If you’ve read any of my previous articles, you know I’m a firm believer in the need to have a strong value proposition. In fact, when a dealer decides to do business with you, it usually means your value proposition was stronger than the incumbent or your competitor. An often overlooked element of a successful agent’s value proposition is the ability to accurately assess where his or her relationship is with the dealer at any given time, and knowing how to climb the relationship ladder.
The first rung of the relationship ladder is the vendor relationship. As a vendor, you are transactional, not relationship based. You are, in most cases, the low cost provider and your business is safe until someone else comes in with a lower price (and they always do). As a vendor, you do not have access to the leadership team and are not invited to attend any meetings that may take place. As a result, you have no understanding of their corporate strategy and, more importantly, no influence in any decisions that are made. In short, you are in a precarious situation.
The next rung up the relationship ladder is the consultant relationship. As a consultant, you have moved beyond simply providing a product or service to being a member of the team. Your work ethic and industry expertise has earned you the right to talk to the owner when necessary, and you do participate in dealership meetings. This access to the decision makers gives you the advantage of knowing what is going on in the dealership today and, more importantly, what the strategic direction for the future might look like. Your input may be sought on specific topics related to the role you are playing in the dealership – for example: performance development, pay plan structure, job descriptions, etc. This level of access may give you a heads up to future opportunities within the store, but you may still have to compete for them. At the consultant level you have a seat at the table; it’s just that the seat might not be permanent. The consultant level is obviously preferable to that of the vendor, but there is more work to do.
The third rung of the relationship ladder is the advisor relationship. As an advisor, you are now a trusted member of the leadership team. You regularly meet with the owners and participate in most operational meetings. You are viewed as the “go to” person for all things F&I. With this unfettered access, you know exactly where the organization is and where it wants to go. As new opportunities arise, your dealer partner looks for ways to send business your way. At the advisor level, you have earned your seat at the table. You are a part of the team, but you still haven’t reached the top rung of the relationship ladder.
The top rung of the relationship ladder is the personal relationship. At the top rung, not only do you enjoy all the benefits of the advisor relationship, but now your personal life and your business life with this dealer become intertwined. The conversations you engage in are not solely related to business issues. Your council may be sought on a variety of topics and you spend quality time outside the dealership with your dealer partner. Dinners, family vacations, boating, hunting, fishing – you name it. At the personal level you get to spend all this time with the dealer, but you don’t feel compelled to, nor are you asked to foot the bill. For obvious reasons, this level of relationship affords you the best protection from losing the business, and is the level you should strive for in all your accounts.
How strong can the personal relationship be? Several years ago, while working for another organization, I was involved in a deal trying to unseat an independent agent incumbent. We did the dog and pony show – we had a better price; we had a better product; we had more resources. In fact, we had a much stronger value proposition. What we didn’t have was the personal relationship. We found that with the incumbent agent having attained this highest level of relationship, having the best price, product and resources is not always enough to win the business. The dealership was unwilling to switch providers without ensuring that his “guy” was taken care of and included as part of the deal. While this might not be typical, it does illustrate the power and value of reaching this level.
So now what? First, I would suggest you perform an honest inventory of all of your accounts and identify where you are on the relationship ladder. Next, for the rest of the year, try to move up one rung.
In those stores where you are a vendor, go above and beyond what has been expected and earn the right to have access to the decision makers. Prove to them that you have their best interests in mind and bring them value.
In the stores where you think you are at the consultant level, look for ways to improve their business. Remember, their business is more than just the F&I operations. Look to add value in the fixed operations area, become a legal compliance guru and keep your partners up to speed on the activities of the CFPB. Remember if you want more, you have to do more.
In the stores where you think you have attained advisor status, test the waters to see if the possibility of moving to the personal relationship level exists. I mention this because it very likely you will not be able to get to a personal relationship with all of your accounts, and that is all right.
If you’ve been fortunate to reach the personal relationship level, do not take it for granted. Continue to give more than you receive and your business will be much stronger.
Remember, this job is a journey, not a destination.
