, ,

How Construction Equipment Dealers Can Succeed (Or Fail) Faster

Our new guest writers, Jordan Arsenault and Nick Mavrick bring big data to their first blog post for Learning Without Scars, “How Construction Equipment Dealers Can Succeed (Or Fail) Faster.” Don’t dig for data. Let data dig for you.

Big trouble: that’s how we are ending 2024, most economists agree. Inflation, investment bubbles, over-the-top government spending, technology disruption, dealer margin and market share compression and the exceptional market power of two major rental companies. How can your dealership thrive with more instability ahead? 

One may turn to Warren Buffet’s counsel:  “I don’t look to jump over seven-foot bars. I look around for one-foot bars that I can step over.”

In your construction equipment dealership, would you allocate capital differently if you knew how much revenue and profits were created by the top 10, or 20 percent, of your customers? What if you learned that 5% of your customers generated over 70% of revenue & profits? Or that your top customers’ life-time value was 5X or 10X larger than that of your average customer?

Consider the following construction equipment cases:

  • Major construction equipment service company:  23% of customers, 87% of revenue, each customer generates $43k annually, 5X greater than the next customer group.
  • Major equipment rental company:  3% of customers generate 62% of revenue and profits – only 15 customers per store, that each generate $250k annually 4X greater than the next customer group.
  • Major construction equipment dealer:  11% of customers, 83% of revenue and profits.

 

None of the above had been using the proportionality of their data for 80/20 capital allocation, to manage their salesforce, or in short – replicate what they are doing well, to do more of it – faster. They kept going by raising prices, cutting employee expenses, and taking incremental actions while remaining perilously close to a vicious doom cycle. Why?

  • While successful relative to their peers, they shared attributes that imperiled ability to replicate their successes by leveraging data:
  • Transaction driven, not data driven  day-to-day busyness, obfuscated strategic actions, for tactics.
  • Siloed data, and disparate systems:  DBS (dealer business system), CRM, Business Intelligence, data warehouses, ERP and more. They lacked a unified dataset.
  •  Dirty data:  garbled customer data was inconsistent by account; making it difficult to distinguish between decision-makers and influencers.
  • Tactically use of prospect databases and rarely used industry intelligence:  not linked to internal data.
  • Business Intelligence:  relegated to answering obscure ‘jeopardy’ like questions for their OEMs or ownership.
  • Territory management:  based on geography, rather than market opportunity goals. This resulted in an inability to rank salesperson performance, or more importantly evaluate share-of-wallet penetrations with high value customers.

 

For the solution, one may turn to Charlie Munger for advice:  “There is an old two-part rule that often works wonders in business, science, and elsewhere: take a simple, basic idea and take it very seriously.”

To solve data problems, BiltData.ai has constructed a Continuous Insights portal to transform a dealer’s data to quickly identify patterns and establish proportionality – which are referred to as the 80/20 rule. 

  • Data is cleansed, structured, and enriched to provide a unified hierarchy and dataset for strategic use.
  • Quick-decision dashboards for customers and prospects drive action focused on Best, Future Best and more, resulting in laser-like focus to gain and secure profitable business, faster.
  • Geographic dashboards address sales coverage deficiencies that were not previously visible, and rank sales performance. 
  • Smart leads help build market share faster by enabling multi-dimensional prospect insights, and visual filtering. This saves time by moving from cumbersome spreadsheets to one unified dataset, where action can be taken in 2-3 clicks.

The results: construction equipment companies can move quicker to take the most ‘profitable’ share, grow best customers, find the best prospects, grow share of wallet by upselling, launch new markets profitably and adopt new sales and pricing models

“In God we trust; all others bring data.” -W.  Edwards Deming

Relentlessly pursue data for your continued success!

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Jordan Arsenault is Board Chair of BiltData.ai. Jordan is the Board Chair of BiltData.ai. With an extensive career in sales management, Jordan is an expert in using data to accelerate revenue and ROI. She currently serves as Chief Strategy Officer for Southland Resources, a leading raw material energy producer.

Nick Mavrick is the CEO of Biltdata.ai. With decades of B2B data science expertise, BiltData.ai provides a tailored industry solution. We enable the construction equipment industry to get going with X-Ray vision for customer and prospect data. Nick is an expert in CRM and data mining, as the cornerstone to segmented marketing, strategy, operations and driving ROI. He has vast experience in supporting B2B sales teams including VOLVO Rents, NationsRent, multi-brand dealers and more.

,

The Dangers of Flatbed Trucking and How Safety Can Be Improved

Guest writer Dan Shipley gets down to the nuts and bolts of the conversation around safe operations with “The Dangers of Flatbed Trucking and How Safety Can Be Improved.”

Flatbed trucking might not always get the spotlight, but it’s one of the backbones of our freight industry. It’s the reliable workhorse responsible for moving heavy machinery, construction materials, and those oversized loads that simply can’t be boxed into traditional trailers. However, with all its importance, flatbed trucking is also one of the riskiest jobs on the road. The very nature of hauling on an open, flat platform creates unique challenges, ones that affect not just the drivers but also the safety of everyone around them on the highways. In this discussion, we’ll explore why flatbed trucking is so dangerous, present some eye-opening industry data, and dig into ways we can make it safer—because when it comes to transporting heavy goods, safety should always come first. Flatbed trucking is dangerous primarily because of the way cargo is carried. Flatbeds don’t have walls or roofs to contain their loads, which leaves securing the cargo entirely up to the driver. Unlike enclosed trailers, where even if a load shifts it remains contained, flatbed loads are vulnerable to shifting, sliding, or even falling if not properly secured. This makes securement one of the most critical aspects of flatbed trucking. Drivers spend a considerable amount of time fastening heavy-duty chains, straps, and tarps to keep everything in place, but this also exposes them to injury risks. Whether it’s climbing up onto the trailer, securing oversized loads in unpredictable weather, or dealing with unforeseen road conditions, flatbed drivers face a different kind of danger compared to other truckers.

And let’s not forget about the elements. Flatbed drivers load and unload outdoors, come rain or shine. In the summer, they’re sweating it out under the hot sun; in winter, they’re trying to handle freezing chains with numb hands. High winds, rain, and snow also make securement much more difficult, adding to the potential for accidents. This exposure not only affects securement quality but also contributes to slips, falls, and general fatigue. A tired, overworked driver is a more vulnerable one, and flatbed trucking certainly takes its toll physically. The loads themselves are another significant safety concern. Flatbeds are used to transport a wide range of cargo, often heavy, oddly shaped, or oversized. Because of this, the center of gravity on a flatbed can be uneven, leading to a greater risk of rollover accidents. Rollovers can be catastrophic, both for the driver and others on the road. Imagine trying to navigate a winding road or making a sudden stop with a poorly balanced load—the results can be disastrous. This makes weight distribution one of the most important yet challenging aspects of flatbed trucking.

