Association acquires Friend Management Systems
“I can assure any dealer that if the conversations you have with others at random dealer gatherings stimulates you, the conversations in a peer group will rock your world,” writes Trent Hummel. Hummel discusses dealer peer groups in the current edition of It’s Just Good Business.
The Western Equipment Dealers Association hopes Hummel’s attitude about dealer peer groups catches on with other dealers and the association’s newest addition to its Dealer Institute, Friend Management Systems.
The association’s board approved the acquisition of FMS this past spring and the takeover date was September 1. FMS is a strong and well-known brand in dealer development that provides dealers with “access to unprecedented dealer performance metrics via a system of copyrighted benchmarking” to improve “dealership performance,” according to Doug Friend, founder of Friend Management Systems.
While dealer peer groups are common in the equipment industry and other industries, how they’re structured varies. Some groups may have 20 members, hence the name 20 Groups, or some may have less than 20 members. The common factor in many equipment industry groups is most members are generally dealer principals.
The structure used by FMS is more inclusive, meaning his groups, which are referred to as “dealer performance groups,” are not limited to dealership owners.
“We offer three kinds of groups – leadership, aftermarket and in-house,” says Friend. “The leadership groups are made up of four to five dealerships and three to six team members from those dealerships. The team members may include the CEO, GM, and corporate managers in sales, parts, service, finance, or precision ag.”
The aftermarket groups include branch, parts and service managers from the dealerships in the leadership groups. The in-house groups include two- to three-day sessions and all parts, service and sales managers attend on different days.
Major addition to Dealer Institute
Although the Dealer Institute is an infant in the industry, it’s a growing baby and the acquisition of FMS is a major addition to the association’s educational division. The Dealer Institute was created to help dealerships be prepared to manage daily operational needs as well as train employees and FMS has a proven track record of doing just that.
At this writing, however, the Friend program is only available to John Deere dealers but it fits the mission of the Dealer Institute and is a major addition to the mix of onsite and online training programs.
WEDA CEO John Schmeiser
WEDA CEO John Schmeiser says Friend’s dealer performance groups will be a stand-alone program within the Dealer Institute. “The key to this will be the support of current participants and John Deere,” says Schmeiser, “and continuity is important.”
“Over the past few years, WEDA has heard from numerous participants in FMS dealer performance groups about how valuable the program is to their dealerships,” says Schmeiser. “These dealers attribute a lot of their success to Friend’s leadership and aftermarket groups. Since WEDA solely exists to serve its members, the association viewed this acquisition as another way we could help dealers succeed in the future.”
Helping dealers succeed was key to Doug Friend in aligning his business with the association. “For Friend Management Systems it was the bench strength of WEDA’s dealer members, which will allow for expansion and adding more financial data to the current $6 billion-plus database to serve existing and future members.”
Doug Friend, FMS
Adds Friend, “the first order of business is to “top up” some existing groups with WEDA members and to get one or two new groups off the ground.”
Schmeiser agrees. “The intent is to fill existing groups and then use WEDA’s resources and contacts throughout North America to add new groups.” He says conversations with Deere dealers are already underway.
Friend Management Systems is a recommended provider of training for John Deere.
“The acquisition of Friend Management Systems confirms WEDA’s commitment to the long-term success of dealers,” says Michael Piercy, director of business development, for the Dealer Institute. “Our priority is to provide dealer’s access to the highest level of dealer development, training and education, and consulting services.”
Michael Piercy, WEDA Dealer Institute
Joining a group requires commitment
Although currently limited to John Deere dealers, Doug Friend says dealers need to consider a few things before joining a group. “Dealers have to be prepared to have their full leadership team attend group meetings, including the CEO, and to be comfortable sharing full dealership financial performance with all of their team members,” says Friend.
As for whether dealership type, such as agricultural, outdoor power or construction comes into play, Friend adds that “dealers in groups should have similar business models in terms of product offerings and size.”
Schmeiser adds that dealers also need to understand these leadership groups operate like a board of directors. “This means other dealer principals will offer scrutiny and opinions about another dealer’s operations and will hold them accountable for goals and objectives. Although some may be hesitant about the additional level of oversight, that is what leadership groups are designed to do and this system has proven to create high performing and highly profitable operations.”
Looking ahead in the short term
As it stands today, FMS works exclusively with John Deere dealerships. As noted previously, the success of these business relationships has earned FMS a preferred provider status with John Deere.
Groups representing other brands aren’t planned in the short term but that’s not being ruled out by the association. “The first priority is to fill existing openings and grow the John Deere groups,” says Schmeiser. “Since WEDA’s announcement of the purchase of FMS, a number of dealers have contacted the association and expressed an interest in being part of a group.”
