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2016 Industry Leader — Steve Shankin

Steve Shankin calls it “entrepreneurial overcommitment.” Others might have called it “making a decision and hoping like it heck it works.”

After leaving the bicycle business, Shankin was doing general product development work in 2001, when a customer turned to Shankin to design a UTV.

“In the process of designing the full vehicle, I told them that they needed to offer the right accessories for the vehicle to be a success,” Shankin recalled. “They didn’t want to have anything to do with the accessories, which scared me to death because I didn’t think the unit would sell without accessories, and my company was really new so I really needed this thing to be successful. And so in a moment of entrepreneurial overcommitment, I said, ‘OK, well then I’ll do the accessories, and we’ll sell them. And that’s how our entire aftermarket business got started.”

Steve Shankin

Steve Shankin

Roofs and windshields were the first products offered, followed by plows, winches and other practical products.

“Remember this is 2002 now, and the UTV accessories market was nothing like what it is today. There weren’t many vehicles out there, but there were a few, so we said ‘Let’s see what kind of problems we can solve for people.’ It was a great business to be in, and we got into it before it kind of became what all the cool kids are doing. Our timing was good when the market took off. We were there and ready for it.”

Now, the Raleigh-Durham area business in North Carolina has 16 employees, all thanks to Shankin’s foresight into the UTV marketplace.

What is the biggest opportunity for the industry, and how can the industry take advantage of it?

I’m obviously biased, but I think the biggest opportunities relate to capitalizing on UTV sales — in a number of different ways.

More OEMs are coming out with vehicles that have very specific target users, and at the same time, there are more vehicles coming out that are better-than-ever multi-purpose models. This is going to continue to draw new customers into the UTV category as customers see more ways their practical needs can be met and more ways to have fun with a UTV. But dealers have to be ready, willing and able to point this out to potential customers. The vehicles are so versatile, and there are so many different models in most dealerships that it’s critical for salespeople to remember that customers don’t truly want the vehicle; they want what they’re going to do with the vehicle. The difference is subtle but critical. When a customer’s real need is better understood, you can get them in the right vehicle and get the accessories that will help them make the most out of their purchase.

I always tell people that if you’re just selling the base vehicle, most of the time you’re selling a very, very expensive wheelbarrow, and that’s usually not what your customer really wants. Spend the extra time and energy to learn the customer’s needs and set them up right! Asking a lot of questions like “What kind of stuff would you like to do with your vehicle?” and pointing out other ways other customers use UTVs in your area can go a long way to increasing sales and customer satisfaction.

The UTV segment is a major growth opportunity — but in a way it’s also a threat to the powersports industry. Customers can go to farm/agriculture dealers, big box stores, golf car dealers or any other number of outlets to buy UTVs. These other places are actively competing with powersports dealers for customers and taking market share.

What has been the biggest challenge in your current position, and how have you dealt with it?

Without a doubt the biggest challenge is getting the attention of our customers. Seizmik only sells to distributors, who sell to dealers, who sell to the end user, and in that supply chain, we have a lot of different customers, but only one who we have an actually monetary transaction with — the distributor. It’s been really hard to get the attention of the end user, dealer and the sales reps for the distributors. Finding ways to get in front of the right end user has been the most difficult and the most expensive. And if I truly had it figured out, I sure as heck wouldn’t be telling the whole world about it.

We’ve tried a lot of different things, and honestly most haven’t worked all that well. The old saying of “You waste half of your marketing dollars; you just never know which half” has definitely been true for us. We’re continuously doing new things to get in front of customers and refining the messaging. We’re getting better and having more success, but I certainly wouldn’t say we’ve got it figured out.

What’s the best advice you can give to others in the industry?

This is super easy. FOCUS ON THE CUSTOMER.

It’s common to hear people in any part of the supply chain complain about their customers, but it’s critical to remember that without those customers none of us have a job. There are some customers who are great and others who are difficult to deal with, but they’re all important. We all need to be focused on getting more customers and accepting that they’re not all going to be the ideal person to work with. Be grateful for the customers you have. All of them. Thank them for their business. And really mean it, because they’re why we have a paycheck.

Don’t just focus on what you can sell the customer. The real target is what they need and want — and how you can add value. Selling a customer something they don’t need is not success. Making a customer happy is.

When we’re making decisions at Seizmik, the most important question we  ask is “What’s best for the customer?” We try our best to figure that out and do it.

Your company implemented at MAP policy within the past year or so, and soon other aftermarket companies followed. How important has that decision been to the integrity of your products and your brand?

Our MAP policy has been a huge success for us in many ways, and I haven’t exactly been bashful about trying to get other companies to implement their own policy. I was initially torn about broadcasting the positive impact because I’d like the MAP policy as a competitive advantage — but I decided to spread the word because I think the industry needs more ways to be profitable and sustainable.

Most discussions about MAP involve a discussion about brick-and-mortar versus online, and our industry frequently doesn’t see past that. There always have been, and always will be, products and retailers who compete primarily on price, so a MAP policy certainly isn’t the right thing for everyone. There is nothing fundamentally wrong or unhealthy with that fact — and lots of end users love it because it obviously saves them money. Lots of specialty retailers in every industry hate it because it destroys profitability. Others love it because it drives volume.

The real issue for our MAP policy isn’t about brick-and-mortar versus online. It’s about adding value. I’m not going to knock a company that competes primarily on price, but they’re not the right fit for Seizmik. I want dealers who compete based on the value they add.

The most frustrating issue I experience is talking to dealers who don’t want to stock products because they don’t want to carry the inventory cost. “If someone comes in and wants something, I’ll order it for them and have it here tomorrow” is how they might explain themselves. Many times these same dealers are the ones who complain about losing sales to online retailers. Why in the world is a customer going to walk into your store to buy something and have you special order it and require them to come back to pick it up in a day or two? Of course the customer is going to buy it online (almost certainly for less money) and have it shipped to their house. What value does a dealer with an attitude like that add? In that case they actually decrease value by expecting the customer to make a second trip.

The goal of our MAP policy wasn’t to decrease Internet sales or increase prices; it was to shift sales to retailers who add more value and to cause dealers to want to add value. I was confident that we had good products that didn’t need to be discounted, yet lots of retailers were discounting and competing only on price. Margins for retailers were shrinking fast and a handful of online dealers were doing huge volume. In the process, they were damaging my brand and the market. We put a lot of effort into the MAP policy, and the dynamic shifted quickly. Sales moved from the discounters to other dealers who added more value. They have inventory in stock, better product presentation, great service and a healthy attitude about customers.

We still have a lot of sales through online retailers, but now we’ve added a lot more thought brick-and-mortar shops, too. Sales overall grew a lot — probably not all due to the MAP policy, but it definitely had a positive impact.

If you find yourself complaining about price or margin, I suggest you start to focus on value — as in ‘What value do I add?’ or ‘How can I add more value to justify a higher margin?’ Whether you’re an online retailer, brick-and-mortar store, or manufacturer doesn’t matter — your profit margin is largely dependent on the value you provide to your customers.

 

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