Incentives

Tonight brings us another guest post from Steve Day. The former Vice President of Tractor and Equipment, Steve is discussing incentives, and how they can drive your growth in your business.

Incentives Can Drive Growth

For the majority of my career, I believed that a paycheck was a pretty good incentive for doing your job. When I worked for a manufacturer, I often got suggestions from my employees that we should offer incentives directly to our distributor employees to direct their activities more in the direction we wanted them heading. I always considered this a gross intrusion into the distributors business. As time went on, I did grow to like the idea of manufacturer incentives to distributor employees (paid through the distributor) to drive distributor employee training in areas of products and systems. Cash, trips, awards, peer recognition, all seemed to have a positive impact on employee capabilities.

When I made the move to distribution, I fell back on my old beliefs that a paycheck was appropriate compensation. I was convinced to try some experiments in incentives by some of my managers and we made some tentative tiny steps in some products. I have always been a big believer in unintended consequences so we put some safeguards in place. The results were both stunning and quite a wakeup call for me. The incentives drove growth, profitability and job satisfaction for the employees who participated.

We started out paying incentives to Parts Counter people and additional incentives to Product Support sales people. We quickly added incentives for other employees and we watched our growth in the incentivized items skyrocket.

Some of the lessons we learned were as follows:

  1. Pick commodity parts for your Counter and Product Support Sales. Your competition is often Walmart and NAPA and this is a real growth area.
  2. If you want to incentivize Service then look to rebuild opportunities and add-ons sold when a project is started.
  3. Incentives will tell you who your best employees are quicker than anything else I can come up with. Measure people on bonuses paid. Make sure you take the size of the market the employee is operating in into account.
  4. Make it easy on the managers and the employees. You have systems that can easily take care of all the administrative work. I have seen paperwork become a roadblock. Manufacturers love to get huge amounts of paperwork for most of their programs and many people opt out because of it.
  5. This will drive your inventory group crazy. You can’t base future sales on history when you offer incentives. Have way more inventory than you think you will need. It won’t be enough. Nothing screws this up like running out of inventory.
  6. Since you are going to be buying more and being a bigger customer- get a better price. Get a much better price. This will fund the incentives and increase profits at the same time.
  7. Let people know where they stand in company sales. Competition is fun and can push people to be very creative in a positive way.
  8. Incentives are a great way to help your employees understand what the company values and it will help them direct their activities in very positive ways.

Incentives that are properly directed will change your company. Your Part’s Department will become very customer service directed and your Counter will become a sales machine. Your Service Department will seek our more profitable work that can be planned. You will inevitably make some personnel changes but this usually ends up with getting people into spots more suited to their skills.  Employees operating at the highest level will make a great living for themselves and their families while they make the company much more profitable. They will also become much more difficult for you competitors to hire.

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Friday Filosophy v.01.28.2022

Henry Ford (July 30, 1863 – April 7, 1947) was an American engineer and businessman. He started making cars in 1896 and founded the Ford Motor Company. He developed the idea of a system in which each worker has the duty to do one small part of the process of making something. His idea made it possible to produce cars in large numbers. This was called the assembly line. Many factories around the world still make things this way. It was quite innovative at the time and it allowed him to produce many cars quickly and at a cheaper price than other car companies could. He married Clara Bryant and had one child named Edsel Bryant Ford. Ford left home for Detroit, Michigan to start his mechanical career.

In 1903, Henry Ford helped start the Ford Motor Company. He was the owner of the company.[1] The company sold its first car which was the model T car on July 23, 1903. Ford became president of the company in 1906.

In 1908, Ford’s company began making the Ford Model T car. Ford said that he wanted to make a “motor car for the great multitude”. This meant that he thought that most Americans should be able to afford to buy a car and not just a few rich people. In order to reach this goal, he chose to make the design as simple as possible. All his cars would be made the same way. They were even all the same color – black.

It cost $850 to buy a Model T car. Even though that was a lot of money back then, it was still very cheap for a car. Many people wanted to buy Model T cars. In fact, so many people wanted to buy them that Ford was having a hard time making enough cars to sell one to everybody who wanted to buy one. Ford helped develop an idea, not much used before his time, called the assembly line, and started using it in his factories in 1913. Because of the assembly line, making new cars would not take as long. He put a moving belt in his factory. Cars moved along the belt, and workers put on one part at a time. Each worker would only be responsible for putting one part on cars.

The assembly line was a big success. Cars did not take as long to make, and they were cheaper to buy now, too. By 1916, it only cost $360 to buy one of Ford’s cars, and more than three times as many people were buying his cars now. The Ford Model T changed America. It made it easier for people to live in the city instead of the country.

