Tuesday, September 30, 2008

Through the Eyes Of the Bold, Part 28

We've been highlighting partnering with your body companies and other suppliers and putting together promotions with their assistance. Today, I want to talk about another way you can partner with your body company that will also help you with your promotions.

First, I want to mention here that all of these bold posts have less to do with aggressiveness and more to do with focus. The way to move the commercial truck department forward is to focus on it. By focus you will plan things out, you will ensure that things get done and you make it the forefront of your sales efforts. By concentrating on commercial upfitted trucks and businesses who use them, you are automatically building relationships that will bring 75% of your total sales in other products your dealership sells. The commercial truck is the way in. As a result of this, it is worth your focus because it is the foundation of a strong department with strong gross profits.

I talked about planning your promotions out a year in advance in yesterday's post. That requires focus. I mentioned that you want that planning so that you have your favorite pool companies order the inventory you need so it is available when you need it. Today, I will elaborate on this aspect of your focus and planning.

Because you are a leading edge genius, you are going to be different on purpose. In addition, you will focus on things others take for granted. For example, many dealers just take whatever the pool companies order up. But, you are different because you have a strategy that you want certain options and combinations that help you in your marketing. For example, you think the limited slip axle is one of the easiest options in the world to sell and provides great value. The pool company has that on a few units, but you want it on all of your units. So, you have them order them for you. You also like some colored units, so you have them order some of those for you. Any options or combinations or chassis they don't normally stock, you can have them order for you.

When you do this, this gives you maximum flexibility in your stocking operation and helps to minimize your flooring expenses. You have to have a good relationship with your pool company so they know that you will take the units and not leave them high and dry. So, with this maximize inventory and minimize flooring expense theme, here's how that looks from the big picture:

The pool company typically has 90 days of free flooring and some may have a bit more than that, but for the sake of this example, we will just use 90 days that you can be assured of. After 90 days, they start paying flooring and you don't want them to do that, so you have to take it out of the pool by then. At the same time, you probably have up to 120 days free flooring as a Ford BPN dealer, but we will use 90 again to be safe. So, doing the math, 90 and 90 is 180, or six months of total free flooring. That's half a year! Ordering empty chassis for your lot from the manufacturer makes no sense whatsoever to me. You get about 60 days and that is it, plus essentially, you have an unsaleable piece until it gets a body. This is a flooring creating machine! Not good. But, you're the leading edge commercial truck genius, so you order all your units through your partners so that you have up to 90 days to take it and then 90 on your lot to sell it.

If you can think of your inventory from this perspective, you can really reduce your flooring expenses by planning out your needs well in advance of the need and partnering with your pool companies. In this case, I would work with a number of pool companies, so that you have lots of flexibility and they don't see a large potential downside. Make sure that you follow through and take all the units that you have them order in the specified time frame, or help them move them to another dealer prior to the flooring start, or worst case, you reimburse them for any flooring expense.

More ideas tomorrow.

Monday, September 29, 2008

Through the Eyes Of the Bold, Part 27

More on commercial truck promotions and partnering.

We've now done strong promotions on service bodies and flatbeds. Now, I want to move on to van bodies. But, before we do that, I want to mention that looking at this as a big picture, there are really three basic body types we concentrate on: service, flatbed and van body. There are many variations of those bodies. For example, a contractor body is just a variation of a flatbed. A plumber body is a variation of a service body and some are a variation of a van body, a steel dump is a variation on a flatbed and so on. So the service, flatbed and van body are my promotional base line.

My experience with van bodies is that they sell a little better in the fall through winter time frame than the spring and summer. As a result of this, I am going to take advantage of that time to spike the sales even more.

As before, we will take a promo level of about 20 units as a package which is serious motivation for the body company to assist me in having a very successful promotion. At the same time, we are building a very strong relationship with them and they are excited about our bold thinking and it all works very well--it's a partnership--win-win-win. The customers benefit from this promotion as well.

So, we take 25% as our price leaders units. With van bodies, the single rear cutaway and the dually cutaway are both popular, so I will mix up the 25% according to how I perceive this mix on the road. From my experience, I will take 2 single rear 10' and 3 dually 14', which is the most popular dually model. These will be plain units with no options.

Next, I want step up pieces to be 50% of the mix. In this case, I would add some options like side door curbside access, interior shelving package, FRP panels instead of aluminum, E-track with bars, 96" with furniture attic, liftgates (at least one like Tommy Aluminum Railgate, and standard Tommy style gate), translucent roof, and so on. We want value added options that the customer isn't going to find everywhere they go. To make our promo work as the others, we want to negotiate some free options or pricing is such a way that we can price a van body with a couple of options very near the stripped unit, creating extreme value in the customers mind. Make sure and have upgrades on single rear and dually in approximately the same mix as the price leaders. I would also add a few 12' dually on cutaway which I have found to be a very good selling piece that almost nobody stocks. Make sure it is on the 138" chassis, not the 158", otherwise it defeats the purpose.

The remaining 25% will be exciting alternatives that the customer may have never seen. Mix in some tilt cab models and go for longer bodies on those. The 16' and 20' can be very good here. Here's a good place to include the Supreme Vanscaper that we highlighted a short time ago or something along that line. Order some tuck-away style liftgates on heavier GVWR chassis. If you are using a company that does van bodies and makes a plumber style body out of that, here is a good place to put one or two of those as upgrades. Take a look at all the options that the van body company has to offer and see what you think are really interesting to show off that you never see on dealers lots. Get creative and create excitement.

Here's a good rule of thumb that you might shoot for in the way of assistance from the supplier with an order of this size. Shoot for 10% of the dollar value of the total order. You want this not in dollars of discount, but in dollars of accessories which has a margin for them. Ten percent of the total order in cash may not be reasonable for them, nor would you order more than 25% in stripped units which have less markup than units with options. It has to be fair to both parties. You don't want to take the body company to the cleaners, you want to partner with them by having them get a sizable order where they help you to move that quickly in hopes you will come back again and again with similar thinking. Play fair and be reasonable and you will succeed nicely. If you are hard on the body company, they may do the deal, but you are at the same time destroying an otherwise good relationship. If it isn't win-win, it should be no deal.

When you are aggressively marketing like this, it creates excitement all around. It creates excitement with prospects, the body company partners, and for your own team as well. Get excited about all the possibilities of partnering with your suppliers to create strong, effective, and profitable promotions. Plan your promotions well in advance so you can include all the details that make it effective. I recommend that you plan them about a year in advance. Advance planning is very important to make sure that the pool company has the units you need when you need them with the options that you want on them. We'll talk more about this later.

You are the genius behind your dealership's extremely successful commercial truck department. You know how to put together exciting promotions and you are constantly promoting something and continually growing. You see your whole operation through the eyes of the bold with courage and confidence. Rock on!

Sunday, September 28, 2008

Through the Eyes Of the Bold, Part 26

Continuing on commercial truck promotions and partnering.

In yesterday's post, we did a nice promotion on service bodies. You can do the same kind of promotion on flatbeds.

Using flatbeds, I would order 25% price leaders again. This is our draw. Single rear wheel flatbeds are not popular pieces, so we will concentrate on dual rear 84" CA with gas engine like the Ford F36 with typical equipment options and just a plain 12' flatbed. That is our price leader. You might consider one option only--a hitch. It is somewhat harder to locally install a hitch on a flatbed than a service body, so I think I would order plain flatbeds with a class IV hitch as the only option.

To this, I would order 50% as upgrade models of the same kind of chassis with some body options. These may include, underbed boxes, tapered headboard, short contractor style gates, upper bed boxes, rack, dump hoist, full size gates, and so on. Feel free to have several combinations of those since they all make the flatbed more useful. You might have one or two diesels as you see fit, but not more than this. Make sure that you include a few 10' on 60" CA super cab, crew cab or regular cab. Man does not live on twelve footers alone.

The last 25% will be a mixture of other flatbed curiosities, like aluminum flatbed, gooseneck bodies, 14' on tilt cab or F450 type trucks, maybe a 16'. Just get creative. The goal is things the customer is unlikely to see on any lot they've been on. You might even put a small crane on one unit just to show that you are bold.

Run this promotion in a very similar way as the service body promo where the price leader is the draw, the next step up is the profit piece and that opens their eyes to the units with other options that they will find very useful. Again, as before, we want to work with a body company so we can get some free options so that we can make the first step up pieces a "no brainer" for the customer. It is typically easier on the body company, especially if they are also the manufacturer, to give free options than it is to give cash. Frankly, this works out better for you anyway because it makes the offer to the customer make more sense. Just like throwing in a $2,000 Factory Extended Warranty is so much better than discounting the vehicle $2,000. The value is the same for the end user in dollars, but the perceived value of the no worries warranty is the better tool and at the same time you are only giving away your cost on that. We'll call that a bonus-bonus, win-win.

