Foodservice Equipment Reports

Selling Dealer Value To Big E&S Buyers

I spent the weekend working on a presentation our Editor-in-Chief Beth Lorenzini and I will present in Shanghai next week. It details and analyzes how big U.S. chain and institutional buyers evaluate, spec and buy E&S products and how they select suppliers. It's based on exclusive new research we’ve done over the past year.

We hope you saw the first installment of this research last August when we ran an article on the purchasing processes and criteria of chain buyers. We’ve done similar research with noncommercial segment buyers and specifiers. That story will run in Foodservice Equipment Reports’ May issue.

Looking through the research question-by-question, I’m struck by a couple of things that are very pertinent to dealers. The first is somewhat painful to tell you. While multiunit operators do listen to your recommendations about supplier brands among a host of other sources, dealers often are a second-tier influence. The surprising thing to me is that chain folks consider you a bigger final influence than noncommercial operators. (Dealers are mentioned somewhat more prominently when operators are asked to name all outside influences.) Maybe it’s the consultant influence in the noncommercial segments, maybe it’s the bid processes many institutional operators must go through or maybe it’s just that they buy major equipment more sporadically. Maybe chain operators are more aware of your value because they need your services as much as your spec help.

To me, one of the most telling insights in the research is the number of big operators both in chain and noncommercial segments who report no one outside of their own organizations has much influence on the spec or supplier. It’s more than a third in both surveys.

The second key insight is how much food quality, operational issues and capital-cost realities influence the E&S and supplier spec. I’ve railed at my manufacturer friends for decades that it’s not about engineering and shiny stainless. Operators don’t care. It’s about food and product yield and labor savings and ease of use and speed of service. And it is still, unfortunately, about initial cost of the capital good.

I hope this helps you think about your value to big operators. I’ll suggest one more thing, given what we learned from the research. Sell your services as much or more than specific products or brands. I’ve also said for decades that buyers hate middlemen but need all of the services they provide. The big chains are going to customize the specs and work directly with OEMs and their reps. They listen to you, but not a lot. All multiunit operators, but especially very big chains and noncommercial folks, actually have very good knowledge of the brands they want. They have lots of experience. They usually keep detailed maintenance and asset records and are very good at calling around to their friends to find out which brands work, have good service histories and the like. Oh, sure, capital-cost realities intrude everywhere, but don’t think for a second it’s all about initial cost.

What they really need from you is all of the other things you do. Here’s what I told a meeting of chain buyers back in 2004--

No one appreciates the middlemen or wants to pay them. No one can do without them or the functions they perform, such as:

  • Specification and brand selection (you still have some influence, but it’s more about the package)
  • Kitchen layout and design
  • Fabrication
  • Purchasing
  • Consolidation, staging and order tracking
  • Title and credit management
  • Project management
  • Installation and startup


For many big multiunit operators, these services are the unique value dealers provide. If I were a dealer, I’d sell services.

Beth and I will have to leave the annual FEDA convention early to get to Shanghai for the March 31 presentation. The presentation will happen the opening day of Hotelex. It’s a big annual E&S-only trade show we’ve partnered with since 2005.We apologize in advance to Ray Herrick, Brad Wasserstrom and all of our FEDA dealer friends.

And if you’d like to view the presentation, titled “How Big U.S. Chains and Institutions Purchase Equipment And Select Suppliers,” we’ve put it in a downloadable format at fermag.com.

See you in Indian Wells, I hope.

Cheers,



Robin Ashton

Publisher

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