  • When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.
  • If everyone is moving forward together, then success takes care of itself.
  • Failure is simply the opportunity to begin again, this time more intelligently.
  • It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
  • If you think you can do a thing or think you can’t do a thing, you’re right.
  • If you think you can do a thing or think you can’t do a thing, you’re right.
  • Thinking is the hardest work there is, which is probably the reason why so few engage in it.
  • You can’t build a reputation on what you are going to do.
  • Quality means doing it right when no one is looking.
  • It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.
  • One of the greatest discoveries a man makes, one of his great surprises, is to find he can do what he was afraid he couldn’t do.
  • Don’t find fault, find a remedy.
  • It has been my observation that most people get ahead during the time that others waste.
  • A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.
  • The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.
  • As we advance in life, we learn the limits of our abilities.
  • There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.
  • I am looking for a lot of men who have an infinite capacity to not know what can’t be done.
  • If money is your hope for independence, you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.
  • The only real security that a man can have in this world is a reserve of knowledge, experience and ability.
  • Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.

The Time is Now.

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Introducing our Colleague John Sessums

Our new guest writer John Sessums is the owner of Mechanic and Techs LLC, based in Baton Rouge,  Louisiana. John’s career spans 38 years involved in equipment dealership management, and he is also an AEMP Certified Equipment Manager. As a Senior Product Support Manager and later as Wholegoods Sales Manager, Johns’s focus has always been on increasing sales by providing superior customer support. Once retired, he formed Mechanic and Techs and now offers a unique buffet of affordable Product Support Growth Solutions. M&T provides Consulting, Recruitment, Speciality Job Boards, On-Line Search Systems, LWS Skill Assessments/Training/Testing for those in Service, Parts, Sales, and Rental. 

I have been a past student of Ron Slee’s Quest Learning Centers, and I credit that training as the foundation of my success. As a Regional Manager of Product Support and later as Whole Goods Sales Manager, I have sent many of my employees and managers to Ron’s training seminars to learn from the GOAT himself. They each returned with a three-ring green binder that held the secret of success for themselves and their employers. Using Learning Without Scars, all companies looking to grow now have a proven method to succeed.

Every dealership is looking to grow, but most are more focused on handling day to day issues

Six years ago, after 38 years in the heavy equipment business, I launched a recruiting company focused primarily on recruiting higher-level equipment technicians. Our team created a buffet of employee management services for equipment dealerships across the country centered around LWS.

About two and a half years ago, Ron and I discussed a client who was having trouble finding the number of techs they needed. As we talked, I shared with Ron my main challenge was locating and vetting qualified people. Like everyone else, I had to take a candidate’s word that they actually had the skills they claimed to have.

Considering my company offered a performance guarantee, I needed a proven method to confirm a candidates’ knowledge and skill level before recommending them to clients. Being an old equipment guy, I also knew guarantees and refunds were great, but what I valued most was hiring qualified and committed people the first time. After talking with Ron over several weeks, I knew I had found the exact answers I needed.

Ron and I took part in an equipment industry article about five years ago about the coming technician crisis. What will now follow will be a rapid rise in wages and a gradual decline in overall tech competency and efficiency. As with technicians, the last train carrying needed Product Support replacements has already left the station and is rapidly heading towards that same bridge. Thankfully, all manufacturers offer excellent technician training, so that crisis will hopefully even out over time.

LWS will be at the forefront of product support employee training. Ron and his team have been busy formatting and transferring his thirty-plus years of knowledge and teaching onto the new LWS site for the past several years. Ron’s training seminars, books, and consulting have been considered the Gold Standard for Capital Goods dealerships across the U.S. and translated into several languages worldwide. Senior managers in dealerships across the country have vetted and approved the LWS courses. An equipment industry senior service management expert developed the Technician Assessments. While the site’s content was time-tested, duplicating Ron’s unique delivery method and personality online took time to perfect. You can now visit Learning Without Scars and view firsthand what our friend, along with his daughter Caroline, and the entire LWS team have been up to for the past few years. I think you will be very impressed.

Our company, Mechanics and Techs LLC., was designed and is staffed by seasoned semi-retired equipment industry corporate managers. We have successfully managed multi-branch Service, Parts, Outside Product Support Sales Teams, New and Used Sales teams, Rental groups and worked with a wide variety of brands and types of equipment and trucks.

We combined our many years of hands-on dealership experience to create a unique selection of affordable Product Support Growth Solutions specifically designed for our equipment industry clients. We provide Consulting, Recruitment, Specialty Job Boards, Web-Based Online Candidate Search Systems, LWS Skill Assessments/Training/Testing for those in Service, Parts, Sales, and Rental.