Think about timing when you do these. I would do the flatbed promo at the very beginning of the typical dry season which is spring in some areas and early summer in others. In California, I would kick this off in April. In Minnesota, it might be early June. The service body promo can be done at any time of the year.

You can use these promotions to spike up the slower months. As a general rule, I have found January and February to be slower commercial months because of the typical spike of what I call "Tax Selling Season" in October through December with particular attention in November and December. Typically, December is usually an off month for retail, but the best month of the year for commercial. As a result, my promo for October through December is "Tax Selling Season" and I may not run a specific model campaign. Then immediately on January 2, I am in full swing for a January-February campaign to spike up the slower months to create better numbers. I would focus on 60 day promotions with maybe one or two 90 day. In addition, I would have them back to back, non-stop, forever with twists and turns to keep it fresh for me and my prospects.

More tomorrow.

Saturday, September 27, 2008

Through the Eyes Of the Bold, Part 25

Continuing the subject of partnering and promotions. I've talked about partnering with your body companies and other suppliers and even other dealers. Having your favorite suppliers kicking in to help you market your product is a good idea and one that they should be open to. Let me expand a bit on the idea of promotions.

A short story from my early days in the car business. As a young sales manager wanting to try exciting things, my first bold move was in late 1978 as I recall. I worked at a Chevy dealership where we averaged about 60 new cars & trucks plus used. The LUV small import truck made by Isuzu for Chevrolet was a good product and we stocked about 5 or 6 at a time and sold about 4 per month approximately. LUV came out with a trip to Japan if we hit a certain objective in about 120 days. Our objective seemed unreasonable the first time I looked at it. Our goal was set at 50 units. Do the math--4 units times 4 months equals 16 units which was our average. Seems unrealistic to do 50, but I wanted to go and got excited about the possibility and put together a promotion. I ordered 50 LUV trucks and I wanted them delivered all at once and create a stir seeing all those trucks being unloaded. The dealer was getting in his car and saw them unloading and said to me, "I sure hope you know what you're doing!" Confidence, right? Bottom line: We missed the goal--by only 2 units. We sold 48 LUV trucks during the program and that was 3 times our average! And guess what? It was fun! That is the power of promotion, having a vision and making a bold move. This was not an isolated case, just the first and it taught me the value of promotion.

Since then, I have done so many of those kind of promotions. I found that you can create enough excitement to spike your sales for a relatively short period. This helps increase your overall customer base and can help you raise your overall average as well. It is typical that if you are promoting one kind of unit that the sales of that may go back where it was after the promotion. No worries. The spike has done its job. So, go have some more fun. You know, business should be fun! Doing the same old things all the time is boring stuff. Live on the edge, at least just a little.

So, how can you do this in commercial trucks? I've helped dealers do this with service bodies, for example. They would buy about 20 or so service bodies in one order to be delivered right away--not in one delivery, but all landing within about 20-30 days. We need the initial order to land together, say about 5 or 6 of the order. We would focus on single rear wheel gas rigs and add a few other pieces. We would have some price leaders. These would be 3/4-ton gas like the Ford F20 with Air and not much else and it would have a service body with zero options. No rack, no hitch, just the body. Out of the whole number of 20 units, we would have 25% price leaders, so in this case it is 5 units.

Then we have some switch pieces. These were usually 1-ton single rear wheel like the Ford F30 and F34 with a little more equipment like tilt and cruise and CD player and more GVWR. These units usually have discount option packages. On these, we would put racks, hitches and a few would have some other options so that we show some unique things they don't find down the street like drawers, vise brackets, cargo bed enclosures, etc. This group will be about 50% of the mix, or 10 units. The remaining 25% will be a mixture of other size bodies on dual rear wheel trucks like 9' and 11' units with options.

The price leaders are the draw, but with a twist. I want to work a deal with the body company so that I can get free racks on the 1-ton single rear units. The body company gets a 20 unit immediate production order, I get 10 racks free for the promotional event. If I can't get them free, I want to get as close to this as possible. So, the price leader 3/4-ton is advertised on the truck and in ads for a certain very low price and I want the 1-ton to be priced at about $1,000 more in round numbers. Let's say the 3/4-ton comes in after incentives at $22,995, then I want the 1-ton as near $23,995 as I can get in $500 increments. Even if we need to have them $2,000 apart it will work just fine.

The idea is that the somewhat better truck with rack and hitch is so little more because a rack and hitch alone are usually around $1500, so if we added a rack and a hitch to the 3/4-ton, it would make the lesser truck more than the better truck. Simple logic says buy the better truck. But because of my deal and bold order, that is where the gross profit is. In addition, the customer will see all these other valuable options that they never see on lots, and pretty soon, they have to have the cargo bed enclosure, the master locking system, etc. More gross profit and happier customers! This promo would typically run for 60 days from first landing to finish and it has proven to be successful.

In order to make this work, you will give the entire order to one company, otherwise you are unlikely to get the support I am suggesting. In the process, you are creating a strong partnership with the body company that will have great benefit in the future because from here on, you are a promotional genius!

More tomorrow!

Friday, September 26, 2008

Through the Eyes Of the Bold, Part 24

Today we are continuing with partnering ideas with body companies and other vendors. At the same time, we are pointing out some of the specialty products of some of your excellent suppliers--our own opinion, of course. Yesterday we discussed three of Knapheide's quality products along with Scelzi and SVE MidBox. We hope you see the value of these fine products because we think they are awesome. Let's find some more partners!

When it comes to a wide variety of products and a list of extreme modifications, Supreme Corporation is a world leader. Van bodies is something they have done well forever, but few probably know of their Supreme Specialty Vehicles. Need a SWAT truck, Mobile Lab, Tactical Armored vehicle? How about a Crime Scene vehicle, Cash Transport, or Bomb Squad truck? How about. . . well. . . they probably make that too. So, that's off the chart for you? You need to partner with someone and keep your job? Okay, we just wanted you to know just in case. Think of the $10-12 pounders on those before we move on. . . Okay, I'm confident that Supreme would be most pleased to partner with you on some promotion or campaign you want to create. Since they are a nationwide company with many locations, you should be able to work the logistics out well. Of course you have their van bodies. They are experts at it. They also do refrigerated units in the same professional way. If you have ever had a chance to view some of their Refrigerated Bodies, you know they are quality all the way. And the refrigerated vehicle market is a great market to get into. They will help you understand what to stock to break into this market. Here's another product that is unique and should sell well all over the country: Supreme VanScaper. This is a great way to make use of a van body and create a maneuverable solution at a reasonable cost. Supreme has a selection of Landscaping solutions. Download the catalog and check it out. You could do a Supreme-A-Thon since they have so many products and double your marketing power with their help. Give Supreme a call and discuss the possibilities.

Remember this: All of these body companies are partners. They need you and you need them. They have product to move and you need to have product to move and they will work with you in almost any way that makes sense based on the level of your partnership with them. You want to order one unit and get a bunch of support? Dream on. This series is through the eyes of the bold. The better your order, the better they will help you. It's open to your imagination. Believe me, if they didn't support you, they don't deserve any of your business. Wouldn't you do the same with your customers? Of course.

Take full advantage of this concept. So, in order to make this work well and not have a deluge of inventory from 6 different suppliers, you pick one or two per promotion and give them good sized orders with plenty of negotiation on how they can help you make it successful for you and the body company. They want you to move it off your lot so you can buy some more. So, maybe this time, you choose Supreme and Scelzi and another time you choose Harbor and Marathon. It is good to choose suppliers that have different product lines so that you can choose a mix of product that fulfills a solid portion of the market and so the body companies are not directly competing product for product. So, I wouldn't choose Royal and Harbor at the same time, but Royal and Knapheide could work well. You get the idea.

Then, you might also find that one of the pools has a serious number of certain chassis and you think that you can move a good number with the right kind of promotion. This might mean that you choose one body company for this promotion. You know or should know that this is all Wal-Mart stuff, right? Wal-Mart buys large quantities at special prices and markets it in bulk. You do the same and get your partners to help you defray the marketing costs or other expenses or just the price to make a great promotional event. And, since we are looking through the eyes of the bold, we would be doing almost non-stop promotions. Starting to make sense from an overall marketing concept? There are so many ways to boost business and this whole promotion and partnering thing is one of the best. Take serious advantage of it. Always be looking for opportunities to partner with suppliers.

