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Thoughts on Selling

Selling is as old as the hills. It probably started with Adam and Eve, and I am not sure who was selling to whom. People who are not involved in the sales profession are somewhat intimidated by the thought of selling. There is still a negative connotation to being a salesman for many people.  Imagine what the world would be like if there were no salesmen. What a thought that is isn’t it? So to better understand selling let me list the six fundamental steps in the sales process.

  1. Research
  2. Objectives
  3. Questions
  4. Benefits
  5. Objections
  6. Closing

Within each of these six elements there are several important steps – more on that later. As in life selling is pretty simple it is people that screw it up. The time is now…..

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Selling Skills Part Two

Presentations in the world of parts and service sales are truly a lost art. Rarely does a Parts and Service Salesman go to a customer and make a presentation on a product or service that they are offering. Yet this is a skill and call type that needs to be developed if we are to obtain the proper capture rate for the authorized equipment dealers.

The first problem that I encounter is that there is a serious deficiency in features and benefits knowledge on what we are selling. How did this happen? I submit to you it is because we are in the order processing business more than we are in the sales business.  We will deal with this matter in more depth later.

The second is that we don’t know how to deal with objections. An objection is a huge signal indicating what it is that you as a salesman have to overcome in this discussion with your customer. They are telling you that there is something here that they don’t understand very well. You need to become adept at communications and show all your feature and benefits knowledge. One thing to remember is that the features are for you. It is the benefits that are for the customer so don’t spend a lot of time bamboozling them on fancy mumbo jumbo on fantastic features.

Finally is closing the sale. This reminds me of the high school dance at the gym. The guys lined up on one wall and the girls on the opposite wall. A boy walks across the floor to ask a girl to dance and returns in front of everyone having been turned down. Many salesmen have that image imprinted on their brain and they are afraid to ask for the order. Imagine.

Selling is pretty simple it is people that screw it up. The time is now…..

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Education Version 3.1

Last week I met a wonderful enlightened man. (I don’t mean to sound arrogant with that start but he was a breath of fresh air)  He is running a store for a construction equipment dealership. We were talking about books and learning and he gave me two wonderful gifts.

The first was TED.com. Please check out this site. It is a terrific blend of thinkers and topics put together in a way that should stimulate some introspection and thinking.

The second was the Kahn Academy. Now please understand I am not promoting this group or product just bringing it to your attention. Have a look you will understand my excitement. Thanks Tim.

The time is now.

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The answer to the question is….

The question that most of you thought of when during the afternoon discussion between the supervisor and the technician the technician says he is not going to finish all the work that you gave him to do today is “why not.” That is not the right question. You are all thinking like production managers from the old school.

The question that I believe is right is “how much longer will it take to complete the work?”

Once we have the length of time required we can ask the next most important question “can you stay.”

We have established that the technician will miss the standard time for the job – that might be #1 (remember) now if they can’t or won’t stay to make it right – that might be #2 all in one event.

If they can’t stay then the labor efficiency will drop precipitously as the following morning when he starts up on that job again he will have to take between thirty minutes and an hour to get to the point where he was when he left last night. That is either a 6.25% drop in labor efficiency or a 12.5% drop. Neither one is good.

If the technician can stay you will eat a little overtime but your schedule is intact and the completion date for the work is still in line. The time is now.

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Labor Efficiency Anew

Many ask the question “how can I get technicians to be more efficient with their labor hours”. I suggest that having proper supervision is the best way to get each and every technician to be more efficient. Imagine if you will that you had one good supervisor for every eight shop technicians. (I know that many of you don’t have that many – in which case you are in what I call no man’s land. You are too small to have the proper levels of supervision and that leaves you with too little time to increase the labor sales revenues.) I want to have a supervisor in the middle of the eight technicians. I want the workstation for the supervision on the floor with the technicians. They can see the supervisor all day long as the supervisor can see them all day long.

Let me ask a simple question. Will the men be more efficient with the boss in their midst? Will they be more efficient with the boss watching them all day long? I also want the supervisor to spend at least fifteen minutes with each technician every morning and again every afternoon another fifteen minutes.

Will labor be more efficient? You bet.

The afternoon discussion will have another question. Will you finish the eight hours of labor I gave you to do today before you go home? If they say “yes” everything is good.

If they say “no” what is the first question that you ask? I thought you would say that. That is not the right answer.  More on that later. The time is now.

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Market Capture Rates

Some of you have equated the labor efficiency blog with the actual market capture rate of labor. They are two very different elements in the business. One measures the performance of the supervision of the labor pool and the efficiency of a particular technician on a specific job or group of work orders. The other measures how much of the available market the dealer in question has actually obtained and maintained.