We will introduce you to more of our services, in more detail in the coming weeks and months. I look forward to having Mechanics and Techs working with learning Without Scars for years to come. Thanks for welcoming us as a Colleague.

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The Transition from an Equipment Dealership to a Technology Platform

Our new guest writer Alex Kraft Started as an equipment salesperson for Flagler Construction Equipment (Volvo heavy dealer in Florida) in 2004.  He worked in various positions at Flagler, ultimately serving as Chief Operating Officer from 2017 to early 2020 when Flagler was sold to Alta Equipment Company. Tonight he brings his expertise to our readers in his blog post on the transition from an equipment dealership to a technology platform.

Alex Kraft knows all about that transition. Alex started Heave in July 2020. Heave is an equipment platform.  Customers come to Heave and post an equipment need, our technology connects them with dealer salespeople, providing them multiple quotes in 1 place.  No more chasing salespeople down, getting voicemail, and waiting for calls back.  We love being brand agnostic and 100% focused on getting customers information that they need, quickly and with a lot less effort than they’ve had to put in traditionally.

The heavy equipment dealership/rental house couldn’t be more opposite from the “start-up” world.  But my dealership experience has helped me understand what is so special about the start-up environment. I started as a heavy equipment salesperson at 24 years old. It was my first “real job.” I didn’t know much about the industry before I started my career. As a young salesperson, I did my best to try and shadow some of the more successful vets, as well as pay attention to how the overall operation ran. It doesn’t take long to understand that “this is the way it’s always been done” is a mantra that is adhered to. The dollars are huge, brand names have been established, and dealers have protected territories. When you’re younger, you naturally ask a lot of questions: ‘why do we do it this way?’ and ‘has anyone thought to _____?’  Equipment dealers, and companies in general, are full of naysayers who love to tell you the three reasons why something won’t work. I’ve worked with tons of those people. There are those that probably would say I was that person at one time. It leads to constant stasis as no new ideas are introduced. You live in a world where it feels like the culture is, ‘let’s not screw this up’ as opposed to ‘let’s get this accomplished.’

When I took the risk of starting my own company, I had an idea based on my industry experience. We were now a start-up. One major difference off the bat: there are no bad ideas.  Everything is a test. It’s incredibly liberating because nothing stays the same. Our team’s internal conversations usually start with, ‘we tried this for 30 days, this is what really worked well, this is where things fell off….’.  We make a tweak and do another experiment. We’d fix that issue, then something else arises. We go through the same process all over again. I understand that this can seem exhausting for some, or for others who like structure it sounds like a nightmare, but for me it became such an energizing experience. I thought back to the times in my early career and realized how draining it can be to have teammates who are always shooting things down. Yet you sit in a customer meeting, and they tell you it’s your last chance because the people change, but nothing ever seems to change at your dealership.

With a start-up, it’s very empowering to work in a climate where it’s ok to be wrong, where it’s almost expected. When an idea doesn’t pan out, it’s because we tried it and have data that tells us it didn’t work. But also, what comes out of it are nuggets that we can apply to get a little bit better. Over time, those little incremental tweaks and improvements lead to a viable successful project. This entire process is what helped our young company figure out our niche and get traction with a new product in this market. If we were stubborn and had I shot down all my team’s ideas (since I was the only one with industry experience), we’d probably have folded up the tent and I’d be talking about what could have been. This is also what leads to great optimism because you become comfortable with the unknown, since your company is in a constant experimentation mode.

The point I want to get across in this post is to encourage dealer leaders to remember that they don’t have all the answers. And that’s ok. I may be wrong, but it seems like everyone is fearful of ‘digital’ and ‘technology’ because they represent new ways in an ‘old school’ industry. You may be the market leader right now and feel that you have the most to lose if you make some missteps trying something new. Technology can be a great equalizer for some other companies who aren’t afraid of embracing different ideas. Borrow a page from the start-up culture, and experiment in certain areas. Engage your teams and try something new, whether it’s in sales, rental, parts, or service. There is a large knowledge base in the market, so you all have team members with a great deal of experience. Start on a small scale, whether it’s selecting only one location as a test or a small sample size of customers. You don’t have to try a pilot across the entire company (actually I would discourage that since it may not be manageable). Give your employees the confidence that it’s their idea, it’s all in the interests of the company getting better, and they can be wrong! Let the results speak. Maybe it doesn’t get the intended result. That’s ok, at least you tried something different, and you know. The funny thing is, I bet your customers will be appreciative, because they respect your company trying to improve, and I bet your people will have some tweaks to the original idea that will get what you’re looking for. You will probably see a new energy among your employees as well, as they feel more connected to the company and in control of their destiny.

