Alex Kraft and Mets Kramer talk about the Digital World

You experienced that as well up in Canada, didn't you? That's with the dealer and Liebherr and others.

How big was that company that shut down and had everybody work from home? Do you know a number?

Okay. So think about that for a second. And I'm going to call that brilliant. That once a month they got together as a group and had a meal. A whole group, right? I don't know. Alex, in your days, we had management meetings, management meetings, twice a year. And we'd go away somewhere and there'd be, depending on the size of the company. 100,200 people, and we break up into work groups and everything else. But those days, the companies that I was with were 500,700 employees. We never created camaraderie like that, ever. Even departmentally, we never did it. Did you experience that, Alex, in Florida?

Yeah, I wonder what it is that's causing people to be seemingly afraid of this or at least anxious about it. I know the older guys like me, we're risk averse. We don't want to make mistakes because we don't have recovery time. And as Alex, you said, you're... You're kind enough to say that I'm not the typical boomer stuck in the old days, but

a lot of young folks that are kind of stuck too. I think it's really healthy and we've lost sight of this. If we get together regularly and communicate our thoughts and fears and what Alex and I were talking about before you signed on, Alex was. that we don't celebrate successes vibrantly enough. You know, we need to celebrate successes because they don't happen all the time. Yep.

exactly right.

I think both of you heard the story about my daughter who teaches. And when the pandemic came in and we went to virtual learning in classrooms for kids and they stayed home. Her school district mandated that the teachers had to go back to school to do the virtual learning. Imagine this. You've got professionals that are being told to go back to a workplace so I can see you work.

No, I'm not.

You know, you guys have heard me reference Patrick Lencioni often in his book, The Three Signs of a Miserable Job, where irrelevance is one of the items that the employees don't understand the contribution that their performance, their job function gives to the company. Notion just blows that out of the water. I'm working on a column now for... the independent equipment dealers for Dave Gordon and Kim on artificial intelligence and how it's impacting customer service. And you guys both know Dale Hanna and Foresight Intelligence. And you've heard Alex Schuessler who came from ArtEquip that like there's people, younger folks, younger than me, but you guys are in the world that is finding these things, exploring these things, and you're not afraid to. You give it a shot. If it works, terrific. If it doesn't, next, we'll try something else. That seems to be a real serious generational warp. The younger folks, let's go. Let's try it. Come on. Worst that we can do is fail. And they understand failure is part of success.

You probably see that out at the dealership right now, Mitch.

But if you're a student of history, it's the disruptors in every single darn case. Go back to the Vikings. And then how England defended themselves. All of a sudden they had arrows. And then the roads in Italy are still the same width as the damn wagon wheels were the trains in Italy, or the same width as the wagon wheels were from the Roman Empire. For goodness sake, what's going on here? And we, you know, we've, this, this, you know, we're, we're trying, I think you guys know, we're trying an artificial intelligence text to voice product out of the United Arab Emirates. And it's hard to determine the difference between a computer voice and a person's voice anymore. So when, when somebody is answering the phone on the other end, you're not really sure anymore. Is this actually Bob or is it, you know, a machine Bob?

is, does that matter?

In other words, it's better.

Including me and you and Alex, you know, after a while, rejection, you know, there used to be, I sold encyclopedias for a while in university. And I remember one of the guys, we had a short training session. He said, if you're standing on the corner and you're asking a good looking lady to come out to dinner with you, there's going to be a lot of people smack your face. Right. One's going to say yes. And depending on how skillful you are, your face is going to hurt or not.

My daughter, we got her an encyclopedia. She's taken it to the classroom. She works in a very, I think 97% of the students are low income people. Very, very difficult circumstance. They'd never seen an encyclopedia. Well, it's in their classroom now. And you have no idea how many kids, even though they've got computers at school, they don't have them at home. They don't have cell phones, but they pick up the books and they sit at their desk and say, I'm going to read these books. They're showing some thirst for knowledge. If only we gave them good tools.

What are you doing, Alex, in the sales transactions? It's no longer working from home. It's conducting the work differently. And that's exciting as hell. I'm starting to see you now making posts on social media and I'm sharing them. And I mean, it's terrific. You cut the cost of the transaction out completely.

Maybe I get up early and my wife's still asleep and I've got my cell phone and I go through my email, I go through texts lying in bed. It's four o 'clock in the morning. There's nothing else to do. It's, you know, why do I have to come down to the computer? I can do it on the phone. And, you know, it's exactly what you're talking about. What's convenient to you? The problem to some degree with that, I saw a posting this morning of a young lady whose feet are up on her luggage in the airport waiting area at the gate. She said, I left my laptop at home today. And the comments that everybody was making, boy, you're brave. And my comment back, I said, did you leave your cell phone too?