When we look at the statistics, it’s clear that flatbed trucking is no small feat. According to the Bureau of Labor Statistics (BLS), truck drivers already have one of the highest rates of occupational injuries and fatalities among U.S. workers, and flatbed trucking is at the top of that list. Studies from the National Institute for Occupational Safety and Health (NIOSH) show that nearly 50% of injuries among flatbed drivers are due to falls, while overexertion is another significant factor. Flatbed drivers often find themselves hauling heavy chains, securing awkward loads, and maneuvering on top of slippery surfaces—factors that all contribute to higher injury rates. The Federal Motor Carrier Safety Administration (FMCSA) also reports that flatbeds are more likely than other types of trucks to experience rollovers, with uneven loads being a key cause. And the Insurance Institute for Highway Safety (IIHS) notes that flatbeds account for about 10% of truck-related fatalities each year, a significant number given their smaller share of the overall trucking fleet. So, how can we make flatbed trucking safer? For starters, it’s about smarter securement. Load securement is both an art and a science, and the industry has been developing more advanced techniques and tools to help drivers get the job done right. Better materials for straps, chains, and tarps, along with automated tensioning devices, can make a real difference in keeping loads stable while reducing strain on drivers. Simple things like adding side barriers or rear stops can provide an additional safety net, helping to prevent items from shifting or falling off during transit. It’s a practical step, but one that could have a significant impact on overall safety. Driver training is another key factor. Comprehensive, hands-on training that covers everything from load securement to understanding weight distribution can greatly enhance safety on the road. Refresher courses can ensure that drivers stay sharp and up to date with the latest techniques and regulations, which is crucial in a fast-evolving industry. When drivers are well-trained and confident in their skills, they’re better equipped to handle unexpected situations, whether it’s a sudden stop or a shifting load on a tight curve. Personal protective equipment (PPE) also plays a significant role. It might sound simple, but having the right gear—such as non-slip footwear, helmets, gloves, and protective eyewear—can help prevent injuries. Tarping tools that reduce manual lifting can also cut down on musculoskeletal injuries, which are all too common among flatbed drivers. It’s not just about loading and driving; it’s about making sure that drivers have what they need to stay safe while working on and around their rigs. Technology can also help bridge the gap in safety. For example, load sensors that monitor cargo stability during transit can alert drivers to potential shifting before it becomes dangerous. GPS and telematics systems can provide real-time updates about road conditions, allowing drivers to adjust their routes or speeds to avoid hazards. These tools are not just add-ons; they can become vital parts of a driver’s safety toolkit, making a significant difference in accident prevention.

In the end, flatbed trucking is always going to be a challenging job. But it’s also an essential one. Making it safer isn’t just about ticking boxes on a safety checklist—it’s about protecting the drivers who keep our economy moving. It’s about ensuring that each trip, whether it’s across town or across the country, is as safe as possible. With better securement practices, enhanced training, and more robust safety measures, we can make flatbed trucking not just a job, but a safer career choice for the many hard-working drivers who take on this crucial task. It’s time to recognize the unique risks of flatbed trucking and invest in solutions that protect drivers, cargo, and everyone on the road. Because when it comes to hauling heavy loads, safety isn’t just an option; it’s a necessity.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

AI, Unknown and Optimism

AI, Unknown and Optimism

Guest writer John Dowling addresses one of the current topics that is at the forefront of the international conversation, “AI, Unknown and Optimism.”

Amidst the hype and excitement about Artificial Intelligence, it’s important to remember its potential to revolutionize the heavy equipment industry. Whether you view it as a significant technological leap or harbor concerns about its implications, we can all agree that AI is a new frontier full of possibilities. There’s much to learn about harnessing the power of artificial intelligence to drive the success and profitability of heavy equipment dealerships, and this journey is one filled with unknowns and optimism.

 

There are two routes when choosing an AI platform. I’m not an IT expert, so I won’t be using technical jargon. I apologize in advance if I don’t use the correct terminology. Let’s refer to one option as “captive AI” and the other as “noncaptive” or “free AI.” By captive AI, I mean that the manufacturer’s AI platform will be limited to its branded products, providing support exclusively for its dealers. 

 

On the other hand, noncaptive or free AI, which we can also call unlimited AI, refers to a third-party AI provider that is not restricted to a single manufacturer or data source but can access data from all dealer sources.

 

Now that we’ve defined ‘limited’ and ‘unlimited’ AI, it’s time to discuss their advantages and disadvantages. This knowledge will empower you to make an informed decision about Artificial Intelligence, a decision that could significantly impact your dealership’s future.

 

While this blog may not provide a definitive answer, it aims to equip you with the knowledge to make informed decisions. We’ll discuss the benefits and concerns that dealers face when they begin to explore this new and unknown technology, guiding you through this complex but promising terrain.

 

Let’s start with the advantages of utilizing AI. These benefits include increased parts sales, higher technician recovery rates, reduced employee onboarding time, decreased time spent processing warranty claims, less time needed for receiving technical support from the OEM, and improved data utilization. 

 

During a conversation, Cristoph Nathan, the Executive Director of Product Support for Kubota, made the point that AI does precisely what a human can do by processing data but does it more efficiently. Joel White with Digital Iron stated that AI can do the “laborious tasks,” freeing time for the dealership’s employees.

 

I was trying to update my Air MacBook the other day, but I got an error message saying I did not have enough memory to download the latest update. While cleaning up my MacBook and deleting unwanted text messages and duplicated pictures, I was just dumbfounded by the amount of data I had. Dealerships and manufacturers are no different. They have years and years of data stored on a server somewhere, but there is no good or efficient way to access and use it. And that is where AI comes in. The benefit and power of Artificial Intelligence is the ability to effectively and efficiently utilize your data to deliver better customer service and increase profitability.

 

The benefit of using a limited AI platform, especially one provided by a manufacturer, is that dealers don’t need to go through an integration process. This means they don’t have to upload manuals or involve third-party providers to access their data. The advantage of this limited platform is that the dealer’s data is not used, thus there is no risk of compromise.

