The iCademy online dealer training program has been another important investment. We would need an army to educate all of our dealers, whether that education was of a technical nature or simply on the features and benefits of our products. We have one person, John Keeler (national training manager for STIHL Inc.), who has done an outstanding job with this program.
Also with respect to advertising, our marketing advantage co-op program, which allowed area dealers to take out full-color, full-page ads in local newspapers, was very effective in building awareness among consumers. This is a big reason why we have dealers selling a lot of equipment to consumers, dealers who would have never thought about the consumer market 10 years ago.
FW: Another thing the marketing advantage program did was make consumers aware that STIHL products were available at a wide range of price points. I had friends and neighbors who would apologetically tell me they bought a new chain saw, but they didn’t buy one of ours. “I just didn’t need one that good,” was often the explanation. So I’d ask: “How much did you pay for it?” Their response: “$149.” My response: “Well, we have saws that start at $179. Wouldn’t you have rather paid another $30 to get a STIHL?” The marketing advantage program did a lot to correct this false perception that our products are too high-priced for the average consumer.
The marketing advantage program also did a lot to change the way dealers viewed each other. It took some time, but they eventually realized that the other dealer across town was a competitor, yes, but a competitor on a like basis; he offered service and had technicians, stocked parts and so on. The real competitor is the big box. Dealers are realizing that to gain market share from the box stores is the best way forward.
Q: Mass retailers such as Sears and Home Depot are now marketing commercial-grade zero-turn riding mowers. Are dealers going to have another fight on their hands when it comes to public perception, i.e. “you don’t have to go to a dealer if you want a more durable, higher-end piece of equipment”?
PB: I can only speak from STIHL’s perspective in the handheld arena. The dealer has become more relevant in the buying consideration of the consumer over the past 10 years. The dealer is the expert. In the past, the decision was often price-driven. That’s still the case in a lot of circumstances, but not as much. And the desire to get the best value for the money has heightened with the tough economic times we’ve seen the past few years.
Q: There are not as many dealers today as there were 20 or even 10 years ago. If the number of dealers continues to shrink, is this going to present a problem for STIHL?
FW: What’s interesting is that we’ve gone against that grain so far. Our dealer count has actually been increasing every year. We have more dealers than we did 10 years ago.
Q: What role have hardware stores played in your ability to increase your dealer base?
PB: More and more hardware stores are seeing the value in putting in a service counter. We will not do business with them unless they do. Hardware store owners are very smart businesspeople; they have to be to survive in that business. They, too, want premium lines which the box stores don’t have. And they are independently owned and operated.
We’ve also found that the typical hardware customer is different from the typical OPE dealer customer. And hardware stores also provide access to our products and accessories when the majority of OPE dealers are not open on the weekends.
FW: Keep in mind that our product does not appear in hardware store franchise catalogs, like ACE Hardware or Do It Best Hardware. Each store is set up with its own account, just like a dealer is. It’s then up to the individual store to sell and service STIHL product or not. Individual hardware stores are treated just like OPE dealers and conduct business like those dealers.
Q: What role has your marketing relationship with John Deere played in your ability to add dealers and grow sales?
FW: Clearly, our affiliation with John Deere has had something to do with it. And frankly, this relationship in general has exceeded our expectations. But sales is only one element. The culture of the two companies has also been a nice blend. The cooperation level of their senior management team has been stellar. The entire organization is a class act.