You can partner with aftermarket suppliers in the same way. Take a number of pickups and dress them up for increased profits and increased sales while having the supplier help you with marketing expenses. It works well for both companies. You get some great saleable pieces that add some excitement to your product mix and they get a bunch of business in one order. Makes their eyes kind of glaze over, you know? That's a good sign, so watch for it. Be a skilled planner and marketeer.

Now, here's a really bold concept: Partner with other stores. Let's say you sell Ford, so you can partner with the Ford store in a nearby city and do an offsite event and share the expenses. What a concept! Instead of competing, you are partnering. I know it is unheard of, but it is through the eyes of the bold. What's the worst thing that could happen? I don't see any. I just see good things. You cut your expenses in half; you get to promote an event and they promote it at the same time, so you have double exposure; the opportunity for sales should be approximately equal. What's not to like? It's time to think differently and see through the eyes of the bold.

More promotional and partnering ideas tomorrow.

Thursday, September 25, 2008

Through the Eyes Of the Bold, Part 23

I'm a huge fan of the idea of cooperation rather than competition. There are so many ways we all can help each other and still reach our own goals very effectively. In addition, I think it is also effective to look to your own team to see if there are ways to partner with each other that you haven't yet thought of. I'll discuss some of these ideas today.

Think of your body company partners. I hope you think of them as partners, because they are. For example, Knapheide is well known for offering to send out flyers to a sizable database to help you move the product you buy from them. So, how about buying a few different KUV's from them and have them help you by sending out a few thousand pieces to help you in your marketing campaign? Sounds awesome to me! This is an industry leader product and is absolutely perfect on the Ford LCF or Isuzu tilt cab. I would suggest at least three of these so that you have a 10' single rear wheel on a cutaway with the low roof, a 12' on a dually mounted on a conventional cab with walk-in height and a 14' on a tilt cab. This will give you a selection that is very effective. As one sells, replace it right away. But, maybe you really are bold and that's not quite bold enough, so let's order at least one of their super Crane Bodies. That will get your heart moving. You need some aerobics anyway. What will really get your heart moving is the 5-6 pounder that comes from stocking that! For the less bold, they have a safe bet: Do people really use Gooseneck bodies? Of course they do and Knapheide builds one of the best in the world (I know because I use to sell them!). So here's an opportunity to get some great product from the largest truck body company in the world and have them put some of their resources into your hands by helping you market the product once you get it. And, I will bet that they will do this more than once and I will bet there is more they will do for you. Want to find out? Give them a call and talk about partnering with them.

How about this: Partner with your other body company like Scelzi, by getting a couple of their great flatbeds with composite floors that look and even smell like wood. Then add at least one, but preferably two or three different Flatbed Dumps. How about a 10' on a 60" CA, a 12' and a 14'. They excel in this product, but they have much more, such as their great Combo Body. Get a 10' and a 12'. Or, choose from a wide variety of their great products. But wait--Scelzi has designed the most awesome drawer assembly I have ever seen. They look like a high line Craftsman cabinet mounted inside the compartment. I tell you this: if you have one on your lot to show, I don't see how you cannot get excited and watch your customer get excited as well. Here's a couple of sneak photos that I took near Seattle:


I'm sure the photos don't do it the justice it deserves, but trust me, this is an awesome set of drawers and your customers will buy them if they can see them and touch them. If you would like full size photos of this option, send me an email at tminion@commercialtrucksuccess.com. So, while you focus on some things to buy so that Scelzi is more motivated to help you, maybe you get them to order a few hundred trinkets that you can give away while prospecting. For example, some nice, inexpensive ink pens that people will want to use with your name, address, phone, logo and then have Scelzi put their logo on it as well. Heck, with their logo on it and your nice order, they may go for a few thousand to last you a while, or a combination of things like sticky note pads, letter openers and so on. I cannot imagine that they would not be willing to help you with these things. That's partnering. You need some fresh exciting product anyway, now make it work better for you!

Who else can you work with? Well, here's a great one--especially in today's current market conditions. Order up two to four of the SVE MidBox trucks. They make them for Ford F150 and Chevy Colorado.



When you add the topper to it in either metal or composite material, you really have a great work truck and it is on a light duty inexpensive chassis that gets better mileage. That's an unbeatable combination right now. I might order one without the topper and two with. Just look how useful this truck can be and with the side compartments, it doesn't get much better. And, I'm sure that if you partner with SVE in a way that makes sense to them, that they will be happy to help you in some unique way to move your operation forward. Give them a call and discuss the possibilities. In addition to their assistance, you get a great product to talk about and show off on your lot. Put one in demo service and show it everywhere you go. There are plenty of light duty users that would love to see this product.

More partnering ideas tomorrow.

Wednesday, September 24, 2008

Through the Eyes Of the Bold, Part 22

It takes a team.

In June of 1989, I accepted a position to build a department from the ashes. After observing the department in a separate building and getting the big picture, I talked with the general manager and dealer and said that I could not be a selling manager as the previous manager was and get the job done. After some lengthy discussion, we agreed. What was happening before is that the only one making any money in the department was the manager. This is big problem having a manager compete against his own salespeople. That makes no sense to me. So, I started from the ashes with the team I had and built from that. Only one of those that started survived. In the process, I had to find new team members and I found one gem just a few months after I started.

We were like the rag-tag team, but we were a team. We worked together well and moved the sales dramatically from where they were. I focused on building by seeing what I wanted to accomplish and getting the tools and support we needed to continue to grow. Buying a good database was a very high priority to me and we had virtually no budget for that, but I pursued it and we ended up getting $10,000 to buy the whole database on disk. We did it in about 4 payments at reasonable intervals, but we got it. That was the best decision ever. It was the database that moved us forward.

Just prior to the database first purchase, I decided to sell upfitted trucks to generate new income for the dealership instead of cheap selling the retail inventory. Since this product wasn't being sold by the dealership now, it would all be incremental business and fresh profit. We started with one service body and built from that. Within about two years, we had our own lot across the freeway from the main store. That is quite a growth curve. We started in the back corner in a trailer and moved into our own lot in two years.

It takes a team. If I had come in as a selling manager, it would not have happened. Focus is everything. Consider how it would be if the dealer opened a store and he or she was the main salesperson as well. It probably happens, but I can guess how large they are and how long they have stayed that way. I worked a very short time for one dealer who used to change all the florescent light bulbs when they burned out along with other maintenance tasks. That's not a great use of talent. They aren't in business anymore.

The team needs a leader. A good leader. Someone with the big picture of things clearly in their mind and how to break that into pieces the team can deal with. A leader needs to develop systems of accountability and performance while being the best encourager around. The leader instills confidence and fights the corporate battles that keep the team running smoothly. This is a superior arrangement.

I see a lot of dealers where they have a fleet/commercial manager and that is it. What can you expect? 15 a month? 20 in good times if they are good at what they do? I know a lot who do less than this as well as couple who do more, but there is a limit what one person can do no matter how good they may be. It is not a good arrangement for developing a department. You might as well have one salesperson on the retail side and call it a retail department. It is not effective. I see some who have more than one fleet/commercial manager, but they are all the same thing, doing the same job--for themselves. It is not really a department.

For maximum effectiveness and long term growth and profitability, having the team structure will be best. That is a non-selling manager to focus on the plan, implementation and growth, more than one salesperson who is focused on sales and an admin person to focus on the database, paper flow and support. This allows the manager to do more training, assist and encourage the sales staff and grow the department to be a serious profit center for the store. It then becomes a department within the dealership and it is a plan that I know for a fact is a great plan and produces great sales results. Yes, of course, it is through the eyes of the bold.

Tuesday, September 23, 2008

Through the Eyes Of the Bold, Part 21

Continued from yesterday's post regarding moving old commercial inventory including some observations of many dealers in the past couple of years.

Marketing. I see some that are advertising in the Trader style magazines, but little else. Though the Trader publications can be good for business over the long term, people must go to a convenience store to buy the magazine and my experience is that they do not always have copies of it. It can be questionable how many copies are picked up by people looking to buy a truck. I also see some that advertise on Trader Online by putting their commercial inventory there. You may even get better response there. After six years of running two pages in every issue in good times and less good times, I know one thing about the Trader publications. One is that they worked well for us over the long term. Two, we got almost no calls on common items, but the more unique the product we put in there, the better it sold. This is because there are so many dealers tripping over one another trying to sell the same things. Used and unique are the best pieces to put in there. Online, you can put all your inventory.

