Is there anyone out there who is not looking for both additional sales and profit? If you are looking, then ask yourself two questions:
1. Do I have customers out there who purchased equipment from my dealership and are going elsewhere for their service requirements?
2. Do I have customers out there who purchased equipment from my dealership, but are servicing this equipment in their own shops with their own technicians?
Believe me, the answer to both questions will provide your dealership with a long list of prospective customers for profitable product support sales.
After you have prepared your two lists for each group of prospective customers, ask this question: Are these prospective customers who purchased their equipment from our dealership paying too high a cost for someone else to service it, or to do it themselves?
Before you answer these questions, it’s important to clear your mind of any negative thoughts. Listen and write down your negative thoughts and then ask yourself: Has our dealership truly put forth the effort to assure that we have at least a “shot” of getting this business when we sell the equipment? We are more than willing to sell a piece of very expensive equipment for profits of pennies on the dollar – 4 percent, 5 percent, 8 percent or maybe even a high of 10 percent, but we spend a minimal amount of our time during the sales process marketing our highly qualified and efficient service department. They will do the job right the first time, on time and for a fair price. We deliver the equipment without a second thought of making sure that the customer knows how excellent our quality of service, after the sale, really is – but we constantly miss our golden opportunity to improve our total sales and the profitability of our dealership.
In numerous previous articles we’ve listed the reasons customers give for using “some other source” to provide service for equipment they purchased from your dealership. It is fair to say that the reasons given all point to a lack of marketing effort on the part of the selling dealership. Too many times surveyors are told: “No one from the dealership actually asked us if we wanted them to service our equipment!”
In my recent article, “An Action Plan for Increasing Parts Sales in a Down-turn Market,” the action plan dealt with the first question asked above – getting the service business from customers who are using someone else to perform their service. Service is your guarantee for achieving the parts business. It is interesting to note that a major Original Equipment Manufacturer at a recent dealer meeting told his dealers that in 5 years they would be losing 14 percent of their parts business. He went on to explain that there would be fewer customers and those customers would be using larger and more productive equipment, and therefore fewer parts. That’s a little scary for dealers who have seen little to no increase in equipment margins. If this is believable, then equipment dealers should make it their No. 1 goal to market and sell the full services of the equipment dealership to every single customer who buys their equipment.
This document is still available to those of you who did not send for it the first two times it was offered. Don’t wait 5 years to put your Action Plan for Product Support into place.
Through the years we have consistently reminded equipment dealers that they need more, or at least their first, professional set of “boots on the ground.” Their reply is usually negative. Too many dealers still think that product support or aftermarket sales are guaranteed with the sale of the equipment.
I might be “old–fashioned,” but I have yet to see a blueberry, blackberry or even strawberry that could make a sales presentation and sell a customer on purchasing their complete line of product support from an equipment dealer. Maybe the technology exists somewhere down the road, but right now the successful equipment dealers I see are out there doing it “the old–fashioned way.” They have “boots on the ground,” marketing the services their dealership has to offer.
I have a successful dealer located in a state that readers would probably recognize as one of those hardest hit as far as their economy is concerned. This dealer keeps me posted every quarter on the results of his “blitz campaigns.” To date, each one of his customer campaigns has brought outstanding – even amazing – results, with sales topping the best numbers he has posted in the past 5 years. This dealership has planning and focus, as well as professional “boots on the ground” mentality to ensure his success. The dealership is optimistic,
the dealership believes, the dealership is positive, the dealership has professionals, and the dealership works at marketing his entire business. It has a better than 100 percent Absorption Rate, and is profitable in a
downturn market.
When we discuss “boots on the ground” with dealers, one of the first comments they make is that many of their major customers have their own service facilities and technicians and prefer to do the work themselves. This is a common concern that dealers express when we are discussing the development of their service market.
Have you ever asked yourself why customers are servicing their own equipment? These customers are farmers, contractors, operations managers of huge manufacturing facilities, possibly grounds supervisors for very large golf courses, or even homeowners. The point is that the customer has a “core” business to maintain. Do they actually want the additional problem of maintaining the equipment they purchase from your dealership?
Chances are that at some point your dealership lost service customers because of several possible reasons:
- Customers were not sold on your dealership’s ability to keep equipment “up and running,” preventing their greatest fear of “unscheduled-downtime.”
- Customers were not sure that they were receiving quality service at a competitive price. In other words, did they believe that they could do the work “cheaper” than your dealership could perform the work?
- Did your customers believe that your dealership would be there for them when they needed service: 24-7-365?
Make up your list of questions and answer all of them before you proceed further. Once your dealership has done this, a prepared professional Customer Service Representative can ask the customer: Do you want to get your company out of the repair business and concentrate on your core business?
There are a growing number of equipment owners globally who are looking for fleet management. The major reason behind this is that customers are looking for both operating efficiency and cost savings. If you want your equipment users as service customers, you are going to have to market you dealership’s services professionally. You are going to have to market to your customers that your dealership is capable of servicing your customer’s equipment, while providing your customers with an “overall cost saving program.”
Here are some marketing and selling points:
- Trained technicians: Equipment has become extremely technical, requiring skilled and trained technicians to complete repairs. This training is very extensive and expensive, and without it your customers and their “hired hands” become parts changers until they find the problem, costing your customers additional time and money.
- Parts inventories: Stocking parts can become very expensive for your customers and obsolescence becomes an expensive issue. Restocking charges on parts ordered also can be a cost.
- Hidden internal costs: Do your customers know the cost of issuing Purchase Orders, receiving invoices, matching with shippers and paying invoices, as well as additional bookkeeping costs?
- Personnel costs: This includes the true cost of technicians and your customer’s accounting costs for processing paperwork for each individual parts supplier. Technician’s Workmen’s Compensation is definitely a cost that your customer also needs to include.
- Hard and soft costs: Tracking all the costs, hard and soft, that relate to equipment usage is where many equipment users (your customers) show their shortcomings. Tracking and controlling the cost per operating hours of each individual unit is mandatory in order to recognize excessive costs. Which units are creating this problem is another area producing a cost to the customer.
Converting customers to using your dealership’s services is no easy task. It cannot be done in one quick call. It calls for building a relationship with your customers and gathering information, which your customers typically will not supply until you have answered many of their questions about your dealership taking over the equipment maintenance that is crucial to their business.
Through the years we have developed a document that will assist the professional Customer Service Representative in selling your service to customers who are currently doing their own service. This format takes the sales presentation one step at a time in convincing your customers that they are spending too much time, effort and money to keep their fleet of equipment operating and that your dealership is up to the task of eliminating the customer’s No. 1 fear: Unscheduled Downtime!
E-mail us at: amsconco@aol.com and we will send your dealership this document free of charge. We also will send our readers a companion document titled: When Your Price is Right, Sell It! This marketing procedure is not – and will not – be a simple task, but if you continue to neglect this lucrative area of sales and profitability, you will never really know what you have been overlooking for all those years.
And remember, Albert Einstein once said: “Insanity is doing the same thing over and over again and expecting different results!”
John R. Walker is president of After Market Services Consulting Co. Inc. You may contact him by e-mailing editorial@mhwmag.com
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