Does Your Dealership Measure Customer Retention?

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Does Your Dealership Measure Customer Retention?

Our new guest writer, Tom Montgomery, asks a critical question in his inaugural blog post for Learning Without Scars: Does Your Dealership Measure Customer Retention?

If you had to define Tom Montgomery in a nutshell, you would say he is a powerful strategist. Tom is a business savvy professional with in-depth experience.  He is consistently able to deliver excellent results in high growth, competitive markets. Tom is a strongly analytical person with a no-quit attitude. He is a dedicated team builder and creates an environment of support and encouragement for his team members. Tom is an articulate communicator who is skilled at building relationships. He has served as a mentor to many and teaches customer loyalty skills while driving sustained revenue growth. Tom comes to us with a skill for transforming low-performing teams into high-caliber workforces. He has had a more than 40-year career in the heavy equipment industry.

During the time that I was working for one of the leading Komatsu dealerships in North America I discovered a method on how to improve profitability by understanding how often our customers bought goods and services from us. This was one of the simplest and easiest methods to create new opportunities for the dealership however very few dealerships take the time or effort to find out how. This method was a review of how successful we were in keeping our customer base loyal to the dealership.

It was all about Customer Retention!

Measuring customer retention may be one of the most important steps you can take to protect your dealership. It gives you a firm grasp on the “percentage” of your customer base who buys from you year-after-year. Learning how to measure and understand retention will allow you to take steps to improve the sales and profitability of your business. When I discovered how to track this important measurement, I was able to work magic in terms of sales and profits.

What Is a Reasonable Target for Customer Retention?

Remember, we are trying to find what percentage of your customer base who buy from your dealership on a repeat basis (historically comparing one year to the next year).

It is best to use a five-year history if you are able to do so. A reasonable goal would be keeping 80% of your customers in Parts and Service departments and 95% in the Sales department.

First Let’s Look at the Benefits to Your Dealership.

You don’t need to be a math wizard or a specialist in database management to accomplish this.

You will see how DO-ABLE this is as you read further. When I have studied dealer’s customer retention, I have found that most dealers lose at least 50% of their customer base in a five-year period. In order to survive you must find a way to replace that income or perish. One way to replace that income is to find new customers to replace those who have left your business.

However, adding new customers to your customer base is the most challenging and expensive way to survive.

There is a better way!

It is much more valuable and less costly to find ways to sell to existing customers rather than to add new customers as the sole method of making your business grow. Consider this; you have probably spent a considerable amount of time, energy and money building a relationship of “trust” with you current customers. You must “leverage” this relationship of trust to benefit both your customers and your business. It has been estimated that it costs 5 to 14 times the amount to add a new customer as it does to sell to an existing customer. Most dealers DO NOT have the resources to sustain that type of activity.

What Are the Reasons Customers Leave a Dealership?

This information comes from my study of dozens of dealerships:

  • 5% of customers leave a business because they have moved out of the area.
  • 5% leave because of changing their buying habits.
  • 10% leave because they prefer the competition.
  • 12% leave because they did not like the services your dealership provided.
  • 68% of customers leave because they believed they were treated with indifference or have felt unappreciated.

Here are a few important questions to consider.

After a customer purchase from your business how soon should you contact them with a telephone call, post-card, email, letter to say, “Thank You?” Do you have a standard practice in your business to “follow-up” on a recent purchase? Retaining a customer is nothing more than finding ways to meet and exceed the customer’s expectations. And… It is much easier to do that than to continuously find new customers.

What Is the Financial Impact for Your Dealership?

By figuring out the percentage of customers that buy from you, year-after-year, you will be able to specifically measure the “financial” impact to your dealership. Here is a remarkable fact:

For every 5% improvement in retention, you can expect a 25% to 80% improvement (or more) in the profitability of your business. Since a majority of dealers never measure customer retention you will be creating a significant advantage over your competition. It is like having a roadmap to improved profitability. Once you know where you stand you will be able to make significant changes to improve it.

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The Year That Was

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The Year That Was

Guest writer Christopher Kiely takes on the important task of the review of 2022 with his blog post: “The Year That Was.”

I was asked to write a “year in review” type reflection piece for the end of the year. As you can tell it is now past the end of 2022 and no such piece was produced. Instead, I pondered and wondered and debated and did all the usual writer’s block prolonging techniques that I have perfected over the years. If there was a market for such knowledge, I could write a book! 

The problem is, I take this lesson to heart, elucidated by many but perhaps most succinctly by Buddha:

“Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.”

2022 was a challenging year for me and many of my friends and acquaintances, and unfortunately for many people I know 2023 is continuing to provide challenges even in its nascent state. Sitting around pondering the past and predicting the future are intrinsically intwined human behaviours and this time of year when our calendar flip urges us to reflect and consider past and future there is no shortage of such behaviour. There is also no shortage of depression and anxiety surrounding this time of year. 

As Lao Tzu pointed out:

“If you are depressed you are living in the past. If you are anxious you are living in the future. If you are at peace you are living in the present.”

That is some of our oldest written human wisdom right there, often repeated throughout millennia. Yet we persist in our mind-wanderings into fictional futures and misrepresented pasts, ignoring the reality of the present for the dream images of the past or the imaginative dilemmas of invented futures. We have become consumed with such things in our culture. Tearing down symbols of our past while making plans and predictions about our future based on ill-conceived computational models. We spend remarkably little time in the present. Perhaps if we did, we would solve our more “present problems” such as homelessness and poverty rather than trying to right past injustices (a fool’s errand) or get to Mars in an EV spaceship (a fool’s goal).

