The 4Ps Marketing Model Hurts Your Dealership

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The 4Ps Marketing Model Hurts Your Dealership

Guest writer Roy Lapa turns our traditional wisdom of marketing on its ear by pointing out how the 4Ps of marketing model hurts your dealership.

The persistence of the 4Ps of marketing within heavy equipment dealerships hurts their future. The 4Ps of marketing represent the following elements: price, place (distribution model), promotion, and product. Without jumping into each of the 4Ps, I will focus on the current dealership situation and the respective challenges facing many dealers worldwide. Further, I will turn towards the 7Ps of service marketing which include three essential additional elements: people, process, and physical evidence (service environment). A dealership needs a strategic level transformation to reap the full benefits of the 7Ps service marketing mix.

Current dealership scenario

In analysing 15+ of the largest heavy equipment dealers in Europe, the USA, and Canada, one finds that the vast majority focus their efforts on selling:

  • OEM equipment within a dealership contract—mostly within an exclusive region, established industry, and size class 
  • Genuine OEM parts 
  • Factory-authorized service on a per-hour basis, labour blocks, maintenance and repair contracts, preventative maintenance contracts, and unscheduled breakdowns for respective OEM 
  • Equipment rentals, respective OEM, via a subsidiary or in-house, with a bias toward using this option to sell equipment.

Further, most dealers enshrine selling new equipment, making it a top priority. Despite the dealers’ promotional materials, many behave in a way that, unfortunately, assumes parts and service sales will be “captive” once the equipment arrives in their market.

Macro-environment challenges and opportunities for dealers

As most of the world’s major economies transform towards service-based economies, the service sectors will account for anywhere between 40% and 93% of their respective GDP and between 50% and 90% of all new jobs. (Paul) Will we view this as a challenge or opportunity?

  1. The increased demand for customized end-to-end services within all major economies attracts a significant amount of disruptive and innovative competition and solutions. Solutions that provide traditional dealer services and, more importantly, customer services not currently offered by dealership go-to-market models.
  2. The data currently shows most dealers winning only 35-40% of the post-equipment product support services.
  3. The prevailing referenced 4P’s used to establish Go-To-Market (GTM) strategies in many manufacturing industries (“John Deere Marketing Mix”) result in a significant negative influence on the dealership’s GTM approach. Why the negative influence? The outdated model ignores several major factors, especially in a service-based market environment.

Industry opportunities and challenges for dealers

A quick recap of five major trends happening in 2023 (“Five Equipment Dealership Trends That Will Shape 2023”) highlights a deep need for dealers to rapidly transition towards a customer-centric, service-based model.

  1. Online sales and rentals will increase significantly. In 2020, Volvo CE began allowing customers to pre-order new electric equipment online, and they recently launched an online configuration tool for those machines, which allows customers to “build and price” their ideal model.
  2. Electrification will disrupt the dealer’s revenue model. Grand View Research reports an expectation of global off-highway electric vehicle market of reaching $42.70 billion by 2030. Growth will result from lower operating costs as well as improved battery technology and lower battery costs. The cost of parts drops by about 90 percent, so if your operating costs for a skid-steer were $20 an hour, which drops to $3 per hour.
  3. Connected machines and jobsites will continue to reduce ownership and operating costs. Sixty percent of Volvo’s connected machines use the company’s advanced telematics system called ActiveCare Direct. These machines are monitored 24/7/365 for alarms indicating an issue. Actionable information (an ACD case) alerts a customer’s equipment manager and the local dealer within minutes. Included information will also help the customer address the issue without the help of a dealer.
  4. Technology will bring greater efficiency to parts and service. OEM dealer market share for parts has dropped to 35–40%, about half previous years. Luke Powers, CEO of Gearflow, believes dealers will soon compete directly with Amazon. “MRO supplies became the first entry point for Amazon coming into the industrial markets.”
  5. Rental continues to grow, while an Equipment-as-a-Service model draws significant interest. Construction equipment rental revenue grew by ~12.5% in 2022, surpassing $41.6 billion, with growth forecasts of 7% in 2023, 2% in 2024, 3% in 2025, and 3% in 2026.

