I recently had the privilege of attending the BTA Mid-America meeting as well as the Seat Based Billing seminar in Kansas City. I also attended the Pro-Finance 2 class in Cleveland, Ohio a few weeks later. All of the events were very beneficial and well worth the time and cost of attendance.
I walked away from them with an even stronger conviction that our industry is facing profound changes. I believe in 5 to 10 years the industry will look radically different than it does today.
Seat Based Billing
When I attended the Kansas City seminar, I had been reading about Seat Based Billing (SBB) for the previous 6 months or so and thought I understood the concept. Some of the major network and computer companies have been moving toward SBB. I’ve seen one company that advertises computers at a fixed price per month. This is not a lease or installment sale—it’s a monthly seat license allowing a user to use the computer and its software.
I could see one immediate advantage SBB has over Managed Print Service (MPS). With MPS, if you really manage the client’s printing and help them reduce their output, the result will also be diminishing aftermarket revenue. Since the aftermarket is where most of the profit comes in, this is obviously detrimental to the dealership. On the other hand, if the client is paying on a seat license, reducing the output increases the dealer’s profit. Additionally, SBB starts to obscure the pricing, so your prospect or customer will not be able to shop your offer as easily.
While the things I thought about SBB were correct, the seminar showed me that there is much more involved. If you manage SBB correctly, you will increase your profitability and open additional business opportunities with your client, while also saving them money. In the end, SBB should help you have a much stickier relationship with your clients.
BTA Mid-America
The speakers at this conference really impressed me. I think this was the best set of speakers from any of the meetings I attended. I will review a few of the high points.
Dr. Neeli Bendapudi of University of Kansas talked about the importance of building a living brand. She highlighted some iconic brands in industry today. She also made the point that every interaction with the public either builds or diminishes your brand. It made me think of the companies I know and how some of their employees’ appearance affects my view of the company. It also brought to mind how employees drive company vehicles: whether they are courteous or rude affects how people see your company. All of these things become a part of your brand.
Sally Brause of GreatAmerica Financial Services talked about ways to improve employee retention. Employee retention is critical in all companies and for all positions. Retaining service employees is even more important in our industry because of the cost of training.
Tom Callinan of Strategy Development talked about developing highly successful sales teams. Even though I have been in the industry for more than 30 years, he changed my views on the challenges of sales management. It seems that some companies are mired in their traditions and that makes them less successful than they could be.
Bob Goldberg of BTA talked about selling a dealership and some of the traps that may exist in a dealer agreement. One thing that his discussion brought to mind was the need to have an exit strategy. Every dealer principal is going to exit their business in one way or another, whether death, selling the company, or passing it on to the succeeding generation. It is best to make that exit plan now, rather than later.
Melissa Whitaker finished the session, and she discussed ways to improve the sales team’s focus and results. She highlighted that the days of cold calling to introduce oneself are over. Now it’s time to market with precision and then attack your target market.
I also had the opportunity to visit with all of the vendors. One thing that really caught my attention was the Epson 100 ppm inkjet printer. Inkjet technology is rapidly evolving and this unit is an example of the evolution. Pricing and CPP information are not yet published, but I believe this printer may be a threat to the existing business model.
Pro Finance 2
This class was a refresher for me. I had the opportunity to attend a class provided by Sharp for service managers that covered the original version of the Pro-Finance course. I think that most service managers should take the opportunity to attend this class. It teaches you to understand the financial model and shows why managing service is so important.
There have been some changes to the model and as MPS and Managed Network Services become a larger part of dealerships’ revenue streams, the model will need to evolve further. It is important that the managers in a company understand this model.
My Final Thoughts
The one overriding theme tied to all these events is that our industry is changing. Dealers that are not planning for these changes may find themselves irrelevant by the beginning of the next decade. It is also time for dealers to begin looking for other revenue streams to offset what may be serious threats to their aftermarket revenue.
