[Strategy interview] Strength in numbers

MD of Superstat, Alex Dunn, spoke to Nell Walker in February 2019’s edition of Dealer Support about the importance of dealer groups – and their future

Alex Dunn, MD of Superstat, essentially grew up with the business he now leads. He took on a summer job at the company 25 years ago – in Superstat’s first year of existence – and then returned after university to take on another, supposedly temporary, role. Fast forward a quarter of a century and Alex is now managing director of the dealer group leading a team of 11 with a strong membership of 230 dealers. Of course, it has changed during that time – it’s had to.

“It started off as a buying group, pure and simple,” says Alex. “There were a lot of dealer groups at the time and we went to market with a motto that still stands today: ‘dealer first’. The idea of someone truly championing the success of the independent dealer went down well and it is something we believe in to this day. As a group we ask ourselves: is what we’re doing in the best interests of the dealer? If the answer is no then we don’t do it. It’s the only way to stay true to the cause.

“Purchasing was an area where we could show huge benefits to dealers, but we wanted to go beyond that so started to introduce initiatives that would further support the dealer in sales, marketing, training and support”. As the industry has changed the group has changed, along with its dealers, primarily helping them to differentiate themselves and improve their marketing. The marketing side is a big draw for Superstat, as busy dealers don’t always have the time or resources to market themselves effectively.

“We’re hands-on in the sense that we believe there are certain things that can be done better, and more cost-effectively, centrally,” Alex explains, “with that cost shared out amongst the dealers. They’re getting a marketing service that ordinarily they wouldn’t have the time or money to work on consistently.” This is why, Alex believes, dealer groups are important; it can be tough for dealers to fend for themselves, after all. “Trading conditions are very turbulent, and increasingly difficult,” says Alex. “There is strength and safety in numbers, and dealers can benefit from the economies of scale in a group. It allows them to access business tools that could otherwise be cost-prohibitive.”

Dealer group challenges

The challenge for dealer groups is to stay relevant to the dealer and their customers. “We are only ever as good as what we did yesterday,” laughs Alex. “Groups have to be one step ahead of the game at all times. We’ve tried in the past to implement initiatives that the market wasn’t ready for and learned that you can’t force it. We have a lot of respect for dealers who are running their own businesses and groups mustn’t sit in their ivory towers, dictating how it’s going to be. You have to listen and learn, and work with your dealers to their agenda. That’s why it’s so important to us to attract dealers that want to grow – it’s about quality not quantity”.

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The fierce independence of many dealers can also be a challenge but, for the most part, it’s a boon. While many within the industry complain of dealers’ inability to shift and adapt quickly, Alex thinks that the opposite is true, having watched the way his own members have interacted and evolved.

“Dealers adapt quicker than they sometimes get credit for,” he says. “A lot of them have already reacted to this ongoing decline in traditional office products by selling in new areas. I see dealers constantly making micro-adjustments on a day-to-day basis and, as SMBs, they’re nimble enough to shift quickly.” He believes that, when they are slow to change, it’s due to the fact that they’re so busy looking after customers they sometimes don’t have the time to see the wood for the trees.

“Another challenge we’re finding with some of the dealers we talk to these days can be the ‘dealer group’ tag itself” continues Alex. “It can bring a lot of preconceptions along with it and, as we’ve adapted our offering to be more sales and marketing-focused, we’ve found that ‘dealer group’ no longer represents the ethos of what we do. We’re more like an all-encompassing sales and marketing agency with the focus on the relationship between dealer and customer – but that’s not as catchy!”

Dealer wins

While Alex doesn’t believe there are necessarily any ‘easy wins’ in terms of product areas for dealers he does feel that there is too much choice in diversification, making it difficult to choose which to focus on and do well. He feels that, in many ways, independent dealers are extremely fortunate that they have MPS, workwear, business gifts, FM, print, education and so on that they could diversify into, and that there are not many businesses that have those opportunities in front of them. His advice is that dealers choose areas that align nicely with that they already do, with the skills of their sales team and that fit the dealer’s existing customer base.

“Dealers are really successful in selling new product areas because they can exploit those unique relationships that they have with their existing customers. They have built up trust over the years and have a rapport that you can’t get on Amazon, so pick the right product area with the right partner and they are extremely successful. Selling a new product area isn’t easy and it doesn’t happen overnight,” Alex admits, “But with the right approach, the right marketing and training it can be done successfully.”

At a time of uncertainty, Alex is comforted about the state of the industry by the dealers within his own group which continues to strive to make its businesses the best it can possibly be. “We’ve got a young, fearless, energetic group of forward-thinking dealers – and that’s what gives me confidence for the future. This industry has challenges just like any other, we’ve fought challenges before and we will continue to do that – that’s what we do!”

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