 

However, before we get too excited, we should consider whether this is the right direction to go in order to protect our data. There is always a drawback to consider. When I discussed Tech Assist, Case IH’s AI assistant, with Jim Hudson, a Regional Service and Parts Sales Manager with Case IH, and some Case IH dealers, the Case IH dealer’s technicians expressed that they see value in the Tech Assist platform. It reduces the time needed to find information to diagnose a piece of equipment, ultimately increasing technician efficiency in the long run.

 

Kubota has also been successful with an AI platform, but there is a drawback. The platform can only search Kubota manuals, and the same limitation applies to Case IH dealers. This is because the AI platform is restricted to the data of specific manufacturers. For multi-line dealers, a separate AI platform would be needed for each manufacturer they work with. An unlimited or third-party AI platform would allow technicians to search all manufacturers’ manuals with just one login, instead of needing a separate login for each line of equipment.

 

I recently conducted a training video emphasizing the importance of estimating every job. Service managers often don’t estimate every job because determining the repair time for a piece of equipment is not convenient or accessible in the heavy equipment industry. Kubota’s upcoming AI iteration will include a service estimate platform. This exciting development will assist Kubota dealers in increasing technician recovery rates and profitability.

 

I believe Kubota is moving in the right direction, and I’m excited to see this AI in action. However, there will be a downside to this next iteration. The issue will be that the AI will be limited. Kubota’s platform and any other manufacturer will only be able to use their data, which will be based on warranty data. This is a contentious topic. Manufacturers think their warranty flat rate times are generous and accurate, but dealers don’t believe that.

 

But this blog is not about warranty reimbursement rates. The point is that the manufacturer’s AI platform is limited to warranty reimbursement rates. So, their estimating model will be based on what the warranty reimburses the dealers, not actual customer billing times. 

 

It’s important to remember that a manufacturer’s AI platform has the advantage of not being integrated with the dealer’s data. However, the downside is that the manufacturer’s platform is restricted to only their data. This means that using AI to estimate service jobs relies on the manufacturer’s warranty reimbursement claims, not the repair times the dealer has previously charged customers.

 

After completing the training video on estimating every job, I realized how practical and beneficial it would be for AI to assist dealers in estimating jobs. I contacted Joel White, the Head of Marketing at Digital Iron, an AI platform based in Belfast, Ireland. I inquired whether they could develop an AI model to extract data from the dealer’s business system and help the service manager estimate service jobs. 

 

Joel arranged a meeting for me with Ciaran Gillen, the founder of Digital Iron, to discuss this further. Ciaran confirmed they could build a model to extract the necessary data from closed work orders and assist the service manager in estimating customer repairs.

 

A third-party AI platform not limited to one manufacturer’s data will allow service managers to pull from the data within the dealer’s business system. The third-party or unlimited platform will not be limited to just one brand or manufacturer but could be utilized to estimate every line or brand of equipment a dealer sells. However, the drawback is that the dealer has to give the third-party AI platform access to their data to build the model. 

 

AI is only as good as the data it has access to. There is no limit to what AI can do for the heavy equipment dealership. But we must remember that AI will only be as good as the data it can learn from. Manufacturers’ AI platforms will be an easy way for dealers to integrate AI into their overall business practice. However, the manufacturer’s platform will be limited only to the manufacturer’s equipment and data.

 

If your dealership only carries one line of equipment, using the manufacturer’s limited platform may be the way to go, but what about dealers with multiple lines of equipment from different manufacturers? We could all see the benefit of a third-party or unlimited platform.

 

If you choose to go with a manufacturer’s limited platform, there will be no need for integration or allowing the AI platform access to your business system and data. However, as stated before, Artificial Intelligence is only as good as the data it accesses. The more data and the higher quality of the data that AI has, the more productive and valuable it will be. 

 

Maybe the third-party AI platform is the way to go. But before you make that decision, you must remember that you will need a trustworthy AI service provider because they will need access to your data to work efficiently and profitably. No matter what direction or road you take with AI, it will be full of unknowns and optimism.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

Why India is Poised to Become a Global Manufacturing Hub

Why India is Poised to Become a Global Manufacturing Hub

Our new guest writer Sanjay Pendharkar is a seasoned professional with over 30 years of experience in sales and business development across India and South East Asia. His expertise spans market research, channel partner management, and strategic business growth. After 32 years with JCB, Sanjay founded his own consultancy in 2020, advising multinational corporations in the earthmoving, material handling, concrete, and metal processing equipment sectors. He excels in developing engagement strategies, sales forecasting, and competitive analysis. An industry thought leader, Sanjay contributes articles to niche magazines and serves as a jury member for prestigious awards, keeping him at the forefront of industry trends and innovations. His first blog post for Learning Without Scars is “Why India is Poised to Become a Global Manufacturing Hub.”

Introduction

By 2024, India has solidified its position among the top 7 global manufacturing nations, with the sector accounting for nearly 15% of its GDP. With increasing investment, a skilled workforce, and supportive government policies, India is emerging as a key player in global manufacturing.

The global landscape for manufacturing is undergoing a seismic shift. Countries and multinational corporations (MNCs) are reassessing their supply chains and production bases in response to economic, political, and technological changes. India, with its expanding industrial base and strategic policies, has gained attention as a formidable contender for global manufacturing.

Historical Context

India has a rich history in manufacturing, with industries like textiles and steel forming the backbone of its economy. In the mid-20th century, India was among the world’s leading textile producers, and sectors like steel, automobiles, and machinery began to flourish post-independence. 

Despite this promising start, India’s manufacturing potential remained largely untapped on a global scale. Factors such as bureaucratic hurdles, lack of infrastructure, and limited foreign investment slowed growth. India’s manufacturing was also overshadowed by rapid industrialization in China, which became the preferred destination for MNCs.

Current Landscape

Economic Growth

India’s economy continues to be one of the fastest-growing major economies globally, with an average annual GDP growth rate of 6.8% over the past five years. The International Monetary Fund projects India to be the world’s fastest-growing major economy in 2024-2025, with an estimated growth rate of 6.5%. A young, vibrant population coupled with a burgeoning middle class is creating a favourable environment for manufacturing, with rising domestic demand for goods and services.

Government Initiatives

The Indian government has launched and expanded several initiatives to boost manufacturing:

  • Make in India 2.0: Launched in 2022, this program builds on the original 2014 initiative, focusing on 27 sectors with an emphasis on cutting-edge technology and sustainability.
  • Production-Linked Incentive (PLI) Scheme: As of 2024, the scheme covers 14 key sectors with an increased outlay of $30 billion.
  • Ease of Doing Business Reforms: While the World Bank discontinued its Ease of Doing Business rankings in 2021, India has continued to implement reforms, with the government claiming significant improvements in areas such as starting a business, getting construction permits, and cross-border trade.

