Archive for category: Marketing

The Beginning of Marketing

March 11, 2012/in Business Plans, Business Services, Consulting Services, Marketing, Parts, Product Support Selling, Service/by learningwithoutscars

The starting point for market segmentation is the information necessary to determine the potential of each client in the market place to be covered. To determine that in the equipment world we have to obtain a complete and accurate working machine population. This is the usual starting point for any good marketing information in the equipment world. To expand on that we truly have to state that if you don’t have an accurate and complete working machine population you really don’t know your business.

The machine population information required is the make, model, serial number, configuration, year built, annual hours of work, and current hour meter reading. From this information we can make a determination of the market potential for parts and service.

The machine population is normally split up into four categories.

Small 1 – 3 machines
Medium 4 – 12 machines
Large 13 – 24 machines
Fleet 25 + machines

In many cases these categories codes can be split into the same identifiers based on the total machines for all brands owned by the customer as well as the number of machines of the dealer supported brands – this might become an important distinction in some dealerships.

The next levels to consider in market coverage are the relationships that exist between the dealership and the customer. This we can determine by the level of purchases that the customer makes at the dealership for parts and service.

These purchase levels are the old fashioned A, B, C, and D.

A the top 10% of purchases
B the next 15% of purchases
C the next 25% of purchases
D the bottom 50% of purchases

These levels are obtained by providing a descending purchases report for parts and another for service. From these reports you can apply the A, B, C, D categorization to each customer – one for the parts purchases and the other for service purchases. This is the beginning of marketing. This is the starting point for market coverage. Are you ready? The time is now.

Market Coverage

March 11, 2012/in Business Services, Consulting Services, Customer Service, Marketing, Product Support Selling/by learningwithoutscars

Being all things to all people has long been impossible. Yet many dealers continue to operate without a strategy for market coverage and as a result continue to do what they have always done. Treat everyone the same, until that special customer has a problem.

To make matters worse for our customers – somewhere in the 1980’s resulting from the huge run up in interest rates, enacted by the Paul Volcker Federal Reserve, dealers made the decision that they didn’t have enough money to provide face to face market coverage. So they cut back on the number of salesmen in the field.

The intent was to reduce sales costs, read market coverage costs, but it meant something else. It meant that the decisions made on market coverage were made by a salesman not by the company. The salesmen were confronted with a time limit – they could only work so many hours. This left them with the decision of who to visit and who to ignore. I remember an old story about a dealership hiring a salesman. He visited with the Sales Manager on first day on the job and was given a customer list, the keys to a vehicle and the boss pointed at the door saying – “here is a list of your customers, your vehicle is parked outside the door, there is the door – see you.” I am sure this is fictitious aren’t you?

The trouble is we have not done a very good job of determining a market coverage strategy. It is all about market segmentation. You need to determine which of your customers you want to have a salesman touch in the field and unfortunately, due to costs, you have to decide who you don’t want to have assigned to a salesman. This can only be done with a proper and complete market segmentation plan – more on that in a future blog. The time is now.

Points to Ponder v1.1

March 8, 2012/in Business Services, Consulting Services, Customer Service, Marketing, Parts, Personnel, Product Support Selling, Service/by learningwithoutscars

One of the advantages there is to travel is the ability to have time to read. In my cross country voyage yesterday I had a good chance to catch up on some of my late reading. One point came out that I really enjoyed.

“Social Cohesion at the risk of Truth” this is a quote from Jeff Bezos of Amazon fame.

I think it is amazing in its clarity. Ignoring the world around you, not implementing changes necessary, risks the truth. For some time, in my consulting life, there has is a constant. People are anxious, nervous, or just downright stubborn, when it comes to making the changes necessary. These changes might be required to improve customer service. They might be necessary to “save” the Company financially. They might be necessary for a whole host of solid rational sound reasons. Yet they are often approached with less than an excited mien. The status quo is much safer. This social cohesion – the comfort of everyone involved in many cases outweighs the needs to make change. The time is now.

Facts are awfully stubborn things

March 2, 2012/in Business Services, Consulting Services, Marketing, Parts, Product Support Selling, Service, Simulation Modelling, Twenty Groups/by learningwithoutscars

This is a most interesting time, isn’t it? I listened to Jimmy Rogers on CNBC the other night. He was pointing out there is an election this year in the United States, there is one in France. Germany has an election next year. In fact there are 40 governments that will face elections this year. There will be a lot of money spent by the politicians. Yes, they spend our money to get themselves reelected. Sorry to be so cynical.

