Atlantic Great Dane Dominates Northeast Market by Generating Customer Loyalty
Atlantic Great Dane Inc is tucked away in the southeast corner of Maine, a state with one-third the population of Boston, the nearest metropolitan area. Interstate 95 runs all the way to New Brunswick, but it's hardly one of the nation's major trucking corridors.
The Portland area is known for shipping, not trucking. Originally called Machigonne (Great Neck) by Native Americans, the peninsula was established by the British in 1632 as a trading and fishing settlement. It is the "Jewel by the Sea" - an evocative tag Henry Wadsworth Longfellow put on his boyhood home.
To get to Atlantic Great Dane, you exit I-95 in South Portland and navigate some back streets through a residential area. There, on Hemco Road, you find a two-story tan building on 211/42 acres.
It is unimposing. But do not be fooled. Atlantic Great Dane is a heavyweight in the industry. It sells between 600 and 900 trailers a year (eighth among all Great Dane dealers) and has a market share of over 50% in new trailer sales in its coverage area.
Great Dane Trailers vice-president Dan Hartley, who nominated AGD for Trailer Dealer of the Year, says it is the company's No 1 dealer on the East Coast and is among the top three overall.
AGD accounts for 67% of Maine's new trailer sales in reefers and vans, and 56% of the total market, according to the 1999 Polk Report.
"I call it `The Unknown Gem of the Northeast,' " Hartley says.
Says AGD president Scott Lamb, "I tell Great Dane we're the outpost. We're right on the edge."
Maintaining Dominance There's an old adage that New Englanders recite: "If you don't like the weather in Maine, wait a minute, it will change." But the climate in the trailer market doesn't fit that maxim. AGD, founded in 1988, has maintained a dominant foothold, with a growth chart that shows a steady climb from $9 million in sales in 1992 to $31 million in 1999. Sales have increased an average of 11.25% annually for a 10-year increase of 189%.
"Atlantic Great Dane is not a huge operation per se," Hartley says. "They're outstanding to work with. All the people are top gun. They're really pro-Great Dane. They communicate with the factories well.
"They have such a strong relationship with the customer base in Maine. I feel sorry for the competition. That's a tough place for somebody to sell trailers. Atlantic Great Dane is loyal to its customers, and they're loyal to Atlantic Great Dane. We've got dealers that sell 2,000 trailers - but they're hard to work with. Atlantic Great Dane's success is because they take care of their customer base in Maine. If a customer has a problem, they deal with it immediately. People put a lot of faith in what they do."
Hartley says he can remember only one customer discontinuing business with AGD. Lamb asked Hartley, "What should I do?" Hartley told him, "Let him find someone else, and in a few years, he'll come back." And he did.
Lamb says his guiding principle always has been to treat customers the way he would want to be treated. He places a huge emphasis on ethics.
"Unfortunately, there are those in our industry who are unethical," he says. "They would not flinch at overcharging a customer for a repair ... or for parts they did not use during a repair, or a service that was not performed. The use of substandard or used parts and charging for new is well-documented. There are also salesmen who misrepresent trailer specifications when quoting a customer in order to get the sale."
But how would customers even know? Lamb says they soon find out who is honest and who is not. He attributes his market share to ethics.
"Any dealership that conducts itself in an ethical manner on a day-to-day basis from top to bottom is contributing to the high ethical standards of our industry, and their commitment will be rewarded," he says. "The unethical dealer will not succeed over the long run."
That message was driven into his consciousness by Bob Comeford, the most influential person in Lamb's business life. They first teamed up at Trailmobile's dealer in Everett, Massachusetts, and when Comeford left for Northeast Great Dane, Lamb followed.
"He was one of the leaders in this business," Lamb says of his friend, now retired in Florida. "He taught me how to deal with customers - the integrity part of the business. You don't want to wander to the dark side, because that will come back and bite you every time.
"We work extremely hard with customers in making sure we're doing it the way they want us to do it - not the way we want to do it. We give them exactly what they want. I think a lot of times customers don't receive what they want."
Both Hartley and Lamb believe this is illustrated by the strong growth of AGD's orders for food-industry reefers - a facet that has taken the company out of its region and into the national realm. AGD performs a large amount of high-spec work for companies, adding extra posts and heavy-duty floors.
Lamb says the national accounts - primarily for food-industry reefers and dairy trailers - have been a key element of the company's growth as sales have nearly doubled in the past three years.
"The vast majority of business I get is through relationships that have evolved over 23 years with Great Dane," Lamb says. "A customer has trouble and wants me to help him straighten out a problem because no one else has been able to. If the customer wants me there, then that's where I go. He has a particular need - to customize the trailer so it corrects all the problems he has with his other equipment."
Lamb says his company takes advantage of what he calls "the most extensive design and testing group in our industry." He solicits Great Dane Engineering for information about weight distribution, geometric dimensions, and specifications. Great Dane's engineers have come to AGD to meet with food-industry customers to discuss new specifications for their trailers. And AGD has taken its customers to Great Dane's factories for engineering reviews and pilot-model inspections.