Infrastructure Development

India continues to invest heavily in infrastructure development:

  • $1.8 trillion allocated for the National Infrastructure Pipeline (2019-2025)
  • 375+ operational Special Economic Zones (SEZs) as of 2024
  • Significant progress in industrial corridors like the Delhi-Mumbai Industrial Corridor, with several nodes operational

Key Advantages of India

Skilled Labor Force

India’s skilled labour pool continues to grow:

  • 550 million people of working age
  • 1.8 million engineering graduates annually
  • World’s largest youth population (aged 15-24)

Cost Efficiency

India offers significant cost advantages:

  • Labor costs 15-50% lower than in China
  • Competitive real estate and utility costs
  • Abundant natural resources

Technology and Innovation

India is making significant strides in high-tech manufacturing:

  • 4th largest auto industry globally, with a strong push towards electric vehicles
  • Growing aerospace manufacturing sector, with indigenous projects like Tejas fighter jets
  • 2nd largest smartphone manufacturer globally as of 2024
  • Emerging hub for semiconductor manufacturing with major investments announced.
  • Rapid advancements in 5G technology, artificial intelligence, and quantum computing, further enhancing manufacturing capabilities.

Global Supply Chain Realignment

Shift from China

The trend of companies diversifying their supply chains away from China has continued:

  • According to a 2023 Deloitte survey, 70% of surveyed companies were considering or actively shifting manufacturing out of China, with India being a top alternative destination.
  • India captured 33% of relocating companies from China between 2021-2023 (JP Morgan Research, 2023)

Trade Relations and Market Access

India’s strategic location and trade agreements offer significant advantages:

  • Access to domestic market of 1.4 billion consumers
  • Free Trade Agreements with ASEAN, Japan, South Korea, and others
  • Part of Quad Alliance, strengthening ties with US, Japan, and Australia

Sustainability and Future Trends

Sustainability Initiatives

India has reinforced its commitment to sustainable manufacturing:

  • On track to achieve 500 GW renewable energy capacity by 2030
  • Net-zero emissions target by 2070 reaffirmed at COP28.
  • National Green Hydrogen Mission launched in 2023, aiming for annual production of 5 million tonnes by 2030.
  • National Electric Vehicle Policy 2023 targeting 30% of new vehicle sales to be electric by 2030.

Digital and Industry 4.0

India is embracing the fourth industrial revolution:

  • $2 billion allocated for AI, Machine Learning, and IoT under the Digital India initiative.
  • ‘Industry 4.0 India’ platform expanded to include 100,000 MSMEs by 2024
  • 25% of large manufacturing plants have adopted Industry 4.0 technologies as of 2023.

Challenges and Solutions

While India’s manufacturing potential is immense, challenges remain. However, significant progress has been made in addressing these issues:

Infrastructure Bottlenecks

  • Challenge: Ongoing need for improved transport and power infrastructure
  • Solution: 
    • National Infrastructure Pipeline (NIP) expanded to $1.8 trillion for FY 2019-25
    • ‘PM Gati Shakti’ – National Master Plan for Multi-modal Connectivity launched in 2021, with a digital platform to ensure integrated planning and implementation of infrastructure projects.
    • 11 industrial corridors being developed across the country.
    • Dedicated Freight Corridors (Eastern and Western) operational since 2021, significantly reducing logistics costs.

Skilling the Workforce

  • Challenge: Continuous need for upskilling to meet evolving industry demands
  • Solution: 
    • Skill India Mission 2.0 launched in 2021, focusing on digital skills and Industry 4.0 technologies.
    • National Education Policy 2020 emphasizing vocational education and skill development.
    • Pradhan Mantri Kaushal Vikas Yojana 3.0 (2020-2024) aiming to skill 8 million youth.
    • National Skills Qualification Framework (NSQF) aligning skills with industry requirements.

Regulatory Environment

  • Challenge: Complex regulatory landscape
  • Solution: 
    • Implementation of Goods and Services Tax (GST) has simplified the tax structure.
    • Labour reforms: 4 labour codes consolidating 29 central labour laws, implemented in 2022.
    • Reduction in corporate tax rates to 15% for new manufacturing companies

Supply Chain Resilience

  • Challenge: Need for robust and flexible supply chains
  • Solution: 
    • Production Linked Incentive (PLI) Scheme expanded to 14 key sectors with an increased outlay of $30 billion.
    • Self-Reliant India (Atmanirbhar Bharat) initiative promoting domestic manufacturing and reducing import dependence.

Adapting to Global Events

  • Challenge: Disruptions caused by events like the COVID-19 pandemic and geopolitical tensions
  • Solution: 
    • Rapid digitalization of manufacturing processes to enable remote operations
    • Diversification of supply chains to reduce dependency on single sources
    • Government support through economic stimulus packages and policy reforms to boost manufacturing sector resilience.

Conclusion

As the world seeks resilient, diversified, and technologically advanced supply chains, India offers a compelling proposition. For multinational corporations looking to optimize their manufacturing footprint, India presents an opportunity that is hard to ignore. The time to invest in India’s manufacturing potential is now – those who act early stand to gain the most from this rising global manufacturing powerhouse.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

What Would You Have Done Differently?

What Would You Have Done Differently?

Guest writer Tom Barry is here today with a tale from the trenches: “What Would You Have Done Differently?”

As the saying goes sometimes, you learn the hard way…

The business brevity concise version of my learning takeaway was – ‘Trust but Verify’!

I admit that I should have learned and internalized that sentiment from…

President Ronald Reagan well over a decade earlier!

The situation stemmed from my then-early decade-long background in construction equipment as well as the IT/ERP Software Industry, wherein I was contracted to advise a small Rent to Rent (RTR) business on their desired interest to become more competitive and profitable. Towards that end, the business strategy evolved under my guidance and expanded to become an OEM Distributor, which favorably impacted equipment competitiveness and revenue by way of lower initial acquisition costs and related KPIs. Additionally, I secured a new ERP/CRM software/computer package specifically earmarked for this industry sector endeavor, along with extensive physical facility layout and infrastructure modifications serving to support adding new and complementary OEM lines of construction equipment – and more. 

 

Noteworthy:  Additionally, I also sourced and instituted a construction equipment rental insurance rider policy option for this evolving and poised for expansion rental business so to have full access to rental insurance coverage for all interested renters at the point of a rental agreement. A common option widely available for decades now for those cases when a renter does not have their own blanket policy resources.

