Product Support Marketing: A Guide…#MarketingMonday

Let me introduce you to#MarketingMonday.  With the arrival of Learning Without Scars and our embedding the blog in the www.learningwithoutscars.org web site we are kicking off a fresh series of activities. You are by now quite familiar with my Friday Filosophy. Well this is the first of our #MarketingMondays. We will post a new blog each Monday on Marketing.

How many people understand marketing in the Product Support world?

Let me start with a definition of marketing. Marketing is “the selling of products or services – the business activity of presenting products and services in such a way as to make them the primary choice of the customer.” Marketing is basically the selling of products or services.

We should start with the basics of marketing – the 4 Ps:

 

  • Product
  • Place
  • Price
  • Promotion

These are the ABC’s, the fundamentals, the foundation of most of the marketing class work done today. As with most everything in our world the 4 Ps have evolved. Today there is a new approach called SIVA:

 

  • Solution
  • Information
  • Value
  • Access

SIVA is much more customer focused. More recently, there has been an addition to the 4 Ps and now there are 7 Ps as  process, physical environment and people have been included. We will discuss these in more detail over the coming weeks and months.

I want to also address market share. This is the ultimate measure of success in the parts and service world. I will provide you with methods to be able to calculate the market share for parts and service. Not with the precision of capital goods market share, i.e. Boeing plane share, or Freightliner Class 8 share or Chrysler 300 market share, but very accurately.

We will discuss the significance of customer retention, and how we can influence that in our operating world. What influences customer defections, recovery methods, and the strong influence that retention has on the profitability of your business.

We will also cover market coverage methods. The “how to” manuals for setting up personal and telephonic territories. This will also cover compensation methods and options to consider.

In other words, this blog is intended to be able to cover everything and anything about marketing parts and service. I hope you will join me on this voyage.

The time is now.

The Work Truck Show – Indianapolis 2014

Once again I had the privilege of providing an educational session for the NTEA. The subject matter was Parts & Service Marketing: Making a Difference.

The dramatic changes that have taken place over the past ten years, and those ahead, demand a more professional, productive and profitable Product Support Operation. To support the realization of this Parts and Service Opportunity we have designed this program aimed at those charged with the responsibility of managing this segment of the business. Parts & Service Marketing – Making a Difference consists of 6 elements presented during this learning session.

The Customer Service Focus

Why this is no longer a fad but deadly serious business. We explore the various aspects of customer service – what they are and how can we learn to be better at them.

Defining Customers

The “customer” has become a generic description of who we serve. We need to segment the markets that we serve and define the customer more precisely using a broad array of categories that allow us to more completely define customers with similar needs and wants.

Customer Relations

Expectations must be understood and shaped – when, why and how can they be changed in order to provide systems, procedures, methods, tools and training that will meet the expectations. Satisfaction of customer expectations requires us to have internal excellence in everything we do.

Designing Customer Service Excellence

Understanding who your customer is and what they require is critical in designing service excellence. People perform service, create expectations, satisfy expectations and create the perception of a difference.

Customer Loyalty

Strong Products or Services are central to customer loyalty and loyalty must be a company wide commitment. Everything should be aimed at creating and maintaining this loyalty. We discuss the tools and methods to create, develop, and maintain loyalty.

Measuring and Managing Success

Long term behavior is critical in understanding the return on investment from Parts & Service Marketing initiatives. Clear goals, measurement criteria and profit targets must be constantly reviewed and adjusted to adapt programs to changing customer needs and expectations.

We had a good turnout and some good dialogue. Thanks to all.

Marketing Missiles 2.1

In the Construction Equipment market the parts and service groups have very low market capture rates.

I don’t think that any customer service provider is aiming to have less than a 50% or even less than a 25% market capture rate. Yet that is where the parts and service departments are in these critical measures. The employees care about the service they provide to their customers. Yet obviously there have been events that have caused many customers to find solutions to their needs elsewhere.

I am convinced that part of this is created by the lack of market coverage that is provided to customers.

  • First there are not enough salespeople involved in the parts and service area. It appears that the number of sales people is determined to minimize complaints from suppliers rather than a deliberate choice of who to cover and why. I know that is strong but how else could you explain that there are typically more than double the number of prime product sales people compared to product support sales people.
  • Second there is little if any follow up on actual transactions. Wouldn’t it be nice to have a supplier give you a call and ask how you were treated during your most recent sale or inquiry? Of course it would.
  • Third we don’t engage the customers who have a change in buying habits. A customer that has had a change in buying habit and has not purchased anything or contacted you in more than the standard time between activities should be contacted and engaged. That leads to a defection rate that is unusually high.

