Back in February, I wrote a piece called "The missing link is dealer trust" in which I opined that dealers' confidence in suppliers was at an all-time low, certainly in the 40-odd years I've been observing this industry.
It's certainly not a one-way street. With their increasing emphasis on D2C and Click & Collect sales, it's clear that suppliers are losing trust in dealers, too, at least in their ability to reliably deliver brands' products to the end consumer. But it's not a 1:1 relationship, either. In transactions between suppliers and dealers, it's the dealer who's the customer, and when you begin to erode your customers' trust, it's time to take a hard look at your business practices.
In this piece, I'll be outlining a number of practical, pro-active initiatives suppliers can implement right now to regain dealer trust.
Smoothing the last mile
"The truth is that both vendors and retailers need to understand each other better." —Chad Pickard, owner, Ratchetco
I reached out via email with Chad Pickard, owner of the Ratchetco.com dealer consultancy. He responded with a list of six things that suppliers can do right now or in the immediate future to help restore dealer trust.
"The big one is transparency," Pickard says. "On B2B sites, '+5' is not transparency. Retailers get burned on a product they order today and then gets deeply discounted tomorrow.
"Predictability. 'We've got 365 days ahead of us, and we're going to drop this product in six months, so let's plan accordingly.' SRAM has done a good job of this kind of transparency," Pickard says, "and that gives retailers a chance to come into the excitement of a new product. "You're going to carry this product, so let's connect the last mile, and update the dealer locator to reflect the retailer's involvement with the product.
"Speaking of dealer locators, eliminating dealers who have gone out of business or dropped the line is another big one." In other words, stop sending customers to dealer locations that no longer carry your product. RV here: Sounds so simple. But you'd be surprised how many suppliers wait months or years before updating their closed dealer listings.
Pickard continues, "Suppliers have to care about the last mile; they have to care about dealers having their products on dealers' pages. Vendors like Workstand and Citrus Lime have the ability for dealers to show those products on their website, why not take advantage of it?
"Reps. Not waiting until they're going to be there in ten minutes. Call ahead and make time 'Hey, I want to take a look at your website and make sure you have the presence there to help you with a brand page with local flavor.'"
Warranty Resolution, especially with e-bikes. "You need to resolve warranties within 24 hours on a business day," Pickard says. "I talked to a brand that said 'we just can't do that,' but what are the costs associated with letting that warranty sit 10 days or 20 days? The retailers are representing the brand to the customer, they value that customer, and they're often handcuffed with delays on solving the problem. When the dealer can pull the customer in closer to that brand, that retailer and everyone benefits."
Finally, "A comment that was made to me at the NBDA Dealer Summit that vendors don't understand retailers. The truth is that both vendors and retailers need to understand each other better. We should strive not to be right but to understand each other. From a vendor standpoint, that means the dealer coming to them in a healthy way about inventory issues. As Walt Whitman used to say (origin is disputed), 'Be curious, not judgmental'. "Much of the confusion in our industry comes from this lack of understanding. It's got to work both ways."
The NBDA position
"Define what the supplier commits to providing the retailer such as training, communication, marketing support, warranty response, and inventory support."— Cat Strain, NBDA Best Practices committee chair
The NBDA has a Best Practices committee, which has a very detailed, 13-point PDF about what it considers industry best practices. But when I reached out to Cat Strain, the committee chair, she responded with a list of just four common-sense points that suppliers can easily implement. I quote them verbatim here:
- Communication, protect investment. This means no discounting, good marketing, staff training, watch DTC, no online dumping.
- Help dealers sell through, not just buy in. Provide staff training, merchandising assistance, marketing tools, demo opportunities, community activation, and meaningful sales support).
- Two-way accountability. There is both a dealer agreement and a retailer agreement, which defines what the supplier commits to providing the retailer, such as training, communication, marketing support, warranty response, and inventory support.
- Show up and listen. Join the NBDA, show up at events and learn how to best support in person — the value of the face-to-face connection. Practice flexibility.
Putting the pieces together
Altogether, rebuilding dealer trust is just good practice for everyone
These are tough times for suppliers. Staff cutbacks and reduced budgets have stretched resources thin. But there is still plenty of upside for suppliers to invest in dealer relationships. Brands need to remember that dealers are your customers, and treat them accordingly.
Many of the ideas expressed previously in this piece are policy changes that don't require budget or personnel resources to put into action. Tweaking software or re-assigning rep priorities are simple to accomplish. And the suppliers that make those changes will be the ones that reap the rewards, both in terms of increased sales and ongoing dealer commitment to their brand.
There's a message here for retailers, too: seek out suppliers who treat you the way you want to be treated. Give them the opportunity to earn your business, and reward them with your loyalty when they do.
Altogether, rebuilding dealer trust is just good practice for everyone. It's a win-win for suppliers and dealers alike, and the whole industry benefits. So let's get started on it.