Working on Technological Developments He says he has worked directly with Great Dane Engineering to develop the recessed pullout platform and steps at the radius side door, and he was involved in the development of the false ceiling allowing for a multi-temp trailer using only the host refrigeration unit.
"We've spent a lot of time trying to do things right, without trying to re-invent the wheel," he says. "We try to be progressive and try to stay in the forefront of the trailer business. But we don't want to be the first ones to try everything."
As is the case with any strong company, the sales department is backed by strong parts and service departments.
The parts department is open from 7 am-midnight and has $502,000 in inventory, with four turns per year. AGD has one on-the-road salesman and several trucks for free delivery in Maine (it delivers an average of twice a day to local customers, going to Bangor twice a week).
AGD does not have a voluminous walk-in business, largely because its customers rely on the parts department's expertise, which means the parts department is maintaining inventories so customers don't have to.
Lamb says that when AGD quotes a parts customer, it presents him with a personalized formal quotation for all parts that would suit his needs. Example: With a tire company, the quote would include rims, bands, and other items related to its business, and the presentation would include pictures of the various parts and a table of contents for easy navigation. Since implementing the personalized quotation procedure, parts sales have increased by 25%.
"The key to the success of this procedure has been getting to know our customers, identifying their needs, and producing a quality quotation they can use," Lamb says.
Parts Inventory Analyzed Lamb says the company analyzes its parts inventory on a regular basis to try to sell off any slow-moving items and add any critical parts that are in short supply. That allows AGD to stock more of the top-selling parts and keep inventory at a healthy level.
The service department is open from 7 am-midnight, backed by 14 mechanics. AGD offers a state-of-the-art paint booth, refrigeration work, frame-straightening, free pick-up and delivery, and a mobile truck for emergency repairs.
"We have the ability to rebuild Thermo King and Carrier," Lamb says, "and that gives us a little piece of the business that a lot of people are not into."
The most pressing need at AGD is simply space. Because of the configuration of the lot and the surrounding businesses, expansion is impossible. It has two annex yards where trailers are parked on five acres, which eases some of the congestion but does not aid efficiency.
Lamb has investigated sites in Maine, and says Bangor - 130 miles north of South Portland - is the logical area for a new shop because AGD has a strong customer base there. Lamb expects to finalize the acquisition of a new location within two years and begin operation within five years.
"By having two locations in two areas of the state, we should be able to better respond to our customers' needs, be it sales, service, or parts," he says. "Solving our space issues should make this a more efficient company."
As Lamb sits in his office, he looks at a wall where five boards track trailer sales. Two boards track production trailers, using orange squares for reefers and yellow for vans. Below that are trailers that have been delivered or are being delivered. Another board monitors inventory sitting. And the final one shows those that have been tagged and ticketed.
Meeting the Trailer Demand Getting the trailers is going to be easier because Great Dane is scheduled to construct another plant near Toronto.
"The more trailers they can build, the more we can sell," Lamb says. "The past few years, the biggest thing that has hurt us is not having enough capacity. From a dealer's standpoint, you want capacity. You never want to lose an order because you can't build them."
The downturn in the trailer economy doesn't concern Lamb.
"I feel very positive, mostly because of our customer base," he says. "They're very solid companies. I believe they will continue to grow, and hopefully we will grow right along with them.
"Dry freight van (sales) have definitely slowed down. I think the consolidation of companies is affecting that. But it still comes down to, how solid is your customer base? I think the economy is slowing down, but I don't see it having much of an impact.
"If you have been paying attention in the good years, you should be well-positioned to make the necessary adjustments in the off years without doing real damage to your company. If you have kept up-to-date with your plant and equipment purchases, you can probably delay some items without affecting performance, while holding a little more return on investment. We are fortunate in this business because when new trailer sales decrease, then service, parts, and used equipment sales will increase."
Looking Ahead Lamb's vision for the future?
He believes that the major issue facing his company in five years will be maintaining customer loyalty.
"The trailer market is becoming more and more competitive, and our customers have many options available to them," he says. "Atlantic Great Dane will have to focus on the things we do well in order to maintain and expand our customer base."
And to do that, he believes a stable work force will be crucial. It's a key to the company's success right now. The 31 employees have an average tenure in the industry of 12.7 years.
"We have the greatest employees," he says. "The retention is real good. We want to be known as a great place to start and finish your career. We want to be recognized as a valuable member of our community."
And if his company wins Trailer Dealer of the Year, that recognition will extend nationally.
Lamb says he didn't envision the nomination. It was never something he thought about. The only thing he focused on was trying to "do as many things right every day" as he possibly could. He felt that the backing he received from Great Dane would always make that likely.
"I think that if we win, the customer would really take that as a positive, that they're dealing with the right people," he says. "It's a tremendous honor. There's nothing anybody likes better than to be accepted and respected by your peer group."
"We would be very, very proud to have Atlantic Great Dane be the Trailer Dealer of the Year," Hartley says.
He pauses, then says with a hearty laugh: "Scott will probably want more discount, though."