The dealer/manufacturer relationship

By David Gee

The relationship between recreational boat builders and their dealer networks is a symbiotic one, with each needing the other to survive. And like any relationship, it requires dedication, diligence and constant communication to build and maintain trust and respect that go beyond contractual agreements and product portfolios.

“Almost anyone will acknowledge that trust is the key to a successful dealer/supplier relationship but few can actually execute well on that,” opines Correct Craft CEO and president Bill Yeargin. “Trust means keeping your word even when it costs a lot to do it. Trust is doing what you can to ensure the dealer is successful. Trust is backing the dealer when they have a difficult customer situation. Trust is easy to talk about but it has to be lived out every day in both little and big actions.”

Trust, like beauty, can sometimes be in the eye of the beholder, says Paul Terzian of Causeway Marine, recent winner of the Boating Industry Top 100 Best in Class award for Best Service Department.

“A supplier and its dealer may both believe they are acting in a trustworthy, honorable, and equitable manner, yet one or both parties may also feel they are being taken advantage of,” Terzian told me when we were chatting between breakout sessions at the recent Elevate Summit conference in Orlando. “To really gain solid trust, both sides should outline short and long term expectations of one another, and what they are willing to exchange for those expectations. Each should know where the other is ‘coming from’ and what impact the proposed actions would have.”

Trust me

Relationship experts say trust is the first and most important predictor of long-term relational success.

And that resonates with Tim Kuck, executive vice-president of Regal Boats, and a participant in our Dealer/Supplier Relationship panel discussion at Elevate.

“From the relationships my parents built when they started the business, to the relationships we have today with staff, contractors, suppliers, dealers and customers, we try to build trust by putting people first.”

Kuck, who co-owns the company with his CEO brother Duane and sister Pam, said one of the ways they tried to build trust with dealers during the economic downturn a decade ago was by cutting back on production when they saw things starting to go south.

“We were trying to help them sell the boats they already had, and not just trying to sell them more boats for our short-term gain,” said Kuck during the panel discussion. “Our purchase programs don’t require dealers to buy a certain number of boats to have a competitive price so we try to be dealer-friendly that way.”

That was duly noted by another Elevate panel discussion participant, Dan Bair, CEO, Quality Boats of Clearwater, Boating Industry Top 100 Dealer of the Year, and a Regal dealer.

Like Kuck, he is also the second-generation owner and operator of a business his father started, and added his own twist on the definition of trust.

“Trust is formed at the intersection of character and competence,” said Bair, who runs the four-location dealership in the Tampa Bay area with his brother David.

LinkedIn love – and trust

Sometimes you have to make a judgement about the character and competence of a person, and trust them, without even meeting them.

That was the case for me recently when Daniel Wolf, the co-founder and president of Dewar Sloan, a consultancy that advises executives on the direction, integration, oversight and execution of strategy, reached out to me with a compliment – and a LinkedIn connection request.

Soon after I received a copy of Wolf’s latest book, Strategic Teams and Development. In the book he writes about trust.

“Human trust is the critical bond that enables individuals, groups and organizations to work together, live together and serve together. Trust is catalytic is so many aspects of relational capacity. Reliability, consistency, dependability and respectability are all part of the trust equation.”

A recent phone call with Wolf allowed the opportunity to do a deeper dive on relationships, and how we build that trust.

Relationship spectrums

“My general starting point is to look at the kinds of relationships we have, and then the kinds of relationship we want to have,” said Wolf. “I have a relationship spectrum that is comprised of four different levels. The first level is ‘I have some stuff for sale, you choose to buy it, there’s a transaction and we’re both happy.’”

The second level begins the journey towards becoming partners.

“We basically trust each other, we both care about inventory levels, having the right products, price management, and so on,” Wolf explained to me. “The next level of relationships is solutions-based. One side has problems and issues, the other has solutions to those problems.”

And the elusive fourth level? Co-discovery.

“We not only trust each other completely, but we truly care for each other personally, as well as professionally, we know each other’s significant others and families and so on. In this stage, we’re ‘married,’ and we’re making offspring from our conversations and engagements.”

Wolf is a life-long boater himself, and has worked with producers and suppliers in the marine industry for 40 years. He admits there are always going to issues that will pop up to threaten a good dealer/supplier relationship.

True teamwork

“Who is going to underwrite the risk? Who has more risk? The manufacturers need to keep the factory going ,but the dealer doesn’t want to get caught with too much inventory. It’s a seasonal, cyclical business and it has ups and downs. That’s just the way it is. But how about instead of trying to figure out whose ox is going to get gored there are open lines of communication and you are each looking out for the other and you are each vested in the other’s success? Then you can be a true team.”

In his book, Wolf quotes Andrew Carnegie who speaks to this. “Teamwork is the ability to work together toward a common vision…the fuel that allows common people to attain uncommon results.”

However, Wolf quickly added true partnerships are rare and each side has to continually work at it.

“You can’t just say you have ‘common goals’ if you don’t. There are lots of manufacturers and dealers who have common interests, but few who have common goals.”

One of the principal ways Wolf says to achieve that is to have open – and responsive – forms of communication.

“You can’t go off in your corner and hide and pout, and I can’t go off in my corner and hide and not call you back and expect to be a team.”

The last point Wolf made is that you have to act at all times as a partner yourself if you want to have a partner on the other side. “That means shared contributions, shared accountability, shared productivity and a little bit of grace and forgiveness along the way. Because we’re all human and we make mistakes and things don’t always work perfectly. Trust is built by communicating often, and by often I mean all the time, about everything that matters. That’s what partners do.”