On one memorable occasion, a long-standing rental customer of decades for this business had at my direct request emailed over a signed copy of their blanket insurance policy coverage for an equipment rental pick up start planned for later in the day. The blanket insurance policy paperwork they provided was intended to save them the $45 that the optional rental contract insurance rider would have cost them for full repair and total loss coverage. This rental service insurance coverage option was something that I sourced to create a streamlined turnkey ease of rental with peace of mind via an agreement positioned by an outside insurance vendor. 

A few hours later, I was in an upstairs office at my desk peering through an adjacent bay window overlooking 30+ acres of our rental equipment storage lot. It was a beautiful sunny day I recall as I was on the phone with another customer. Unbeknown to me at the time, it turns out that the customer for whom I had earlier rented equipment and received their Insurance Policy Rider for an excavator rental had their truck driver arrive as he had just walked into our downstairs rental office. The customer’s driver was thereupon informed… ‘the excavator unit intended to be rented is all set to go’… ‘the keys are in it’ and our Rental Representative gave him the authorization to proceed to take the unit given their familiarity and frequency of engagement with our yard operations. 

Twenty minutes later, from the vantage point of my desk. I spied a tractor trailer flatbed heading towards an exit from our back yard facility with a boom, arm, and bucket of a loaded excavator still up in the air… (not retracted, settled, blocked, and not fully tucked and chained for legal transport onto the deck). Was he moving the truck to address that matter on more level ground or in the shade… or was this a problem?

ACTION: Immediately, I informed my customer that I was on the phone at the time that I had an emergency to address and that I will call them back asap. I grabbed my binoculars (as I kept them at my desk) and focused on gleaning the drivers’ side door of the flatbed truck 75+ yards away… to gather the phone number and immediately called that number. I told the person that answered that their driver was leaving our yard after loading his truck with the mini excavator with the boom and arm still up in the air… Stating… call them RIGHT-NOW as there are bridges in the area… and hung up to allow them to do just that. 

Just minutes later, I got the return call from the same person that I had just hung up with and heard that the equipment hauling driver had indeed hit the railroad bridge and that ‘the bridge had won!’ Even the track base of the excavator that was chained to the deck had just ripped and sheared completely off the truck bed and was now lying in the road. Thankfully, the truck driver was uninjured, safe, and OK despite being shook up – and no one else was involved – Thank GOD!

Within an hour, the owner of the rental company visited me ‘Hoss’ with whom I was contracted to work. I came to learn directly that he was remarkably close friends with this long-term customer and their family – in fact, they were neighbors for decades. Hoss had just concluded a phone call that he received from the customer/owner that had just been informed of the news from his driver of the now damaged rented excavator by way of an overhead railroad bridge. 

He went on and asked me about the insurance coverage status of the unit. I related that I had the proof of insurance that I requested of the customer right here on my desk and was about to call the customer again for the next steps. As I reached to pick up the proof of insurance paper that was in the rental file, he proceeded to inform me that they (his long-standing customer/friends) sent a forged/fraudulent insurance document to us. This was just verified by the very same customer and person that called him. My mistake was that I never called the customer’s insurance company on the templated form to verify the veracity of the newly signed and dated blanket coverage policy form from this long-standing customer. We were talking about an MSRP: $70K Mini Excavator value.

Result: The mini excavator was clearly totaled due to the unyielding movement specifications of the railroad bridge vis-à-vis the applied physics of 45mph. My owner/president ‘Hoss’ to whom I directly reported had extremely specific questions prepared for me. I shared all the nuances associated with why I sought out and positioned this insurance vendor resource for our business as well as how our Optional Rental Insurance Rider worked. Moreover, and specifically, he was interested to know how such optional arrangements were perfected and electronically memorialized by my required actions at the time of a rental transaction order. 

I related that I was expected to act and execute on an honor basis in accordance with the rules of procedure outlined for this process not to mention the State Insurance Laws already in place which also cover the subject matter. In reply to my shared information and without delay, I then listened to minutes of an early afternoon inebriated diatribe espousing a ‘non-negotiable’ set of specific ideas on what I should do next involving the ‘available’ resource of an Optional Rental Policy Rider program that I had positioned for our business operations. 

To which, I categorically declined all espoused suggestions (vehement directives) that would never hold up to the light of day – at this stage of the known circumstances. I illuminated Hoss that his personal white-hot enthusiastic hatred of insurance companies is not an actionable basis for retroactively effecting the prevention of a bell ringing sound for that which has already rung. I added that I would arrive at the customer’s office within an hour or so and address the matter directly. 

I gathered the rental order file and made two copies. I replied that I would report directly back to him on where we stand upon my return from the customer’s office. Next, I made a couple of calls to put everything in place and prepared the paperwork that I needed and departed. As I passed under the Railroad Bridge in question, I noted the overly impressive stoutness of the engineering design of our still impressive Industrial Revolution! I had to pause and take a picture with my Polaroid Camera at the time.

Upon arrival at the rental customer’s main construction office, I navigated the conversation complete with life-cycle cost values, payback study scenarios, brochures, and productivity estimates for addressing their work on hand and convinced them of a remedy to the matter at hand. I sold them on buying a brand-new identical mini-excavator unit (that I had in stock) to that which was totaled and still in the road… on the spot where it fell. They also bought the ruined mini excavator at an attractive price as a ‘parts order supply’ to support the lifetime of the unit that was here now to be added brand new in their fleet. Fortunately, the ruined unit also qualified for the same new machine OEM subsidized financing given that they were both bought at the same time as the base unit with the destroyed unit ‘as a parts support order.’ 

Sometimes when an unintended bad financial scenario arises, you hold it close to better navigating an eventual financial position that can serve as a Band-Aid remedy that given the circumstances – works out in the long haul.

Although my approach to selling two mini excavators in this creative manner was financially welcoming and conducive to the ultimate bottom line of the customer, our equipment rental business and the OEM’s financing arm, not all was as warm and glowing as the Sun that day. There were consequences going forward. My dismissal of and complete non-compliance with the stated directives on how I was to proceed by Hoss proved consequential. In the not too far off distant future, an unspoken and unwritten basis for my unceremonious dismissal ‘without cause’ was provided via the conclusion of my Independent Contractor Agreement in concert with the favorable terms set forth therein.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

Navigating Risk Management in Today’s Construction Industry

Navigating Risk Management in Today’s Construction Industry

Today, we continue with guest writer Andy Fanter in his article on “Navigating Risk Management in Today’s Construction Industry.”