I rarely see any other marketing to speak of, but there are quite a number of things that can be done to help communicate with potential buyers. The very first thing that comes to me is a good commercial web presence. I've looked at hundreds of dealers websites and the commercial/fleet portions of those sites and it is my opinion that they don't work very well. There is much you can do on the web when you have a tool that can really help you sell. A separate website is easy and smart. Here is an example: Geweke Trucks. Another very powerful marketing tool is what many call an email newsletters. I prefer to call it email marketing. Here are some examples of what one of those might look like: Newsletter. A newsletter is one type. Basically it is a communication with your customers and prospects with graphics, photographs and has interest and is attractive to the eye. To make this work, you need their email addresses.

Another marketing tool is direct mail. Having a list of potential customers and addresses, you can send flyers, letters, and other types of mail to attempt to communicate directly with the kind of prospect you want to. I think it is more effective than any of the publication ads because it can be controlled so well. I would target a specific piece to a specific group, for example, a plumber body flyer or letter to plumbers, HVAC, and other types that would use that body. Targeting your marketing is the best thing you can do.

Your overall marketing requires a good, solid database and a way to manage it. Keeping track of the people you contact, updating information, planning marketing strategies and campaigns. Nothing replaces the database and it becomes your solid gold tool for moving inventory.

Beyond the database marketing, there is more you can do. Prospecting is one of the simplest and best tools. Going to the end user is pretty straightforward and very powerful. The key here is doing so many each day on a regular basis. Prospecting will also benefit the database by updating information. Another method of prospecting that is hit and miss but can be very effective is to carry a digital recorder everywhere you go and when you see a prospect on the road, make vocal notes of the information, phone numbers, vehicle types, why you think they are a prospect and so on.

Another method is to go where prospects go to buy things and put up a display. Maybe that is The Home Depot, Lowe's, 84 Lumber, County Fairs, where ever you think it is a good place to park a vehicle and talk to the kind of people that you want to talk to. You can also have a display at your store and get people to come to you, and that will require a lot more planning and effort to pay off.

Yes, we are still on marketing. There are so many things that can be done. When I see a dealer that is not moving old inventory, one of the first questions I will ask is what they are doing in marketing to move the inventory. I hear, "I have no budget for any of that," and other types of comments. I don't argue really, but I don't believe a word of it. There is always a way. What I would say is there is no commitment to marketing. Get a better idea and pursue it with vigor. The results will demonstrate that commitment.

Monday, September 22, 2008

Through the Eyes Of the Bold, Part 20

There is a lot of old commercial inventory around on dealers lots--at least on the West coast. It's the oldest inventory I have ever seen. Some dealers have had units on their lot for well over a year and even a few for two years or more. It is a widespread problem, but I have some ideas to help you move some of that iron. In the next few posts, I will discuss them in some detail.

I will start with some observations. The first observation is there is not very much focus on commercial. The trucks are there, and they may even be out front here and there, but there isn't a real focus on commercial. The focus is on something else. One of the things you can do is to think about it. If all you sold were commercial upfitted trucks, what would you do differently? How would your focus need to change? What methods of creating sales would you employ? How would that thinking change your stocking influences? Would that change your thinking about the use of a database? Focus will change the results!

I see trucks that aren't ready to sell. Paint peeling off of the beds, filthy dirty, water stains inside the service body compartments, missing keys, missing or incorrect stickers. These are the easiest things to fix, so that would be good to do. Get them ready.

Generally, I see a mix of bodies that is not conducive for sales. When I see a lot of empty chassis on one lot, I see something that to me would not be good in great times, let alone the current fear-based economy. My advice there is simple: get rid of them or put a body on them. It is an unsaleable piece the way it is. Once a body is on it, the unit become saleable. Unsaleable inventory is a waste of resources. This might have been a strategy that worked at one point, but it is most likely not working now. I am a firm believer that I would rather have the wrong body on the truck than no body. At least then you can demo it and tell the customer, "we will swap this body with that body, and deliver it in just a couple of days." I know all the reasons dealers like to stock empty chassis, but I don't think any of them are good for business.

Next, I see an unbalanced mix of product. I see some dealers with just two or three different kinds of bodies leaving gaping holes in their mix. Plan out a basic mix that covers the bases and add a few specialty pieces for pizazz and then keep it going. Replace sold units with like units, so you keep your mix alive. We talked in depth about mix in this series.

I see very few price leaders. Perhaps you had them, sold them and haven't replaced them. Price Leaders are critical to me, so I always want to have them and replace them in days not weeks. I always want at least one cheap Flatbed, on cheap Service body and a price leader Contractor or other. I don't care how old your other units are, keep the price leaders in the mix. They help draw traffic.

Merchandising is very weak. A lot of stores, I see the commercial trucks in the back up against a fence. Negotiate for a small amount of display space. You don't need the whole lot, so shoot for two trucks at an angle which is about 4 spaces. Then, pick your coolest display pieces to put out there. If you have a dump, that is always a crowd pleaser, color is good, price leaders next, everything else after that. Mix it up. Don't leave the same ones there all the time. Keep it fresh for the public view and for the rest of the dealerships view. It's okay to put pricing on the window like the used car lot does. It's okay to tie balloons to them just like retail does. Every little bit helps. When you focus on commercial, you will consider merchandising more.

More on this tomorrow.

Friday, September 19, 2008

Through the Eyes Of the Bold, Pause & Refresh

I've talked to quite a few commercial/fleet managers lately who are trying hard to keep a positive spin on things in this seemingly downward spiraling economy. One of the first things to slow in this kind of economy seems to be "high ticket" items like cars and trucks. Whether it is a personal vehicle or a service body for a business, a lot of people are making do with what they have while they see how its all going to turn out.

You pick up the paper and all you can see are worrisome thoughts being expressed as "reality." The more worrisome the title of the article, the better the draw. Newspapers live for hard times to report. People just can't seem to get enough of it. Then, you turn on the TV and it is constant coverage on many channels, especially the news channels like CNN, CNBC, Fox, Headline News. They've got this expert and that expert and this opinion and that opinion and they roll it over and dissect it and work it until it is completely exhausted. It is as if that will help in some way. We justify watching it or reading it so that we can stay informed because we have to know what is going on.

Then you come to work and hear it from your co-workers, your employer, the vendors. Everyone has an opinion about it. "Hey, did you hear about the stock market crash?" "Ain't it too bad about the retirement plans of that company that went belly up?" Ain't it awful? Yes, it is downright ridiculous how awful it is. I sure don't want that happening to me! Man, I have to watch out! I'm getting older you know and what would I do?

So, when I'm talking with the commercial/fleet manager, I can feel the disparity of what they want versus the way things are and though they think they are good at keeping the positive spin on things, it shines right through. We don't believe it ourselves. How can we believe a positive spin with all this turmoil in the economy? It's hard enough just to get out of bed and face the world sometimes.

I feel it once in a while now, but less every day. For what it's worth, I will give you some very unpopular advice and see if you get any value from it:
  • It is easy to get information overload, especially when it comes to bad news. I stopped reading the paper many years ago. Frankly, I haven't missed it at all--or I should say that I'm glad that I have missed it! It is almost impossible to not get some news. As soon as you log on to the Internet, you will see plenty there when you aren't even looking for it. So, when it comes to bad news, the less I see of it, the better my life is. You really are in charge of what you let into your brain. Taking charge of that is an intelligent thing. Accepting responsibility for what goes in is very reasonable. I was travelling with a friend and business associate the other day and we were coming into a large city and there were large cranes all over the place building skyscrapers. There were plenty of cars and trucks on the road and I said, "you didn't read the paper, listen to the news, or watch any TV today, so if you were looking out of the windshield and making a judgement about the economy, what would it be?" He said, "I would say that business is very good and the economy is growing." That would be reality from that perspective. Reality is just a judgement; an interpretation of events or situations. So, the advice is to stay out of information overload. Control what goes into your brain. No one else can do that for you, but you can.
  • Pay attention to your physiology. Stand erect, sit erect with shoulders back and head up when possible. It is almost impossible to be depressed and stand erect. You have to slouch to be depressed. You have to be in a certain position. You've been there and you know what I am talking about. Anthony Robbins taught me this, but he is absolutely right and all you have to do to change the way you feel is change your physiology. I know it sounds too simple, but isn't that what's cool about that? It is simple. Nowhere is it written that it has to be hard. Exercise helps immensely. Pay attention to how your thoughts change when you change your physiology.
  • Be thankful. You have so much to be thankful for, but you have to remember to keep that gratitude at the front of your mind. Say how thankful you are for things as they happen. I thank God all day long and just before I go off to sleep for the very long list of things each day that I have to be thankful for. You can thank the Universe, or just say thank you to the air. The act of openly being truly grateful is such a great feeling and feeling good is what you so desperately need all day long. Think about it. When times are rockin' and rollin' you're feeling much better and have a very positive outlook on the future. Live is good, right? You can truly feel that way now as you begin to look for things to be thankful for all day long. Have you ever looked back on something that was interpreted as a negative event, where it turned out that this was the best thing that could have happened because it opened up something else? We've all had those. You need to be thankful for everything because you just don't know from your present perspective what the benefit will be, but you know it will be there.
  • Be flexible. Act like a tree in the wind. A tree moves with the wind. If it didn't, it would break. But the tree is flexible in the face of the wind, so it doesn't break. I have learned to go to Plan B, C, D, E or whatever I need to without hardly even thinking about it. You do that by being a tree. This plan didn't work out, so I go straight to plan B. I got to the airport in Seattle the other evening and wanted to check in for my flight. I find at this time that I booked the wrong day on the return flight. It is for tomorrow. No problem. I go to the counter and discuss it after waiting in line. I can go get a room and stay another day! I was having such a great time, I almost did that anyway! It wasn't the slightest problem. A few minutes delay, but I had plenty of time. I have really been learning to "go with the flow" of things and not "swim upstream very far." Let go of being upset by any changes that happen because if nothing else, you will find the changes were the better thing to happen when you look back on it. I see people get upset about the smallest things. Stress. Who needs it? Not me. I'm a tree!

