Archive for category: 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. 

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People…

Guest writer Andy Fanter returns tonight with a blog about people…not to worry, it’s a good thing. Connections and relationships with people matter, at work or outside of it.

Back in 2018 I hunted with a friend who manages thousands of acres for non-resident landowners. This involves mowing, planting food plots, building duck and deer blinds, airport transportation, caring for homes clients buy in area. My friend needed a strong number two, and I convinced him to hire a friend in the business that was looking to make a move. This year, my friend fired my friend—not surprised the guy he hired is good with people and good with the field work, and my friend hiring was more interested in “ labor” not a leader. I had not talked to my “ hired friend “ since 2020, but when his wife texted me the news that he was fired last week—I responded, “  Can I fix it? “  I was willing to make a two-hour drive to see if I could repair it—the consultant in me. My skilled friend already has another management job, so my offer was not needed.

Last week had me driving to take care of some business. I passed a recent ex-client headquarters enroute, but coming back I was passing it at 10 minutes before noon. I know my ex-client pretty well, we are even friends, I stopped and asked the front desk if he was around. She said “maybe,” and a successful hunt for him started. She was shocked that I just took a chance to see if he was around, but I have known this person 25 years. My friend was happy to see me, bought lunch, and our business relationship mended. We got caught up on 18 months of news. Some may know the name of the client—yes, we are both Gen X and more than a little opinionated!

Well great Andy—there are three people on earth who do not use a cuss word before your name….what does this have to do with construction machinery business and dealers? Never get too big, too mad, or too distant to try and help people. I say it often; the toughest clients to get are the ones you lost. But have you tried getting them back?

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My Perspective from Kansas

Brace yourselves! Guest writer Andy Fanter is ready to challenge prevailing behavior with “My Perspective from Kansas.”

I want to establish my “street creds” before I make 18% of the US unhappy.  I have lived most of my 50+ years in Kansas:  Wichita, Kansas City, Lawrence, Baldwin City, Hartford, Great Bend, and Marion.  Oh, so now you have heard of “that Marion, Kansas”.  Trust me; I have seen worse in my eight years living in Marion.  

 

The attempt to save old buildings and rural America is a waste of time and energy.  There is an old building that has seen 18 months of renovations, $200k+ spent, grants, and the barbeque restaurant still not ready to move in and start cooking.  Meanwhile, two miles away on well-traveled US Highway 56, complete with semi-truck parking sits the closed Pizza Hut. Rumor has it the current owner, a farmer using it to store machinery in the parking lot, would sell for $50k or less.   The old buildings across the US have bad roofs, wiring, plumbing, heating/air, asbestos, etc.   The buildings need demolition and a metal building in place to give a business a chance to survive.

 

You want to come to Marion and debate rural America over—breakfast.  We can get a coffee and a donut at Casey’s convenience store and eat in the park.  Four diners have come and gone in Marion in my eight years living here.  3 of 4 were in old buildings, one tried Pizza Hut—but covid hurt it.   Marion has industrial land for cheap, some cities have it for free—they attract Dollar General.  You could build a nice manufacturing plant for 50 employees.  Marion is a mini big metro across the US—inventory of good housing is low, and if one is for sale it sells in a week.

 

You think visiting Kansas would be great to try the fishing and hunting opportunities.   The lakes have big problems with blue green algae blooms.  The last 15 years have seen a huge surge in nonresident hunting on public land, and private land being bought by non-residents to be used for hunting in the fall and winter.  The same nonresidents buy nice homes in the small towns to use during the hunting season.  I have a friend who manages over 600k acres for out of state residents who own the land.  The same nonresidents own 6 homes in a small town.  If you want to enjoy the outdoors in Kansas, better to write a big check for your own land, and hope no one trespasses.

 

So, what is this Fanter rant?   Good people live in rural areas, and you need to help them get closer to larger population areas to help your business.    Expanding rural broadband is more about corporate agriculture needing the services to control equipment.   None of these issues are unique to Kansas.  Texas would say it saw these issues 30 years ago.   Your future employees are likely in a rural area or working in a restaurant.  They need help seeing a better future working in your business.  For my part of the world, construction and construction machinery offer opportunity over a broad spectrum of dirty jobs to office jobs.  18% of people in the US are living in rural areas—it is time to squeeze that down to 15%.

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Employment – Wages – Inflation

Guest writer Andy Fanter tackles the topic of economics in his blog post for this week: Employment – Wages – Inflation.

A little over halfway through construction machine unit deliveries by state, Ron messaged me about another blog.   I have done the big states, and the numbers are up!!   The topic for this blog:  employment, wages, and inflation—most know general economic stuff is not my favorite, but this will be fun.

Employment:  We are in the 3s, unlikely to get much lower, and unlikely to go much higher for years.   The construction industry needs people, and if you think Gen Y and Z will suddenly want to operate machinery or tools you will be mistaken.  Immigration, we need it for construction, food processing and the restaurant business.  If the banks would tighten the lending requirements for restaurants, like they did for housing after the GFC, it would help a little.  People from all over the world would enjoy working our “dirty jobs” so they can have a good roof, water, sewer, and low chances for tanks in the streets.  Friendly reminder, most of us do not have roots dating back to early America—it is a melting pot.  Even agriculture is back up, so getting people from rural America just got tougher! 

Wages:  Choice is simple:  pay people well, treat people well, have some meals and snacks at work or they will leave.   Looking back over the last 20 years, you needed to make 3 to 5% to stay ahead of inflation.  I know the companies that overwork, underpay, and have more respect for laptop computers.  There are ex-employees from those dealers all over the US working at other dealers.

Inflation:  Oh yay, natural gas and eggs are way down.  Housing and autos, no easier way to say it welcome to “screwedville”.  Home prices are not going to make a big drop, not enough inventory.   Builders are trying—but back to employment issue.  Autos:  new inventory is increasing but nowhere near 2019 levels.  Used auto prices are dropping some, but how much of that was post-graduation, post wedding season?   High interest rates making auto payments $1000+ a month, but this is the 1980s mentality again and new auto sales are on track for 8% to 10% growth. Next few years expect the CPI to be in high 2s, FED would like low 2s, so back to interest rates sitting around 5%.   The consumer can make a bigger dent with inflation by going back to the smart phone and shopping for a better price!  It worked from 2010 to 2019; it drove the FED and Phillip’s Curve people nuts, good employment, low inflation.  Big ticket items, not much change but builders have incentives and so do auto manufacturers.  

Tune in later for more.

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