I don’t know Ron Slee that well yet, but I’d imagine that ‘Learning Without Scars’ is emblematic of trying something and messing it up, leaving a scar to remember.  When I think more about it, with my athletic background, we always learned more from losses than our wins. Yet, in business, it seems most companies are ultra-conservative and are trying to avoid mistakes. It is encouraging to see more industry specific content available on sites like this, as the dealership world has always been under the radar. Now the next step is to do something with this information and act.  All your customers will benefit.

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Quality of Communication Channel – Social Media

In this blog post, guest writer Ryszard Chciuk covers the quality of our communication channel and how social media can help us with the quality of the service we provide.

When writing about the quality of the communication channel, I mean the definition of service quality worked out by Parasuraman, Zeithaml, and Berry in 1985:

  • Service quality is the degree and direction of a discrepancy between customers’ service perceptions and expectations

To improve the quality, we have to close gaps causing the discrepancy between customer expectation and his perception of service. The central gap is:

  • Not Knowing What Customer Expects

This time I am writing about social media, the beneficial source of knowing what customers expect.

I am convinced that machine operators are the most influential people in the construction industry. Dealership management makes a big mistake neglecting their power. Their influence on the purchase decisions made by construction company owners is immense, however barely visible. For example, critical factors of every buying decision are fuel consumption, production volume, and the costs of repairs. The values of those factors depend mainly on the daily behavior of operators. Thereby machine operators can have the most significant impact on a machine dealer’s success.

Other significant groups of customer staff influencing purchase decisions are site supervisors, site managers, and project managers. Those groups are affected by machines’ downtime related to the quality of service.

Do you consider those influencers in your marketing actions? How do you engage them in both party (dealer and customer) success?

How do you utilize social media?

Over 24000 Polish operators are active on the Facebook Group. Mainly, they share their photos taken on construction sites. They also ask others how to operate a machine in given conditions or what is the meaning of the red or yellow lights on their dashboards. Operators share their opinions about the quality of service, spare parts availability, and parts pricing. They ask others about the best source of spare parts. There we find short stories about problems experienced with machines. As far, I have not noticed any activity of aftersales managers.

Another place on the internet is the forum Kopaczka (only in Polish), with over 51000 registered members. There you can read about the daily problems of service technicians, mechanics, operators, and owners of small fleets (in my country, plenty of operators own just one machine and operate as subcontractors). I could not find any dealership representatives active in those media. Maybe they read about troubles their partners(?) share with the public, but nobody knows if they do anything with it. Do you utilize that kind of priceless source of information and the cheapest way of communication in a better way?

What do I expect? The dedicated representative of the dealership is active for 24 hours a day in such places. He gives valuable answers to questions asked by members. He finds solutions in the most comprehensive knowledge base: the experience of service specialists and demo operators working for the manufacturer and his dealers. Somebody should collect all those answers at the dealership website. It could become a section of Q&A in the blog or the product support chapter. The massive collection of beneficial information will soon become the primary source of knowledge for all machine users. The dealer can get an additional competitive advantage if they invent intelligent filtering and structure of that information. To make their partners’ life more comfortable.

I love saying, “Hope the best, expect the worst.” If the status quo in your marketing prevails and it is billboard marketing, you as a dealer will be a victim of internal quarrels at the customer side. For example, a company owner wants more prestige by using machines from the top shelf. The CFO prefers your offer due to the financial conditions. Project managers wish to have equipment supported by the best service, and operators are most efficient working on machines they like the most. You will never know which party is more influential. However, suppose you have established communication channels with each influencer’s group. In that case, you get a chance to learn about your company’s weaknesses. And you have an opportunity to fix them instead of waiting for the divine will.

Please keep in mind: Leaders who employ social listening — analyzing what consumers say on social media — can gain a competitive advantage by getting better insights that they can act on quickly, without incurring the higher cost of traditional approaches.

NOTE: Please look at the social media sites Ryszard is mentioning and find the parallel sites in your geographical areas.

 

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Friday Filosophy v.01.21.2022

Herodotus: c. 484 – c. 425 bc was an Ancient Greek historian. He was born in Halicarnassus, a town in south-west Asia Minor (now BodrumTurkey)

Herodotus was called the “Father of History” by Cicero. He wrote about the ancient empires of BabylonEgypt, and Persia, and about the Ancient Greeks.

During his life, Herodotus probably told his stories in front of large numbers of people in Greek cities. Some men at the time did this for pay. He is now most famous for his writings about the wars between the Persian Empire and the Greek city-states. He told the story from the Greek side, although the war was mostly finished when he was still a child.

