Selling Skills Part Four

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The first last time we talked about the six steps in selling we identified them all. The last time we communicated was on the first step – research. Let’s dig a little deeper into the second one.

  1. Objectives

Well after having completed all the research on each customer in their assigned territory the sales professional is now ready for the next step. That is setting objectives for each and every one of their customers for each and every commodity of parts as well as each and every service program offered.

This also involves some research. The parts purchases should follow the opportunity calculated for each customer based on the machine population, hours of work per year and the application. This is also true for the service programs.

When reviewing the customer purchases against the opportunity for each account the sales professional will identify where there are parts or service programs that the customer does not purchase at the levels that the opportunity presents. This is normally an indication that competition has penetrated this customer for some of their products or services. The diligent salesmen determines who gets the business and who the customer likes about this supplier and develops a plan to combat that competitive advantage.

This leads the sales professional to have a specific series of objectives for each customer which will allow them to have a purpose for each call. This purpose is to save the customer money, improve machine availability of some other tangible benefit to the customer. Having a purpose for each call and objectives to strive to achieve makes a difference in the success of sales personnel. The time is now…..

Selling Skills Part Three

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Last time we talked about the six steps in selling. Let’s dig a little deeper into the first one.

  1. Research

Within research there are three more points to cover.

a)      The Customer

b)      The Products of Service

c)       The relationship.

Customer: For researching the customer we need to know everything and anything that might be significant. In the Capital Goods Industries this means specifically the equipment that the customer owns. The make model and serial number of every piece of equipment; the hours of use of each unit and the applications; any special attachments or configurations on each unit. This is what determines the opportunity. The consumption of parts and service is dependent on the hours of use and the application.

Then we need to have a complete customer profile; family circumstances and birthdays and anniversaries, hobbies, etc. A company profile; in what industries they work (SIC codes); type of business, years in business, number of employees, influential, etc.

The Products or Services: This is the full features and benefits area. This has become a lost art for many people in sales. I think this is extremely important. It allows you to separate yourself from the competition. It allows you to sell value if you have this knowledge. I also think it is important knowledge such that you will be able to “position” your offering rather than making a presentation which can become stale and sound canned.

The Relationship: This is the purchase history of the customer with your company. What they buy and what they don’t buy. How the purchases relates to the potential – this for both parts and service.

With these three stages completed in Research we can move onto the second step in the sales process. Good sales people are diligent in their research. It makes a difference in their success. The time is now…..

Thoughts on Selling

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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…..

Selling Skills Part Two

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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…..

The answer to the question is….

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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.

Labor Efficiency Anew

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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.

Market Capture Rates

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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.

Labor Efficiency

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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.

I’m Back

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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.

Standard Times – Does Your DMS Pass the Test?

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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.