How to be BOLD During Uncertain Economic Times
Learn how to be bold during uncertain times, and the benefits that can come from it.
Episode 226: The last 2+ years have been a roller coaster ride for all of us. In episode 209 we talked about what to do in a recession and one of the things I highlighted was the need to be bold. That got the attention of one of our listeners and today we get to have that listener join us.
My guest today is Daniel Wessels. He is a Parts Manager at M&K Truck Centers, and he has been working for dealerships since 2005 so he knows what it’s like working for a dealership through good times and bad.
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Transcript of Episode:
Jamie Irvine:
You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keeps trucks and trailers on the road longer while lowering cost-per-mile.
The last two years has been a roller coaster ride for everyone. In Episode 209, we talked about what to do in a recession. And one of the things that we talked about was the need to be bold when there are uncertain economic times, which we certainly are in right now. And when I highlighted this, this got the attention of one of our long-term listeners. And I invited him on the show to talk to us about this, because he had some specific thoughts with his long-term experience working in the trucking industry. So my guest today is Daniel Wessels. He’s a Parts Manager at M&K Truck Centers. And he’s been working for dealership since 2005. He knows what it’s like working for a dealership through good times and bad. If you just kind of think back from 2005 to now, we’ve had the 2008, nine collapse in 2016, we had some commodity prices on oil collapse. We then had the pandemic in 2019. So he’s seen it all good and bad. And he’s got some thoughts about how we can be bold at uncertain times. So Daniel, welcome to The Heavy-Duty Parts Report. So glad to have you here.
Daniel Wessels:
Hey, thanks Jamie. Thanks for having me.
Jamie Irvine:
So normally you’re bombing around in your car. You’re selling parts and service and you listen to The Heavy-Duty Parts Report regularly. First of all, thank you for being a longtime listener of the show. I appreciate it.
Daniel Wessels:
Oh yeah. Enjoy the show.
Jamie Irvine:
And today you’re here in your car roadside. You had to pull over. So that’s great, I appreciate you taking the time let’s get into it. What is the usual playbook for someone when they do see this like recession coming or there’s uncertain economic times? You’ve worked for dealerships for a long time. What’s the usual playbook?
Daniel Wessels:
Well, I guess to start off with, I’m no economist, but you know, it looks like a recession is on its way now how bad it gets, lord only knows, but you know, the playbook kind of goes like this. All the dealerships are gonna do some version of, you know, cutting back on inventory, charging the credit card fees, charging for delivery fees, reducing sales staff, or you know, not even replacing guys that, that move on reducing delivery staff, reducing inside sales staff, cutting back on hours or just general markup increases. And you know, a lot of these measures are appropriate, you know, to some degree. But you know, it’s kind of like every single dealership is gonna be doing some, if not all of these measures,
Jamie Irvine:
Well, this has an impact on the dealership’s ability to provide its service and parts sales to their customers. So like you said, reasonably speaking, if all of a sudden you see a sharp decline in revenue, you gotta adjust your costs accordingly, but why do you think that in large part, this is a mistake when they do, when they kind of run this playbook?
Daniel Wessels:
You know, it all kind of depends on your market and depends on what your competition is doing. But, you know, during the tough times, you know, when everybody is cutting back on everything, there’s a lot of opportunities, a lot of gaps open up and there’s a lot of opportunities to go out and ask for, you know, products that you’re not particularly good at. So let’s say if you wanted to focus on, you know, hypothetically shocks or wheel bearings or something like that with less sales staff, less competition in the marketplace and also dealership cutting back on inventory levels. It really provides opportunities for you to go in and get business that you didn’t necessarily have so that, you know, maybe still sales are gonna be down at your branch just because of overall sales. But you know, when those times come back up, it really provides you an opportunity to gain a lot of market share that may you may not have had before.
Jamie Irvine:
Right. And I think there’s a big difference between controlling your costs in the short term, and then what you’re doing as a long-term strategy. That’s gonna take you through this uneconomic uncertain time. Maybe it’s a recession, maybe it’s a bear market and how you are positioning yourself to out the other side at the end of the day, when all of these cutbacks occur, who pays the biggest price?