In his books, Herodotus tells us that he travelled a lot. He says that he went to what is now Italy (including Sicily), UkraineEgypt and Pakistan. He may also have travelled to Babylon in today’s Iraq. He often used stories from people he met to write about other places and happenings.

Some people think that Herodotus wrote about things that were not true. That is possible, because he would have relied on information from various sources. His work is important because there is very little writing on these subjects before his works.

The works of Herodotus are available today in translations.

  • The only good is knowledge, and the only evil is ignorance.
  • In peace, sons bury their fathers. In war, fathers bury their sons.
  • Of all possessions a friend is the most precious.
  • Circumstances rule men; men do not rule circumstances.
  • Great deeds are usually wrought at great risks.
  • Of all men’s miseries the bitterest is this: to know so much and to have control over nothing.
  • Death is a delightful hiding place for weary men.
  • Some men give up their designs when they have almost reached the goal; While others, on the contrary, obtain a victory by exerting, at the last moment, more vigorous efforts than ever before.
  • Of all men’s miseries the bitterest is this: to know so much and to have control over nothing.
  • He is the best man who, when making his plans, fears and reflects on everything that can happen to him, but in the moment of action is bold.
  • To think well and to consent to obey someone giving good advice are the same thing.
  • There is nothing more foolish, nothing more given to outrage than a useless mob.
  • It is clear that not in one thing alone, but in many ways equality and freedom of speech are a good thing.
  • Civil strife is as much a greater evil than a concerted war effort as war itself is worse than peace.

The Time is Now.

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The Business Model

Founder and Managing Member Ron Slee walks us through a close look at the Business Model. 

Let’s Revisit our Business Model

With the famous “supply chain” issues that we have been experiencing for the past few years and the serious difficulty in finding, attracting, hiring and retaining talented people I believe that we need to seriously re-evaluate the business model which has been basically unchanged since the early 1980s. Product Support has to become more prominent in the dealer businesses, marketing territory coverage issues need to be addressed and purchasing, transportation logistics and customer service have to become not only contactless, through the internet, but also exemplary in the eyes of the customer. The other aspect of the parts and service business that needs to addressed is the market capture rates. In the past fifty years the parts and service market shares have been reduced by half, fifty percent. This not a good thing. It is a reflection that we are not covering our marketplace very well. In fact, we probably do not initiate contact, with a phone call or personal visit, with even twenty-five percent of the customers that purchase parts and service from us. This is another aspect of our business model that needs review.

This model was created in the early nineteen-eighties. This, while interest rates were running in the mid to high teens. This, after we had reduced our head counts to be able to pay our interest expenses. We have been able to withstand numerous financial cycles in those forty years. Yet we continue to operate within the same business model.

So, let’s look at this a bit.

  • What is our Market Penetration and how do we address that?
  • What is our Parts Inventory Turnover, our WIP Turnover? How well do we manage our assets?
  • What is our Productivity Level as measured by sales per employee?
  • What should the standard be for sales/Employee?
  • What is our cost recovery of standard charges? Supplies, Emergency Service Charges, Vehicle Expenses, Restocking and Handling Charges?
  • What is our Pricing Policy?
  • What is the Gross Margin realized for Parts or Service?
  • What is the Net Operating Income for Parts or Service?
  • What is your customer retention rate? (How many customers defect from you?)

This is not going to be easy.

The fundamental ratio of success in the equipment dealer business model was done before rental became as important as it is today. It is called Absorption. Under that model the expectation was that best practices required parts and service to be 50% of the total sales revenue for the dealership. Minimum performance as 40%. This was split to be 25% for the parts business and 15% for the service business. If you exclude the rental business for the revenue, cost of sales and expenses, including interest expense. You can use this methodology to see how you stack up.

The Rental Business today has sufficient volume with most dealers to warrant becoming a standalone option within the dealership. Either a separate company or separate division. The purpose of the rental business is primarily two-fold; generating customer satisfaction and profitability while at the same time creating well maintained good value used equipment.

The traditional dealership is equipment sales, new and used, parts and service. This portion of the dealership should deliver a minimum of 100% absorption. The definition of absorption is as follows; – The Net Income of Parts and Service divided by all the expenses for Sales and Administration as well as the inventory interest expense results in a number > 1.00.