Introducing the 7Ps service marketing model

 

To keep it simple, I built an illustration of the 7Ps service marketing model and included some current disruptive examples in the heavy equipment dealership world. The model, introduced in 1981, (Pervaiz) has successfully created sustainable advantages for many organizations (Rebaz et al.).

7Ps service marketing model helps you compete.

Reorient your dealership model to 7Ps service marketing quickly. Customers want strategic and invested end-to-end partners to help them achieve their business goals. 

The examples given in the 7Ps service marketing illustration give you some strong examples of how to expand your services beyond the conventional dealership model and consider further vertical and horizontal integration within your primary industry. Though I have not covered the details of transforming your dealership, you have enough examples to get you moving.

Works Cited, Referenced & Non-affiliation.

Paul Patterson. Services Marketing. Pearson Australia, 2015.

Pervaiz, K. Ahmed. “Using the 7Ps as a generic marketing mix: an exploratory survey of UK and European marketing academics. Marketing Intelligence Planning 13 No. 9, 1995.

Rebaz, Khaleel, et al. The Role of Services Marketing Mix 7Ps on Achieving Competitive Advantages the Case of Paitaxt Technical Institute in Kurdistan Region of Iraq. TEST Engineering and Management 83, 2020.

“John Deere Marketing Mix.” Blog.Notesmatic, 30 June 2022, blog.notesmatic.com/john-deere-marketing-mix.

“Five Equipment Dealership Trends That Will Shape 2023.” AEM Tradeshows, www.conexpoconagg.com/news/the-five-equipment-dealership-trends-that-will-sha. Accessed 26 Apr. 2023.

Note, I am not affiliated with or in any way compensated for the companies mentioned within the article.

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Unidentified but Personalized Content for Account-Based B2B Purchasing Groups. Interlacing the customer buyer stages utilizing Patrick Lencioni’s Six Types of Working Genius styles.

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Unidentified but Personalized Content for Account-Based B2B Purchasing Groups. Interlacing the customer buyer stages utilizing Patrick Lencioni’s Six Types of Working Genius styles.

Guest writer Roy Lapa uses Lencioni as his benchmark in “Unidentified but Personalized Content for Account-Based B2B Purchasing Groups. Interlacing the customer buyer stages utilizing Patrick Lencioni’s Six Types of Working Genius styles.”

A content journey map may help you create and share relevant messaging with your target audience at each stage of the buyer’s journey. Further, by aligning your content journey map with Patrick Lencioni’s working genius styles, you provide interesting and effective media to guide and convert unidentifiable decision influencers. Although different types of working genius styles exist among various roles throughout your customer’s company, one needs to remember that the working genius style remains focused on an individual rather than their positional title. Hence, the material created with the working genius style in mind will appeal directly to the individual. In the likely event that account-based marketers do not know all the key decision-makers within a B2B buying committee, this method provides a workaround for reaching the right individuals.


The following table contains a brief overview of the 6 working genius types. 

Everyone has two strong geniuses based on what comes naturally to them and what brings them joy. When developing content, I suggest focusing on one working genius style, or perhaps two when located adjacent to each other. For example, to write a white paper for your customers about acquiring the most out of a semi-automatic intelligent machine, tailor it to appeal to the enablement and tenacity types.

Why produce B2B content according to a person’s working genius type?

  1. Recent changes in the workplace: from a highly structured approach to a matrix, cross-functional, team approach.
  2. Agile work environments allow more voices to be heard.
  3. B2B customers use decision-making groups that span across multiple departments.
  4. Innovative and direct, it appeals to everyone’s working genius style, regardless of title.
  5. In high-value purchases, roles and titles matter less.

 

The following illustration shows the first two stages of the buyer journey and the aligned persona types corresponding with Patrick Lencioni’s working genius styles. Keep in mind the importance of positioning the content to appeal to the individual’s natural working styles, not their title. 

This approach will provide you, the service provider, insight regarding the type of story to produce and consequently the type of media channels to focus on. Irrespective of the buyer stage, various types of media production (video, written, digital, social, whitepapers, case studies) may be appropriate.

 

ABM marketers can create content that synchronizes their messaging with the working genius type (or persona) and the corresponding buyer stage.