The market capture rate is dependent on maintaining an accurate and up to date machine population and the hours of work for each of the machines in the dealer territory. With the arrival of GPS on most current production machines this is becoming easier to maintain and to track. Older machines, however, still outnumber new machines in most geographical jurisdictions and as such this remains an elusive goal.

If we have an accurate machine population as well as the hours of work for each machine then we can calculate the market potential for both parts and service. This is an important step in the maturation of the parts and service management as we will be able to determine the successes of each of the store locations in a territory. We will then need to become much more professional and effective in our processes, systems and skills when we deliver customer service. The Manufacturers and your bosses will be able to measure objectively how well we do our jobs. I think that will bring a lot more attention to the skills and execution of the management and supervision in parts and service. The time is now.

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Labor Efficiency

Service Departments the world over are concerned about efficiency and effectiveness. There is a very easy method in which we can measure and manage the labor we offer to the marketplace. There are two critical pieces of information from which we must start. The first is called Gross Profit Potential and the second is the actual gross profit.

Gross Profit Potential is the number that you would obtain if you took all of the labor in your department at the published labor rates and the average wages of the technicians employed. From these two numbers you would get the potential gross profit. Take that number and divide it be the published labor rate and you will get the gross profit potential.  That is very straight forward and very easy.

The actual gross profit you can get from your financial statements. Just be sure that it is only labor.

Then a simple division will lead you to labor efficiency. Divide the actual gross profit by the gross profit potential and there you are – labor efficiency. How do you stand up in this measure? You must be over 90%. The time is now.

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I’m Back

Well guess who is back. I have been conducting classes for the past four days and travelling for two of them so I have, unfortunately, neglected you. One of the sessions was on Customer Service and the other was on Parts Management. We start into a two day session tomorrow on Service Management.

It appears that the interest in employee development is beginning to pick up from the desperate savings that distributors were driving attempting ever since 2008 and Lehman. The bad news of these savings as noted in a previous blog is that employees see that and make note of it and when business picks up many of them will determine that the grass is greener on the other side of the hill and leave you.

The largest challenge over the foreseeable future is going to be to attract, hire and retain the talent required for the job functions in your business. And this is a very serious problem.

Automation will absorb some of the shortages but not all. Management, or better said leadership, is required to set the tone and the direction for employee development. The time is now.

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Standard Times – Does Your DMS Pass the Test?

Many Dealer Management Systems (DMS) allow a dealer to access a manufacturers’ information on standard times that are used to reimburse the dealers for warranty work. There has long been disagreement as to whether the time provided is adequate. That having been said it is also true that someone is trying to help a dealer in establishing standard times for repairs – the suppliers.

So what if the time is inadequate? Or in some cases it might be too generous. That just means you need to do a little more work. Meet with your technicians and determine the factor to apply to the time in order that the work can be performed within the time, consistently, and allow you to develop a labor schedule to follow. Well this is where the DMS has to allow the dealers to apply factors to the times provided with the supplier interface and create dealer time files. Does your DMS allow this? Don’t you think it should? When you have reasonable times to apply to a job assigned to a technician you can build a schedule. With a schedule you can develop a completion date for all work. With a completion date that you can meet consistently you will get more business. Isn’t that what you want?

I suspect you should pose this question to your DMS provider. Can you take the standard times provided for warranty and apply a factor by component code, or operation, or a machine group or even machine model. If you can’t I submit to you that it is important to be able to do this simple thing. The time is now.

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Change is compelling….change and hope.

The Canadian Economist John Kenneth Galbraith once said “When mankind is confronted with making a change or proving why they shouldn’t change…. why do people get busy with the proof?” The common excuse for resisting change is the same everywhere – fear. A lot of fears – fear of the unknown, fear of failure, fear that others will be better than we are, a bunch of fears – to the point there is another interesting question to pose to yourselves “what would you do if you weren’t afraid?”  That is the more interesting question.

In our Unit I management training we deal with change and paradigms and I try and get people to understand that resistance to change is both natural and normal. Most of us are settlers not pioneers. The pioneer is the risk taker. They blaze the trail for the settlers. When the pioneer is finished with their explorations the settler will ask “is it safe out there?” Then if the answer is yes off they will go to the new lands. But the options available for the settlers are limited because the pioneer had the first choice.

I submit to you that your customers want you to be leading not following. They want you to lead the changes. And in this world in which we live change has become a fact of life. Change comes in waves it is not incremental. If you don’t get in on the initial waves you want to hope that you can enter later without a large loss. That is an interesting word – hope. Put with the subject of change it is really interesting. How has that worked for you so far? Not all change is good. So you have to be pretty discerning don’t you. You have to be able to evaluate the situation, consider the options and then make a decision. It doesn’t get easier over time. It might in fact lead you to missing out on chances. How do you view change? The time is now.