Yes.

Don't you, you're doing that now, Mets. Aren't you doing websites for dealers?

The thing that's remarkable, what Alex brings up, it's almost embarrassing now. We put up the webpage, the homepage, whatever, and that kind of started in the 80s. It didn't really reach any kind of coverage until the 90s. But we kind of did the Seinfeld thing. You know, we put up everything we wanted to brag about, yada, yada, yada. And then we put the machines up there, models and serial, and we didn't update it. We didn't. And Alex talked about this the very first time. The customer experience. If you look at dealer websites, the customer experience isn't really nice. It's not that good. How the heck do we... How do we, you know, the men should be, now the men, that's the other problem, I guess. Most of the guys that are running the businesses don't look at the internet that much. That might be part and parcel of the whole problem.

Well, yes, smart guy.

Well, yeah, that's true. But analytics that I look at every day, every week, every month, and which platforms are coming from. Mobile device, laptop, desktop, telephone, what is it? And Alex is right. More and more of them are coming from tablets and phones. What are the influencers that get us there? The associations are starting to play a role now, IEDA and AED and NTDA, et cetera. So all of those become important. The manufacturers still influence the dealers and get them to do certain things. And that's going to be true for them. for everybody forever. We, as long as we've got dealer distribution, but that's getting close to the point that it's being challenged. You can buy a car, you can trade your car, you can pay for your car, you can pay for the, you'll get a wire transfer of the pay. You don't need to leave your house.

You probably know that company, Matt.

You're asking about a standardization of freight. Well, we can't even have standard hours.

But you know why that is? Think about it being, you know, I'm the cynic, remember? It doesn't matter all those machinations, when it comes down to setting the price for the machine. The salesman looks at the cost of the machine. He says, I'm going to make 10%. He marks it up by 111. That's the end of it. And

You know, it's truly.

That's called adaptability, man. On the fly.

No, go ahead, Matt.

Over my 50 years, I have implemented in three different dealerships,53 years, three different dealerships that the invoice goes up right after the inspection is approved. before the work is done. We will start when we get your payment. And everybody said, what is this nonsense? I remember in Edmonton and Alberta, we were, I didn't like the way people paid. They pay on the statement, not on the invoice. And I talked to all these companies and they say, what, what you're paying on your state on your statement from us. Yes. But it seems to take 30 to 60 days from the statement date to when you pay. What's holding it up? Well, we have to match all your invoices to the statement before we can put it into payables. I said, ah, how about I send you the invoices with the statement altogether? Would you pay that in 15 days? Oh, absolutely. So guess what? You know, be careful what you ask for. There it was. Did they pay? No. I said, okay, that didn't work for the same group. I went back. I said, that didn't work very well. How about I send you a statement every week and I'll give you a 30 days payment on the weekly statement and I'll send the invoices with you. Oh yeah, we'll do that. Didn't happen. The third time I went back and I said, how about this? We won't start work until you pay us. And oh boy, you thought I'd taken their oldest kid. How come we can't have a reasonable discussion? Alex mentioned it early on in this discussion. We're looking at the customer, but we're not paying attention to the employees. What are the things that they're driving the employees nuts internally and externally? And if all we did was listen to that and do something about it, can you imagine the change? That'd be huge. Nine days from last labor. Holy mackerel, used to drive me crazy. I had one client years ago. They had six months sales and work in process. He said, Ron, this is ridiculous. Can you come up? And he had about 11,12 service managers. So I said, fine, guys. You're working Saturdays and Sundays until this gets down to a month. They did it. They got it down. We got together. I said, okay. Can you keep it in a month? They said, oh, yeah, absolutely. Guy calls me back in about six months. He's up to four months again. I called the guys on a conference call. I said, do I have to come up and have you work weekends again? Or maybe we should just have you work seven days a week to get, forget it. How, how do you change behavior? It's unbelievable.

You know, you might, you might be pointing at one of the real reasons for resistance going digital means that you have to solve problems. Oh yeah.

I went to a mine site in Northern Quebec. Early, early in my career. Before I went, there were the three mines, and I went to all of them. And before I went, obviously, I was looking after parts, and I had to check and make sure I didn't want to get killed when I walked through the door. And I went into one guy, and he ordered two of everything. If needed one, he'd order two and return one. And I said, you're really hurting me. Why do you do that? And he said, well, you know, there's one time I had this machine, this mine machine down. It was out of production. And I said, when did that happen? And he looked up into the ceiling and he said, I think that was 1953 or four. And I'm in 1970. Give me a break, you know. And it's a remarkable circumstance. You know, I think you both know my rule. Find every part every day and let the customers know where it's from, and then they can make a decision. And Mets mentioned Amazon. I can't tell you how many dealers I've said, why don't you have a dealer prime? And you've got, if they're within 50 miles, it's 50 bucks a month. If they're 100 miles, it's 100 bucks a month or some number. And we'll prepay free. Yeah. To Alex's point, I'm going to lose a million eight on the freight. And to Matt's point, I got to work with a precision to exact number. Holy mackerel, baby.

