Dave Baiocchi Know your Strengths
2022 is shaping up to be a year like none other in the recent past, as supply chain disruptions force us to reassess our priorities and reorganize our assets, our staffing, and our way of doing business. If there was ever a moment to re-invent yourself, that moment is now.
As you enter the 2nd quarter of the year, demand for your products will no doubt be increasing while inventory dwindles. If you don’t have a battle plan for how you will navigate the inventory shortfall, you need to get busy. Murphy’s law stipulates that “things left to themselves go from bad to worse”.
I have mentioned in previous articles the usefulness of gathering all of the middle managers and stakeholders for a yearly SWOT analysis. This year I believe this exercise to be critical.
For those of you that may be unaware of this assessment tool, a SWOT analysis is designed to do a deep dive into the following:
- Strengths
- Weaknesses
- Opportunities
- Threats
When market conditions change, it’s important to reassess all four of these important areas. The results may motivate you to shift resources and manpower in order to align your tools and planning to meet the realities of the current marketplace.
As a consultant, I have helped mediate many of these gatherings. I always like to start with strengths and opportunities, then follow with weaknesses and threats.
Strengths and Opportunities (the value proposition)
Contrary to popular opinion, not every dealership is the same. There are things your organization does well. Your organization has a unique blend of experience, personnel, capitalization, and customer base. You will no doubt have advantages and points of value that your competitors don’t have. On the other hand, you also will have challenges that may be difficult to overcome based on your capabilities and resources. This blend of capabilities and deficits are the building blocks of a VALUE PROPOSITION.
I define a value proposition as the PRIMARY REASON a customer does business with YOU and not the dealer down the road. It amazes me how many dealers have not codified this into a series of bullet points that every employee should have memorized by the 2nd week of their employment. For the dealership to have sustainable success it must RESONATE with customers. Why you resonate as an organization should be well defined.
It’s important to KNOW what your dealership REALLY DOES WELL. Then ask WHY. By the way… the truth can be startling.
When going through the process of defining strengths, there is a tendency to lean towards legacy instead of the truth. This can be emotionally challenging. Your dealership may have built its long-term reputation on a key point of value like technical excellence, robust inventory, financial flexibility, or personnel experience. These items may have been foundational attributes years ago, but do they apply to your current state of affairs?
The marketplace is evolving. In order to maintain resonance, your dealership must constantly redefine the current value proposition. It has to be relevant. It has to be meaningful and it has to be TRUE.
One way of assessing your strengths is to do a forensic analysis of the customers you serve. Is there an industry, or a group of industries that you tend to gravitate to? As you address unique and challenging applications in a particular industry, your reputation for solving problems adds to your value for that particular market segment. One dealer may have a substantial following from manufacturing companies, while another tends to succeed in the food and beverage industry. Many times, these followings are a natural extension of the unique blend of capabilities, policies, and offerings that resonate with a particular industry.
Understanding this helps you not only to define your strengths but also allows you to plan to increase your influence inside that industry. One of the problems with a SWOT analysis is that when talking about strengths and opportunities, you will tend to cast your net a little too wide. It’s natural to want to be all things to all people. You can’t. You have limitations that will naturally limit your capabilities. Every dealer has a finite capacity to serve their customers. Keeping the list of key opportunities within the confines of that capacity can be the difference between resonance and disappointment.
Weaknesses
Nobody likes to talk about their weaknesses. One of the problems however may be semantic. The word “weakness” has become a pejorative because it tends to cast blame. A discussion about weakness however should simply allow you to define market realities.
For instance, your competitor may have a larger field service staff than you do. They have 15 vans on the road, and you have six. Those are the numbers. The discussion shouldn’t necessarily be how to increase your staff from six to 15. The discussion should be about OPTIMIZING the operations of the six vans you have so that the customer never even considers the competitor as a viable option (despite their capabilities).
A discussion of weaknesses needs to be tied to actions that limit your exposure. Optimizing resources, increasing efficiencies, customizing solutions, and increasing flexibility in your offerings are all ways you can limit your exposure in spite of deficiencies incapacity.
Threats
Sometimes threats can be known, sometimes they come out of the blue. Some can be external while others lurk right inside the dealership. I like to assess threats based first on their impact on customer service and second based on their impact on the bottom line.
It may seem uncomfortable to think that threats can be internal, but many times we put ourselves at the highest risk when we ignore the things that can hurt us the most. These include:
- Lack of safety enforcement and accountability
- Compensation programs that negatively affect customer service (see my article on “Silos”)
- Customer-facing processes that take too long (service estimates, parts pricing, voice mail responses, cross-department response)
- Insufficient van inventory (requiring return visits)
- Lack of data visibility (between departments, and employees)
External threats may include things like:
- Capitalization and borrowing limits
- Litigation
- New competitive product offerings
- Mergers and acquisitions
You might expect that I would list threats like lack of inventory, interest rates, inflationary pressures, and supply chain shortages. I don’t really consider these threats. If it’s something that the entire industry has to deal with, it’s no more a threat to you than it is to your competitors. Threats that need your attention are things that uniquely affect YOU.
Reinventing your value proposition will not be an easy task, but it may be the very thing that gets you through 2022 in a profitable way. The effectiveness of a SWOT analysis however will always be predicated on your ability to be honest with yourself, as well as your level of commitment to follow through on making and communicating the proper adjustments to your unique value proposition.
About the Author:
Dave Baiocchi is the president of Resonant Dealer Services LLC. He has spent 40 years in the equipment business as a sales manager, aftermarket director, and dealer principal. Dave now consults with dealerships nationwide to establish and enhance best practices, especially in the area of aftermarket development and performance. E-mail [email protected] to contact Dave.
