The All-Important Triangle - Customer /Dealer / OEM

It was a cold, snowy, dark morning in Moscow and I was on a mission to convince the customer to trade his timber for my equipment. This was a sign of the times. The Russian’s needed equipment to harvest and process timber and I had the equipment they needed. Only problem was, we needed a middleman (broker) to buy and sell the timber for western currency (Russian Rubles were not traded outside the Eastern Bloc), which would have provided the funding to pay for the equipment. I never found a broker in time to complete the sale. As it turned out, the customer had other offers and they were not willing to wait for me. 

Why is this story relevant and how does it tie into the title of the article, The All-Important Triangle – Customer / Dealer / OEM? This early selling experience is when I really learned how important the triangle was and still is today. If I had known then what I know now, the sale would have been completed. I would have lined-up and contracted with a timber broker before meeting with the customer. 

This article is about why and how customers, dealers and original equipment manufacturers (OEM) should work together to provide the best overall equipment purchase and use experience for the customer - the all-important triangle

Building Relationships…  
Over the past 30+ years of selling mobile equipment to dealers (independent and corporate owned) and customers (contractors, miners, road builders, and others that use mobile equipment), I’ve never stopped thinking about the triangle relationship - how well it works and sometimes doesn’t work so well. In my article, “Brands – do they make a difference”, I discussed the importance of the “Three Legged Stool” (customer/ dealers/ brand-OEM) referred to in this article as the all-important triangle. I guess I never thought as much about making the hard sale as I did about building relationships, trust and confidence in the company and products I represented. 

During the course of my experiences, I’ve learned that to obtain the best results, it requires working together (customer / dealer / OEM) to find a combination of products and services that best meets the customers purchasing criteria (product, application, use / duty cycle, price, quality, reliability, delivery, aftersales parts and services, etc.), the dealer’s commitment and capability to meet or exceed that criteria and the OEM’s ability to deliver on its brand promise (say what you do and do what you say). The results are usually quite remarkable - customers and dealers are satisfied and everyone gets the opportunity to repeat the process.

The Customer / Dealer Relationship
This all sounds very easy, but I am not naive enough to think that all customers think alike. They likely have different views on how they interface with dealers and OEM’s. They rely on and have an expectation that the dealer will meet their needs. They know the importance of their dealer and want to have a good experience. 
Customers and dealers are part of the local community fabric and often time relationships are developed around events outside of the workplace.

Large or small, customers all have at least one thing in common. They all want to profit from the tools (mobile equipment) they purchase for the types of jobs and work to be performed. They want assurance that the dealer will sell them the right product at a competitive price for the job. They want to know that the dealer will be there to answer the bell (24/7) if and when service and / or repairs are required. They want and need to know that the OEM has a strong relationship with the dealer and is providing back-up support when necessary.  And, in most cases, the customer wants to be on a first-name basis with the decision makers at the dealership because communication is vital in attaining optimum performance and up time.

Dealers are in the middle.  They are the seller of record and own the local customer relationship. They are on the front lines daily providing the customer with product and services. I don’t know a single dealer that doesn’t want to do a good job of serving its customers. Their reputation and integrity in the community are what drive them and sustain them.  Also, they are the face and representative of the OEM, who should provide supporting sources (equipment, parts, training, marketing, etc.) to help the dealer be successful. I believe that having a good understanding of these interdependencies is what makes the difference. This is why the triangle is important to the success of all parties; customers, dealers and OEM’s.

The OEM / Dealer Relationship
So where does the OEM fit and what is its role in the all-important triangle?  How does the OEM move its products from the factory floor to the end-use customer? Why and how is the dealer important? In my article entitled, “Brands – do they make a difference”, I state that all OEM’s have “the ability and capability to produce products that meet basic government standards, incorporate industry-accepted design characteristics and customer-expected features. The products are designed to be safe, productive, operator friendly, easy to maintain/repair and are cost effective to own and operate.”…..This is what OEM’s do best! .….”The manufacturer chooses to either sell products directly through owned retail outlets or through independently owned dealers”. What I didn’t talk about in that article is the much needed relationship and trust between the OEM and the dealer. The OEM must make sure that they help dealers to be successful and that it’s an integral part of the business strategy. Some of my biggest successes came when I was able to convince the company to invest time, money and resources in the dealer organization. 

Let me give you an example (I have hundreds of them): It was not long ago that I was working for an OEM that hired me to be in charge of launching 25 new heavy-range products, some of which were completely new to the dealers while others were redesigned and extensions of the existing product lines. It was going to take a herculean effort to convince the dealers to invest more money to buy, stock, train, promote, hire and ultimately sell these products. It meant significant investments were required by the dealers. Like many good OEM’s, we did many of the right things; product demonstrations, promotional material, financing programs, spec sheets, technical data, training material, price lists, press release kits, service parts inventory, etc.

As I began to interface with the dealers, I started to get pushback and signals that the company wasn’t providing sufficient financial programs and backing for the investment that they would have to make. In one specific case, the dealers wanted to order the new product line but were apprehensive because the pioneering cost (start-up cost to build customer confidence) was very costly. To make a long story short, I tried to convince the company to provide financial programming that would help offset some of the pioneering cost but was refused on the principle thinking that these types of investments were dealer risks. Needless to say, the product line failed to gain any traction and eventually was discontinued. This was a case of disappointing the stockholders, customers and dealers. It was an opportunity lost! 

Here is an example of how good things can happen when the all-important triangle works… In a more recent situation, I was responsible for national accounts in the Americas. We had been working with a new customer that was having some product problems. The local dealer was doing everything they could to resolve the problems. The dealer had made the repairs, yet was unable to satisfy the customer that there would be no reoccurring problems. The dealer and customer called on the company for help to resolve the impasse.  The OEM recognized the opportunity to help the dealer and satisfy the customer - step-in and provide guarantees and back-up to the dealer as evidence to the customer that the commitments would be fulfilled. The company made a conscious decision to invest in the dealer and the customer, which ultimately resulted in repeat business for all. It was a win-win situation!

Lessons Learned
I have always thought of the dealer as my customer and the end user as the ultimate customer. Furthermore, I’ve thought that the dealer and OEM together should build relationships with the ultimate customer that are based on the trust and confidence that the products and services will not only meet but exceed expectations… Did we always succeed? No. But more often than not.

The valuable lesson learned is that customers want and need to plan and know with reasonable certainty how the dealer and OEM products and services will perform. For the all-important triangle to be successful, the OEM, dealer and customer need to be in lock step working together to achieve the best overall results.