The other part of that is we've got a lot of young people to Alex's point, both of your points. We've got a lot of young people on staff that can do this and want to do this and wonder why the heck we don't do this. It's a remarkable thing. Fred Smith, Federal Express. We're going to bring everything into Memphis before we ship it out to where it's going. What? You crazy? U.S. Postal Service, everybody's delivering on Sunday. Who for? Amazon. The Postal Service employees love it. There's so many things, and you guys are right out at the edge of it, which is wonderful. But speed it up. You need more. We need to get more pronounced results. Maybe we need to have a, quote, symposium on digital dealerships virtually. and invite five to 10 presidents, CEOs, executive VPs, whatever, just to sit and talk.

Yeah, it's funny. One of the guys that I've got a lot of time for is Ed Wallace. who's written many books on relationship marketing. And one of the last podcasts we did was he talked about the rectangular sales call because we're making the sales call online now on Zoom. And it's your rectangle on the screen. I said, Ed, we got to get past this stuff. Relationship marketing, what is that anymore? And Alex, you're breaking that down. The relationship marketing is a different world today. They look at night, they do their research when they're not working their machine. And it's particularly true with the compact equipment or light industrial, whatever you want to call it. Those guys, you know, I used to tease product support salesman. I said, the guy, the owner operator, the guy that there's three machines and down, you make the sale of the maintenance agreement to mama. And the problem you have is mama might not want to see papa more. You know, and that's an acceptable reason not to get the business. But all teasing aside, we've got to adapt. And the employees can tell us what it is because they live in that world today.

It is busy work. You know, one of the things that early on in my career, I did a lot of manual work. I take data reports and I would pair through the darn thing line by line by line looking at it because nobody else did that. And it gave you amazing truth. And you had the facts. And like Reagan said, facts are stubborn. They don't change. And I'd get into a discussion with the boss and they said, no, no, that's not true. And I said, well, here's the facts. I didn't know that. Well, you've got this report. It's been there since the beginning of time. Then big circle go out to the dealer business system people. I said, give me a report that shows how frequently that report is used within that dealership. Who uses it and how often do they use it? And nobody's got that report yet, but they all say, well, they don't use half of our system. I said, well, if that's the case, get a report to give it to the dealer and you're going to help the dealer.

And we became so dependent on that one computer, you know what we did, right? Got two? We got two. I'm not joking. I am absolutely not joking. I had two IBM machines that were down at the same time connected to a bank of eight disk drives, both of them, so that we knew. And in the dealership, out in the stores, if a... Lady decided to have tea at two in the afternoon and plugged her kettle in onto the same outlet that the terminal was on, brought the computer down. I mean, we've come a long way, but we haven't. Alex goes to his right when he says, all we've done is we've gone from paper to glass.

If you could wave a wand, Alex, what would be one thing that you would ask the dealers to do next month that would start them down the path of a digital dealership or using data better?

You bring back the story of Louis Gerstner, who came from McKinsey when he went to IBM as the chairman. His first meeting with all of his direct reports, he's got about 20 guys in the room, maybe a couple of women. And he asked one by one who their top three customers were. And nobody was able to answer the question. Before he got halfway through the room, he killed the meeting, said, go away. I want you to find the three and we're going to meet again. And I want you to give me those three names. And it was a couple, three days later, he reconvened. They all gave him his 30 names. He killed the meeting and he got on a plane and went to visit every single one of those guys. What do you want from us? What do you need from us? It's so basic. We get caught in a circle of a web of some nature. This is what we've always done. We've got to do that because somebody's going to ask.

thing that you would trigger? What

So you want the squeaking wheel. You want the people who get angry. They have higher expectations, things you're not able to do. It's the age old thing. You know, the tough student in the class is the one I want. You know, I'll get you over it. So I would have one thing, very simple thing. Every customer that they go visit, I'd like them to have. The customers show them their website. And I bet you the customers can't find it. I think that, you know, that's, I would think that that is such a simple window into the need of digitizing things. All right.

It's for Mets, not for you.

I think this has been great, guys. And I want to keep doing this with you, too. I find this very stimulating. I think it's a lot of good content for people if they listen and hear what you're saying and then act on it. You will all be better off. So I'm going to say thank you now and wrap this up and thank our audience for participating and listening. We hope you enjoyed this. We hope we gave you a lot of different ideas. And I look forward to having you at the next Candid Conversation. Mahalo.