How Construction Equipment Dealers Can Succeed (Or Fail) Faster

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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!

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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.