The construction industry is changing fast, and so is how we handle risk. Andy Fanter dives into this shift, pointing out a generational gap that’s reshaping things. While older folks were more into taking risks, the younger crowd is playing it safe. This cautious vibe, mixed with dealership consolidation and financial conservatism over the last 15 years, has made sales of new and used equipment more complex and frustrating.

Fanter stresses the importance of planning ahead and assessing risks to reduce headaches across departments. His approach to managing sales risks at equipment dealerships involves pinpointing the best-selling products and boosting orders to meet demand, much like Starbucks expanding its product lineup. Using data analytics, dealerships can better understand market trends, which can help keep customers happy and grow market share.

A standout example of this shift is the parts department losing market share—from over 80% in the 1970s to just 40% in 2020. Fanter blames this drop on poor dealer performance and tracking, showing how crucial parts and service are for customer satisfaction and profits. He believes focusing on these areas, rather than just equipment sales, is key to staying competitive.

Fanter also calls for fresh thinking and risk-taking from industry leaders. Despite tech advances, productivity is lagging, so a new perspective is needed. He suggests looking into the underused subscription service model for machinery as a possible game-changer.

Sharing personal experience, Fanter highlights the need for resilience amid criticism and the challenges of business consolidation. He stresses strong communication and relationships, suggesting more sales reps to handle increasing traffic and road construction issues. A friend’s success story supports this, where hiring more staff improved sales.

Technology and data analysis are crucial for understanding sales trends and optimizing revenue with strategic pricing. Fanter critiques manufacturers for past price hikes that hurt margins, advocating for analytics to boost dealer transactions and customer retention. He even suggests creative distribution methods, like drop boxes for inventory, to overcome dealer pushback. By focusing on dealership profit drivers and continuous evaluation, businesses can adapt to changing environments. This adaptability is also relevant to the electric vehicle sector and the environmental concerns surrounding lithium batteries, pushing companies to use dealer data for sustainable growth.

The pandemic has brought back in-person meetings and revamped training programs with voice recognition tech. An engaging teaching method has students defining key management concepts and tackling questions about ignorance, stupidity, and insanity in management, emphasizing the risks of stagnation and the need to stay adaptable.

Fanter also touches on job issues related to new U.S. computer chip plants and the nuclear energy revival, along with challenges in clean energy regulations and high energy loss during transmission. Economic signs show a rise in housing permits, driven by young adults wanting customizable new homes. This trend encourages builders to offer flexible options, ultimately benefiting the equipment industry as single-family homes increase.

In summary, Andy Fanter’s insights offer a clear guide for navigating the new era of risk management in construction. By adopting innovative strategies, using technology, and building resilience, businesses can thrive amid change and uncertainty. As the industry evolves, so must our approach to risk, ensuring we’re not just ready for the future but actively shaping it.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

A Candid Conversation with Andy Fanter

A Candid Conversation with Andy Fanter

 

On the Learning Without Scars Podcast, we just had a candid conversation with Andy Fanter. Andy Fanter started Intercast in 1994. The company is a division of Cyclcast, created in 1978 by Dick Fanter. Dick retired in 2019. Andy currently forecasts for over thirty dealers across the US. In his free time, he enjoys the stock market and fishing.

Risk and Generational Shifts

The construction industry is witnessing a fascinating transformation in attitudes toward risk. Andy Fanter’s analysis reveals a noticeable shift from the older generation’s penchant for risk-taking to the younger generation’s more cautious stance. This evolution is shaping how businesses strategize, plan, and execute their operations. 

The conservative financial goals that have  emerged from dealership consolidation over the past 15 years have added layers of complexity to sales dynamics, especially between new and used equipment. Proactive planning and robust risk assessment are becoming indispensable tools to mitigate interdepartmental frustrations.

Strategies for Success

Fanter suggests a keen focus on identifying top-performing products and boosting inventory to meet customer demand, drawing parallels with Starbucks’ successful product expansion. This approach not only meets demand but also enables sales personnel to bundle complementary items, enhancing customer satisfaction. Leveraging data analytics to gain insights into market dynamics is crucial, especially when customer retention and market share are at stake.

The Market Share Conundrum

A striking example of the industry’s challenges is the decline in OEM Dealer parts department market share, from over 80% in the 1970s to around 40% in 2020. This downturn is attributed to poor dealer performance and inadequate measurement. 

Despite maintenance efforts, equipment breakdowns persist, underscoring the importance of prioritizing parts and service for customer satisfaction and profitability over merely focusing on equipment sales.

Embracing Innovation

Fanter calls for bold, innovative thinking among industry leaders, particularly in adopting underutilized subscription service models for machinery. His experiences highlight the resilience required to navigate criticism and manage travel expenses amid business consolidation. Building strong communication and relationships is key, as demonstrated by a friend’s successful strategy of hiring additional staff to boost sales performance.

Harnessing Technology and Data

Technological advancements in computing and data analysis are revolutionizing sales strategies and revenue enhancement through strategic pricing. Fanter critiques manufacturers for excessive price increases in the 1970s, which led to unnoticed margin drops. He advocates for the strategic use of analytics to improve dealer transactions and customer retention. Innovative distribution strategies, like drop boxes for inventory, are proposed, though they face resistance from dealers.

Adapting to Change

In the face of environmental concerns and shifts in the electric vehicle sector, Fanter urges businesses to adapt by utilizing dealer data effectively. The pandemic has also prompted a return to in-person meetings and revamped training programs, with voice recognition technology enhancing learning experiences. Engaging teaching methods encourage students to define key management concepts and address the pitfalls of ignorance, stagnation, and adaptability.

Economic and Market Trends

Employment challenges related to new U.S. computer chip plants and the revival of nuclear energy highlight the ongoing clean energy debate. Economic indicators suggest a rise in housing permits, driven by young adults, with demographic shifts pointing to a preference for customizable new homes. This trend offers opportunities for builders to provide flexible options and for the equipment industry to thrive.

What should we do now?

As we navigate these dynamic times, the construction industry stands at a crossroads of risk and innovation. Embracing change, leveraging technology, and prioritizing customer satisfaction are vital for future success. 

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

Why Equipment Dealers Should Rely on an Agency

Why Equipment Dealers Should Rely on an Agency

Guest writer Debbie Frakes returns this week with a blog post that covers why equipment dealers should rely on an agency.

In today’s fiercely competitive equipment dealer landscape, a consistent influx of new business is vital for the health and longevity of your operation. With contractors and construction firms having numerous choices for equipment, parts, service, and rentals, how can your dealership stand out from the crowd?

