Where will you fit in?
Reading and watching CNBC (financial channel) on a regular basis gives you a surprisingly good idea of how you are going to get out of this economic craziness and get a handle on where you stand in your market post-pandemic. Future business activities are sure to be different calling for action on management’s part, but it is sure tough to make a decision unless you know where to start.
One of the most interesting segments I saw on CNBC concerned Ford and Salesforce. They seem to be joining forces to help contractors get a better understanding of their business and identify where changes need to be made making them more efficient and more profitable. When you think about this it is a GREAT value-added program from Ford since a substantial number of the customers who buy the F-150 are in some sort of service or contracting business.
Is your management thinking along these lines as a means to drive continued sales to current customers, but also be a selling point to attract new customers because you have something they need that they are not getting from their current vendor? Who could you team up with to do what Ford and Salesforce are doing? Think about this because there is a market share out there for somebody to take.
Along these lines, I hope you had a chance to read “Five Lessons Learned for the Post-Pandemic Supply Chain” that appeared in an MHW email recently. The Five Lessons are as follows:
- Stay open to new and unconventional ways of doing business.
- Broadening networks; expanding connections; deepening relationships
- Allocating resources to equipment and partnering with asset-based providers.
- Increasing inventory levels.
- Adding more storage space in multiple markets.
Seems like the author, Dale Young of Worldwide Distribution Services, is suggesting spreading the risk, renting when there is a lack of hardware, stepping away from the just-in-time approach, and adding buffer inventory to carry you over the hump. Now you made not need to follow this approach, but I bet you have customers who should be thinking about these issues and what to do about them.
It seems to me that most lift truck dealers have customers with problems dealing with supply chain issues, inventory issues, labor shortages, logistic problems. payroll issues and Covid issues. They may also have issues with long-term contractors that are killing them because they are not using the equipment enough to warrant the cost. So, what help can you offer customers to ease their pain? Who could you team up with to reach this goal? Could you offer seminars or Zoom programs to cover some of these problem areas? Between you and your OEM, there have to be “solutions” available to stop the pain and at the same time strengthen relationships.
It is no secret that it is going to cost EVERYONE more to run their business whether they are maintaining reasonable sales levels or not. Even if they are running at 2019 sales levels their margins will shrink due to cost increases or pushback on price increases.
So, if you want to know your starting point for future planning, I think we could agree that your company along with most of your customers and potential customers are going to be dealing at some level with the problems noted earlier.
NOW, THIS IS WHERE YOU FIT IN
Customers are going to listen to anybody that calls on them who can reduce their pain in terms of cost reduction or improved efficiency. And they are going to expect you to deliver those solutions. So, you have two or three options to consider:
- Lower your prices and live with it.
- Find ways to lower your costs to absorb the cost of the solutions you are providing.
- Find ways to assist customers in ways that you do not currently offer.
What would the Ford CEO do?
Ford is offering a solution that helps the customer pay for the truck he bought. Ford also found a partner to work with who can communicate the results of the solutions to the customers. And let us not kid ourselves, technology is going to be a big part of these solutions, and if you are not comfortable with that statement you will have to find “partners” who do and are able to collaborate with your customers.
To get you started in your own company I would like you to get a copy of your trial balance for the end of the year and examine each line item to determine if the revenue or cost is going to be impacted by Covid or supply chain issues, or payroll issues, or warehouse issues including receiving or delivering product. You will be amazed how often you will be saying “What the hell is in this account?” to your controller. Believe me, you will find costs no longer required or costs that can be reduced. When you finish this simple process costs will be reduced which in turn absorbs part of the solutions you have to offer.
Next, get a full list of current as well as former customers. Examine each company on the list to find those you must keep, those you would like to keep, past customers you would like to get back and new customers you would like to get. Now go down the list and find out where each of these current and former customers “stands” and ask what you can do to help. I bet you will generate a list of meetings with these companies and between you find ways to stop the pain or produce a plan to stop the pain. After all, your expertise is on the shop floor or in the warehouse environment, which covers many of the areas causing the pain.
My reading and listening are telling me that technology, AI, and VR are going to become part of the solutions customers to move ahead into the future. But knowing this and knowing where you currently “stand” I surely do not want any outsiders getting into my customer’s warehouse because I did not follow up to assist when I could.
Find some partners. Work through your OEM’s, Bankers, Accounting Firms, Consulting Firms, System Providers, Payroll Services to find solutions to your customer’s problems. Customers will love you for that and spread the word to other potential customers. If you ask, “Is there anybody else having problems I can help out? I would appreciate their contact information so that I can talk to them.” What will your customer do? Refer you is what they will do.
Find out where you STAND currently which allows you to plan how to service customers into the future.
HAVE A GREAT 2022!
About the Columnist:
Garry Bartecki is a CPA MBA with GB Financial Services LLC and a Wholesaler columnist since August 1993. E-mail email@example.com to contact Garry.