How do you rate on market coverage? Are you engaged with ALL customers every year? Do you know your defection rate? Do you know your market capture rates? These are important questions with serious answer from which you can make the necessary business decisions. In this case ignorance is not anything like bliss.

The time is now.

Marketing Missile v2.0

Branding is a critical element of Marketing. It is who you are and what the market believes you to be. A brand is an elusive element of marketing. How do you create a brand? It is the same as your culture. It is not what you want it to be it is what it is – plain and simple.

Do you remember the amazing Kreskin? He made his incredible skill of reading minds a marketable skill. He is still going strong well into his seventies. There was a recent article on him in the American Way the inflight magazine from American Airlines, my preferred airline, even in these troubled times. Back to the subject – Kreskin – he says “To those who understand there is no explanation necessary…but to those who don’t no explanation is possible. That is the same with marketing and branding.

You must have a brand. It must represent who you are and what you do. You must have marketing in order not to remain in the shadows of the market.

In today’s world of social media it is now being said that unless you are using Twitter and Facebook you lack credibility with the younger generations. The older generations have differing needs and channels. The point through all of this clutter is that your brand and your marketing have to span all generations and all motivations for your products or services.

So what is your brand image? How do you protect it? Who drives your marketing? How is it designed? These are critical questions for you to answer. The time is now.

Marketing Missiles v1.9

Marketing is a broad topic covering a lot of different sins.  It is mass mailings, it is seasonal cards, it is monthly or bimonthly newsletters, or quarterly specials. It is promotional materials and handouts. It is sales catalogues. It is also CRM (customer relationship management) systems and sophisticated information reporting. It is a bunch of stuff.

In columns I write and other documentation I have been stressing the new forms of marketing being taught at schools of higher learning, in marketing undergraduate and master level degrees. It is called “relationship marketing.” The educators and schools are acknowledging that marketing is about building and nurturing relationships not just all of the stuff listed above. Week I don’t think that is going to come as any surprise to any of you in the business. We all know that business is people to people. So our marketing efforts need to take on a much more serious tone.

We need to “touch” our customers more frequently and with a higher level of skills and quality.

The first order of business is to have a specific purpose for the “touch”, the call. Each and every time you “touch” the customer you have to have a reason that the customer will understand is aimed at reducing their owning and operating costs. The call should be about them – not you. You are providing a service to the customer. You are looking out for their best interest. What do they use of your services? What parts aren’t they buying from you? Who are they using if they don’t use your services? Are you monitoring the operating cost per machine hour? Are you advising the customer to trade in the machine when the costs are too high on a monthly basis? These are all part and parcel of marketing – the new marketing; Relationship Marketing. We will deal with this in much more depth in the weeks ahead. The time is now.

Marketing Missiles v1.8

In another post nearby I talk about the internet as a mode of contact with the customers.  I get a lot of push back on this from distributors and dealers. They say that they will lose control of the customer. I couldn’t disagree more.

In the equipment world let’s suppose we have a market capture rate close to 30%, which for many of you is very generous. The fact that you are worried about losing control of your customer now after having lost 70% of them is rather odd isn’t it? But let’s explore the mystical world of the internet.

With the XML protocol you can now track the cursor as it moves around the screen. So here we have a customer browsing in the evening, when you are closed, looking at your website. They are looking for a part for one of their machines. They go to your parts menu and find that there is access to electronic catalogues. They enter the model and serial number of the machine for which they want or need parts. That takes them to the table of contents. They select a section of the machine, for instance the engine, and a schematic of the engine appears on the screen asking what they are looking for in the engine. They can take the cursor to a section of the engine and enlarge the schematic so that they can see the specific part numbers. They can then select a part number and have it go into a shopping cart. Once they are finished they can go to their shipping cart and obtain price and availability information. They can place an order or they can leave the process.

The next morning with good analytics you will know who looked, what they looked at, for how long they looked, did they check prices, did they check availability and did they place an order or not. If there was no order placed then you call then and offer to help or ask what they wanted. This is much more and much better quality customer contact. Don’t you think? The time is now.

Marketing Missiles v1.7

My good friend Jay Roszell just posted to his blog – Growth without Pain – “What is the True Cost of Sales Training.” In it he lists off the costs of the training which includes the usual suspects but he goes further and touches on “opportunity costs.” The cost of any activity cannot be measured in a vacuum. You have to recognize that there is a opportunity that will be lost when the employee is not out on the job while they are at training.

