Greener BeeGreen TipsA Few Tricks and Tips for New Dealer Development

Trying to open up new dealers can be a long and expensive process, especially since territory managers are often on the road servicing and convincing the current dealers to carry the proper inventory. This leaves little time to properly conduct the right analysis for identifying the ideal new dealer that you would like to have carry your product. Usually outdoor power equipment companies, or original equipment manufacturers in general, rely on basic common sense and a few data tools to help drive their decisions. But there are more advanced ways to help you, and it can save you lots of time and money too.

Challenges of opening new dealers

Let’s first examine some of the challenges of opening up a new dealer beyond just loss of time and money.

First, there is always the task of not upsetting an existing dealer who may feel slighted that you are attempting to place a “competitive” dealer within his or her own general community.

Second, you need to provide real data to the new dealer that there is growth opportunity where an existing dealer conducts business.

Sometimes, OPE companies think just plotting existing dealers and previous product sales compared to the nearest desired dealer provides enough information to guide the territory manager’s strategy. It really requires much more than that to establish a strategy. Here are a few ways to improve your method.

Get as much local marketplace information as possible

There are many data variables that should be considered at the local, county and state level. For example, population swings, housing starts, landscaper penetration per capita of acreage, household equity, local noise ordinances, competitor product sales, and more. This provides the territory manager with a solid understanding of the dynamics within the community and puts him/her on solid footing when engaging with the owner of the dealer.

Convert product registration into customers

Often OEMs think that one product registration equals one customer. And this approach can greatly mislead your analysis. At Stihl, a client of Black Ink ROI, we take 16 years worth (millions of records) of product registrations and we identify if one person bought more than one product. This helps segment two important factors. Factor one: know the difference between new versus repeat buyers. Factor two: understand the lifetime value of the customer.

For example, over the past five years I have bought four different product SKUs, across three different dealers and two different states. If one were to just look at product registration data alone, I would be four different customers of Stihl, all labeled “new.” But the true picture is that I am one repeat, multi-buyer customer with four different products. In addition, my value to Stihl is greater to date, and my future lifetime value is even greater.

Enrich the customer data


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