But 2012 is going to be a good year – one way or another. If we have to show unemployment going down well let’s not look so closely at the shrinking size of the work force; If the deficits get too large let’s blame it on the recession or the conflicting arguments between one view of the economist Keynes and the rigors of the Austrian school followed by the later Milton Friedman. Politicians will be in the feel good best this political season

The total unit sales in the United States are still less than 50% of what they were at their peak. The customer fleets and rental houses are almost at the complement of units now. So where is the boom going to be coming from in the US? It sure won’t be housing will it? And as long as housing operated with depressed prices the pent up work force movement will not be released.

The only answer is that the market is what the market is and get over it. Get one with it and make the best of it. The happiest people normally DON’T HAVE the best of everything but they do MAKE THE BEST of everything. The time is now.

Maintenance

March 1, 2012/in Business Plans, Business Services, Consulting Services, Customer Service, Marketing, Parts, Personnel, Product Support Selling, Service, Simulation Modelling/by learningwithoutscars

Over the years more and more people have realized that maintenance on a piece of capital equipment is one of the more critical activities to conduct to reduce the owning and operating costs of that piece of equipment. This is true for your vehicle or washing machine just as much as for your machine.

There was a sudden recognition some time ago that the “customer” didn’t really appreciate how important maintenance was in extending the useful life of that machine. They felt, in many cases, that maintenance was simply dropping fluids and changing filters. As most of you know it is far more than that. Along with this recognition the various suppliers started to make it easy for the customer to maintain their machinery. They sold maintenance agreements and extended warranties offering the customer piece of mind and a reasonable price. But there still remained one serious stumbling block – Service Management.

Yes, in many cases, the Service Managers are in the way. You see they are very busy people. They don’t have enough people in their organization to support the current service workload. This service organization is a subject of one of our webinars next week. Check at www.rjslee.com under the learning tab for more information.

I am struck by the fact that everyone knows how to run a parts department or a service department except of course the people that actually do run the parts departments and service departments. This is one of the major challenges facing management in equipment dealers. How do we get professional management into parts and service when we don’t have sufficient respect for the work that is being done in these departments?

A new discussion on market share

March 1, 2012/in Business Plans, Business Services, Consulting Services, Customer Service, Marketing, Parts, Personnel, Product Support Selling, Service, Simulation Modelling/by learningwithoutscars

Al Wiley, an executive of Xpectmor, sent us a comment on our recent Market Share post. He says that “market share is the definitive measure of customer satisfaction.” Of course he is right. The measure of market share, however, is what causes the dilemma for many of us.

In the equipment market it is reasonably easy to define market share. There are a finite number of transactions and everyone knows what everyone got. For instance, we have five different suppliers in the market with sales last month. Supplier #1 got 4 sales, supplier #2 got 1 sale, supplier #3got 2 sales, supplier #4 got 2 sales and supplier #5 got 1 sale. The market share is a simple matter of arithmetic. Supplier #1 got 40% market share and so on.

With the parts and service business it gets more complicated. The various suppliers into the market don’t know what the other suppliers sold during any particular period. So how can we possibly calculate the market share of any particular supplier? That is why there has not been any real definitive publication for market share.

When I first started in the Industry in the late 1960’s some suppliers used to conduct a personal survey with each and every one of their customers worldwide. Can you imagine the time and cost for such a survey? Well they did them and they published the results within their distribution network. It was not precisely accurate but it was a very good indicator of where you stood as a dealer in parts and service market share.

As more and more machines get GPS equipped and the dealers/distributors, manufacturers and customers become more adept at understanding telematics and their use we have a terrific opportunity. We can calculate what the consumption of parts and service “should” be on a machine.

This is the first problem. The customer doesn’t always follow the recommendations of the manufacturer of the machine for the maintenance intervals nor the maintenance items to be dealt with for a particular service. Similarly when it is obvious that a repair should be made with a “new component” sometimes a repair that I call “bubble gum and band aids” will be performed. You might be wondering why this is important. Well it is due to the fact that all we can do is calculate the “potential” consumption of parts and service for a particular machine in a specific application running a specific number of hours. It is this potential that we have to use to calculate our “market capture” rate. See now we change the word. It is no longer market share it is market capture.