Conclusion

  1. Six individual working genius styles (personas) determine your content, not their job title. The persona map aligned to the buyer stage will appeal to all relevant people in medium-to large-sized account for each business situation.  (B2B buying groups)
  2. Consider different working genius types that may be involved with the company’s decision-making process. (Smaller organizations)
  3. In medium- to large-sized organizations evaluating substantial investments, there are typically more than eight individuals involved in the purchasing decision. All genius working styles (personas) will likely be involved.
  4. Media selection (mix, types, frequency) must match the working genius type (persona) and buyer stage.

Works Cited

Lencioni, Patrick M. “The 6 Types of Working Genius.” A Better Way to Understand Your Gifts, Your Frustrations, and Your Team, Matt Holt, 2022.

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The Validity of 5-Star Google Reviews

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The Validity of 5-Star Google Reviews

Guest writer Roy Lapa walks us through the ins and outs of feedback. We have all seen reviews posted online, but how can we measure the validity of 5-star Google reviews?

Can you trust them? Yes, with some precautions. Google actively updates, examines, and penalizes most false or biased reviews. Nevertheless, despite their best efforts to curb these actions, this behavior persists, and customers and businesses alike experience the negative effects.

Google wants its reviews to reflect the real experiences and opinions of its users and not be the result of either swaying or other forms of incentive. If Google discovers that a company offered incentives in exchange for reviews, it has the right not only to remove those reviews but also to suspend the company’s account. Here are three recent encounters I have had: 

Hotel Reviews vs. Hotel Experience

We booked a hotel for employees going on a work trip to a new region based on Google reviews. After the trip, when we performed a post-event review, one of the strikingly negative comments revolved around the hotel experience. Descriptions by the employees who stayed at the hotel depicted a dramatically different encounter than what we read within the Google reviews. As we investigated deeper, we found what seemed to be a lot of reviews from people who did not appear to exist. Though we did not do a full forensic dive, we concluded that the business had a substantial number of reviews which were not authentic. 

Marketers Give Advice on Paid or Influenced Google Reviews

Let us start with a definition of marketing from the American Marketing Association: 

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. 

Although the word ‘value’ is overused and rarely assessed, I am positive that customers would not value Google reviews unless they provided a complete representation, without bias, of the business they were considering engaging with. Unfortunately, I recently discovered the opposite within the marketing agency industry, and it is heartbreaking to see because it harms all professional and ethical marketers. Marketing strategies which focus on obtaining genuine reviews are a fantastic approach; however, be wary if the marketing recommendation you receive for your business includes any indication of achieving 5-star reviews as the primary goal.

Financial Consulting Firm Requests 5-Star Google Reviews or No Review at All

When a powerful group tells its members they are required to act a certain way or else, this is clear positional power at play and full of bias. This firm has an exceptionally large following, but in this instance, it has, unfortunately, lost focus on one of its foundational values of being ethical. Discouraging open and critical yet true feedback leads to several major negatives that have the potential to become monsters later. Here are two to contemplate:

  1. Focusing solely on the outcome will result in a win-at-all-costs mentality. The obvious downfall here is in crossing the ethical line.
  2. Short term gains in Google rankings and attracting more customers will eventually lead to long term consequences, such as being blocked by Google, being found out by customers or prospects, harming your reputation, and sacrificing your values.

 5-Star Conclusion

  1. Build a preferred online reputation on solid ground with real and unbiased reviews. 
  2. Make the process of collecting all customer feedback effortless.
  3. Create a system which will quickly respond to and manage negative reviews. 
  4. Update the Google review, if you are able, to satisfy an unhappy customer’s negative review.
  5. Alert Google right away if you have reason to believe that the review is fake.
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OEM vs. Dealer Brand Identity: Are you frustrating your customers?

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OEM vs. Dealer Brand Identity: Are you frustrating your customers?

Guest writer Roy Lapa continues his blog series focused upon Brand Identity with “OEM vs. Dealer Brand Identity: Are you frustrating your customers?

As a follow-up to my original post, “Brand Identity = Measurable Customer Behaviours,“ I would like to quickly highlight a problem that could affect both dealers and original equipment manufacturers (OEMs). We work hard to make our brands stand out to our customers, and the more a dealer and an OEM can work together, the better. Although some archetypes are more inclined to work well together, every organization is different and typically embodies one dominant archetype along with components of several others. While various archetypes may clash, they can also function in complementary ways.