Time is a glittering light for most of us. A shiny beacon we can hardly take our eyes off or shift our mind from. It is all around us, on our phones, on our wrists, on our walls, glowing from billboards and signalled at quarter hours by bells and cuckoos. Yet we don’t even really know what it is. We can explain it chronologically, “time is the continued sequence of existence… blahblahblah”. But where does it go when we sleep, when we no longer perceive it and its best-friend space? It becomes an illusion. 

As my best-friend I never met Alan Watts points out:

“We are living in a culture entirely hypnotized by the illusion of time, in which the so-called present moment is felt as nothing but an infinitesimal hairline between a causative past and an absorbingly important future. We have no present. Our consciousness is almost completely preoccupied with memory and expectation. We do not realize that there never was, is, nor will be any other experience than present experience. We are therefore out of touch with reality.”

“Out of touch with reality” is how more and more of us are beginning to see the world we live in. At least those of us that have broken away from the institutional propaganda we have been conditioned to accept as our past, present and future. These are the people I write for. Those of us that have deeply felt the absurdity of it all. This is not something you can explain or convince someone of, much like faith, proselytizing to the nonbelievers is typically futile and it requires the same “knowing as a feeling” as opposed to rational thinking, in a world where rational thought is governed by that which you perceive as part and parcel of the absurdity.

So, I don’t spend too much time recalling the past or gazing toward an uncertain future, a terrible person to ask to write a “year in review” piece. But not the worst person to provide some trite rehashed “New Year’s Wisdom” you can discard with your new gym membership in a few months? Perhaps. We’re going to give ’er a go regardless.

Living purely in the moment is a nice notion, suitable for monks and bong-smoking couch dwellers. One can disappear into such existence if one chooses a devoutly ascetic life. Most of us are not conditioned to such a lifestyle however and, illusion or not, must actively participate in time. Appointments are made, meetings scheduled, future KPIs, goals and objectives are set. We are flooded with past data, asked to recall and recollect, urged to review past earnings and performance. It is easy to lose that “infinitesimal hairline” of reality when one actively participates in the absurdity. But actively participate we should and often must! 

Where then do we find the time for the present, for the moment, for the now?  Remember in school when you were told not to daydream? They lied to you. 

As our good friend Albert Camus counters:

“Imagination offers people consolation for what they cannot be and humor for what they actually are.”

Imagination allows us to escape Lao Tzu’s “anxiety” and “depression” of time. It places us in the creative now and, contrary again to what we have been taught, creativity requires no great technique beyond the ability to daydream. The institutional ideas and standards for creativity are housed in systems and techniques (music, photography, oil painting, sculpture, etc.…) that one must train and develop. To connect to the present moment, many people and organizations preach the need for meditation or “mindfulness” never confessing the difficulty or even discord some may find in the practice, especially initially. But the pay off for creativity needs no marble statue or voluminous published works, one can be the crafter of epic works in their mind, the benefit of the imagination, of the exercising of creativity is the same, regardless of tactile outcomes. And connecting to the present moment does not require the quiet undisturbed still-mindedness of a Zen master. 

The mind can be allowed to wander, to question and create on its own, the need to silence it is overstated. Discovering the mind is just like your lungs, and one can actively think as they actively breath or leave both the breathing and thinking to natural impulses we don’t directly control, or understand, is the real secret to “mindfulness”. By understanding your thinking is not you and letting it flow rather than trying to cling to thoughts, one can develop a contemplative imaginative creativity that has no technique beyond the manifestations of one’s own mind and use that to manifest profound change in their lives. Getting lost in imagination, creating in your mind the things you want to see, hear, do, be; whether they are works that have associated technique or not, (this is your imagination after all and no systems or techniques are required), is a powerful place to be. In that place, a place all of us knew the directions to when we were young, lies the current moment, and as close as we get to “reality”. Love and peace are only found in this moment, there is no past or future love and peace that is real, only the love and peace of the “now” is felt. This is why they condition imagination out of us and attempt to place it behind a wall of institutionally approved techniques.

This year I hope you are all able to shift your focus and avoid the depression of misremembered pasts and anxiety of speculative futures to find that “infinitesimal hairline” and spend some time there each day, whether in mindfulness or imagination. The more time you spend there, and one of the reasons you were encouraged not to, the more likely you are to find that other “knowing as a feeling” that lingers around in the inner quiet creative moments of the here and now, what Charles Bukowski knew and felt when writing The Laughing Heart, and what I will share as my “rehashed wisdom” and wish for you in this New Year:

The Laughing Heart

 

your life is your life

don’t let it be clubbed into dank submission.

be on the watch.

there are ways out.

there is a light somewhere.

it may not be much light but

it beats the darkness.

be on the watch.

the gods will offer you chances.

know them.

take them.

you can’t beat death but

you can beat death in life, sometimes.

and the more often you learn to do it,

the more light there will be.

your life is your life.

know it while you have it.

you are marvelous

the gods wait to delight

in you.

 

Charles Bukowski – The Laughing Heart

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Encouraging Lifelong Learning in Your Company

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Encouraging Lifelong Learning in Your Company

Guest writer Steve Johnson contributes to this week’s installment on Lifelong Learning with his blog post, “Encouraging Lifelong Learning in Your Company.”