The solution is a well-planned, consistently executed marketing strategy. However, equipment dealers often struggle to allocate sufficient time and resources to marketing efforts because of the demands of their daily operations. That’s where using a full-service marketing agency specializing in equipment dealer marketing is invaluable. 

Key advantages of partnering with a comprehensive marketing agency

  1. Specialized Industry Knowledge—A full-service agency with equipment industry experience brings targeted expertise to your marketing efforts. Their understanding of sector specific challenges and opportunities enables them to create strategies that truly connect with your audience. A top-tier agency applies proven tactics from successful client campaigns, continuously refining their approaches to recommend only the most effective strategies for businesses like yours.
  2. Efficiency Boost—Delegating your marketing tasks to a full-service agency frees up valuable time for core business activities. From website maintenance to email campaigns, advertising, and social media management, the agency provides an effective approach without overburdening your internal team. The result is that you have more time to focus on serving incoming customers while ensuring a steady stream of new business.
  3. Cost Effective Solution—Using a marketing agency is often more economical than building an in-house team. You gain access to diverse skills and expertise without the expenses and time investment associated with recruiting, hiring, and managing full time employees.
  4. Fresh Business Insights—An external marketing partner offers a new perspective on your dealership. They can identify your unique selling propositions and conduct customer surveys to align your marketing messages with your audience’s priorities. Additionally, they provide clear performance metrics, allowing you to see exactly what’s working and how well.
  5. Integrated Marketing Approach—An agency delivers a cohesive strategy, ensuring consistency across all channels. For example, at our agency partner Wimby’s typical equipment dealer marketing approach includes: 
  • Monthly emails highlighting your products and services 
  • Customer satisfaction surveys, conducted over the phone, to discover any process or product issues as quickly as possible 
  • Lead generation campaigns to grow your customer list 
  • Email list verification and expansion 
  • Website SEO optimization 
  • Regular website content creation 
  • Social media management
  • Tradeshow support

Data Driven Outcomes—Winsby provides regular key metrics reports to track campaign performance, offering tangible evidence of effectiveness and enabling data-based decision-making.

By collaborating with a full-service marketing agency well versed in equipment dealer businesses, you can develop a robust strategy that drives sales and supports long term growth. The expertise of an agency like Winsby ensures your dealership remains competitive in a saturated market, consistently attracting new customers while retaining existing ones.

Contact Winsby today to see how a full-service marketing agency can boost your equipment dealership’s performance and drive sales! 

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
,

The Invisible Hand

The Invisible Hand

It’s not a conspiracy against you – it’s an algorithm at work. Guest writer John Anderson returns this week with his blog post, “The Invisible Hand: How People Over 50 Are Caught in the Algorithmic Web, and Don’t Even Know It.”

Picture this: You hop onto YouTube to find a tutorial on fixing that leaky faucet. Seems innocent enough, right? Twenty minutes later, you’re deep into a video about backyard survival techniques, and an hour after that, you’re convinced you need to start stockpiling canned goods because “Big Water” is coming for your taps. What happened? You fell into the algorithmic rabbit hole—where fixing a faucet turns into prepping for the apocalypse.

If you’re over 50, welcome to the club. You may not realize it, but you’re living inside a web spun by algorithms designed to keep you glued to the screen, showing you exactly what the platforms *think* you want to see. Spoiler alert: It’s not always what you need.

What’s an Algorithm Anyway?

An algorithm is basically a set of instructions that help computers organize vast amounts of information. In the digital world, they’re used to decide what videos you watch, what ads you see, and even which long-lost friend from high school shows up in your Facebook feed. Think of them like that nosy neighbor who always seems to know what you’re up to, but instead of bringing over a casserole, they’re serving you videos of conspiracy theories or cat memes (depending on your browsing habits, of course).

Living Inside the Algorithm—Or Why You Can’t Stop Watching Cute Animal Videos

If you grew up in a time when rotary phones and the encyclopedia were your go-to information sources, the idea of algorithms shaping your life may sound far-fetched. But here’s the reality: The moment you start interacting with content—whether you’re Googling how to use your phone’s camera (again) or watching an *adorable* puppy rescue on YouTube—the algorithm takes note. It’s like a waiter who remembers your order so well that they start bringing you dessert before you’ve even looked at the menu.

And the more you engage with what’s served up, the more the algorithm fine-tunes its recommendations. Before you know it, you’re in a never-ending loop of “related” content that aligns with your preferences, reinforces your opinions, and keeps you locked in place. It’s like the algorithm is your personal content butler—except instead of refilling your drink, it’s refilling your biases.

Example: YouTube’s Slippery Slope (Not the Fun Kind)


Let’s say you start watching DIY videos to learn how to fix your kitchen sink. Seems harmless enough, right? Well, the algorithm doesn’t stop there. Soon, you’re recommended videos on home renovations, then on flipping houses, then on economic downturns, and suddenly you’re convinced the world is ending, and it’s time to invest in bunkers and gold. You started with a leaky faucet and ended up questioning the future of society. And you haven’t even fixed the sink yet!

That’s the power of YouTube’s algorithm. It’s designed to keep you watching, and it knows that controversy, fear, and extreme content keep eyeballs on screens. So instead of recommending a nice, balanced series of videos, it feeds you content that gets more and more sensational. You think you’re learning, but really, you’re being sucked into a vortex of clickbait—and no, it doesn’t involve a life jacket.

 

It’s Not Just YouTube and Facebook: Other Traps in Daily Life

 

It’s not just YouTube, Facebook, or the web where you get entangled in the algorithmic web. Simple activities like signing up for rewards programs, using loyalty cards, or even just shopping with store or credit cards feed the same invisible algorithmic hand. Take grocery stores, for example: that innocent little loyalty card you swipe every time you buy groceries doesn’t just give you discounts—it tracks your every purchase. Algorithms analyze your buying habits, predicting when you’ll need another gallon of milk or that next box of cookies, and then boom! You start seeing online ads for your favorite snacks before you even think about going back to the store.

 

Example: Let’s say you use your credit card at a clothing store. The purchase data doesn’t just stay there. It may be shared with third-party marketers who start showing you ads for shoes, jackets, and other items you hadn’t planned to buy. Suddenly, you’re in a digital shopping spiral, thanks to the algorithm’s ability to predict and shape your purchasing behavior. What started as a quick trip to get socks has led you down a consumerist rabbit hole.

 


Why We Stop Thinking Critically: “If It’s Online, It Must Be True… Right?”

