I recently attended a few conventions where I had the opportunity to meet and talk with many automotive product vendors and automotive dealer principals. Often, the conversations revolved around relationship-building between the two. When asked, both the vendors and the dealers agreed that the most important thing in any business relationship is the relationship itself. Both sides agreed that when relationships went south and deals were lost, it was mostly due to things that were small and insignificant in the overall picture, things that seemingly could have or should have been avoided.

This got me thinking: What is it that drives one side or the other to end relationships?   I asked 20 dealers and 20 vendors for their thoughts.

Part I is titled “Five Things Vendors Do That Dealers Hate” and Part II is appropriately titled “Five Things Dealers Do That Vendors Hate.”  There is nothing remotely scientific about what follows.  However, it was fascinating to see how nearly identical issues were brought up from person to person. So, let’s get started with Part I and take a look at what drives dealers crazy about vendors.

Part 1: Five Things VENDORS Do That Dealers Hate

1. Dealers hate it when vendors over-promise and under-deliver. This seems like the easiest thing to avoid- there is no excuse to continue doing it.  The dealer is going to use your product once they purchase it.  It can either do everything you say it can or it cannot. There will be no hiding this fact.  Easy solution: Do the opposite, under-promise and over-deliver.
2. Dealers hate it when vendors are late delivering the product. Most products are not just about one person, but instead are likely to involve several people, departments, or maybe even the entire dealership. The more people involved, the more on-time delivery becomes essential. It’s one thing if the lunch I order takes fifteen or twenty minutes longer than it should.  It is an entirely different scenario if a product that I rely on to operate my business is days, weeks, or months late.  It can very well affect employee scheduling, vacations, ease of doing business, and profits.
3. Dealers hate it when vendors do not follow-up and fail to offer the proper amount of support. Having someone who understands your product and all of its uses will go a long way in determining just how satisfied the dealers are with your product. Their satisfaction will directly correlate with how long they continue to use it. It is better to stay one or two days longer to make sure people really understand your product than to depart too soon. While training and installation days can cost vendors thousands of dollars, early contract termination or non-renewals can cost even more. With turnover being a major expense in areas of some dealerships, it’s imperative that follow-up training be scheduled on a regular basis. This will ensure that new employees are as excited about the product as the original users were.
4. Dealers hate it when vendors fail to follow the chain of command. Few things upset a decision-maker more than when subordinates start making decisions or when the decision-maker’s boss is contacted.  This is another relationship-stressor that can be easily avoided. I myself have made this mistake and learned of its consequences the hard way. I have found that the key to avoiding this problem is communication. When forming a relationship with a dealer, discuss the chain of command.  For instance, I have a simple form that I have the decision maker complete while I am putting an agreement together.  It ask the decision-maker to list three other names that I may contact in the event that they cannot be reached.   Next to each person’s name I ask them to list the circumstances under which I may contact an alternate individual.  Since implementing this process, I have never experienced a chain of command problem.  As a matter fact, most decision makers thank me for taking the time to gain clarity.
5. Dealers hate when vendors show up at the end of the month or show up without an appointment. Being a business owner myself I can tell you that I fully understand this frustration. Nothing is worse than being in the middle of something important and having an interruption. That said, I do not know that I would counsel against this. After all, most business owners have some form of “gate-keeper” in their office whose job it is to keep that from happening.  Furthermore, there have been times when I have been interrupted and a lot of good has resulted.  Likewise, I have visited many, many dealers and managers unannounced or at the end of the month and had mixed results.  Sometimes I have been gently kicked out- but and other times, I have established what resulted in a great relationship or, even better, a sale. I think the key here is to be prepared for anything. Understand that there is a chance that you will not get to talk to someone or get gently escorted out, but there is also a chance that you will make a sale. Be aware of the dealer’s mindset, but do what you feel you need to do to make a sale. To be successful in sales, you have to be bold and you must be a risk taker.

Part 2: Five Things DEALERS Do That Vendors Hate

I was recently at a convention where the question was asked, “What do dealers or their decision-makers do that vendors hate?” I felt this would be a great show topic since, in many cases, vendors are a very important extension of a dealership’s team.  Some are even thought of as family.  Likewise, this topic is important because without dealerships and the business they provide, many vendors would simply disappear.  As you listen to part two of this message, just like when you listened to part one of this message, ask yourself if you are guilty of doing any of these things and whether they could be hurting your very valuable relationships.

