think your competition. There’s nothing like the sound of a well-run business in the morning!