The dealer captures the potential business based on their actual sales of parts and service. Once we have these facts nad have them for a sufficient period of time we can make a clear statement about capture rates are the success and/or failure of the particular strategy that a dealer is following. The time is now.

Selling Skills

February 28, 2012/in Business Services, Consulting Services, Marketing, Product Support Selling/by learningwithoutscars

Preparation is one of the keys to good selling skills. Of course that is common sense for most or at least it should be if you want to succeed at selling.

Imagine not know the customer? Not knowing what they want and need. What they own and how to make their operations more effective. The job is to reduce owning and operating costs while at the same time protecting the residual value of the capital good. This applies to everything – cars, boats, ovens and equipment.

Knowing who the customer is; their buying habits, personal attributes, their needs and wants, the relationship that they have with your company. These are critical factors. You should also know that they don’t purchase everything from you yet be sincerely interested in where they do buy if not from you and why. This is when you can bring your specialized selling skills to the interaction. Find out what it is they particularly like about that supplier and you will know what you have to do. Bring on the features and benefits and the value proposition. It is pretty simple if you pay attention and do your homework. The time is now…..

Dashboard Management

February 26, 2012/in Business Services, Consulting Services, Customer Service, Marketing, Parts, Product Support Selling, Service/by learningwithoutscars

In the January issue of the Construction Equipment Digest, the monthly magazine of the Associated Equipment Distributors, my monthly column focused on the use of Dashboards as a management tool. You can see the article at www.rjslee.com under the Articles tab, CED January 2012.

I suppose the promotion of Dashboard management started with Jack Welsh’s book “Straight from the Gut – although where ever it got its push to get into the mainstream of management it really doesn‘t matter other than the fact that it got there.

The old management by walking around style is still with us and useful. That haviong been said the current group of professional managers needs different tools for different times.

What has been your experience with Dashboards?

Here we are…

February 14, 2012/in Consulting Services, Customer Service, Marketing, Parts, Product Support Selling, Service/by learningwithoutscars

Welcome to our blog. We will be involved in discussions and debates on all subjects relating to the operational aspects of equipment dealers and distributors in the Capital Goods Industries. Parts, Service, Product Support Selling, Marketing and Customer Service will be our focus here. But we don’t want to limit your repsonses or thinking to those topics alone. We hope you enjoy and will learn without having to incur the scars on various parts of your body or mind.

Keep involved and participate as we communicate with you on a weekly basis. Thanks for your interest.

The time is now…

TESTIMONIALS

What is True Success?

In our lives we are all involved in work, our jobs, as well as our families. That gives us both the professional and personal aspects of our lives. Many of you know I have referenced Tom Morris and his books, in particular True Success, A Philosophy of Excellence and Plato’s Lemonade Stand. They are both very helpful in our lives. I have referenced them many times.

Everyone seems to have some formula for us to follow to achieve success. Some are about market share, or customer service, or parts availability or labor efficiency. However, let me ask a question. These measures, while extremely important, do they make you successful? Is that how you define your success? I don’t think so.

I still remember, as if it were yesterday, when I was looking for my first job after finishing my university career - what was it that I wanted to do? What was my passion? What excited me? I had no clue. I was too young and I had no real-life experiences from which to make the choices necessary. From where I am now, I wonder how it is that we are supposed to be able to answer these questions. My grandchildren are in Gen Z. Recently at a family meal, I asked them both what they wanted to do. My grandson is a Junior in High School. He has many things that he is interested in and cannot make a selection yet. My granddaughter who is a Senior in University has a little more clarity. She is taking Biology with a focus on Genetics. It would seem clear that she has a path she is following. Yet it is clear that nothing could be further from the truth. She doesn’t know yet either. One of the troubles today is that there are so many choices. I always told (and still tell) people, particularly when I was teaching Education at University, that everyone should leave their options open as long as possible. When I was out looking for work the people that influenced my life - my parents, teachers, advisors, and counsellors all told me the same thing. Take your time. Whatever you choose that will be where you will work for the rest of your life. That was 1968. Things have definitely changed.

Today the average number of jobs that an individual will have over the work life for men is 12.5 jobs and women 12.1 jobs. It takes that many before a person can make their own selection of their life’s work. But then we still have the question that needs to be answered. What is success? Is it status in the community? Is it money? Is it your job title? I submit to you it is happiness.

For this particular subject I have to turn to psychology and psychiatry. Those two particular disciplines deal with the human experience in many ways. From the challenges that various groups of people have in learning or reading or concentration to depression and other human issues they have more knowledge than most in what success means.