This definition of absorption has been in use since at least the 1960’s. It is a common belief that it was created by William Blackie when he was the Chairman of Caterpillar Tractor. Early in my career I met Mr. Blackie. It is a very special memory for me. He was one of a kind. I offered to work for him as a trainee for $100.00/month. He suggested there wasn’t much he could teach me but more importantly he thought $100.00/month was a bit steep. He was kidding of course. Bill gave me terrific advice. It is something that I have never forgotten. He said that although absorption was a critical business management tool, it wasn’t all about the net income of parts and service. It was also about constraining the expenses in the sales and administration departments and putting some control on the level of equipment inventory that bore interest charges. This is a critical fact that most people choose to overlook. Parts and Service Net Income can not cover profligate expenses in Sales and Administration. Nor can it cover excess machine and attachment inventory levels.

Looking at the Parts and Service businesses we have some measures that need to be reviewed and standards determined for each according to your line up of brands and your geography. The following is a short, and incomplete list.

Sales Revenue

  • Parts, by category, Customer, Service, Warranty, Internal, Expense
  • Service, by category, Customer Shop, Customer Field, Internal Shop, Internal Field, Warranty, Expense.

Personnel Expenses

  • Parts; salaries, wages, overtime benefits, commissions, etc.
  • Service; salaries, wages, overtime benefits, commissions, etc.

Operating Expenses

  • Parts; Vehicles, Service Charges, Systems, Forms and Materials, Training, etc.
  • Service: Vehicles, Shop Supplies, Small Tools, Licenses, Training, etc.

Fixed Expenses

  • Parts; Rent, (mortgages) Heat, Light, Insurance and Taxes
  • Service; Rent, (mortgages) Heat, Light, Insurance and Taxes

Head Count

  • Parts; In Store Selling, Warehouse, Office, Leadership
  • Service; Office, Technicians, Leadership

Assets

  • Parts; Inventory, Vehicles
  • Service; WIP, Tooling, Vehicles

Net Income

  • Parts; >25%
  • Service; > 25%

In the coming weeks I will break down this model in more detail and leave up to you to determine how you want to proceed. Our executives and owners today are for the most part between fifty-five and seventy-five years of age. At that age they are very risk averse. They seem to be operating on autopilot. This is a time for action. This is a time to make significant or some would say even radical change. Einstein said that continuing to do what you have always done expecting different results is insanity. I think we all can relate to what I am saying. We have yet to exploit our systems and technology. As Alex Schuessler calls it “Paper to Glass.” We have used technology to make things faster but we have simply replaced a form filled in by pen with a screen template, that looks like the form, that we fill in using a keyboard.

It is long overdue. It is time to replace the business model. The Millennials and Gen X and Gen Z are demanding it. And they are proving it with their job change statistics. Each month for the past four months over 3% of the workforce has changed jobs. That is the highest level recorded in many decades. This is a reflection of the fact that they are not going to accept the status quo. They want and need to do better. I think they are right. Care to join me with them and change our business model for the better?

The Time is Now.

Did you enjoy this blog? Read more great blog posts here.
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Friday Filosophy v.01.14.2022

Ray Douglas Bradbury: August 22, 1920 – June 5, 2012) was an American author and screenwriter. One of the most celebrated 20th-century American writers, he worked in a variety of modes, including fantasyscience fictionhorrormystery, and realistic fiction. Bradbury was mainly known for his novel Fahrenheit 451 (1953) and his short-story collections The Martian Chronicles (1950) and The Illustrated Man (1951).[4] Most of his best known work is speculative fiction, but he also worked in other genres, such as the coming of age novel Dandelion Wine (1957) and the fictionalized memoir Green Shadows, White Whale (1992). He also wrote and consulted on screenplays and television scripts, including Moby Dick and It Came from Outer Space. Many of his works were adapted into television and film productions as well as comic books. The New York Times called Bradbury “the writer most responsible for bringing modern science fiction into the literary mainstream.”

Bradbury was born on August 22, 1920, in Waukegan, Illinois, to Esther (née Moberg) Bradbury (1888–1966), a Swedish immigrant, and Leonard Spaulding Bradbury (1890–1957), a power and telephone lineman of English ancestry. He was given the middle name “Douglas” after the actor Douglas Fairbanks.

Bradbury was surrounded by an extended family during his early childhood and formative years in Waukegan. An aunt read him short stories when he was a child.[9] This period provided foundations for both the author and his stories. In Bradbury’s works of fiction, 1920s Waukegan becomes “Green Town”, Illinois.

The Bradbury family lived in Tucson, Arizona, during 1926–1927 and 1932–1933 while their father pursued employment, each time returning to Waukegan. While living in Tucson, Bradbury attended Amphi Junior High School and Roskruge Junior High School. They eventually settled in Los Angeles in 1934 when Bradbury was 14 years old. The family arrived with only US$40 (equivalent to $774 in 2020), which paid for rent and food until his father finally found a job making wire at a cable company for $14 a week (equivalent to $271 in 2020). This meant that they could stay, and Bradbury, who was in love with Hollywood, was ecstatic.]