Remember when you were told to “question everything” in school? Yeah, that lesson kind of goes out the window when you’re on the internet, thanks to the algorithm. When all the content you see confirms what you already believe, it’s easy to forget how to think critically. It’s like your brain goes on autopilot, nodding along to everything on your screen.

And let me tell you, this hits close to home. I have a friend, let’s call him Randy. Now, I have immense respect for Randy—he’s one of the handiest handy people I’ve ever known. He could build a shed, fix a car, and probably construct a bridge with nothing more than a Swiss Army knife and some duct tape. But here’s the problem: Randy has been exploited by the algorithm. He’s fallen deep into believing some of the wildest things being shared on Facebook. It hurts because I believe Randy is a good person with strong opinions, but he’s being taken advantage of, his beliefs hijacked by sensationalized and misleading content. The algorithm has gotten its hooks into him, and it’s hard to pull someone back from that once they’ve gone down the rabbit hole.

 

And it’s not just Randy. Anyone can fall into the algorithm’s trap. Let’s take Elaine, a retired educator with a background deeply rooted in critical thinking. She specialized in the most subjective, critical subject, ART! She has a stable home life, a wonderful husband, terrific kids, and is a super grandmother. In fact, you’d be hard-pressed to find a more stable, intelligent person. But then, out of nowhere, she blurts out a conspiracy theory backed up by propped-up ‘facts’ from a dubious web article or a questionable news source that leans one way. You can’t help but wonder: how do you stop yourself from shaking them and saying, “Wake up! You’re caught in the algorithm!” She’s gone from being a pillar in the education of others to a pawn in the algorithm’s game.


The Real-World Fallout: Losing Friends Over a Facebook Meme

We’ve all heard the horror stories: friends unfriended over political posts, family group texts exploding over conspiracy theories, Thanksgiving dinners that turn into mini-civil wars. Believe it or not, algorithms are partially to blame for the great “Facebook Fallouts” that have been ripping families and friendships apart.

You see, when algorithms keep feeding you content that reinforces your worldview, it becomes harder to relate to people who see things differently. It’s like showing up to a dinner party wearing a tinfoil hat and expecting everyone to compliment your fashion sense. And when your friends and family challenge your newfound beliefs—beliefs that have been neatly curated and packaged for you by YouTube or Facebook—it’s easy to write them off as “uninformed” or “brainwashed.”

Spoiler: They’re probably thinking the same thing about you.

Can We Fix This? Or Are We All Doomed to Fight with Aunt Karen Forever?

Good news! You can totally fight back against the algorithm (and hopefully save Thanksgiving dinner in the process). Here are a few strategies to help:

– Ask “Wait, Really?” More Often: When you come across something online that gets you all riled up, take a moment to pause. Ask yourself, “Is this actually true? Or is this just a clickbait trap?” Spoiler alert: It’s often the latter.

– Break Out of Your Bubble: Challenge yourself to read articles or watch videos that come from a different perspective. Yeah, it might be uncomfortable, but it’s like eating your veggies—good for you in the long run.

– Manual Search > Algorithmic Suggestions: Instead of clicking on YouTube’s recommended videos or relying on Facebook’s “Top Posts,” take control of your own searches. Look up things on your own, like a grown-up.

– Fact-Check Like It’s 1999: Before you share that article with a headline that says, “Scientists discover tomatoes cure insomnia!”—do a quick fact-check. Turns out, tomatoes don’t cure insomnia, and neither does most of the clickbait circulating online.

 Final Thoughts: Stay Sane in the Algorithmic Age

Sure, the algorithm is a tricky little devil, but with a little awareness and a healthy dose of skepticism, you can reclaim your brain and think critically again. Don’t let the endless supply of “related” videos and emotional social media posts turn you into a mindless drone who believes anything the internet throws your way. The algorithm might know what you *want* to see, but that doesn’t mean it’s what you *should* see.

So go ahead, fix that faucet—just be careful not to fall into the doomsday prepper videos afterward. Remember to ask yourself if you are in the algorithm or thinking for yourself. And if you find yourself getting into a heated Facebook debate with Aunt Karen (or Randy), remember: It’s probably not worth it. At the end of the day, the algorithm doesn’t care about family peace. But you should. And as for Elaine, maybe next time, ask her to fact-check before Thanksgiving. It might save the turkey and the family reunion!

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
, ,

Chipotle, Starbucks, and the Huge Construction Machinery Dealers

Chipotle, Starbucks, and the Huge Construction Machinery Dealers

Guest writer Andy Fanter dives into the cross-industry pool with today’s blog post: “Chipotle, Starbucks, and the Huge Construction Machinery Dealers.”

Starbucks has been struggling. Plenty of national chains and local competitors are offering coffee and related snacks. Chipotle has been growing for years with a simple model. Come make your burrito or bowl and order a high margin drink. We are not cheap, and do not study the calories and sodium too much. Fresh ingredients taste good, and people come to get it for lunch and dinner. Starbucks hired CEO Brian Niccol from Chipotle to fix the problem. His solution:  reduce the menu and make stores less chaotic. Sell hot and cold coffee drinks and related snacks—and be faster. The best products….faster.

 

How does this apply to the construction machinery dealer? I have been in this business 30 years, and around it since the late 1970s. Consolidation has made dealers excessively big; billion dollars in revenue surprises no one anymore. Smaller competitors chip away at market shares—sound familiar, Starbucks. Dealer reaction, flat forecasts to stay big. The US economy and construction are expanding 85% of the time. Why not order more of the best 10 to 15 products expecting to grow those sales by 10% next year?

 

Here is what I am seeing with flat forecasts. Get into spring and dealer needs more machines—months from manufacturer, standard. Neighboring dealer-takes top management time to negotiate a deal. Buy used equipment for rental fleet and sell from rental fleet. Now the used division is not happy having to add to the rental fleet instead of to customers. Product support starts to get busier and trying to get used machines ready for rental fleet. The rental reps are not happy because good machines are being sold. Finally, the regular field sales force is unhappy because there are not enough of the best machines to go around. A year spent holding, or likely slipping in market share. The sales force does best when they have the best items to offer customers.

 

The machinery dealer needs to be a mix of Starbucks and Chipotle. Manufacturers and customers insist on a wide range of products, and locations—a little chaotic like Starbucks. Dealers know the hot models that their customers prefer. Have plenty of those, new, and ready to go—Chipotle model. 

 

It is much easier for the reps to get more deals for a variety of products when they do not have to account for long delays on the best products. What happens if you order too much? Dealer trades and adds to the rental fleet.

 

Just like Starbucks manages through the chaos.

 

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.