In my last article, I said to readers, “As a final note, make continuous learning intentional and give it high priority. Continuous learning is your responsibility, not the responsibility of your company, your supervisor or anyone else. To be able to effectively manage your career, you need to plan your future, that is, identify your goals and chart your path for reaching those goals. An important part of that path is going to be continuous learning. Plan your educational future now. In doing that, we encourage you to explore educational opportunities at Learning Without Scars for high quality industry- and position-specific education.”

Given the above, the smart company will still encourage and enable lifelong learning, as it’s in their best interests as well. Another quote from my last article, “At some point in the future, you could find out that management no longer feels you are relevant to attaining the company’s goals. You could find out that the job market feels the same about your resume.” One can say essentially the same thing about a company. At some point in the future, you could find out that your customers and suppliers no longer feel you are relevant to their futures. Investments in employee lifelong learning are investments in your company’s relevance, efficiency and productivity. They are crucial in meeting your customers’ needs, leading to higher customer satisfaction and retention. They are also crucial to employee satisfaction and retention.  Your investment in employees is a clear demonstration of how you value them.

Enabling lifelong learning in your company should be a part of your employee development program. If you don’t have such a program, you should invest in one. As has been said before, “What about the costs?” The usual and correct answer to that is what are the costs of not investing in employee development? Don’t know where to start? Here are some ideas.

  1. Commit to lifelong learning as essential to your company’s ongoing success. For example, one company I worked for started by committing to a minimum of 80 hours each year of continuous education for each employee. Select a qualified employee and assign management of and accountability for the plan. Determine where you are now as a company and where you want to be in a year; and in 2 years or 3 years. The company plan must include specific actions, completion times and results expected. Establish a budget for continuous learning and the systems to support the plan. A company lifelong learning plan will require a system to archive records of educational achievements, support company award programs, facilitate human resource planning and develop individual future educational plans.  
  2. Employee participation is required for their own success, as well as the company’s success. For each employee, define specific learning activities, due dates, results expected. Incorporate short-term and longer-term measurable learning goals into the performance review process. Involve employees in the development of their learning plan; find out where they are and where they see themselves in the future. Make the connection as to how their learning plan relates to their own personal goals. Show employees where there is alignment with their learning plan and both their personal and company success.  It is important for the learning plan to be formally agreed upon initially by both the employee and the supervisor or company’s training representative.   
  3. Link learning outcomes to job qualifications and promotion opportunities; answer the employees’ question, “How can I get there?” Employees need to have a stake in their company as to their possibilities for personal and professional growth. Job design needs to show learning and knowledge requirements in terms of the steps involved in available career paths. This includes various types of organizational knowledge: company policies, financial, supervisory, managerial, human resources, federal and state laws and more. It can also include such things as technical knowledge, computer skills, accounting and financial skills, telephone skills, sales, customer service, group dynamics, and project management.
  4. In reference to the above items, immediate supervisors have a substantial stake in employee learning and development. Their success depends on their employees’ performance. Schedule regular supervisor-employee discussions for review of the individual learning plans in a non-threatening environment. Congratulate employees on their successes and deal with unacceptable results in an encouraging way. Discuss what employees see as obstacles to company expectations and how they can be overcome. Still, employees need to know what the company expectations are and that those expectations need to be met. 
  5. Incorporate different types of learning styles into employee education based on what is most effective for each individual. People learn in different ways such as visual/spatial, auditory/aural, or kinesthetic/physical. As much as possible, tailor learning experiences to the individuals being taught. For example, I’m no car mechanic, but for such subjects, I can learn and then demonstrate my competencies much better in a “hands-on” learning environment. For public speaking, I needed a fair number of live experiences to be comfortable and effective. For me, negotiation skills required both book learning and role playing.  
  6. It can be highly frustrating for employees who are sent for education in areas where they are already competent. Where you can, offer opportunities for “testing out” or demonstrating such skills and knowledge. You may also, however, run into situations where someone thinks much more highly of their competencies than is reality. “Testing out” can reveal the true situation to that employee. For some things where answers are “absolute” or factual, a written test may be most applicable. For other situations that are more situational or “gray,” discussions of performance in real business situations with a company supervisor or mentor may be more suitable. 
  7. Companies need to be able to recommend vetted and approved learning resources for employees to help “show them how to get there,” as mentioned in item 3 above. The company also needs to help connect employees with these resources based on their needs. Develop a library of books and periodicals that reflect best practices in various disciplines like accounting, finance, management, business law and others. The library can include manuals for common business software used. Materials that can support development of skills in project management, team building and the so-called soft skills should not be ignored. Include company hosted opportunities for group sharing and learning. For example, a company may want to bring in an outside provider where all employees participate in team building education. 
  8. Develop and vet a list of outside learning resources that employees can request from company management. These include technical courses, computer software, management training and many other areas where further education can benefit the company. With management approval, this can include tuition reimbursement for programs that provide skills and knowledge relevant to current or future job qualifications. Many companies also reimburse tuition for courses related to attainment of a certificate or college degree. If your worried on your ROI for such education, full reimbursement can be tied to an employee commitment to stay with the employer for a stated period of time.  