This is the same as a “redo” work order. We charge the time of the technician to the job a second time which is applied to an internal expense account. But do you charge that at the man’s wage? The Man’s rolled up personnel cost? or to the customer retail price? or to the retail price and the rolled up employee cost. There is an argument here to be made isn’t there?

Of course this is true about training in general. How much it costs to send employees to outside training events. Whether they be Industry supported such as the AED Foundation classes and webinars and special meetings or to University or Community College extension classes, or a technical or vocational school. I want to go to Jay’s point that without ongoing training and coaching all training will fail.

Too many people graduate from school and decide that – “phew that is over with.” I am sorry to be the one to burst their bubble. I am afraid that is where learning truly begins. As you know I taught “Education” to prospective teachers at McGill University in Montreal – a long, long time ago. The object was to teach techniques to be used in the teaching of a skill or a subject. BUT the most important skill that I thought should be taught was the skill that would enable each student to be able to teach themselves. That would be a life skill that would be theirs forever. It worked with many but not all. That is my failure as a teacher.

But the point I want to arrive at in this blog is that LEARNING is a differentiator for your business. There are customer service measures everywhere that talk to different measures ofr customer satisfaction. Such as “how many different equipment salesman in a year covering your customer caused the customer to be dissatisfied with that company?” Why can’t you keep a salesman in your company? The same is true for instore personnel and Field Service Technicians. In fact it is true for all customer contact personnel.

So why do employees leave? Usually it is dissatisfaction with their boss, or the Company, rarely about money. But I want to suggest there is something else at work here. The employees will leave if they do not feel that the Company is giving them an opportunity to grow. That’s right – the opportunity to grow. How does an employee get ready to take on a more challenging job? Is it all learning as you go or is there some training involved. I know you know that training is involved, and training is expensive. But just think how much more expensive it is to have dumb employees doing the jobs at hand.

So make the investment in training your employees. The AED Foundation used to ask for 40 hours a year. I now want 80 hours each year for each employee. That is right nearly 5% of the employee paid year. But I want more. I want the involvement in the management to ensure that the training “took” and not just blame it on the employee if they revert to old ways a couple of weeks after the training has been completed. That is a cop out. It is MANAGEMENT that must ensure the proper behavior from the employees and learning is just one more of those responsibilities. The time is now.

Marketing Missiles v1.6

Why do your employees work for you? Three Harvard professors, Hesketh, Sasser and Schlesinger wrote a very definitive book called “The Service Profit Chain.” In it they posited that Employee Satisfaction and Loyalty delivered Service Value. That is the “thing” that customers “feel” when they do business with you. It is not about you or your business it is about the employees. This Service Value is what drives Customer Satisfaction and Loyalty and keeps them coming back. That is all you need to drive profit and growth. Have you got it?

Why don’t you ask the employees how they feel? It doesn’t take much to ask and you will be amazed what you can find out if only you listen. After all if your employees are not satsified and loyal then all the marketing in the world will not correct it. The time is now.

Marketing Missiles v1.5

Why do your customers buy from you? What makes your customers loyal to you? Without the answers to these two simple questions you really don’t know how to either grow your business or protect it.

What is it that makes your customers buy from you?

Everything you sell in your parts business is available from someone else and in all likelihood at a lower price. Of course you will say it isn’t the same quality but who are you kidding. Not the customers. They know that everything is made by someone and that those somebodies will sell through other channels.

Is it your special sales campaigns? You know the buy a dozen get one free deals? Or is it because your parts people or your service management gives them discounts? Discounts are like cocaine – it might be a good high but coming down is terrible. Try cutting a customer off from the discounts that have become used to and watch them buy somewhere else.

You need to pay serious attention to this question. Why do your customers buy from you? You might want to ask because until you know you will be subject to the whims of your customers for your business success. Don‘t forget you have to do more of what it is they like and less of what they don’t like. The time is now.

Marketing Missiles v1.4

So we won’t concentrate on what we do or how we do it. We will concentrate on WHY. The starting point here to me is that we will focus on the fact that we are in business to reduce the owning and operating costs of capital equipment for the equipment owner and operator.  We are in business – WHY – to provide the lowest operating cost machine which translates into the highest value proposition for the customer.

In the context of Service-Dominant marketing this means that we should have a complete, current and accurate machine ownership list. This also would be helpful if we had electronic control units on each machine to track equipment and component operating conditions – things such as clogged air filters or overheated engines. This will allow us to assist the customer in their equipment management – after all that is what we are supposed to be good at isn‘t it? The time is now.