A dealer friend of mine and I were talking about changing markets, and the conversation somehow led to craft beer. That is the reason you are about to (hopefully) read this article. Have you ever thought about how the beer and lawn industries might be similar? I realize this article seems like it’s going to a very bad place, but hear (or read) me out.
Craft breweries are popping up all over the place. In most cases, the hops are the new “happy point” for real beer drinkers. However, what impact does craft beer have on the big beer guys? You would think the major beer players are being hurt by the unusual, the hoppy, and the new. The labels are cool, the names are awesome, and the way they package them is refreshing (no pun intended). And unless you are trying Bob’s Uncle Jack’s brother’s father-in-law’s beer, there is a good chance the craft beer tastes really good.
If you made it this far don’t stop reading now because, believe it or not, there is a point about to be made! In our industry, there are many options for the products, parts, and accessories you sell today. The equipment you sell – the tractors, lawnmowers, handheld items, edgers – is similar to the craft beer. Their brand-name accessories are like your parts. The drinking glasses, the signs, the t-shirts, and the other memorabilia that the craft beers supply are taking business away from the big beer producers.
So I ask, what are the big beer producers doing about their new competition? Are they waiting for the fad to wear off? It reminds me of when many dealers thought the big box store would go away. Guess what? They are still around. Are the big beer guys going to try to compete in the craft beer business? If they do, they may fail. “If you can’t beat ‘em, join ‘em” is not always right. You want to know what’s really odd about the craft beer business? It costs more money than regular beer. People will pay more money for something different that gives them satisfaction.
“What does this have to do with me, A.D.?” Everything, Mr. Dealer Reader Person. All day long, all I hear is “Amazon has this for this price. eBay has this for this price. Why can’t you sell me that part for the same price?” People are paying more money for craft beer because they want to. They have a perceived value made up in their head. There is also the cool factor, and that adds more money to the perceived value. Let’s get real, what’s so good about craft beer that someone will pay $3 more per six pack? It has to be the cool factor. The big beer producers, no matter how cool they try to get, cannot be cool like craft beer companies. They are only as cool as they have always been with what they have always sold.
Still aren’t “singing along with Mitch?” (threw that in for you older people), then maybe this will help. A new guy puts a shop in your backyard, not literally, but down the street a few blocks. His prices beat yours for performing service work. His posted shop labor rate is $10 an hour cheaper than yours. Can you compete with that? Maybe, but probably not. What is your customer’s perceived value for your service? If the perceived value is no better than the new guy, your business might retain your family but it won’t take long for other customers to find the new guy. And until they have a problem that doesn’t meet their satisfaction, they are not coming back.
Make their perception about you their reality story about you. Give every customer, new or old, a reason to never go to any new dealership. Are you taking too long to repair products? Speed it up. Are you advertising your experience and exceptional products and service? If not, do it. Even if the guy down the street is made up in A.D.’s head to prove a point, do these things anyway. If you don’t, you might find that A.D. is good at predicting the future.
With all that said, I’m pretty sure it’s 5 o’clock somewhere. Remember to keep your blades and mind sharp. You can contact me by e-mailing me at OPEMAGAD@gmail.com (I do reply to every note), or you can tweet me @OPEMAGAD.