A Candid Conversation with Andy Fanter
A Candid Conversation with Andy Fanter
On the Learning Without Scars Podcast, we just had a candid conversation with Andy Fanter. Andy Fanter started Intercast in 1994. The company is a division of Cyclcast, created in 1978 by Dick Fanter. Dick retired in 2019. Andy currently forecasts for over thirty dealers across the US. In his free time, he enjoys the stock market and fishing.
Risk and Generational Shifts
The construction industry is witnessing a fascinating transformation in attitudes toward risk. Andy Fanter’s analysis reveals a noticeable shift from the older generation’s penchant for risk-taking to the younger generation’s more cautious stance. This evolution is shaping how businesses strategize, plan, and execute their operations.
The conservative financial goals that have emerged from dealership consolidation over the past 15 years have added layers of complexity to sales dynamics, especially between new and used equipment. Proactive planning and robust risk assessment are becoming indispensable tools to mitigate interdepartmental frustrations.
Strategies for Success
Fanter suggests a keen focus on identifying top-performing products and boosting inventory to meet customer demand, drawing parallels with Starbucks’ successful product expansion. This approach not only meets demand but also enables sales personnel to bundle complementary items, enhancing customer satisfaction. Leveraging data analytics to gain insights into market dynamics is crucial, especially when customer retention and market share are at stake.
The Market Share Conundrum
A striking example of the industry’s challenges is the decline in OEM Dealer parts department market share, from over 80% in the 1970s to around 40% in 2020. This downturn is attributed to poor dealer performance and inadequate measurement.
Despite maintenance efforts, equipment breakdowns persist, underscoring the importance of prioritizing parts and service for customer satisfaction and profitability over merely focusing on equipment sales.
Embracing Innovation
Fanter calls for bold, innovative thinking among industry leaders, particularly in adopting underutilized subscription service models for machinery. His experiences highlight the resilience required to navigate criticism and manage travel expenses amid business consolidation. Building strong communication and relationships is key, as demonstrated by a friend’s successful strategy of hiring additional staff to boost sales performance.
Harnessing Technology and Data
Technological advancements in computing and data analysis are revolutionizing sales strategies and revenue enhancement through strategic pricing. Fanter critiques manufacturers for excessive price increases in the 1970s, which led to unnoticed margin drops. He advocates for the strategic use of analytics to improve dealer transactions and customer retention. Innovative distribution strategies, like drop boxes for inventory, are proposed, though they face resistance from dealers.
Adapting to Change
In the face of environmental concerns and shifts in the electric vehicle sector, Fanter urges businesses to adapt by utilizing dealer data effectively. The pandemic has also prompted a return to in-person meetings and revamped training programs, with voice recognition technology enhancing learning experiences. Engaging teaching methods encourage students to define key management concepts and address the pitfalls of ignorance, stagnation, and adaptability.
Economic and Market Trends
Employment challenges related to new U.S. computer chip plants and the revival of nuclear energy highlight the ongoing clean energy debate. Economic indicators suggest a rise in housing permits, driven by young adults, with demographic shifts pointing to a preference for customizable new homes. This trend offers opportunities for builders to provide flexible options and for the equipment industry to thrive.
What should we do now?
As we navigate these dynamic times, the construction industry stands at a crossroads of risk and innovation. Embracing change, leveraging technology, and prioritizing customer satisfaction are vital for future success.