The goal is to make sure that the customer knows that the OEM-Dealer brand identity stands for: consistent, predictable, and measurable behaviour.

 If the OEM and dealer archetypes frequently contradict, the brand goal of consistent predictable behaviors may be more difficult to achieve. Depending on the circumstances and environment, the 12 Jungian archetypes can interplay in a variety of ways. However, the following combinations demonstrate both potential matches and mismatches.

Matching examples

The Sage and the Explorer complement one another nicely since they both value wisdom and knowledge. While the Explorer seeks knowledge through firsthand experience, the Sage seeks understanding through research and reflection. They can strengthen each other’s weaknesses and widen their customer engagement by working together.

The Caregiver and the Innocent, also complement each other effectively since they both value nurture, compassion, and empathy. The Innocent conveys a sense of clarity and optimism, whereas the Caregiver offers support and guidance for customers. They may foster a safe atmosphere for one another and for customers by working together.

Mismatched examples

The Ruler vs. the Rebel: The Ruler archetype is concerned with upholding order and control, whereas the Rebel archetype is all about breaking the rules and defying control. Because the Ruler wants to maintain the status quo and the Rebel wants to change it, these two archetypes might easily collide.

The Sage vs. the Innocent: The Sage is concerned with truth, wisdom, and understanding, while the Innocent is focused on simplicity, knowledge, and optimism. Because the Innocent is pleased with the world as it is and the Sage is constantly looking to learn more and understand the nuances of life, these two archetypes may clash.  

Without insinuating any relationship pros or cons, the below are some example OEM and corresponding Dealer brand identities. Advantages arise when the dealer and OEM give their best effort to make sure that their most important customer-focused behaviours are complimentary. The examples are based on simple online research and are only meant to be used for conversational purposes. 

Key takeaways:

  1. OEMs and dealers should align their customer-focused behaviours. 
  2. OEMs and dealers with compatible archetypes may find it easier to establish a consistent brand identity. 
  3. OEMs and dealers with potentially mismatched archetypes should agree on a regional brand identity to avoid customer frustration.

Note:

All brands, dealer names, and original equipment manufacturer (OEM) references are owned by the respective OEM entities or their affiliates. These terms are used by Active Focus Point for reference purposes only and are not intended to indicate affiliation with or approval by the entity. 

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Brand Identity = Measurable Customer Behaviors

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Brand Identity = Measurable Customer Behaviors

Today’s blog post, “Brand Identity = Measurable Customer Behaviors,” is brought to you from a new contributor. Roy Lapa is an experienced marketing professional with 25+ years of experience in B2B and B2B2C heavy industries in various functions such as sales, customer service, remanufacturing, industrial automation, product support, marketing, and management (with over 10 at senior levels). Roy’s DNA is geared toward developing solutions that are data-driven, customer-focused, and innovative. Roy is the Managing Director & Co-Founder, AFP Marketing Agency LDA.

If you search online, you’ll find many different brand identity definitions that point to various components such as your values, communication style, what you want people to feel when they interact with you, how recognizable you are, promises you make, tone, voice, fonts, colours, etc. These achieve some level of awareness but lack tangibility for most industrial businesses. Let’s narrow the definition to something more tactile for industry manufacturers, dealers, distributors, and service providers: 

Your distinct brand identity must be linked to repeatable, scalable, and measurable customer behaviours.

Archetypes

Archetypes have proven useful as a simple framework in helping define customer behaviours since they play a role in influencing human behaviour, according to Carl G. Jung1, a Swiss psychiatrist and psychoanalyst. With some industry input, I have mapped out some of the top mining and construction manufacturers onto the 12 brand archetypes illustration2. Though there may be some debate about each OEM placement, this simply serves as an example to help you figure out your brand-customer relationship. 

Here are a couple of questions and an example for each to assist you in defining your brand-customer relationship. 

Why am I here as a Manufacturer, Dealer, Distributor, or After Sales Provider? 

Example: Mountain snow groomers keep failing within the warranty period leaving the customer unsuccessful in figuring out why. They follow all the OEM recommendations to no avail. 

  •  [MASTERY-HERO] If you have a reputation for saving the day, one of your service managers is likely one of the customer’s ‘pinned’ text message contacts.  