With what I've said so far, if you do these things, your business is already improving without any effort whatsoever on your part. Isn't that cool? Now, I'll mention some things you can do to improve business. We might have to call these "work." But, we'll do it in a lighthearted way.

  • Now that you've taken control of what goes into your brain, let's take more control of your business. Begin to visualize what you want. Play with it. See it as clearly as you can see it. Visualize it often, but if the picture begins to change to something unwanted, let it go and come back later. See your customers coming in and picking up their new SUV, Plumber Body or whatever you are wanting to sell. See it happening. Don't force it, but hold it as long as you can, then let it go. This should only take a very few minutes each day. The value of this is that you are seeing things the way you want them, even if it is a fantasy. Dreams do come true you know, or have you forgotten that? See things the way you want them regardless of your current reality. Think of it as practice just like you are standing in the batters box at the World Series and you're watching that 95 mph fastball coming into the perfect part of the strike zone and you're brimming with confidence and excitement, and whack! It's a long, high drive over the center field fence! It's a home run and the bases are loaded! You just won the game! That's powerful visualization--and it works powerfully in your business life.
  • Talk to people. This is a good time to follow up with your existing clients and see how things are doing with their vehicle and more important than that would be to just thank them for being your customer. You might mention that anyone they know that might be in the market that you would take the same great care of them. A couple of minutes on each one should do the trick. Follow up is very important and will reap many rewards. One is that you will see how successful you have already been! You have a lot of customers!
  • Do some marketing every day. Send out some nice inexpensive mailer, or send some email thank you notes, or offers. Call some referrals. Go visit a few good customers and on your way in or out, stop and say hi to a new prospect or two. One of the lessons I learned about multi-level marketing was that the key to success there was consistent effort. You don't have to call 50 people today. That's a scary number. Just call a few, but do it every day. That is the key: consistent effort. Throw some spaghetti on the wall and see what sticks.
  • Have some fun. Go play golf with a client. Stop by the batting cage at the park after lunch and hit a few homers. Try to do something unusual that is out of your routine. When times are not as good, it is better to avoid as much routine as you can. It can lull you into a blank stare. Walk backward a few feet. It doesn't have to cost anything, just do something for fun. I used to walk into the business office singing Jingle Bells in July. That always felt good and it made them laugh and everyone felt better. It is all about feeling good, so find some little things that feel good and do them. Mix them into your day.
  • Get out of your office. Stop staring at the computer. Stop listening to other people complain. Get outside. Go visit potential prospects. You will find them everywhere. Hand out some cards. Just have some fun with it. You could say, "You're probably not in the market for a car now or soon, but when you are, I want your business!"
  • Now is a great time to clean up and put things where they need to be. Get more organized. You can work on some projects that you have been meaning to get to. Now you have the time. Don't allow yourself to feel guilty about taking the time. You need this, so allow yourself to do it and enjoy it while you do so. Get your database up to speed. Whatever has been languishing, let's get it done now.

The day is over now. You've made a great deal more progress than you were making before. You are developing a grateful attitude about everything around you and all the events that unfold. Go home with joy in your heart that you have given value today. Go home refreshed and tomorrow you will get the opportunity to get better at it and find more joy. Sales will begin changing for you. They may not for those around you, but they will for you. You've probably heard it said that attitude is everything. They are right. It is everything. But, attitude is just your response. You've always had it, but it might not have been a good attitude or even a positive attitude. It might have been a negative attitude. You get to choose. Events cannot choose for you because events don't make attitudes, only your response is your attitude. Choose wisely. Choose joy.

Thursday, September 18, 2008

Through the Eyes Of the Bold, Part 18

Today I want to continue to look globally at the commercial truck operation within a dealership and offer some ideas to have it make more sense.

In the majority of the Through the Eyes of the Bold series this month, I have spent a lot of time on inventory, and for good reason. I have seen the inventory be the beginning and the end of many a commercial operation. It's those big white things, you know. I remember back when I was a commercial manager that the other managers used to say that the commercial trucks are too big and take up too many spaces. I said, "well, they take up one space, just like the other cars and trucks. They just fill that space up a bit more, but it is still only one space." But, that was a waste of time because it is just their perspective. The way that doesn't come up much is when they see how many get sold!

When I say that the inventory is the beginning and the end, I mean that at an auto dealership, inventory is a given. A dealer doesn't have much of a problem understanding having inventory on the lot to sell from. Based on that, it is a fairly easy sell to get the dealer to stock some upfitted trucks. That's the beginning. "If you build it, they will come." That's the mantra in the car business. The other mantra is "turn and earn." So, when they don't turn, the dealer gets sour about commercial rather quickly and begins to wind it down. So, the crucial part is what do you do once you have the inventory? The "if you build it, they will come" theory will have a very small amount of success, because display is only a small part of the story of the successful turning of inventory. You have to remember that this stuff is specialized inventory designed to be used by a specific group of users and based on that, there has to be a much better plan on how to "turn and earn." You turn them, you earn the right to keep doing it. You don't turn them, the dealer will come in with controls and may shut it down.