Rule number one for such lifelong learning programs is that you have to get started at some point. I encourage you to start by doing something now. At least formulate a basic plan. Give your plan the time needed to achieve expected results. Your plan will evolve as you determine what things work best in your company and the benefits become more and more apparent.  We encourage you to explore educational opportunities at Learning Without Scars for high quality industry- and position-specific education for inclusion in your lifelong learning plans.

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Should equipment dealerships be looking to acquire rental companies?

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Should equipment dealerships be looking to acquire rental companies?

Guest writer Gary Stansberry writes about an important question in his blog post this week: Should equipment dealerships be looking to acquire rental companies?

In a recent blog in this forum, I wrote about dedicating your business to rental if you are serious about having a successful rental division in your equipment dealership.  That means having dedicated IT systems, facilities, equipment, and personnel focusing solely on rental.  As I mentioned in that blog post, I came from an AED type dealer with a rental department.  Even though we had significant rental revenues, we did not know what it meant to be a truly responsive and service-oriented rental company.  It took me actually working for a dedicated rental business before I fully understood this.  

We have seen more and more equipment dealers become interested in the rent-to-rent strategy. These dealers recognize the growing importance of the rent-to-rent model as an integral component in achieving their desired market share and brand exposure within their trade territory. In most cases, equipment dealerships do not have existing staff that have experience in a high-volume rental environment.  Unless they have worked in a management role for one of the major rental companies such as United, Sunbelt or HERC, or possibly for a larger regional or independent rental company, your rental (and by rental, I mean rent-to-rent, not rental purchase) department is not likely to achieve its full potential.

Our primary business at The Stansberry Firm is selling rental businesses.  Given that some dealers realize they do not have the necessary talent, systems, and expertise in-house, some are now turning to acquiring an existing rental company as a way of gaining that knowledge.  In the last few years, we are now seeing a “new” type of acquirer; equipment dealerships (or their wholly owned rental subsidiaries).  Often, the biggest challenge for these dealer groups is finding a rental company, especially one with multiple locations, that operates solely within their manufacturer assigned territory.  A second issue is that often equipment dealers do not have the in-house capabilities to evaluate, value and/or structure a transaction to acquire a rental company.

I have recently worked with a major CAT dealer to help them acquire two dedicated rental operations to add to their expanding rent-to-rent operations.  In addition, I have sold two of my rental company clients to equipment dealers that are looking at these acquisitions to lead the way to integrate the rent-to-rent philosophy into their existing operations.  Although I am an acquisition specialist, I am a firm believer that your rental growth strategy should come from a combination of acquisitions and “greenfield” expansion.  Most everyone I talk with in the rental industry is complaining that their two biggest challenges are equipment availability and getting good people.  An acquisition is a way getting a proven rental revenue stream, rental ready equipment and rental-knowledgeable people on your team that can help strengthen your entire rental strategy.

I want to leave you with a final thought; the rental market is growing.  The American Rental Association, through its ARA Rentalytics™ service, has consistently touted 2022 to be a double-digit growth year, to be followed by several more years of more modest growth.  There is also a notion that the combination of inflation, rising interest rates, equipment availability and supply chain issues, in tandem with a labor shortage will cause more end users to rent equipment vs. buying equipment: i.e., an increase in rental penetration (equipment rented vs. owned by the end user).  According to the ARA, rental penetration in 2019 was 56.7% and dropped to 54.5% in 2020.  The last major shift in rental penetration was driven by the 2008 recession; according to the ARA rental penetration in the US was only 39.7% in 2005 steadily increasing from 2011 to the current level of 54.5%.  Some industry observers believe the current market factors could drive rental penetration several points higher and possibly as high as 60% within the next 24-36 months.  If potentially 60% of the equipment market is rental, why wouldn’t you be looking to grow this segment.

Gary Stansberry is the President of The Stansberry Firm, LLC and specializes in rental business sales and consulting with businesses to increase their value.

More information on the company can be found at www.thestansberryfirm.com.  

Gary can be reached at (210) 797-7368 or by email at gary@thestansberryfirm.com.

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How Is Your Customer Service…Meh?

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How Is Your Customer Service…Meh?

Guest writer John Anderson relates his road trip experiences to readers in his blog post this week: How Is Your Customer Service…Meh? Here’s hoping your service cannot be described as “meh.”

I recently made a cross country trip in the United States, well perhaps not cross country so much as up and down.   Crossing into the US at Detroit and meandering my way to the southern climes of Florida.   Traveling throughout my career I learned to value “windshield time”.  It was my time to solve the world issues at hand.  I had little to distract me save for a chatty sales rep that was there for a ride along.  This trip was a little different.  Windshield time is now a mix of super productive calls, texts and emails thanks to the technology in my truck and the traditional time to stew and think deep thoughts. 

On this particular trip I spent a lot of time noticing how our expectation of customer service had changed.  I mean it’s changed a lot.  The bar is lowered to a near subterranean level.  How many times in the last year have you been surprised that someone has called you back?   How many times have you been surprised by someone actually getting you an answer or making a plan or reserving a product. How many times have you made a call only to here “can you hold please.”  And it’s said as a statement, not a question.

What I liked about this trip is I started to really notice when I got great customer service and when I didn’t.   Surprisingly it was hard to find those instances where someone cared.   It was like I was starving for a meaningful customer interaction.  Had I just become a curmudgeon and gave off so much negative energy that nobody would make eye contact?  I was two fuel stops, one fresh fruit stand and a rest station into my trip.  I had no experience, not bad, not good, just meh.  That’s it! We all accept MEH!  We have come to accept if it isn’t bad, it’s just MEH!  How far we have come and how low we have set our expectations from the days of Customers for Life, What Customers Crave, and Hug Your Haters (these were all bestsellers once).