Bradbury attended Los Angeles High School and was active in the drama club. He often roller-skated through Hollywood in hopes of meeting celebrities. Among the creative and talented people Bradbury met were special-effects pioneer Ray Harryhausen and radio star George Burns. Bradbury’s first pay as a writer, at age 14, was for a joke he sold to George Burns to use on the Burns and Allen radio show.

  • There are worse crimes than burning books. One of them is not reading them.
  • Don’t think. Thinking is the enemy of creativity. It’s self-conscious, and anything self-conscious is lousy. You can’t try to do things. You simply must do things.
  • Jump, and you will find out how to unfold your wings as you fall.
  • If we listened to our intellect, we’d never have a love affair. We’d never have a friendship. We’d never go into business, because we’d be cynical. Well, that’s nonsense. You’ve got to jump off cliffs all the time and build your wings on the way down.
  • I don’t try to describe the future. I try to prevent it.
  • Stuff your eyes with wonder, live as if you’d drop dead in ten seconds. See the world. It’s more fantastic than any dream made or paid for in factories.
  • I hate all politics. I don’t like either political party. One should not belong to them – one should be an individual, standing in the middle. Anyone that belongs to a party stops thinking.
  • I know you’ve heard it a thousand times before. But it’s true – hard work pays off. If you want to be good, you have to practice, practice, practice. If you don’t love something, then don’t do it.
  • Science fiction is any idea that occurs in the head and doesn’t exist yet, but soon will, and will change everything for everybody, and nothing will ever be the same again. As soon as you have an idea that changes some small part of the world you are writing science fiction. It is always the art of the possible, never the impossible.
  • Fall in love and stay in love. Write only what you love, and love what you write. The key word is love. You have to get up in the morning and write something you love, something to live for.
  • Every morning I jump out of bed and step on a landmine. The landmine is me. After the explosion, I spend the rest of the day putting the pieces together.

The Time is Now.

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Go Live Success!

Tonight, guest writer Christ Kohart shares the ins and outs of how to succeed at ERP in Go Live Success. 

How to Succeed at ERP despite what you’ve read!

Time to upgrade your dealer business system (ERP)? In a continuing series, this question was recently asked of you. If you answered ‘Yes’ or ‘Maybe,’ the following information is for you.  Approached wisely and thoughtfully by both the dealership and the ERP provider, an ERP upgrade will reap the rewards starting with day one. This article will share one of the best practices that delivered positive experiences for those well-prepared dealerships (and for their business partners). The dealership that provided the bullets below had a successful go-live and continues to thrive on its ERP.

Here are a few improvements experienced shortly after going live on the new ERP:

  • Increased accuracy
  • Ability to track your dealerships share of customers spend
  • Instant, real-time reporting
  • Financially close an accounting period within two business days
  • Simplified transaction structure
  • Immediate updates to global data from all areas of the solution

How were these results apparent so quickly? Preparation, research, planning, establishing metrics, training, and execution. As with anything we approach, properly planned new endeavors have a much higher chance of success than when planning was only at a high level. This article will look at the importance of reviewing processes you use throughout the dealership and then the subsequent implementation of standard processes throughout your dealership.

At this dealership, during the early stages of transformation (before committing to a specific ERP), there was extreme pushback from staff regarding the number of processes requiring review and standardization. There is still the thought process in our industry that “we’ve been successful for decades doing it this way, why change?” I’m going to continue those out who do not standardize processes now, whether or not the dealership is considering digital transformation. Why? If you do not embrace standard processes throughout the dealership, you are not creating consistent, repeatable (and reliably reportable) results. This same dealership demonstrated the fortitude to thoroughly review 300 processes across all business areas (Accounting, Sales & CRM, Rental, Product Support).   At the start, many processes had not been standardized between departments (such as purchasing) and locations (“every branch has their individual way of doing it”). At the end of this endeavor, the dealership had created a solid purchasing and purchase approval process and standardized operational processes across their branch network. The first result realized before selecting an ERP:  The dealership had the documentation necessary to establish metrics used during the ERP selection process. The second result:  The dealership solved their difficulty in capturing and correctly categorizing purchases, whether for internal consumption, resale on a work order (how many times have you received an invoice for outside work & materials long after a work order was closed and invoiced without the charges?), or components that should have been capitalized vs. expensed when installed on prime products?