Allow me to share some things I've learned about turning the inventory, even in times like today. These will help you start right and keep growing.
  • Database, database, database. If you don't have a database of potential customers to contact and stay in touch with, I don't know how you will succeed except in a market where there is more demand than there is product. Buy one. Upload it to a customer relation management program. ACT! is a good one, and there are many others on the market. You might even have a good one in house at the dealership, but you need to be able to control the fields specifically for commercial trucks. For example, you need to be able to put in SIC codes and descriptions of different users, like cement contractor, electrical contractor, landscaper, engineering contractor, plumber, and so on. This allows you to target specific audiences with specific offers that are specifically designed to be attractive to them. We have a whole plan on what to do with a database, but you see that it is number one on my list. It is number one. I had a 10,000 name, six county database that I used and massaged for years. It made all the difference through good times and less good times. Get a good database.
  • Use an Inventory Management System that is also a database of statistics. This is number two. If you don't manage your inventory, it will manage you. I cannot even imagine running a commercial operation without this. Through this program, I print inventory lists with all the information a salesperson needs to close the sale. Out of this, I build a database of information that helps me make better and better inventory decisions in the future. I will be able to know how much I made on flatbed dumps versus steel dumps versus empty chassis. I will know how long I had them in stock and I can have averages and totals. I started using this in 1989 and never stopped and you would be flat amazed the valuable information I gleaned from it. It's how I figured out that stocking empty chassis made no sense from a profit, flooring and turn time point of view. At the last operation, I had about 80 upfits on the ground and only about 2 or 3 were empty. I see dealerships today that have 50 and 22 of them are empty. That's a flooring bill going skyward. You might as well stock Mustang GT's with no engine. Hey, you can buy this GT, but it will take about 4-6 weeks to get the engine of your choice. . . sure. Get an inventory management system. We have one that you can get that is easy to use.
  • Know what you want to achieve. Write a plan. I started writing plans in 1989 at my first commercial operation and I would write one before the start of each new year with goals, plans, changes and in as much detail as I could. I got better and better at them as time went on. At first I thought it was silly, but it is not the least bit silly. Keeping it in you head is not good. I started it mainly because I had to keep re-selling the dealer on the value of keeping the department alive. It worked. It not only stayed alive, it began to thrive. At first, I couldn't show sales, so I showed activity. Here's how many we talked to and here's deals we're working and here's relationships we're building and so on and so on broken down by salesperson. In the first six months, I probably did about 30 reports although they were short and were just a list of our activities. We needed his support and we had almost no sales at the start, so we had to show him value another way. Get good at reports so you can demonstrate value and communication with the dealer and/or general manager. Then, write a full blown report for the next year, but don't do it in January, do it in November. Be the first to produce your report for the coming year. State what has happened, achievements, sales, statistics, what you see in the coming year and how that will flow and most important after all of that--what you need from the dealer to help make that a reality. You will get the support. Dealers aren't used to that kind of business planning, so they will respond to you because they see that you are keeping their interests at the forefront. Get a plan and keep planning.
  • Now, at number four is get your inventory coming and have it make sense to the market. We talked a great deal about the mix and expanded on each category, so you should have that down pretty well. If you are going to sell F150's, you need more than one. You need a regular cab, a super cab, a super crew cab, a 4x4 as an absolute minimum. Then you need some F250's and F350's and Rangers and so on. I've seen dealers that stock two or three different kinds of bodies and that is it. That wouldn't fly on the retail side, so how could it fly on the commercial side? Get smart about your stock. Next, when something sells, replace it yesterday. Don't wait six weeks. Have a better plan. You need to encourage success. If something is not turning, figure out why as best you can. Don't give up on it, but adjust as you think you need to.
  • Get some partners. One of the things that will help you the most is to not think about other dealers as competitors, but as partners. Whatever make you are selling, it is common for salespeople to think of the same make dealers closest to them as competitors. I even hear many complaints that they steal their deals, undercut the market, don't trade with them, and much less kind thoughts. That thinking will keep your income very small. Get over it. How can you develop a partner relationship with them, so that they help you when you need it and you help them when they need it? We all need help. I remember many, many years ago, there was a Chevy dealer in Fresno that was very large. They typically had over 500+ units on the ground. They thought of themselves as an island and that the inventory was their "value." They stopped dealer trading. They went out of business. That kind of thinking will not grow your business--it will keep it small or kill it. Give value. It comes back ten fold. These new partners will help you turn your inventory by making it available to them so they know what you have in commercial. We're doing this in regions through Ford Truck Clubs right now, but I started it back when I was doing commercial with another large dealer which essentially doubled my inventory at the time. In addition, we would trade two or three of our oldest pieces at the end of each month to keep some movement. Our agreement was that we would just take whatever and not be concerned about it because we get too focused on our own thinking sometimes and don't let better ideas in. It was amazing how their 90 day old or older piece sold in a week off our lot because it was fresh to us. That is a partnership. You could also take that partnership to several other levels if you had a mind to.
  • Have a work plan. How will you get the work done and how will you know it is getting done? You need some kind of system that is simple and yet has accountability. I've heard many, many times how a commercial director will hire an outside guy and he didn't sell hardly anything and four to six months later, we had to let him go. You know what? This is very straightforward, but here it is: That is your fault, not theirs. Of all those that complain of that scenario, not one of them had a plan, other than, hey you go out and call on businesses and let me know how its going. In the meantime, they use up the guarantee (if they didn't have that, they would have been gone sooner) and you get nothing because you had nothing--you had no plan. With our plan, you will know within two to three weeks if it is working, and sometimes sooner. No more long term failures. Get a plan. Frankly, most dealers as the one I just described, don't hire outside salespeople any more. That didn't work, so they quit the idea. Bad plan. Get a new manager! That's a much better plan! Get one with a plan, or better yet, give the plan to the new manager and guide them to success.
  • Keep your eyes on the future. Keep looking for better ideas and better methods and better plans. Filter that through your own intelligent mind and use what works for you and discard the rest. Borrow from anyone and everyone. I've accumulated a lot of great ideas from lots of different places, books, videos, experiences, trial and error and other peoples experience. Use whatever I'm giving that makes sense and keep looking while you do the best you can with what you have available to you today. Think growth. To me a business is either growing or it is dying. It is always a work in progress. How big can it get? I don't know. What's the limit of your thinking? Be open to learning from whoever can teach you. There is always something to learn. The information in the world is currently doubling about every 10 years now. New ideas, new ways, there's always something worth looking at. Stay out of that rut. That's one reason I love trying new bodies. Go to truck shows and see what's new. Subscribe to magazines, blogs, newsletters. Keep your eyes on the future and what you can do to grow.

That wasn't nearly as focused on inventory as you thought it was going to be, was it? The truth is that turning inventory is less about the inventory and more about your thinking about your operation--how you see it and how you keep it working or not. The first two are so important that I feel confident in predicting your success on whether or not you have those and use them. It is how the inventory is the beginning and the end. Of course, through the eyes of the bold, there is no end and there are continuous beginnings.

Wednesday, September 17, 2008

Through the Eyes Of the Bold, Part 17

Today, I will expand yesterdays post where the dealer is concerned. So, this post is just for dealers and general managers.

When I am talking to a dealer (I prefer to talk with the dealer and general manager at the same time), the first question I ask them is, "what do you hope to achieve with this operation?" and "what are your goals?" The answers to this are eye-opening. It tells me their knowledge base and I can see clearly whether their goals are reasonable. I'll give you a real example of a conversation with a general manager. I explained our program in overview and some detail. Then, I ask, "what are your goals for this operation? How many units, or dollars are you looking to create?" He said he wanted 15 upfit sales per month. I said, "that is a worthy goal and we can help you to do this, but with your current method, it is impossible and even 5 per month on a regular basis would not be very reasonable." I said, "15 upfits a month is a strong goal and that kind of number would require a team and a complete operational plan." This GM had one person as a commercial/fleet manager with one other person helping out here and there. This person was not well suited for the job, and especially not well suited for strong commercial sales. The GM's goal is unattainable and very unrealistic. Still, he thought he could make it happen, and still he's waiting for it to happen and in the meantime is paying a sizable flooring bill every month. After two years, it is still less than 3 units per month with about 30 upfits in stock. A very poor plan and doomed to failure with no future.

Here's the best advice I can give you and its free:
  • One person is not a department and one person will not serve your needs when it comes to commercial. Anything more than 20 total units per month in production from an experienced person is a bonus, but the maximum percentage of commercial will probably be about 25% for someone focused on commercial.
  • Focus is everything. Having a fleet/commercial department or having a commercial/fleet department is very different. Commercial is a retail business, it is not fleet. Most fleet people don't really sell much fleet anyway, they sell "fleetail." Some call it business sales. If you focus on commercial, you will get all the rest, if you focus anywhere else, you rarely get commercial. The difference between fleet and commercial is purely profit.
  • Get a good plan. We can help with that, but you need a good plan. How will it get done exactly? Who will do the work? How will the work get done? How will it be followed? How will you know what is working or not working? You need systems, procedures, accountability--in other words, a good plan.
  • Keep your eyes on the ball. Execute and get going and watch closely as it unfolds so you know what is going on. Trust is built through demonstration and trust goes both ways. In other words, work the plan, adjust as necessary, back up if you have to, but work the plan.
  • Be fast to encourage and slow to criticize. That's the difference between controlling and guiding. You look for what is right and encourage more of it.
  • Integrate, don't segregate. Make this part of your whole operation, not a separate part.
  • Know what to do, so that if need be, you can step in or have someone else step in with little loss of momentum if someone leaves. You really don't want mavericks. This has to be part of your plan. What to do when. . .
  • Think big. Your operation will be controlled by your vision. A tree doesn't grow half way, it grows all the way. Maybe you could do 200 upfits per month. Maybe you could be number one in the country or the world. Keep growing your plan.
  • Don't mess with success. If it is working, don't fix it. A new GM comes in and wants to change it? Wrong. Make sure the GM does what you want.

Ultimately, you have the responsibility of the success or failure of your commercial operation. If a commercial/fleet manager comes in and orders too many units and then leaves you holding the bill, that's a shame, but ultimately, it is your responsibility. It's not really about control, but more about vision. What is your vision for what this department will do and how it will get done. That is really your part: the vision. Everyone else needs to follow that and help you achieve that.

The eyes of the bold are focused like a laser beam. Success is a given with the vision and the plan and the focus. Check out our website at www.commercialtruckdealersuccess.com and give us a call and we can help you make it successful from the start.

Tuesday, September 16, 2008

Through the Eyes Of the Bold, Part 16

I've finished talking at length about the basic mix and highlighting each category. Now, I would like to discuss commercial inventory from a global view.

There is no doubt that in most people's view I would be a bold commercial inventory person. I would agree. I would also state that I have a plan. Much of this plan has been discussed openly with you over the last many posts. At least, I trust that you see that there is a logical plan and that the plan is well thought out and well executed. That is needed. You need to know what you are doing.