Daniel Wessels:
Well, you know, of course the customers pay the biggest price, having, you know, less parts at the dealership level on the shelf. Service is almost undoubtedly not gonna be as good as it was as far as parts deliveries, as far as being able to overnight or shuttle parts between, you know, between branches, if you’re, you know, within a dealership group. And I’m not even saying that I disagree with delivery fees or credit card fees or any of that sort of thing, but at the end of the day, you know, a lot of people don’t charge those now. And a lot of customers are are gonna be paying the price for it when those sorts of things go into place.
Jamie Irvine:
And customers have a long memory, right? If you, if you all of a sudden hit them with a fee that they don’t see coming, or you don’t communicate that well, maybe that’s where you let the customer down. You know, it’s one thing to tell them, Hey, look, we’re in this situation, we have to pass this on to you. It’s another thing to surprise them. And also I’m thinking about like increasing their downtime, right? If the truck has to sit for an extra few days to get into the shop and get repaired this has a big impact on the owner operator or the small independent fleet. And people have a long memory. They don’t appreciate that. So definitely we have to be very strategic about the decisions that we make. We’re gonna take a quick break. When we get back from the break, we’re gonna talk about what you should do in economic uncertain times.
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We’re back from our break. And before the break, I was talking to Daniel about some of the things that he sees, almost like a playbook that dealerships and not just dealerships, really this applies to aftermarket distributors and independent repair shops. When these economic uncertain times hit the reflex is to obviously, if revenue’s decreasing, you wanna control your cost. So the reflex is to pull back, pull back on the parts, pull back on the amount of staff that you have pull back on the services that you’re offering increase the fees that you pass on to customers. That’s the instinct, but Daniel, from your perspective, what could a company do instead to ensure that coming out of that economic uncertain time, again, whether it’s a recession or a bear market, what could they do instead to position themselves and put them in a stronger position where they’re actually able to help the customer at a higher level?
Daniel Wessels:
Yeah. Well, first thing, imagine explaining to your customer that, you know, you’ve reduced your delivery scheduled from, you know, hypothetically once or twice a day down to once a day. And oh, by the way, I’m also gonna charge you, you know, X amount for the deliveries. That’s really not a good look, you know, you can do fast damage to your dealership reputation and you can make customers change their buying habits very, very quickly. You know, if you implement too many of these measures too quickly, and if they’re not communicated upfront, you don’t wanna look like the vendor that starts implementing things to make it harder or worse to deal with you and still offer nothing, you know, nothing better in return so you really want to kind of avoid that as far as maintaining your reputation,
Jamie Irvine:
One thing I’ll say about that, Daniel is you have to be very careful with the decisions that you make running a business, because whether you realize it or not, you’re communicating certain things. So if all of a sudden you’re communicating almost like a panic situation, like you said, that’s not a good look that doesn’t set you up for success in the future. And a customer may be hesitant then when things do recover and you relax and then you’re like, okay, we’re back. And the customer’s like, well, yeah, but what happens the next time you know, something goes sideways, how are you gonna treat me? Right. So they’ve got a long memory.
Daniel Wessels:
Yeah, yeah. That’s exactly what you wanna avoid. You don’t want to keep that taste in their mouth. Like, Hey, remember back in, you know 2022, when the recession started and you guys cut way back on everything and I couldn’t rely for you on you guys for basic stuff, basic deliveries, you know, some of the general parts that you should have in stock that you certainly don’t want that to be a customer’s lasting memory of you, especially when times, like you said, when times normalize and businesses back to where, to where it was.
Jamie Irvine:
What kinds of things can we do to like in my video about the recession, you know, one of the things I’ve said is when things go down, like to your point, there is opportunity and you have to be bold. So give us a couple examples from your perspective on things that you’ve thought in the past, we should be doing this right now to set ourselves up for future success, even though it is a recession or a bear market, or just economically uncertain, what kinds of things do you think we should be doing?
Daniel Wessels:
Yeah, well, I think first of all, you wanna keep your operation as normal as you possibly can for as long as you possibly can. So if you offer it twice a day delivery, don’t take that away until it’s really not worth it to make that second delivery run. But I remember I got my first parts manager job back in 2011 and I was about 25 at the time. And I was really, really hungry to go increase sales, but I was also the purchasing manager, even though, you know, because you were the parts manager of a small store. And I remember back in those days, I would go out with the outside salesmen and we’d walk into places and we’d be able to quote right away. And there wasn’t a back in 2011, you didn’t see a lot of other outside salesmen, you know, coming out of the recession in 2009 and 2010, I think everyone had cut back on sales staff.