I am currently reading a book, What Happy People Know, by Dan Baker, PhD, Director of the Life Enhancement Program at Canyon Ranch (This is a pioneering wellness resort which helps people make a lasting transformation that inspires people to find their “well way of life) and Cameron Stauth. The book cites research that has shown that the root of unhappiness – fear – lies in the oldest, reptilian part of our brains, and negative reactions are often dictated by primal instincts. In other words, we are “hard wired” for hard times. Over the past twenty-one months, since March of 2020, we have experienced hard times. This has been a very challenging time. We are all hoping that 2022 will bring us more positivity.

The book is designed to help us, and it has helped me, to understand that in order to be successful - we have to be happy. The authors give you a road map to happiness by breaking down the elements and qualities of Happiness. You get a very detailed description of how each of these qualities can be influences in your life in the book. I am simply listing them here now:

Love

Optimism

Courage

Freedom

Proactivity

Security

Health

Spirituality

Altruism

Perspective

Humor

Purpose

Of this list of a dozen elements, I relate to many. Let me focus on Purpose first. Without a Sense of Purpose, you will flounder. Most of you, by now, understand that our purpose, at Learning Without Scars, is to help people identify their individual potential and then we provide tools to allow them to realize their potential. Many of you will see that purpose as a difficult of not an impossible mission. Obviously, we have a different view on that. One of my fundamental beliefs is that “Everyone wants to do a good job.” This is followed with the fact that “everyone can do more than they think they can.” Put those two facts together and you see the seeds of understanding individual potential.

One of the challenges many of us face is that we get “stuck.” We get stuck in our jobs, in an Industry, a Company, a department. We are stuck and unfulfilled, and bored, and clearly, we are not challenged. But we need the job and don’t want to move, because we don’t think we can replace the job. We are anxious, we are afraid. Whenever I find this situation, I ask the question “What would you do if you weren’t afraid?”

There is a fresh question for me to consider in the book. “Am I living a life I love?” Perhaps that is a little too theoretical for most of you. But think about that. Isn’t that a terrific question to be asking yourself? Of course, it is. There is an interesting aspect to this question and the work of these authors. They always, every time, provide something that each person has to do. Some action. This is not simply a theoretical exercise. They are trying to create a perspective of success. Of happiness. Nothing is allowed to get in the way. For instance, many of us will use our health or bad habits as a “reason” that we can’t do something. They do not accept that excuse. They give us a perspective to consider with an interesting quotation. “Health is the optimal condition of being that allows for the ultimate engagement in life.” If you smoke or are overweight, they suggest you make the best of that reality. No excuse and no reason for inaction. It seems that there is a trigger when we leave our fear behind and pursue a life we love. I strongly suggest that everyone read this book. I think it could make a difference in your life.

This is the ultimate place to ask that age old question “What If?” Can you improve your life? Your job performance? Your family life? Your relationships? I am by nature an optimist. I know the answer to these questions for my life. Of course, I can. I just need to start. To take some action. To get on the path to success. Care to join me?

The Time is Now.

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January 5, 2022

The parts business is in a rut. We have been doing the same thing for decades now. Isn’t it time to put a fresh face on the parts business and offer customers improved service and convenience?

Start with the tired counter. The stand-up counter has been dead for a long, long time. Some of you just don’t recognize that. Put in a sit down work area. Make it pleasing for your customers AND your employees. Do any of you remember why it is that we have a high stand up counter? Well it is for all of those books we used to have to have as parts catalogues and service manuals. They are now gone the way of the dinosaurs for most significant suppliers.

Move to a self service station in your instore merchandising area. Allow the customers the convenience to price items and place orders themselves. Think of the gas station. They have completely redone their business with their self-service gas pumps and the “service” station. This is not your grandfather’s gas station.

Move to strip malls that are more convenient for your customers. Put is a small fast moving item, supply items, convenience items inventory. Operate like a “NAPA” store. The closer you are to the customer work site the more convenient you are. You might even consider putting a trailer on the customer work site. Make it convenient for them. Make it easy.

Move to the internet. The customer has been purchasing things on the internet now for a few decades. They look for information. They check out different suppliers. They check prices. Are you in the game? You will be left behind if you don’t get in the game.

You are in the retail business in the parts business. I wouldn’t know that from walking into many of your stores. You will both adapt and participate in the market or you will be left behind. The time is now.

August 31, 2012