Day two had promise though.  I woke at 6:00am in the RV.  I was graciously provided an overnight stop at Lane’s Southern Orchards.   Imagine a business that encourages you to stop overnight and use their parking lot with no obligation.  I had stayed before and knew the food was good and the peach preserves were the best I ever had but it was closed because I had battled Atlanta traffic. I did call and tell them I would be late.  I woke to a stellar sunrise over acres of strawberry fields and peach orchards.   The cannery was already in full swing and I can’t describe how good it smelled.  I had to hit the road and when I jumped in the truck, I noticed a small hand written note and a jar on my hood that said, “Sorry we missed you! Come back again soon.” My day was off to a great start and I would definitely be back.  Next time I will be in early to buy lots of goodies and load up for the trip home. 

Next stop was to get fuel, no easy feat when you’re dragging 42 feet behind you.  My technology suggested I stop at the next exit and use BUC-EES.  It also suggested I check out their restrooms.  That’s the oddest recommendation I have had yet, but it was the best.  I will leave it to you to discover on your own. Buc-ees is built around positive customer experiences.   They greet you; they sincerely ask about your trip or what you might need.  I think they have everything in the world.  Its like the Walt Disney World of highway gas stations and they use every customer service trick in the book.   With 40 pumps, and hundreds of parking spots there is now waiting.  Need lunch or supper its already cooking. Forgot your warm clothes or a gift for the grandkids, they have it all. I encourage you to have a look on you tube as I can’t do it justice. 

My point is that here I am, 2 weeks later thinking about going back to those places that gave me better than meh.   Do you actively train your staff to prevent meh! Have you trained them on the fine art of conversation.   Do they understand that before you can sell a lot you have to mean a lot.   The bar has never been lower, all you need to do is care.  People are starving for a customer experience; a good customer experience is a bonus.  I have faith that humanity will return to caring about each other and enjoying each other.  In the meantime, it’s just, well meh!

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Becoming a Reader #LifelongLearning

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Becoming a Reader #LifelongLearning

Curriculum Designer Caroline Slee-Poulos takes us into a subject near and dear to her – Becoming a Reader – for her post in our #LifelongLearning series.

It’s a New Year! We all know what that means, don’t we? At this time, we’ve all made resolutions. We are determined. We are committed. We are going to improve ourselves.

I mean, sure, most of the resolutions people make have something to do with weight loss or fitness, but you have to consider who is writing this post. I’m a curriculum designer AND an English teacher.

There’s funny thing about reading: if you’re a reader, there’s very little that is inaccessible to you from a learning standpoint.

But there’s always a catch: you have to have a budget for books!

The Kindle, the Kobo, and the iPad have taken away the space requirements of being a reader. Although, if you’re anything like me, you like the feel and smell of printed books… Still, who can afford a bigger house just to house their books? In all seriousness, if reading is a part of your self-improvement journey in 2023, I have some very good news for you: free books!

There’s one first step to take when you have a title you know you want to read: Google it. You would be surprised how many times there is a free PDF available to you online. Most of them have been uploaded by English and History teachers for different school projects.

If, however, you have decided to start reading as a pastime, a way to de-stress, or a way to be entertained, there’s an entire website of free books – with audio – available to everyone. I use this one in my classroom, and my students use this website to choose what they would like to read. The website is esl-bits.net. On that site, you can read everything from transcripts of speeches and articles to full novels from Steven King. It’s your choice.

If you have a competitive streak, I invite you to set up a free account on Goodreads. Every year, they have reading challenges in which you can set your goal for the year. You get to set your reading goal, you pace, and it tracks your progress for you. I find it very helpful.

If you want to continue learning, reading is your entry point. If you haven’t made a resolution yet, allow me to encourage you to make becoming a reader part of your self-improvement plans.

Let’s all commit to lifelong learning together.

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Employee Satisfaction in 2022 and Beyond

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Employee Satisfaction in 2022 and Beyond

Guest writer Alex Weaver continues the year-end reflections with a look at employee satisfaction in 2022 and beyond…

Recently we looked at measuring our business / commercial performance around four metrics:

  • Financial Performance
  • Market Share
  • Customer Satisfaction
  • Employee Satisfaction

In October, we discussed some factors influencing Customer Satisfaction and today’s marketplace.

At year end, let’s look at Employee Satisfaction. There is a lot of press recently concerning people of all ages and skills, leaving the workplace and not returning.  Also, some younger potential employees are choosing not to enter the workplace.

In today’s challenging economy, the norm appears to be that dealers are continuously struggling to fill 10%, or more, of their jobs.  And it doesn’t appear to be improving. 

“Employee retention is important to any business: the expense of hiring and training new employees can be very costly. Another cost lies in the productivity lost while seeking to replace the employee who’s no longer there. In blue collar jobs, which are generally labor-focused, employee retention is often lower than in office and executive positions. High turn-over rates in blue collar occupations typically occur when employees feel they are under-appreciated, undervalued, and over worked. These perceptions can make employees feel unfulfilled and send them searching for better-paying jobs.”- IDI Workforce Management

Several factors or keys are frequently mentioned in employee retention.