1. Vendors hate it when you do not use the product the way it was designed to be used and then get upset when it does not work. This is one that really drives a lot of vendors nuts, but this can be easily avoided with clear communication and documentation. I have learned over the years that the more time you take explaining your product, what it is designed to do, and how it does it what it is designed to do, the less time you will have to spend dealing with problems down the road. Support your explanations with clear and simple documentation that is signed-off on. These documents should explain what happens when the product is used correctly or more importantly, what happens when the product is used incorrectly. Time spent on this process will serve you well.  For instance, with a certain product there may be five key things to be done by the user if they wish to have success. The vendor needs to explain these five things and then have the decision maker sign the documents.  Always leave the dealership a copy of the signed documents.  With the rare exception, problem solved.
2. Vendors hate it when future business or endorsements are held over their heads for free products or discounts in order to get the deal signed. Funny how decision-makers think. “You give me the discount now and the free product now and only then will I do business with you.” Why should vendors be required to do this when dealers don’t do it with their own customers? I mean, if I want a free oil change, I have to buy three first.  If I want a referral fee for sending someone in to purchase a car, that person must first show up and buy the car before I get the referral fee. What is fair for the goose is fair for the gander. Many vendors will have no problem doing something for the dealership, if the dealership endorses their product or gives them future business.  You have to first do business with them,  just the same as dealers require.
3. Vendors hate it when you try to change the agreement. Like dealers, vendors develop and stock product based on what you tell them you wish to purchase. They invest a lot in this inventory and, in most cases, it does not work like your parts department.  They cannot send back unsold or unwanted parts. Do your research first:  determine how much product you need and then follow through on your order.  When vendors get stuck with a bunch of inventory that ties up their cash flow and you are responsible, you will quickly drop to the bottom of their favorite customers list. From the vendor side, the best way to keep this from happening is to include a restocking fee or change fee.
4. Vendors hate it when you don’t pay on time. Nothing is more frustrating than when a vendor delivers a product, sees the product working, sees it generating business and revenue for the dealership, and then has to be put in the unfortunate position of chasing payment. Dealers get paid virtually immediately when they deliver a car. Dealers get paid before customers are allowed to get their car back from service.  Dealers even require that a credit card be put down when a loner is used for a day.  Vendors must wait weeks and sometimes months to get paid.  Come on, when you get what you have been promised, pay the bill.  It just might save a profitable relationship.
5. Vendors hate it when dealers grind and grind and grind for a better deal. When you sell a customer a vehicle, who is always the happiest customer? The one who paid the most, right?  At the same time, when you sell a customer a vehicle, who is the one that is always hardest to work with?  The one who paid the least.  It seems that the one who paid the least is never happy, no matter what you do or how well you do it.  They never seem to be satisfied and you end up spending many more hours with this customer than you do with the ones who paid more.  The customers who pay more are your best and happiest customers.  This “unique” truth about car sales is not as “unique” as you think.  I have found it to be true about nearly all products. I know many vendors, including myself, that would rather walk away from a deal of this nature than be saddled with it and all of the time and wasted effort and lack of success that always seems to follow.  Instead, I would rather put my time and effort into working with someone who appreciates my products and understands the value I provide.  This is the kind of business practice that makes me happy. Does this mean that as a decision-maker you should not try and get your best deal? No, of course not.  But what it does mean is that there is a point where you may be costing yourself a great relationship. A great relationship with a vendor could help you or set you up in a deal where the vendor goes the extra mile for you.  Stop the grinding a little bit sooner and see what happens.

Conclusion:

At the end of the day, we could take a look at this from the dealer’s side like we did last week, or from the vendors side as we did this week and point our fingers at each other. We could continue to identify things that make both sides uncomfortable or angry.  It is easy to point fingers.  But what I am trying to bring to light is much bigger than that. As I stated earlier, the relationship between a dealership and its many vendors is more of one of extended employees.  Vendors are the people you need to supply the products and services that may significantly dictate just how efficient and successful you will be.  On the flip side, the vendors need the dealerships to be successful and have robust businesses.  One side cannot exist without the other. As I noted last week, it is the relationship that you establish, build, and nurture with each other that will dictate the success of both parties.

It’s like marriage- knowing what builds or destroys your marriage is key to the success and quality of that relationship.  Avoid the bad stuff and focus on what builds strong bonds and trust.  And, just like in a marriage: if you stop dating your spouse or, in this case, your customers, someone else will gladly do it for you.

About the author: Jeff Cowan, in his 30th year of  Service Department Sales Training, is recognized as the creator of the modern-day, walk-around and selling processes for dealership service departments and after-market auto service repair shops.  Jeff is the nation’s authority when it comes to training service advisors and service support staff. You can see him on a weekly broadcast of CBT News and read many of his published articles on various automotive publications. Currently partnered with NADA, EasyCare, NCM, Marellen, and other vendors and manufacturers.

Visit his website at AutomotiveServiceTraining.com get info on On-Site Training, Public and Private Workshops, DVD Training Program, Webinars, and a FREE trial of Virtual Training! For more great tips and advice, follow Jeff on Twitter at@JCowansProTalk. He’s also on Facebook, and Google+. You can also watch Jeff Cowan’s videos on YouTube! 

For more information call (800) 248-2931 or from outside the U.S., call (949) 713-4469.