There is something that I have seen several times at dealerships that really bothers me. It is an experienced commercial/fleet manager coming in, getting the dealer to buy into a commercial truck department, and then that manager goes and buys a lot of inventory with the trust and autonomy the dealer gave him or her. I've seen over 50 units show up in a very short time. That is a financial disaster waiting to happen. Then, I've seen that manager get upset about something and quit, leaving the dealer to clean up the mess. That is another disaster that is very sad and inexcusable as far as I'm concerned. I've seen some of those managers do this and then show up at another store doing the same thing again--sometimes with the same make, other times with a different make. I guess their strategy is "if you build it, they will come." It's craziness. This hurts everyone involved.

Buying inventory is fun, but it has a cost--an ongoing cost. This is why we have a plan. This is why we build the department thoughtfully, not thoughtlessly. Inventory is a necessity, but it need not be 50 units to start with and not ever with one person doing the job. Not ever! That many units in inventory will require a team, not an individual. If a dealer has one person, no matter how good that person seems to be, I highly recommend they watch very closely. When that one person leaves, it can be devastating to the dealer and the dealership. Think of this: would you have a whole dealership run by one person with 50 units on the lot? Not likely.

One person can only do so much and the typical commercial/fleet manager is selling much more than just commercial, so the amount of commercial inventory has to make sense for what is possible to get done. Selling 20 units a month is a lot of work on a regular basis. Commercial will probably be about 25% of that mix in normal times. That would be 5 units. With 120 days of free flooring, the maximum inventory could be about 20 units. This assumes that 25% of their sales are consistently commercial. You can see by looking at it this way, that the inventory needs to be carefully controlled until we change gears and create a team approach. With a team, we can grow this business. With an individual, we are limited by design.

If you are serious about building a strong commercial truck department, it will require a team. A manager to focus on all the global aspects of what needs to get done, of which, managing the inventory is only one thing. It will need a sales team to get the selling done. It will require administrative help to get the computer and paper flow smooth. It also requires a good financial team to get the deals bought and a great service team to make sure they stay on the road.

We all need the dealers financial backing and encouraging support in order to make a success of the commercial department, so we need to make sure that we take care of the goose the lays the golden egg by protecting their interests first. Excessive flooring eats up profits quickly and it is easy to get too many commercial trucks on the lot and then worry about moving them later. Bad design. Get a plan, then get the inventory and as the plan expands, expand accordingly. Take good care of the dealers money, so they will take good care of you.


This was about an experienced commercial/fleet manager, but I have also seen those inexperienced managers come in and do the same thing, so here is a good time to talk about what I think is the dealers part of the responsibility. Get a plan! Hiring a commercial/fleet manager and then giving them the power to bury you in flooring is not a good plan. You need to know what is going on, and matter of fact, either yourself or through your general manager, take part in the proper unfolding of this new operation. You would have that responsibility whether the new manager was experienced or not. Some dealers are looking for a savior to come in and build a commercial/fleet department and that is not a good plan. Get involved and interested. It's not about control, it's about participation. (Tomorrow, I will expand on the dealers participation and plan.)

The eyes of the bold are keenly focused on results and responsibility.

Monday, September 15, 2008

Through the Eyes Of the Bold, Part 15

Today is the last of our mix: Other Bodies.
  • Contractor Body 10-15%
  • Combo Body 5-10%
  • Flatbed 20-30%
  • Service Bodies 30-45%
  • Plumber Bodies 5-10%
  • Van Bodies 15-25%
  • Dumps 5-10%
  • Other Bodies 5-10%

Here's where you get to try new things and have some more fun. Keep your eyes open on the road for bodies other than the normal Contractor, Combo, Flatbed, Service, Plumber, Vans and Dumps. So, I'll just mention a small number of the Other Bodies you might consider:

  • I know one dealer who stocks some aftermarket 4x4 full size vans in cargo and passenger versions. That is a great niche and one that very few will be bold enough to get into. This dealer typically has 3 of them on his lot and he does very well with them.
  • Trailering body. These bodies have become more popular over the years. Here's a nice one from B & W. I've seen this one in real life and it is a great body. This is another niche market that most people will avoid.
  • Chipper Body. This is another great niche that you can take advantage of. Having it in stock will make all the difference.
  • Saw Body. This is something unique and focused on one group of users; however, having it on your lot may find other users who see uses for this body. It is a severely modified flatbed, though it looks more like a service type body
  • Crane Body. Here's a look at the IMT HD Crane Body. You can start with a smaller crane on a Service Body, or go for the gold with this kind of body!
  • Gooseneck Bodies. These are easy to sell and very popular in various parts of the country. This is a nice one.
  • Tow Trucks. Wreckers, Roll-Backs. Get involved in the tow truck market. It is very interesting.
  • Refrigerated Van Bodies. Here's a great niche. You don't find these on dealers lots very often. It is a great market to get into.
  • The SVE Mid-Box truck. Here's a great way to increase your sales. This will fulfill the niche where they aren't quite ready for a Service Body, but really want a more useful pickup. It's really sweet with the shell on it.

I've just touched on a very few of the possibilities that will help you get more business by offering more and more solutions. I would say that most customers don't really know what they need until you show it to them. Just seeing it in real life makes all the difference. Buying out of a catalog doesn't work very well.

If I were just starting into this part of the market, and based on the dealer with 25 upfits and 8%, or 2 units to deal with, I would order the Trailering Body from B&W or similar and the Saw Body from Harbor or similar. Then, I would recommend that you get more and more excited about your possibilities and bump up this mix as you can. I am confident that you will find that this part of the market is the most profitable and interesting because it is so different. In addition, you will find that you have no competition! That'll work! Great profits, no competition. Sweet. . . only if you're bold enough to go for it!

Sunday, September 14, 2008

Through the Eyes Of the Bold, Part 14

We're down to the Dump Bodies on this post.
  • Contractor Body 10-15%
  • Combo Body 5-10%
  • Flatbed 20-30%
  • Service Bodies 30-45%
  • Plumber Bodies 5-10%
  • Van Bodies 15-25%
  • Dumps 5-10%
  • Other Bodies 5-10%

I've been partial to Dump Bodies since I was a kid in the sandbox with my Tonka Dump Truck. The value of this body is obvious to those who need it and they basically come in two general varieties: Steel Dump (or I like to call it the committed or dedicated Dump Body!) and Flatbed Dumps which includes Landscape Dumps, Stakebed Dumps and so on.

You'll notice that the recommended percentage is 5-10%. You might think that is a small number. It is, but a lot of dealers are nervous about Dumps for some reason and when it comes to the Flatbed, a dump hoist can be added fairly easily for a similar cost as buying it that way new. This allows a dealer to be more comfortable in the short term until we build their confidence in this product.

Dumps not only fulfill a good purpose, but are very attractive display pieces when you put the bed up in the air. I guess you could write off any flooring expense as advertising. . . just kidding. Nonetheless, don't discount the marketing opportunities that the Dumps on your lot will bring.

The Steel Dump is a great piece to stock. It is designed to be used most often as a dump, although it can serve a number of purposes. These Dump Bodies are made of heavy gauge steel and are designed to take abuse. They typically come in 2-3 yard, 3-4 yard, 4 yard, 5-6 yard and greater. Unless you have medium duty trucks, we are going to be looking mostly at the 2-3 yard and the 3-4 yard. The variance in the yardage is whether or not you use a side board to extend the capacity. Without the side board, it is 3 and with the side board it is 4. These Dumps are available with fold-down sides which allows you to load the body with a forklift when using it for something other than a dump. Not a real popular option in California anyway. On the 3-4 yard, the fold-down sides are very heavy and hard to deal with and have limited use.

The Flatbed Dump can be just a plain Flatbed with a dump hoist under it, or you might have different size gates on it and perhaps even swing-away rear gates. Flatbed Dumps are in all different sizes.

The Landscape Dump is a very popular Dump Body and essentially, it is a Flatbed Dump with either plywood sides or steel sides with a swing-away rear gate system and is available with other options like side swing-away gates, etc. You can even get this body in an aluminum body with aluminum sides and gates.

Using our smaller 25 upfit stocking dealer, we will use 8% or 2 units for the mix. Based on this limited number, I will choose as my first body a 3-4 yard Steel Dump with underbed boxes, HD Steel Plate hitch with Pintle/Ball combination and I will order the side boards. This will go on the F550 with 19,000 GVWR and I will go with the diesel. The second unit will be a Landscape Body. If I have tilt cab, I want the 12' Landscaper with an I-pack box behind the cab, underbed boxes, hitch and a side swing-out gate with step. This will go on the 108"CA. If I don't have tilt cab, I will go with the 12' Landscaper on the F350 gas truck and it will be a price leader piece.