Schmeiser adds that work on adding dealer groups of other colors will begin shortly. “Due to the nature of the groups, they must remain inline to be successful. The strong reputation of FMS in the industry will eventually lead to new groups with dealers of other brands.”
Expansion requires trainers
One of the primary factors in managing dealer performance groups is having trainers who know the industry. While industry consultants bring a high level of ability to help their clients identify problems, reduce inefficiencies, create solutions, increase revenue, or improve the way a business functions, dealers seem more inclined to respond to dealers.
Friend believes trainers with dealership experience should be a prerequisite. Schmeiser agrees. “In creating the WEDA Dealer Institute, one of the goals was to provide fresh perspectives from individuals who were successful owners and operators of equipment dealerships and we’ve accomplished that.
“We have found that trainers who were on the ground floor in the dealership and had a stake in the business, were best suited to pass on their knowledge to the next generation of leaders. Our feedback from Dealer Institute training consistently shows that dealership employees value the direction from those who have faced the same problems they have and are interested to learn how they resolved those problems.”
So, where does this leave Doug Friend and his decades of experience as a trainer? “At this point, a replacement for Doug has been found to lead the John Deere groups and that transition will take place over the next year,” says Schmeiser. “However, Doug will still be involved as long as he wants to be – in whatever capacity suits him. That will assist in the transition. As the program grows under WEDA, new facilitators will be found to work with newly established groups of other colors.”
The FMS difference
No matter what you call peer groups, Doug Friend says there is a difference between what FMS does versus other providers. “Like many 20 groups, FMS groups share best business practices. What separates us from other peer groups is the in-depth financial analysis, comparisons and rankings we do, the benchmarking based on actual dealer data, and the peer guidance and accountability of achieving annual goals,” says Friend.
“Having full leadership teams involved provides a vast educational experience on what is required, realizing what is possible and understanding the challenges facing the total dealership. Dealers that have been in the program outperform industry averages,” he adds.
Friend takes pride in knowing dealers who have been in one of his groups want to maintain that experience even when they move to another dealership. “A dealership manager who recently changed employers told me, ‘I got more out of your meetings than any other type of training/meeting I attended.’ That’s worth something to me,” concludes Friend.
And it’s worth something to the association. “WEDA continues to be the leading dealer association in North America and the acquisition of FMS is one more service that WEDA can provide to dealers to help them succeed in their businesses,” says Schmeiser. “The track record of FMS is unquestioned. Participating dealers are committed to the program because they see firsthand how it has helped their dealerships grow and grow profitability. With WEDA leveraging this acquisition to make it available to more dealers throughout North America, it has the potential to raise the bar to make the entire industry more profitable and provide long-term sustainability and success.”
“The opportunity to work with Doug, learn from his experience and success in the industry, strengthens our position to be the premiere resource for dealers to meet the challenges of today’s market,” adds Piercy.
The Dealer Institute difference
The Dealer Institute is a culmination of education and training programs offered by the former SouthWestern Association and Canada West Equipment Dealers Association. Following the merger of the two associations into what is now WEDA, Schmeiser spoke with many dealers who indicated a lot of training programs were recycled ideas presented by trainers who sometimes adopted strategies from other industries.
As a result, the Dealer Institute was established to give the industry fresh perspectives on education and training.
“We knew there was a wealth of knowledge out there from successful dealers who had exited the business through a merger or acquisition. They wanted to be involved in the industry and share their knowledge and do so without the excessive time demands that operating a dealership can bring,” says Schmeiser. “WEDA has been able to leverage this knowledge into the Dealer Institute with impressive results. Follow-up surveys on training provided consistently achieves a favorable rating of 80-plus percent.”
But the Dealer Institute isn’t just about favorable ratings. It supports WEDA’s mission to represent and advocate on behalf of dealers. “All of the profits made by Dealer Institute are reinvested into the association’s advocacy efforts, which helps keep dues low,” notes Schmeiser. “With the creation of the Dealer Institute, WEDA has added significant resources to fund government affairs initiatives, which led to the association being able to influence tax reforms to benefit dealers and their customers.”
Conclusion
As Doug Friend and John Schmeiser say, dealers who might be considering a peer group need to come to the table with a basic plan – be committed, get involved, listen to others, work to succeed. Also, as Trent Hummel notes, be ready to learn something that will “rock your world.”
Dealers interested in becoming part of a leadership or aftermarket group are encouraged to contact Michael Piercy, director of business development for the Dealer Institute, at 800/762-5616.
Article written by WEDA Staff
