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Managing dealer change: How OEMs can up their game

Overview

The challenges of managing change for a dealer audience can be daunting. A dealer network frustrated by or unable to cope with change can have far-reaching impacts on customer experience, including damage to brand reputation.

For this reason, effective dealer change management is becoming more and more important to Original Equipment Manufacturers (OEMs). In the coming years, Accenture believes that OEM industry leaders would be those who shift from seeking dealer change-management assistance on an initiative-by-initiative basis to building internal, cross business-unit change management capabilities.

In this point-of-view report, we examine the dynamics of dealer change management.

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Challenges

The Challenges of Dealer Change Management
When faced with managing change that impacts a dealer audience, manufacturers have to grapple with a number of unique challenges and limitations:

Dealers (or licensees, as they are also called) are external entities. They may be captive, but they are independently owned and operated.
Dealers are inherently suspicious of manufacturers’ intentions and actions. They tend to view themselves as victims of change and assume change will only serve the interests of the manufacturer.
Dealers vary greatly in size, scale and brand loyalty, from “Mom-and-Pop” shops to multi-brand networks traded on public stock exchanges (“mega-dealers”).
Given the diversity of dealer entities and the different ways in which dealers are organized, it is difficult to deliver role-specific change interventions to dealers for a specific change initiative.
Dealers are highly geographically distributed, making it challenging to connect with them on a personal level and deliver in-person training when required.
Dealers tend to be well connected. They talk to each other and may channel their frustrations with change directly to brand executives.
Manufacturers are pushing multiple changes simultaneously to dealers from different business divisions (e.g. Sales, Parts & Service, Financial Services), and it can be difficult to keep these changes in sync or to plan them in a collaborative fashion across divisions. This level of change can lead to frustration and confusion among dealers.

Trust Equation

Source: The Trusted Advisor, Maister, Green & Galford, 2000

Dealers in the Trust Equation
When approaching dealer change management from a strategic perspective, and considering the nature of dealer-manufacturer relationships, the Trust Equation is a good place to start. Manufacturers often take dealers’ lack of receptiveness to change for granted.

The Trust Equation can help manufacturers to consider the underlying reasons that dealers generally do not accept change, and it can serve as a foundational question for the validation of all change activities.

Direct Dealer Involvement

Direct Dealer Involvement
Our experience has shown that dealer change management could help to succeed when dealers are involved in the shaping of a solution or change initiative. Engaging dealers directly has a positive impact on all variables in the Trust Equation. However, this in itself presents a challenge because dealer networks are usually comprised of hundreds or even thousands of dealers of varying size and complexity, with a high degree of geographic spread.

Building a dealer-engagement model can help address these challenges.
Leveraging Dealer Advisory Councils
Many OEMs already have established Dealer Advisory Boards or Councils with which they engage on a regular basis. These groups will likely contain most of the influential dealers in a given network, so they should be leveraged throughout a project as a feedback loop.

Project-Specific Dealer Advisory Council
A Project-Specific Dealer Advisory Council should be established expressly for the change that is being implemented.

Dealer Change Network
A dealer change network can help bridge the gap between the project specific Dealer Advisory Council and the rest of the dealer network. A segmentation analysis of the dealer network helps to ensure the most appropriate selection of this group.

In Summary

Dealer change management can be difficult but there are some very practical steps that OEMs can take to improve their change-management efforts, both on a project-by-project basis as well as more holistically across the organization. If they do nothing else, manufacturers must be mindful of the Trust Equation and involve dealers in shaping solutions and change initiatives as much as possible. If they really want to take dealer change management to the next level, they need to make it a specific function—with representation from all dealer-facing business units—within their organizations. The prize to be won means making those changes can no longer be ignored.

Authors

Paul O’Keeffe

Industrial Managing Director
Paul has twenty years of experience leading change programs for OEMs with the majority having a large dealer impact. Paul leads the Change Management Practice for Accenture’s North American Industrial business.

Mark Wrobleski

Change Management Manager
Mark is a Change Management Manager in Accenture’s North American Industrial Practice. He has broad experience in large change programs that impact dealers.

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LATEST THINKING

Managing dealer change: How OEMs can up their game

Overview

Challenges

Trust Equation

Direct Dealer Involvement​

In Summary

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Direct Dealer Involvement