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PALM BEACH, Fla. — As the market slows, trailer dealers need to pay closer attention to customer relations, inventory management, accounts receivables and employees, an industry consultant said.
U.S. trailer orders have run out of steam compared with their surges in late 2017 and 2018, and lately have fallen 54% or more from January’s total of 25,800.
“We need customers. So make it about them, like when you first started your business,” said Allen Phibbs, director of educational and industry relations for KEA Advisors. He spoke during a session on preparing for the next downturn during the National Trailer Dealers Association’s 29th Annual Meeting, which drew a record 820 attendees.
Phibbs called throughput a crucial step — meaning the ability to get a trailer in and out, get a part on the shelf sold, having trailers in stock and having what customers need when they need it or within a reasonable time, and customers will get to decide what’s reasonable.
“None of us like to be sold, so help [potential customers] buy by understanding exactly what their need is. You have to ask questions. That’s how you build relationships,” he reminded the session attendees.
Phibbs underscored his point with a quote he attributed to the late motivational speaker Zig Ziglar: “If you first help the people [you deal with] get what they want, they will help you get what you want.”
Phibbs also addressed inventory.
He cautioned that you can’t just hope the right inventory is available, nor succumb to the first-in, still-here method of stocking inventory.
“What are your stocking strategies? Stocking strategies also include exit strategies for parts and trailers,” he said. “At what point do you need to exit this new trailer or old trailer in this market?”
He warned that the first cause of low gross profit in dealerships is unintentional discounting. “What happens when you don’t give a customer an estimate upfront? When are you negotiating? At the end of the job? How well does that go? Not very. That’s where unintentional discounting takes place.”
At the same time, inventory integrity means having what you say you have, and where it is supposed to be, he added. A dealership’s staff should have confidence in the inventory the dealership says it has.
“The quicker you can turn your inventory into cash, the more value you are going to get,” he said.
The same goes for accounts receivables — or the money due to a company in the short term. Accounts receivables are created when a company lets a buyer purchase goods or services on credit. “If for nothing else, your money is tied up in those investments,” Phibbs said.
Meanwhile, don’t ignore nontraditional business opportunities, he said.
“Do you advertise that you work on box trucks? They have panels, they have frames, lights, doors. Why not?”
Lastly, he said to let your personnel know what your expectations are for them, and tell them how they are doing.
“Keep them happy, and your customers will be pretty happy,” he said. “If you have unhappy employees, you have unhappy customers. I can guarantee that.”
As for the younger generation of employees, they want empathy — the understanding common to grandparents, he said. “Someone who is going to groom them and say, ‘you have done a good job. Keep going.’ ”
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