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Get
it in Writing
I
worked the BTA booth at ITEX both Wednesday and Thursday. It was
great getting to meet many of the readers of my ENX column in
person. Thank you to all of you who stopped by the BTA and ENX
booths to say hello.
Rather than a negative feel caused by the economic times, I felt a
great vitality of interest in new and existing products presented
at ITEX. Taking advantage of educational offerings appeared to be
at an all-time high. Several vendors offered regularly scheduled
15-30 minute training sessions at their booths. These all
appeared to be continually well attended. People took notes and
usually stayed for the entire presentation.
As the 2009 National BTA President, I spent most of my time on the
show floor in the centrally located BTA booth. We achieved a new
record for the number of new (and renewing) BTA memberships sold
at ITEX. These included dealer members, vendor members and
service associates. The offerings of industry specific education,
legal support and a centralized ‘go-to’ organization are a huge
advantage to BTA members.
A well attended 8AM educational offering was presented by Bob
Goldberg, BTA’s General Counsel. Over 100 ITEX attendees felt it
was worth getting up early to be able to listen to Bob’s wisdom.
He covered a broad range of topics. I share with you a few of
the ideas Attorney Goldberg presented that I found essential to
the wellbeing of your company and easy to implement.
During his 75 minute presentation, Bob Goldberg repeatedly
emphasized the need to have all company Policy and Procedures
rules and guidelines IN WRITING. An ounce of prevention is worth
10 tons of cure. In a court of law, judges and juries put a great
deal more value in a written and signed documentation than
hearsay.
Some of the specific examples BTA’s General Counsel Goldberg
shared with those attending his ITEX Power Hour Presentation
included:
Inherent strength of the independent dealer
Bob explained why even though many dealers lack some preferable
business fundaments, such as being undercapitalized, provide
inadequate training, have substandard infrastructure, and endure
shortages of products, parts and supplies they still have a
selling advantage over OEM-owned branches.
Privately owned dealerships usually have stronger community
involvement, longevity in the area, solid commitment to customer
satisfaction, involve personal investment and have the ability to
quickly and appropriately adapt to the changing needs of their
local market. Special pricing, client requests and policy
decisions can be approved quickly.
When independent dealers take advantage of all the OEM incentives,
they can qualify for in-office DSM assistance. When used
properly, the DSM can be a non-paid extension of your sales and
training staff. OEMs can provide recruiting funds, hiring
assistance and no cost employee training. Additionally, the dealer
can receive advertising funds and pre-designed marketing tools,
free gifts and giveaways for employees and customers. Dealers can
be linked to the OEM’s Web-based product, parts, supplies and
service information.
Dealers can also receive access to providing service and supplies
on pre-sold national and government accounts in their area,
receive preferred financing and leasing assistance for their
customers, and request extended low or no interest credit terms.
They are able to negotiate special equipment and supply offerings
from their OEMs. The dealer can increase their customer base with
minimum direct cost to their dealership .
The dealer can actively request their OEM quotas to be replaced
with incentives for appropriate sales. The dealer’s ‘quotas’
should be tied to the percentage of sales of the local OEM direct
operation. When signing a dealer / OEM agreement, require dispute
resolution through mediation. Have a working partnership
mentality when dealing with your OEM. Work to protect the
dealer’s customer base by requiring confidentiality of any
information shared between the dealer and OEM. The dealer’s goal
should be to maximize OEM assistance while minimizing their
control of your business.
Ingredients of successful dealers
These include Confidentiality Agreements with leasing, OEM,
vendors and employees. It is important to have a Written Code of
Conduct, Rules of Engagement, and Non-Compete Agreements with
employees, vendors, customers and OEM. The Dealer–OEM,
Dealer–Vendor and Dealer– Employee relationship must be mutually
beneficial – with each partner being treated with respect.
Bob Goldberg went into great detail emphasizing the importance of
having written documentation on Commission Guidelines. These
should include when the commission is paid. The employee must be
employed at your dealership at the time of payment. Specific
non-sales duties such as order writing, implementation, training,
and after sales support must be completed to earn full or partial
commission. Receipt of payment from the buyer should be required
before the payment of commission is made. Other items to clarify
in writing include charge back criteria, commission splits,
payment of lead fees, reduction of commission for cost of old
equipment removal, cabling, after sales training, software
implementation, licensing requirements and current employment.
Several Maintenance Agreements guidelines were discussed. Each MA
should be tailored to individual needs. They may be paid in
advance: yearly, quarterly or monthly. Each should have a clause
allowing for cost adjustments for the changing price of fuel,
parts and supplies— items whose cost the dealer has no control
over. Automatic renewal at the then prevailing rate and the
ability to use external servicing agents should also be included.
Maintenance Agreement coverage should exclude the cost of exterior
hardware damage, equipment movement, reinstallation, and OEM
non-availability of parts or modifications. MA’s are
non-transferable and non-refundable. If any part of the
customer’s account is past due, service may be refused until the
account is brought current. Replaced parts are owned by the
dealer. The dealer may use any appropriate replacement parts.
There should be a disclaimer for not honoring any other
non-written warranties. The servicing dealer is not responsible
for any acts of God or climatically caused situations.
Ways to recession proof your business.
Bob included his thoughts on Reducing costs, Employee reductions,
Reduced work week, Salary freeze, Profit sharing, Sales Incentives
for all employees, Leveraging excellent credit, Eliminating
non-profitable products and services, Increasing low cost / no
cost marketing, Implementing online sales, Increasing your share
of customers’ business, Investing in technology that decreases
labor costs, Updating transactional documents, Reducing inventory
levels – equipment, parts, supplies
Reducing purchases for in-house use
During the presentation, there was a great deal of note taking and
head nodding, and many questions were asked and answered. At the
end of Bob Goldberg’s presentation, many attendees waited
patiently to talk with Bob one-on-one. Cards were exchanged.
More questions were answered.
Bob Goldberg’s presentation was a wake-up call to many dealers.
The time to prepare for the unexpected is before a problem turns
into a crisis. Written documentation and guidelines are your best
defense for avoiding preventable legal entanglements. For more
information, BTA Members are invited to contact Bob Goldberg at
800.869.6688.