RVAA Keynote Preview: Q&A with Mike Marks
Mike Marks, an expert on navigating market shifts, changing industry dynamics and seizing opportunities under those conditions, is the Keynote Speaker for our conference in Chicago this summer.
For nearly 30 years, Mike has led a major consulting firm that specializes in helping companies in distributor/supplier industries maneuver challenges and grow their business.
We recently spoke to Mike about what Annual Conference attendees can expect from his keynote address:
Q: Do you have any personal experience dealing with changing industries and markets?
A: Yes. Before I got into the consulting business, I was involved in wholesale distribution for a large electronics company – the second largest in the industry in 1984. During my time there, that entire industry actually went through a complete consolidation – all of the lifestyle business were bought in the first stage of rolls ups and then the second stage of roll-ups (where the consolidators ate up the consolidators).
Q: What did you learn from that process?
A: Living through a consolidation like that not only grew my interest in the process itself, but it really helped me grow as a businessperson. When I look back at that experience, I see there were things that I did not fully understand from a Big Picture perspective. But from that process I have been able to adjust my perspective accordingly, giving me the freedom to keep trying things and understand the truth of the phrase, “Learn as you go along.”
Q: What issues do you feel the RV industry is currently facing?
A: The issue for the RV industry is that the vast majority of the players involved in the lifestyle businesses – the owners and CEO’s – typically are very reactive in responding to threats and opportunities. Normally this is the perfect way to go, but lifestyle business generally have to lower cost structures to meet the competition of larger companies with the same level of service and lower prices. Unfortunately, this can lead to some owners feeling very disinclined to make intentional investments.
Another issue for the RV industry is that many of these businesses were built around the Baby Boomer generation. What has happened is that many of the owner/operators of these businesses are deciding to retire and they don’t have someone waiting in the wings to take over the business. They are looking to jump in an RV and go enjoy their retirement, but can’t because they are left questioning whether they should sell their business.
The distribution industry is in a race to the bottom on price with new nontraditional competitors like broadline box movers and Amazon. The consolidation trend is forcing distributors to realign their suppliers, and manufacturers to realign their distributors. The distinctions between distributors and manufacturers are evaporating as both migrate into roles of brand managers.
So if I am hostile to history and I refuse to change how to operate my business, these factors can be the perfect storm of challenges. But more importantly, if I am someone who loves this industry and is willing to adjust my sails accordingly, then this industry is going to be around for a long time.
Q: How would you recommend RVAA members deal with the changing industry?
A: The great part is that this industry is solid in terms of its fundamentals. But all of this change creates opportunities. It’s probably bad news for those who are resistant to change and great news for those who are looking for new ways to grow. Success is only going to come from doing new things, not doing the same things better.
Q: What new things would you recommend companies to try?
A: Companies that take advantage of technology like online sales will really lead the way in the gentrification of the industry. Technology has dramatically reduced the cost of a buyer finding a seller. The key thing to remember is that this technology really pulls the fences down and allows everyone to see into each other’s backyard. This is why it is so important to share information.
Q: What is a common misconception about the concept of consolidation?
A: Well, people just don’t like the word “consolidation.” It’s easy to get into the mentality that someone is coming in and messing up the thing you have built. But if you actually look up the word “consolidate” in the dictionary, it means “to make stronger.” And because of this consolidation, the industries actually end up becoming a lot stronger because the competitive structure changes.
Q: Any final comments before we hear from you again in August?
A: If you find yourself in a majority, pause and reflect. If you are kind of like one of the lemmings running around, then you need to take some risk. If there are a whole bunch of other people doing exactly what you are doing, then what you are doing is probably not going to make you a lot of money. The key here is that you are going to have to do new things instead of just doing the old things better. As my keynote tagline for this year states, “Whining is not an exit strategy.”