As this dealer becomes more confident, I want the percentage to increase on the Dump Bodies accordingly. Marketing Dumps is fun and they bring such a great eye-appeal to merchandising the lot. It is hard to go wrong on Dump Bodies.

Saturday, September 13, 2008

Through the Eyes Of the Bold, Part 13

We're moving on the the Van Body section today.
  • Contractor Body 10-15%
  • Combo Body 5-10%
  • Flatbed 20-30%
  • Service Bodies 30-45%
  • Plumber Bodies 5-10%
  • Van Bodies 15-25%
  • Dumps 5-10%
  • Other Bodies 5-10%

The Van Body; aka Box Van; aka, Dry Van is a very popular and ever-present sight on the highways and city streets of America. It's just a big empty box and you can put stuff in it, carry it somewhere and take it back out. Whether it is moving flowers from the flower store to your house or moving your furniture across the country, or delivering the food and produce to the grocery store, we cannot live without Van Bodies.

Now all of those Van Bodies come in a wide variety of sizes and heights and options, some with roll up doors, some with swing-out doors, some with side doors, some with translucent roofs, some with liftgates, some 84" tall, some 96" tall, some 10' long, some 26' long. All doing the job of moving different kinds of things from one place to another while keeping what's inside out of sight and protected from the weather. Some things are really light and other things are really heavy, so what kind of chassis is underneath the Van Body is very important.

Bypassing the Medium Duty dealer for the moment, most dealers that I see in my travels don't stock enough Van Bodies, number one and number two, they tend to stock the same things over and over. The most common Van Body on dealers lots is a 14' on a cutaway chassis. I now see a 10' single rear wheel unit from time to time. It is a rare dealer that stocks more than two units. Using our ongoing dealer example of the dealer who stocks 25 upfits, we will use 20% and that is 5 units. So, you can see there should be more Van Bodies on the lots.

A couple things I have learned about selling Van Bodies. One is that they have a tendency to sell in groups and two is that they tend to be a little bit seasonal and sell better in the Fall and Winter than the Spring and Summer. It's not a large change, but the seasonality of Flatbeds is the opposite, so I would adjust my stock up and down accordingly to take advantage of that. Of course, your experience is the best judge.

Another thing I learned about Van Bodies is that if you have a good selection of the different sizes, chassis and so on, you can sell more Van Bodies. Having a tilt cab franchise will help you sell even more Van Bodies. One more thing about Van Bodies is that it is an extremely easy thing to sell someone off of the sliding front door crawl through on the cutaway chassis. It is a very easy thing to retrofit, but not the other way around. I recommend that you order none with the opening and if a customer insists, get it installed for them. That silly door and all the rattling and noises that go along with it being there will drive you crazy very quickly. It has such a small usefulness. You have to be a small person to go through there. It's a waste of money to me, but, hey, some people just have to have it, so give it to them after you point some of those non-benefits out to them. It's a good concept, but doesn't work in reality very well.

So, on to our mix. If I have tilt cab trucks available, 3 of the 5 units will be on them and they would be 14', 16', and 20'. If I do not have tilt cab trucks, I want a single rear wheel 10' model with aluminium skin with skirting and swing-out rear doors. The roll-up door takes up too much room inside on this model. Next, I want a 12' on a 138" wheelbase cutaway. This model gives me superior turning radius, common body length and good overall length for maximum flexibility in the city. Next, I want a 14' on a 158" cutaway with a roll-up rear door, roll-up curbside door at the front of the body and a Tommy Aluminum Railgate. The past two bodies will be common 84" height. Next, I want a 16'x90" on a gas F450 120" CA with a tuck type liftgate, roll-up rear door. Last, I want another 14' on a cutaway with a 96" height and a 3' attic, roll-up rear door with an aluminum ramp or a Tommy Gate liftgate.

This mix allows me to demonstrate a wide variety of solutions that a prospect would have a really hard time finding anywhere else. If I added more Van Bodies to the mix, I can have more solutions to offer customers. Again, for common uses, I am going to work with some of my favorite body companies and have them have units that are ready or semi-ready for me to take and have delivered in a day or two and I am going to make sure that I work with my dealer group to have the relationships we need to get units from them when the time comes. The key is covering the maximum number of possibilities that I can and have a large number of readily available common pieces.

Van Bodies and plain Flatbeds have a tendency to be low gross pieces. With the mix above, you should have much improved gross profits. The more common your mix, the lower your average gross. It is one of the great reasons to see through the eyes of the bold.

Friday, September 12, 2008

Through the Eyes Of the Bold, Part 12

Now we are on to the Plumber Body in our study of the mix.
  • Contractor Body 10-15%
  • Combo Body 5-10%
  • Flatbed 20-30%
  • Service Bodies 30-45%
  • Plumber Bodies 5-10%
  • Van Bodies 15-25%
  • Dumps 5-10%
  • Other Bodies 5-10%
The Plumber Body is basically a Service Body with a roof on it, large rear doors and either a taller, walk-in height, or lower height roof. More often the dual rear wheel units have taller roof and the single rear with a lower roof from a popularity point of view (on dealers lots, anyway). Almost everyone that builds a Service Body now builds this kind of unit. Examples of manufacturers of this kind of Plumber Body are Royal Truck Body, Harbor Truck Bodies, Knapheide, Omaha Standard, Reading, Stahl, and others. So, there is a lot to choose from in this kind of Plumber Body and they are obvious with the compartments on the outside of the body.
Some of the Plumber Bodies are less like a Service Body and more like a Van Body. In this case, they don't have compartments on the outside, but have specific shelving designs on the inside. Examples of this kind of Plumber Body are manufactured by Hackney. And, last there are those who build dry van bodies and then convert them into Plumber Bodies by adding some boxes to the outside. These come from manufacturers like Supreme, and Intercontinental. Matter of fact, Supreme is the leader who built the Plumber Body market to the level it is today. Their product is severely limited in design, so others have come in and filled that need utilizing the Service Body with a roof design which offers superior design and features. My hat is off to Supreme for their creativity and foresight.
Using our same 25 upfit unit small stocking dealer, we will use 8% for this example, or 2 units. With 2 units, our selection has to be limited, so we will stock one single rear, low height Plumber Body. In this case, Knapheide makes a good model and is popular as well. They offer an electric door lock option for the body doors that is also very popular and they have a long list of options to choose from.
The second unit will be a 14' full height on a tilt cab and if I don't have a tilt cab available, I will do a 12' on an F350 gas dually conventional cab. The GVWR is limited on the cutaway chassis, and it is too easy to overload this truck. Though most dealers will stock the cutaway dually, here are the selling advantages of putting this body on the conventional cab:
  • The body is not attached to the cab, so you do not hear all the noise of the body and its contents moving around.
  • 1,500 to 2,000 lbs. more cargo capacity! That is huge!
  • A somewhat stronger frame, larger brakes, larger tires, a stronger truck.
  • Seat three comfortably. Wide bench seat.
  • Comfortable seating area with wide space for feet. No engine compartment in the way as is typical on the cutaway.
  • Better stability on the road.
  • Body is easily transferred to another truck chassis if need be, not so on the cutaway.
  • more
With all those features, it is a pretty easy sell and a much better value to the customer. The only advantages of the cutaway are two: 1. slightly lower entry height, and 2. slightly shorter turning radius. I think the benefits of the conventional cab outweigh the benefits of the cutaway chassis on the 12' or larger units.
When it comes to the tilt cab like the Ford LCF, Isuzu and so on, this unit is superior in a number of ways, but the biggest is the shortest turning radius on the market, even much shorter than the cutaway. What is really good about this, is that you can now get a larger body and still have a shorter turning radius. As an example, put a 14' Plumber Body on the tilt cab with about a 137" wheelbase (about the same wheelbase of a pickup truck) and compare that to the 12' on the conventional cab which has a wheelbase of about 165". Big difference, yet longer body. Here's the really cool part: the overall length of the 14' Plumber Body on the tilt cab is about the same length as a super cab pickup truck with an 8' bed! Seriously! Think about all that a customer can do with those features. Last is that it will turn a complete 360 in the average city street.
As your sales increase, or show a good turn, I would recommend that you bump up this mix a bit to add more Plumber Bodies. They are not just for Plumbers. Heating and Air people use them; remodelers use them, electrical contractors, and more. Any company who needs a Service Body could potentially make good use of the Service Body with a roof on it. Keeping things out of the weather and having the space inside to work in there if necessary, the storage shelving advantage, are all great features. Don't think of it as a Plumber Body--that's just what we agree to call it. Of course, plumbers use it too.
Get excited about the Plumber Body and get creative with what you stock and why. Get some selling advantages and see the value of this great body. Your customers will appreciate it.