Five Traditional Keys for Employee Retention

  1. Competitive Compensations and Benefits – Pay employees what they are worth.
  2. Provide Professional Development
  3. Promote from Within
  4. Improve Working Conditions
  5. Provide a Positive Company Culture

Given today’s labor market we should look beyond the above core.  What is our ‘Humanness” factor.

  1. Listen to our employees – provide opportunities to listen, be an approachable communication culture.  It is not all about formal surveys.
  2. Prioritize Action based on Employee Comments / Suggestions
  3. Provide a menu of additional Perks and Benefits.  One size does not fit all.  
  4. What about flexible working hours or schedule?  
  5. What can we learn from the Covid Pandemic?

Where does our industry fit in today’s changing labor market?  How do we recruit “human resources” that are interested in our industry? How are we viewed by younger persons regarding our industry, our machines, and the work those machines perform? 

Does our industry provide a bright future for young and / or first-time employees.  Is our workplace attractive?  Do young workers seek a career or a job?  Many of our grandfather’s sought careers and the gold watch recognition at retirement.  Some worked for the same company their entire work life.  At one time our industry was an attractive recruiting opportunity. I know of construction equipment career individuals that started out with a Tonka toy, or a scale model of a bulldozer.  Transitioned from the toys to the real thing.  A child in a sandbox to a career in our industry.

That was then, this is now.  Looking to the future provides opportunities for creative career opportunities for all employees. 

Provide incentive for employees that recruit new hires.  The recruiting employee can serve as a mentor of the new hire. Both the new hire and recruiting employee receive incentives for career longevity and performance. Offer 10 year and 20-year incentives for recruiting employee and their new hires.

Be more flexible in determining new hire career paths.  Think out of the box.  I remember one company I worked for allowed a secretary to transfer to performing work on cylinder heads in the component rebuild shop.  From desk and typewriter to bench and torque wrench.  She was a successful supplier of shop labor.  

Expand on traditional employee and community Open House events.  Offer information on machines and performance characteristics.  When possible, offer a machine demonstration.  Inform and sell the “public” on the positive nature of what we do and how we do it.  Host career discussions at Open Houses.

Involve employee family members by offering summer or vacation jobs to employee’s children.  Create Intern Programs in all facets of career opportunities. 

Today and tomorrow are more of the same, but some change and additions to how we view our family of employees.  Employee satisfaction is fostered by a sense of inclusiveness and belonging to something important. 

Last thought:  Of the items discussed above, I think the best opportunity for quality recruiting is leveraging your current employees to assist in your recruiting efforts.

Happy Holidays and Best Wishes for a prosperous New Year.

Alex Weaver

Co-Founder – agiltiONE.com

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The Importance of Rest

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The Importance of Rest

Guest writers Jennifer and Joseph Albright are helping Learning Without Scars to wrap up the year with this blog post on the importance of rest.

As we head into the final weeks of the year, I have to ask – are you as worn out as I am? Wrapping up our third year since the start of the pandemic, the equipment industry has not slowed down. If anything, we’ve all gotten busier. More travel, more meetings, more conferences, more everything. Don’t get me wrong, we’ve had our share of struggles – supply chain challenges have continued to be a problem and equipment has been hard to come by. Staffing costs have risen. And if this month’s ISM Inside Supply Management magazine is any indication, it’s not just me. Pieces about frayed nerves and burnout, resiliency, agility in the face of non-stop disruption – what we are seeing in the equipment industry is not unique and it’s very real. Despite all of this business has been good. We’ve been seeing mixed predictions in terms of what 2023 will bring but no matter what the speed of business will not be slowing anytime soon.

 

Many of us look forward to this time of year. Family, traditions, holiday celebrations, and – at least for me – good food are all part of the magic. Add that to all of the normal year-end work madness and it’s also a recipe for a whole lot of stress. While you’ll hear from me in January with all sorts of thoughts on hitting the ground running, planning for the new year and all that jazz, right now I’m telling you to focus on getting some rest. In normal times (if we can remember what those were) there are peaks and valleys, but over the last few years it’s been constant and we are tired. You may not have much time off, this might be a busy time with year-end reporting, invoice processing, sales, and billing for as many service work orders as you can before the end of the year but rest is a critical component of health and stress and can’t be ignored. 

 

Rest reduces stress. Chronic stress leaves us at higher risk for illness and health issues. Not so great for those of us in high stress and face-paced work environments. But rest also improves productivity. It improves our ability to make better decisions and makes us more creative, which is a must in the current business environment. It helps with focus and the ability to learn new things. So really, resting helps us to work more effectively. Yet even knowing all that, some of us still struggle to turn off our heads and get the rest that our bodies desperately need.

 

While it’s probably too late to schedule an impromptu end-of-year siesta, there are ways to sneak in some much-needed breaks and create habits to use throughout the year.

 

  • Get enough sleep – easier said than done but it still has to be said
  • Take a walk or exercise in the morning to clear your mind and start fresh
  • Take a handful of quick breaks throughout the day to step outside or close your door and take a few deep breaths
  • Resist the urge to check email 24/7
  • Ask for help – while everyone else is likely as stressed as you are, do not suffer in silence
  • Meditate
  • Actually, take your lunch breaks – you know who you are
  • Have some fun! Spend some time making memories that don’t involve a spreadsheet.

