“At the end of the day, we’re going to fail if all I do is sell stuff to you,” says John Hopper, Gateway Dealer Network CEO. “I tell customers all the time, 'I'm going to make a whole bunch of money off you because that's my goal, but my other goal is to do it while helping you make a whole bunch of money. If we can do that together, it’s working.'”
From his perspective, the more the dealership can be a partner with every customer, the more they can crush the competition. Without the customer, none of it matters.
"You've got to step back and realize, if that starts becoming a hindrance to getting to that customer that's standing down there, that's a problem, because as soon as the customer leaves, it doesn't matter whether we can get inventory or whether we're making a budget or not," Hopper said.
To illustrate his point, he noted that a contractor looking to start a grading business can get started no matter the color of his equipment.
"In a lot of ways, all the top-tier equipment is good; it will all dig a hole; it will all move dirt and do all that stuff," Hopper says. "What's going to matter for the next 50 years more than ever is the dealer sitting in the room."
People are going to buy the equipment, and there will always be an expectation of its excellence. Every dealer and OEM will continue to argue why their equipment is better, but in the end, the customer is more concerned with how the dealer will take care of them. Eventually, all machines break and need service.
“You're going to have issues; you’re going to fall on hard times, or maybe you can't get approved. And what's your dealer going to do to help you with that stuff?” Hopper says. “I've tried to build that into what we're doing and tell staff, don't forget that it's what we do for the customer that matters, and that's what will bring them back.”
Not surprisingly, he has his example of what he preaches. A customer that dates to his days as branch manager at a store in South Carolina was always going to purchase a Bobcat machine. However, it was always clear to Hopper that it wasn't Bobcat that kept him returning to the dealership. It was his time talking to Hopper about general business practices and improving cash flow that sold him.
"In the end, he comes and buys Bobcats from me, but he's buying the value we provide because he can come in and ask me about problems in operating his business effectively," Hopper said. "Yes, I'll sell you a Bobcat, but if I can capture you by helping you be better at your business or opening access to finances you didn't have or things like that, I've got you forever."
He doesn’t do anything like manage a customer’s receivables, it’s just offering ideas.
“That goes beyond selling stuff; now, you’re a true partner,” he says.
Internally, employees are recognized with “Make it Happen” awards, as Hopper shares their stories during regular town hall sessions answering employee questions.
These qualities and more earned Gateway Dealer Network a finalist position for Equipment World’s 2022 Big Iron Dealer of the Year Award.
Three in one
The Gateway Dealer Network was formed in late 2019 as a solution to three Bobcat dealerships lacking a succession plan.
The consolidation of Gateway of St. Louis, ACME Operations in South Carolina and Bobcat Southwest in Southern California under the ownership of the private equity firm Brightstar Capital Partners led to the development of the company.
The name of the company is a nod to its St. Louis roots, where it is still headquartered, and for serving as a gateway to successfully partnering with its customers.
As part of the multi-company merger, Hopper stayed on as chief operating officer before taking the role of CEO when the previous leader retired. With 26, soon to be 27, stores in operation in 10 states, the Gateway Dealer Network is ranked as Bobcat's second-biggest dealership in the country.
Hopper says an additional four or five stores are slated to open in 2023, and Brightstar remains open to additional acquisitions.
Having some experience in corporate America and not enjoying it, Hopper wanted to ensure he maintained the general business philosophy that he learned from the late owner of Brandt Holdings, Ace Brandt.
Brandt's philosophy was to find the best managers and then take care of all their non-value-added operations such as benefits, IT, marketing, accounting, etc.
“We take care of all those kinds of things, and then we just stay out of your way and let you let you do what you do,” Hopper said. “Bringing the value of a big company but never losing the feel of I'm dealing with the owner in the store.”
The regional and branch managers are granted full authority to make decisions without having to ask permission from the "corporate office," while still benefitting from being part of the Gateway Dealer Network and its resources such as an extensive inventory and the ability to assist each other.
It’s the people
“I know it's cliche, and everybody says it, but the people are what matters,” Hopper says.
It's been a challenge for him to oversee such a large company, recalling the days as a branch manager when he would host Christmas parties with 13 people in his living room.
“My job is to set the general tone for the culture, things like we're going to work with integrity; we're going to take care of our people and our customers,” he said.
Hopper noted that the right culture creates a barrier to turnover.
“To do that you have to create value,” he said. “You must have a good place where they want to work, and you have to think about those people.”
At the store level, he expects the leadership to come from the branch managers taking care of their people in a similar fashion. “I'm not going to tell them what that needs to be because I don't know their people as well as they do. It needs to be more than just a job.”
Several of Gateway Dealer Network’s stores are in climates with extreme heat and humidity. Hopper chose to invest in air conditioning for several store shops to provide some relief for the technicians. "As a business person, I truly believe I get a return on investment because in the sixth-, the seventh- and eighth-hour of their day, they're far more effective. We don't keep it at office temperature out there, but we knock the humidity down and keep the temperature down."
In the recruitment of staff, he takes a similar approach.
“We always do the best ... when we grow our own,” Hopper said. “It doesn't have to necessarily be young in terms of age, but young in terms of experience in the field.”
Gateway Dealer Network leans in from both a local and corporate level in supporting the development of new service technicians. The company has customer support managers in each region who visit the local tech schools and high schools regularly to capture that next generation.
“I think as things progress, we all know what the value of service is but the value in what we put into and how we reward technicians is that's going to shift in our industry I think,” Hopper said.
He said the company is developing a program for new technicians where Gateway will provide all their tools, and after three years if they stay with the company, the tools will be theirs to keep. For those not in the industry, it might be surprising to know that a senior technician might have as much as $100,000 invested in tools.
"It's an investment on our part but worth it," Hopper said.
Rent or buy?
Many heavy equipment dealerships play on both sides of the market, selling equipment or renting out used equipment. With the current supply-chain challenges impacting parts and general services, the used-equipment market has exploded.
Hopper has no problem with this. Gateway Dealer Network certainly has a rental fleet, but it is always a dealership first.
"Everything that you see out there is for sale," Hopper said. "There is no 'that's not allowed to be sold.' To me, it's all for sale. I'm a dealer; I consider myself a trader. I buy and sell stuff; that's what I do for a living."