Taylor Steinberg: Searching for Solutions
We continue to search for solutions in a market environment we have never experienced before. The pandemic is almost gone, our markets need the products we have provided for years if not decades, and our customers are anxious to buy. Material and supplier shortages, domestic and international supply chain chaos and even a shortage of windshield wiper motors places us in a very tough market environment.
As we continue to search for solutions, the following two examples experienced by myself, tell us some solutions are just not worth the time and effort because they will not take care of your customers or achieve your dealership goals and objectives.
First, from about two decades ago, we will examine a Ford dealership in a mid-western state searching for business growth opportunities. The first objective was to improve the commercial outside sales volumes by hiring a senior and very productive commercial sales person from another state about three hundred miles away. The uptick in sales activity was proceeding at a good rate so the owner of the dealership believed it was time to pursue the state and local municipal business. RFQs for the light duty truck business, Class II through Class V, F 250 – F 550 for their state was a few months away. The decision to pursue this opportunity came into focus and the rest is history with a very good learning lesson.
As a Knapheide Regional Sales Manager with this dealer in my territory, it was normal for the state to put out bids for a quantity of 250 trucks or more in their RFQ. Keep in mind, most of the tax supported institutions in the state including every city, county, school district and others may purchase off the state bid. History tells us that RFQs of this type have grown from the requested 250 trucks to over 500 or 600 trucks for the respective model year.
The numbers were crunched, the allowances deducted, the bid submitted to the state and the dealer was awarded the bid. The following song from my favorite musical Evita tells the rest of the story very well. Check out the entire song on YouTube.
“And the Money Kept Rolling in and Out”
“When the money keeps rolling out you don’t keep books
You can tell you’ve done well by the happy grateful looks
Accountants only slow things down, figures get in the way
Never been a lady loved as much as Eva Peron”
Source – LyricFind
Yes, the numbers were crunched, state allowances deducted and the trucks delivered, several hundred of them. In this case, the accountant could not slow them down, as the dealer was required to deliver. The discrepancy, every truck was priced incorrectly and at a loss. The bottom line – the dealership changed hands shortly thereafter and the salesperson returned to his home state.
What’s the point? New territory environments in a different state for the newly hired commercial sales person had a steep learning curve. Both the dealer and the salesperson lacked the experience to pursue large volume markets. Costs were not confirmed before submitting the proposal to the state. Every dealer and salesperson must have a full understanding of the cost structure of all products quoted and delivered.
Second, pursuing a customer solution outside of your core product area where you have tons of experience may not be productive. Over a cup of coffee after church recently, the director of a local business shared their requirements for a highly complex product. After researching this specific market, I found two standard products very popular in my area of expertise, a long wheelbase Class VI chassis with a standard length van body with a number of options and an E450 cutaway with the needed wheelbase..[1] [2] [3] [4] After reviewing the complex bid from another manufacturer, I figured this would be no problem and probably save the business a great deal. Even though our company has never built a product of this specific type, we have built large quantities of highly complex truck bodies and vans to meet the needs of customers throughout all the markets we serve.
The feasibility study began and after several hours of work, it appeared we could do this very easily with a standard chassis and a van body with a number of options. After researching end users in this specific industry, many of them use a chassis and a large van body.
The complex van body required a major series of internal and external options that appeared not to be a problem. After numerous lengthy communications with the installation center and our certification group, we found out the complexity and liability created a number of roadblocks. Upon reviewing the required ASTM, ANSI and numerous Federal Motor Vehicle Safety Standards and Regulations, vehicle certification processes were not achievable for this application. Knapheide will not build or deliver a vehicle without certification.
What looked so perfect for this application became a chain of expenditures, concerns and lost time for all involved. Stick to your core product areas and focus on those vehicle upfits in which your years of expertise will be worthwhile. The amount of research hours consumed for this project was a great lesson as it taught me to stay focused on my areas of expertise. Broadening your horizons is an ongoing adventure as you expand your customer solutions in those markets where you may be effective.
Shouldn’t there be a second standard product listed here? The way it’s written, that’s what I was expecting.
@[email protected] you need to go back to Taylor and ask him what is missing here – we can’t guess.
I did ask him about it – i am waiting to hear back from him
“and an E450 cutaway with the needed wheelbase.” added it and fixed it!