Guys had cut back on inventory. So it was more difficult for the outside salesman to be aggressive when it came to kind of like all makes parts sales, you know, and it just provided a ton of opportunities because you could go into to customers that had been buying from, you know, whatever your competition was on all those all makes parts. And you could say which wheel bearings are you using? And you know, you could make the quote out, but you know, if, if they weren’t following up with other salesmen and you could make your, you know, you could get the items to quote, you could make your quote same day and follow up with it the next day. And you know, if you’re good at sales, you can ask them, Hey, where, where does this stand? Am I too high?
Is my price good? You know, then you can ask the sorts of questions. Like what about your usage? So you can stock appropriately. And you know, during 2011 we picked up a ton of different product categories like shocks, like all makes airbags for trucks and trailers. And because all the competition was had had cut back previously. It was, it was a lot easier for us if you fast forward to maybe like one or two years after that, 2012 and 2013, when everybody had put the appropriate number of salesmen back on the staff, it made it very, very difficult. But there was that window that we had that we picked up a ton of market share. And then when the economy kept picking up, those wheel bearing orders, it would be two to four pieces.
All of a sudden became 12 and 16 pieces. Right. And you know, we owned all of that business for not just one or two or 10 of our customers, but 30, 40, 50 customers. We really changed their buying habits to where it was like, Hey, if you need wheel bearings, you go to the company that I worked for at the time. And then once you do that with three or four or five product groups, all of a sudden they’re like, well, wait a second, do you have any air dryers and stuff? It’s like, well, I’m already calling you for my wheel bearings and my shocks and my Freightliner airbags, how about this air dryer? Do you have one? And then, you know, that momentum just kind of builds on itself. And the next thing you know, instead of delivering one or two product groups over to a guy, you’re delivering four or five, six, and he’s asking you about one offs that you wouldn’t have gotten if you wouldn’t have been able to go in and quote those other product categories that you previously didn’t have.
Jamie Irvine:
Yeah. I think you’re right. It’s really a matter of shifting your mindset. So if everybody else is being reactive and retreating, you need to be proactive. And like I said, when customers they’ve got long memories, they have long memories when you, when you do them wrong and they have long memories when you take care of them. Because I know for myself in my days of selling parts, you know, when we were proactive in those tough times and we really outperformed our competitors, people remembered that. And so then 2, 3, 4 years out when times are good again, and everybody’s coming back and asking for that business and they’re like, no, I mean, where were you when I needed you? I’m gonna keep giving that business to Jamie because he worked really hard for us in that time and helped us out. So you’ve got to do that.
And I like what you said about how then when times get good, you get this exponential impact of all that proactive work that you did. So this is good for, you know, whether you work for a dealership or aftermarket company. This is good for business in the long term. And I think that’s really what it’s all about is having that long- term viewpoint in order to see that, yes, it’s bad right now, but this is just one dip in many ups and downs that we will experience over the course of our career.
Daniel Wessels:
Yeah, that’s exactly right. Those guys absolutely will remember if you were the one that kept your twice a day delivery schedule and you know, once you change those guys buying habits to come to you for whatever it is, they’re gonna keep coming to you. And really it’s up to you to really ruin those relationships too. And you can do that pretty easily. You gotta be careful, you gotta not panic and certainly keep pushing.
Jamie Irvine:
Well, I really appreciate you first of all, listening to the show, second of all, being willing to come on the show and talk to us about your experience and sharing your experience. That’s been fantastic. Daniel, thank you so much for that. Anytime you ever want to come back and talk shop, I would always love to have you on the show.
Daniel Wessels:
Yeah. Thank you very much.
Jamie Irvine:
Okay. So you’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. We’ve been speaking with Daniel Wessels a Parts Manager at M&K Truck Centers. And Daniel, thanks again for being on the show. I’ll let you go. So you can get back to your day.
Daniel Wessels:
Thanks for having me. Appreciate it.