 

For those of us working from home, it’s all the more important to create boundaries between work and life. At the end of the day, shut the door to your office and give your brain a chance to reset. Your body, your outlook, and even your work will thank you for it. Have a wonderful holiday season!

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Making It Happen from the Middle

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Making It Happen from the Middle

Guest writer Sara Hanks talks about how to continue to make changes without a top-down ability in “Making It Happen from the Middle.”

For nearly a decade, the digital transformation projects, and teams that I led were funded from corporate. Although there were aggressive cost-out targets that came along with the program budget, it was clear that the initiatives were selected at the top of the organization and disseminated down. When the team encountered resistance to change, an escalation a couple layers up settled the dispute quickly. The blunt object from the top paved paths that would otherwise be a challenge.

In February 2019, our division was sold to another company. Their IT strategy was not the result of a CEO initiative and the concept of functional teams supporting IT projects was foreign. The program funding that was allocated to the digital transformation was distributed to the functions and my team was mostly disbanded. What remained was a small team of project managers tasked with leading continuous improvement efforts. The top-down ability to drive change disappeared and we had to innovate and influence others to accomplish our work. It’s been nearly 3 years and I can say that change is still possible, but it looks different.

If you find yourself in a similar job scenario where you need to improve the business without much direction, or you are in middle management and seek to make things better, these tips can help.

Ask Questions to Find Problems

Chances are that there is no shortage of issues within a business. If you don’t have a specific problem in mind, then seek to find one though interviews with your teams or your co-workers. Ask about what keeps them up at night, or what do they find the most frustrating. You may need to dig deep using a 5-why approach. In this approach, you ask why several times until you get to the root of an issue that can be solved. When you get to a solvable problem, ask what they have done to fix the problem previously. This will give you a sense that the problem is worth solving, and what has been tried in the past.

Break Projects into Pieces

In project management, the work is broken down into work breakdown structures or WBS. The WBS defines the overall scope of the project and breaks down the work to plan the schedule, resources, and budget. In a scenario where the project is not tops-down, or the project sponsor is not defined, you can think about splitting the project into minimal viable projects. For example, if there is a project to improve the ergonomics in the office, rather than focus on the entire setup, select one element to focus on. Finding funding to provide ergonomically friendly keyboards is easier because of the lower cost and effort. Once the keyboard project is finished, propose adjustable chairs, or monitor stands. Little by little, the incremental efforts add up until eventually enough has been funded that the standing desks are more agreeable.

Look for Low Cost, Low Code IT Solutions

Recently, I met another business transformation / continuous improvement leader from a similar sized company. He was in the same scenario with little direction and low budget. By working with the organization to find problems to solve, he leveraged the Microsoft Power Apps suite to create apps himself to solve the problems. There are several options for low code/no code software development. IT experience is not required and there are plenty of training videos on YouTube.

Be Patient

Chances are that if you have the ambition to drive change from the middle, you are results oriented. I personally struggle with patience and constantly seek instant gratification. It’s important to level-set your expectations from the beginning that things take longer when driven from the middle. If work is out of your control, move onto something else while you wait. For example, I used a change request process to implement some changes in IT. The project was put into the queue and wasn’t executed for 7 months. My team moved onto other projects while we waited. Eventually, the IT team caught up and we had solved 2 different problems in the meantime. Be patient and keep going.

Think Like a Marketer

I didn’t understand the power of connecting with my audience, aka my leaders until it was too late. My passion is infectious, and I mistook energy for buy-in. When I presented machine learning results and interactive diagnostic tools, my leaders appreciated the passion, but didn’t understand what I was saying. They didn’t know what to do about it either and couldn’t help me clear roadblocks. It is extremely important to spend time understanding your stakeholders and tailoring your message according to their style. The manager who didn’t care for my data analytic detail, was more interested in who I was working with and what were the results. I could have saved us both time by cutting to the chase and letting him know what he wanted to hear, or what he needed to hear to willingly help.

Over the years, I’ve seen many people fit the grumpy co-worker mold. Always mumbling under their breath or complaining about things continuing to be a pain. Things don’t need to stay the status quo. I have had several surprising successes on projects this year, including $2.5M in funding, because of the tips described above. Make incremental, intentional, small changes and eventually you won’t believe how far things have come.

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Quiet Quitting – the Great Resignation

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Quiet Quitting – the Great Resignation

Tonight, guest writer Christopher Kiely tackles the conversation we have all heard lately: “Quiet Quitting – the Great Resignation.”

We have likely all seen the headlines mentioning “Quiet Quitting” and “The Great Resignation”. These sorts of headlines have become quite common post-pandemic. I usually try to pay as little attention to headlines as I can. They can be a hyperbolic reframing of previously existing but ignored trends. We used to just call “Quiet Quitting” “Phoning it in”. Nothing new there. A simple web search of the terms shows they seemed to emerge in news headlines beginning with “Great Resignation” around the spring of 2021 and “Quiet Quitting” a little over a year later. Both the terms have legs, with that same web search resulting in several hundred news articles for each in the past 24 hours alone.

“Quiet Quitting” grew out of some TikTok trend earlier this year and now shares space on Wikipedia’s “Work-to-Rule” page¹. Seems like an attempt to apply some sort of rebel ethics to hating one’s job but needing it, which again, is nothing new.

