The current outlook is grim. All the numbers are discouraging. You might wonder if the market will show ANY signs of “coming back” during all of 2009. Well, as the old saying goes, “every dark cloud has a silver lining,” right?
Here’s why I believe that.
We are a resilient country
Have you ever noticed that as time goes by we, as a country, get better at handling crises? It seems like the more we have, the better we get, and the faster we recover. We have more resources to draw from to affect the speed of recovery. This time it goes well beyond our borders. There hasn’t been a concerted effort on a global scale to fix something like this since the last world war.
Every major developing country is in the crisis together, and all of them are working to make a faster recovery. With that kind of focus, recovery can come faster than any time before, and I believe this one will be surprising (at least for us).
So what does it all mean for dealers over the coming months? And what should we be doing about it?
Be Dressed for the party
I used to have a recurring dream years ago. I would dream that I’m out in the back yard working, getting dirty and sweaty. Then, when finishing my work, I would come into the house and find a house full of people all dressed up for a formal party. Then I would realize I had a large, high profile party at my house that I forgot about and the party was happening right now. I had a house full of people, and my #1 goal became how to sneak upstairs so I could get cleaned up and dressed before anyone saw me. That’s when I woke up with the horrible feeling that I wasn’t ready for my own important party. And worse, I was going to miss a bunch more of it because I had to go get ready.
I look at the current market like my dream.
The Party: We know the market is going to come back. It always does. That’s “the party”.
Yard Work: The work I was doing in the back yard is what each dealer is doing now to survive the downturn. It’s the necessary stuff.
Getting Cleaned up and Dressed: The “getting cleaned up and dressed for the party” are all those things the dealer has to have in place if they are going to take advantage of the market when it bounces. If the dealer does not do these things, they will be scrambling around trying to get “cleaned up and dressed”, like I was in my dream, while their competitors are enjoying the party and stealing the majority of the business.
So the question for dealers is: will you be dressed and ready when the party arrives?
How do I get ready for the party?
Here are five things that I consider necessary “getting dressed” items, so you’ll be ready for the party when it happens.
1) Plan Your Infrastructure and Personnel Bounce Back
You’ve downsized your people and your infrastructure since the market downturn. Many of you are running on 25-75% capacity of what you had. Many people have left the industry after being let go. Here’s the fact: when the market comes back, and demand for your products comes back, all remaining dealers will be trying to hire back the capacity that was let go.
What makes it more important is that so many dealers have gone out of business. So on a market comeback, there is less supply (# of dealers) for the demand. This is GREAT news if you’re ready! You may be thinking “we did it once already when we grew so much up to 2007.” But keep in mind you grew your capacity over years of consistent increase in demand. On an upswing of new demand, be careful you don’t just assume you can find all the resources you need on a moment’s notice.
When the market comes back this time you’ll have to be much faster to win.
2) Do Your Market Research
Do you have any idea what parts of your market will come back first, and the strongest? Well, you’d better. Those that are watching local trends, forecasts, and keeping track of (and relationships with) all the strong players in each segment will have the advantage when it returns. This is because they’ll know right where to go while the others are still trying to figure out what’s happening.
3) Get Ready With 3rd Party Relationships
You should have a plan in place with all 3rd parties you rely upon in your market. You should know THEIR health, and how they will be able to bounce back and pick up capacity. Otherwise, their weakness will put your strength in jeopardy. If there is a possibility for any kind of merger that would make your dealership stronger in the bounce back, now’s the time to look at it (it’s cheap and you’re not too busy to take it on).
4) Be Equally Divided
If there’s one lesson everyone has learned this time, it’s how hard one part of the market can fall. Many builder-focused dealers in some parts of the country are gone. Many equally divided dealers are still here because they were not solely focused on builders. This is the time to get expertise and capabilities on all sides (builder, retail, multi-family/commercial).
5) Ensure Your Systems and Processes are in Place and Efficient
If you rely on paper and unstructured processes in your business, you’ll flounder while others pass you by. Every minute your people spend in manual processes is a minute your good competitors are winning your business. And again, there’s no less expensive or more opportune time to get all those things in place than now.
Being in the process and software business, it’s amazing how many times I have heard owners say “we are so busy we don’t have time to slow down and improve our process.” It’s the reason one owner said so profoundly, “I love my business, but I hate my job.” Dealers should tackle this one now, before they grow again so the growth will be more enjoyable and profitable.
We’ve all seen the parties where certain people seem to be on top of it all, and they enjoy the entire experience at the party. They get to talk to everyone. They build many relationships.
Then there are those that come in late and wonder what they missed. While the people who are dressed for the party make significant inroads and execute on their strategy, these people flounder randomly with no real plan, stumbling into opportunities now and then out of dumb luck. Then they go home and complain about how bad the party sucked and they can’t seem to figure out how others found it so rewarding.
So don’t miss your own, most important party. And even if you do make the party, don’t show up all sweaty and grimy – trust me, people won’t want to do business with you. But if you take the time NOW to put all these things in place, you’ll be in a position to not only fully enjoy the recovery, but put your dealership in a top position for years after it.
Now that’s a party.