2-way relationship behaviour: Under customer pressure, you always figure out a way.

What primary market behaviour do I want to be known for? 

Example: Looking for help completing a new and unique infrastructure project, a customer is unsure how to approach the project from a technical standpoint. 

  •  [INNOVATION-CREATOR] You have a better chance of being the first contact if you have a reputation for coming up with innovative job site solutions.

2-way relationship behaviour: When the customer asks if there a better way, you consistently invent. 

This is not new, and yet in dealing with many companies, most want to leap forward to brand identity deliverables such as voice, logo, typography, colours, etc. Additionally, firms are eager to transition to using terminology that is recognized in the business world without first doing a strategic analysis of their primary purpose: a behaviour-oriented relationship. Exploring your core business archetype is an excellent way to discover your brand identity. 

Brand Audit

An audit performed by an external company that employs a mixture of data science and interpretation, along with contextual industry insight provides a clear anchor point which will help you understand where you stand today. Reducing self-serving bias, illuminating internal blind areas, and deciphering what is authentic vs. noise requires effort. Further, strong biases result from relying only on internal personal experience, especially recent experiences, in evaluating what your organization’s archetype might be. Lastly, brand identity is unique to your business and if you want your customer to notice you walking down the street and actively seek to engage, being distinct is key.  

Great job, you narrowed it down to one brand archetype. Although it may be possible to be known for more than one, be cautious you don’t mistake that as being able to provide something for everybody. In working with many organizations, I have seen less than a handful of organizations be successfully known for two archetypes and this rare phenomenon is usually only within a distinct division or subsidiary.  

Align

Now comes the challenging part.  All facets within your company’s behaviours and communications must be in alignment if you are not already working inside your core archetype to undergo a thorough transformation. What do we mean by all? 

  • Executives, senior leaders, and managers: leading by example, living and breathing the company ‘motto’ in all internal and external interactions.
  • Marketing: Events, press releases, product launches, website, content strategy, publications, social media posts, point-of-display areas, colours etc. 
  • Product Support (Parts, Service, Customer Service): phone calls, on-hold messaging, approach to the customer, warranty support responses, in-field support, mechanics’ interactions with customers, etc. 
  • HR: the process of communicating with employees, onboarding, ongoing training, upskilling courses, instant performance-based feedback, retiree communications (alumni), and much more. 
  • Finance, IT, and all operations: the behaviours within these groups need to align as they inevitably spill over into customer interactions.  

Track

Let’s move on to some measurable items to help direct your path for the long term. I have selected these five metrics as they provide a few customer angles to measure. Each one progressively represents a stronger indication of the health of your brand identity demonstrating a more engaging customer behaviour.

  1. Digital Reviews (Trustpilot, Google Reviews, FB)
  2. Net Promoter Score (NPS)
  3. CRM rep interactions with customers (Keywords within conversations)
  4. Case studies and testimonials with customer name and endorsement
  5. Direct referrals

Are there more measurable options? Yes. Each of these five works well for most of the organizations within the equipment manufacturer, dealer, distributor, and service provider industries. From my experience, I would make a few metric adjustments, only if necessary, following your brand audit, brand identity creation, and establishment of certain fundamental joint marketing-business goals.

Real customers. Can you pick the most likely archetype that fits the quote?

  1. We’ve, [brand], stuck together through some tough times in the industry, and that’s helped us get through and into better days. 
  2. The bottom line for me is that we’re building more roads since we started using [brand], and that’s what it’s all about.
  3. What’s important to us is that [brand] has been there for us every step of the way.
  4. We agreed to buy those graders without seeing them on an actual job or talking with anybody who had used them. We made the equipment deal based solely on our trust in [brand’s] recommendation. 

 

 

References & Notes: 

  1. https://en.wikipedia.org/wiki/Carl_Jung
  2. Illustration created from context knowledge, industry input, and online data points, March 2023. 
  3. All brands, and original equipment manufacturer (OEM) references are owned by the respective OEM entities or their affiliates. These terms are used by AFP Marketing Agency, LDA for reference purposes only and are not intended to indicate affiliation with or approval by the OEM. 
  4. Answers: 1. Mastery-Hero 2. Control-Ruler 3. Service-Caregiver 4. Knowledge-Sage
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