The “Great Resignation” was coined by Anthony Klotz, an associate professor of management at Texas A&M University. In a Bloomberg article² by Arianne Cohen from May 2021, Professor Klotz is quoted stating:

“’The great resignation is coming,’ says Anthony Klotz, an associate professor of management at Texas A&M University who’s studied the exits of hundreds of workers. ‘When there’s uncertainty, people tend to stay put, so there are pent-up resignations that didn’t happen over the past year.’ The numbers are multiplied, he says, by the many pandemic-related epiphanies—about family time, remote work, commuting, passion projects, life and death, and what it all means—that can make people turn their back on the 9-to-5 office grind. 

Sure enough, since that article the headlines have been rife with proclamations of “The Great Resignation”. This could all be self-fulfilling-prophecy. Wouldn’t be the first time the media glommed on to a pithy term and ran with it, essentially creating the news it was meant to report. But anecdotally, I have seen friends and acquaintances experience those “epiphanies” over the course of the past 3 years, I have even experienced some of them myself. Unlike the news headlines I wouldn’t just wrap it all up as some societal trend affecting the HR operations of our beloved corporations. The “Great Resignation” is a symptom of the system. 

It has always happened to many of us at some point and it is well-documented in our society as either the “Midlife” or some sort of existential crisis. As Albert Camus, surmised in The Myth of Sisyphus³:

“It happens that the stage sets collapse. Rising, streetcar, four hours in the office or the factory, meal, streetcar, four hours of work, meal, sleep, and Monday Tuesday Wednesday Thursday Friday and Saturday according to the same rhythm – this path is easily followed most of the time. But one day the “why” arises and everything begins in that weariness tinged with amazement.”

Ah yes, the “what it all means” and the “why” of it all. It used to be you had to get to Willy Loman’s age before you started questioning such things and regretting life’s decisions. Not so much anymore. Seems more of us are getting there much sooner than we did in Willy’s Day. With many young people not even wanting to participate. A Time magazine article⁴ by Raisa Bruner from October 2021, puts the numbers at a quarter of workers ages 20-34 not wanting to participate in the workforce.

“The numbers are even more notable for young workers: in September, nearly a quarter of workers ages 20 to 34 were not considered part of the U.S. workforce—some 14 million Americans, according to the Bureau of Labor Statistics, who were neither working nor looking for work.”

“Neither working nor looking”, not for traditional work anyway. Perhaps working toward and looking for something more profound than the institutional 9-to-5? We have witnessed profound failures of our institutions over the past 3 years. Regardless of what side of any of the currently brewing cultural and societal debates one is on, the inability of our institutions from government to educational, from healthcare to law enforcement to deal with these issues without contributing to the division, rhetoric and spite has been deplorable. Our institutions have been tested and found wanting. 

The “Spiritual Entertainer” Alan Watts once said, “Institutions are run for the benefit of the staff” and the past 3 years have proven him correct. Resulting in a culture where we are conditioned from birth to seek guidance and approval from institutions, but many of us no longer trust those institutions. This isn’t an easy fix; this is a profound societal rift. One that is manifesting itself in the “Great Resignation” and it is a resignation from more than work. It is a resignation from a way of organizing our time, our priorities, our lives and ultimately our society.

In our modern western capitalist civilization, corporations are as much institutions as any other, perhaps the most honest institutions since they don’t claim to be run for anyone’s betterment than the shareholders. Well, okay some claim it, but no one really believes them. They are also one of the only institutions regular people still feel they have some control and influence over. You can’t fight city hall, but you can throw a chair through a Starbucks window, shame Nike on Twitter. If the smartest of the young generation decide to use their labor as a protest tool by withholding their talents from those corporations, that surely won’t be good for those corporations or our current society.

Once someone has an “epiphany” about the meaning of something, they aren’t likely to change their minds any time soon. Epiphanies about “…family time… passion projects, life and death, and what it all means…” are some of the biggest epiphanies a person can have. If a quarter of the workforce from ages 20-34 has already had those epiphanies corporations are going to have to make some fundamental changes to attract them back.

The days of offering free coffee and granola bars with access to game rooms and rock-climbing walls probably isn’t going to cut it anymore. In The Myth of Sisyphus Albert Camus discusses the concept of absurdity and states:

“…the magnitude of the absurdity will be in direct ratio to the distance between the two terms of my comparison.” 

The terms of comparison in the case we are discussing are the life we have been told working a 9-to-5 for a living will earn us and the reality of the life we lead pursuing that path. For many of us it seems the level of absurdity is high and the decision to stop doing the absurd has been made. How do corporations and institutions of today regain the trust of the “Great Resigners” and the disillusioned youth and convince them the path is worth their while?

Perhaps Albert can provide a clue when “In The Myth of Sisyphus” he declares:

“Thus, I draw from the absurd three consequences, which are my revolt, my freedom, and my passion.”

The “Great Resigners” and the youth avoiding work have already had their revolt by removing their labor from the workforce. Now it is up to the corporations that want to lure them back to fuel their freedom and passion. The corporations that do will gain access to some of the best and brightest, the ones that figured out the absurdity of it all and had the guts to call them on it.

In our next articles we’ll discuss ways corporations can go about doing that.

 

  1. Work-to-rule – Wikipedia
  2. https://www.bloomberg.com/news/articles/2021-05-10/quit-your-job-how-to-resign-after-covid-pandemic?leadSource=uverify%20wall
  3. https://www.goodreads.com/book/show/91950.The_Myth_of_Sisyphus
  4. https://time.com/6111245/young-workers-quitting/
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