Archive for category: Marketing

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 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.

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.

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.