Let’s address each bullet point and how cleaning up and standardizing their processes affected the outcome after going live:

  • Increased accuracy. By creating standards (processes), every manager and staff member creates and enters information in the same format. If your staff doesn’t format correctly, the entry will not be accepted until corrected. You are now reporting on clean, accurate and identically formatted data from all sources.
  • Ability to track your dealership’s share of customer spend. Suppose your machine ownership database is accurate (I will save that for a future article). Your employees follow an established process for tracking all sales and activities by equipment (asset). In that case, your ERP can produce a report based on product support sales by specific equipment and customer based on operating hours vs. sales. Telematics can further enhance this activity, and I’ll reserve this topic for the future. The bottom line is that you will gain the insight necessary to increase your product support sales to your customers.
  • Instant, real-time reporting. Since ERP’s run in real-time, the overnight batch functions required to update different modules within the business system disappears. A couple of examples: Once a rental contract is created, the status of a rental asset instantly changes from available to reserved; once it’s on rent, status changes from reserved to on-rent. When you close a work order, it updates A/R and is available for review within service history.
  • Financially close an accounting period within two business days. You deployed standardized purchasing processes: when goods are received, they are on the books whether or not you have received the vendor’s invoice. In Service, work orders or individual segments close the day after the completion of work, and labor hours are entered and posted each day. Closing periods become more of a final review. The ERP either automatically creates reports or advises management when the period is closed and allows them to create their custom reports.
  • Simplified transaction structure. Everyone undertakes the same activity the same way, and fewer steps lead to greater efficiency and fewer mistakes. It also allows personnel to cover/take over other activities as a standard process guide is available. Many ERPs will enable you to upload your process documents directly in the program help files.
  • Immediate updates to global data from all areas of the solution. Since you have deployed ERP, information entered in one area updates all pertinent information system-wide. Your CRM connects to Sales, Rental, Product Support, and Accounting instantly. For example, suppose a PSSR makes a customer visit and discovers they are unhappy with a recent rental billing. The PSSR can enter this information in CRM. The responsible rental sales representative, branch rental manager, accounting department, and anyone within the dealership who needs to know are notified instantly. This is all driven by a standard process that drives activity within CRM and, if you deploy it, workflow.

While only one of many steps, it’s incredible how vital the “boring” process becomes when running your business. It’s imperative to undertake this review if you want to have excellent odds to succeed when you go live.

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The Digital Dealership – Where we are now?

Guest writer Mets Kramer updates us on where we are now in this continuation of his series on The Digital Dealership.

Next week, at the AED Summit in Orlando, I’ll be presenting the Digital Dealership concept in the education series.  During the hour we’ll have a chance to dive more deeply into some of the topics I’ve presented over the past year. Even more exciting, we’ll get to have open discussion.

The Digital Dealership will focus on the transformative impact of information, expectations and the new channels of engagement with customers and your audience.

Over the past 2 decades we’ve seen a massive shift in the business models of many different industries. We’ve also seen the impact of a changing demographics as new generations come into the working world and as the world of digital communication broadens. The result is a growing gap between the old approach to business, and the younger generations. The old approach to business was built by the older generations who are also, frequently the most senior managers.  The newer generations, who are often the buyers, have their own expectations on how they want to carry out business. This collision of generation, technology and expectation creates both the most significant opportunity to differentiate and grow, and the highest risk to existing dealerships. In the past decade alone, we have seen major retailers and corporations lose decades or even a century’s foothold in their industry. Gone are companies like Borders and Blockbuster, and JCPenney almost joined them. Numerous others have simply failed to keep up and been relegated to the margins. Each of these companies failed to react to clear changes in the industry and buyer expectations, while their competitors did.

There are clear differences between the companies that failed or succeeded. Those that succeeded have several things in common. First, they saw the change in the market and buyer’s expectations and changed their business model to address these changing conditions. Second each of these companies started to understand the importance of information to their business and learned how to apply it. Finally, these companies applied these first 2 points to their entire business, they didn’t make it a bolt on to their existing business, which remained operating in the old way.

The first point is probably the hardest to grasp as it’s a combination of 2 inputs each effecting the other to produce an exponential rate of change in buyer expectations. In today’s business world we have 3-4 generations comprising our teams. With some of the last Baby Boomers still in the work force and often in the most senior positions, Gen X is now well placed throughout organizations, the Millennials are getting a strong foot hold in decision making and now Gen Z is entering the workplace. All this means we have some people who started in the corporate world before any computers existed and, at the same time, we have new entries into the business who have only known a world with smartphones and internet. How these different generations see the realm of possibilities couldn’t be farther apart. I’ll admit, I’m in the generation that thinks if the internet goes down, in a store, they should switch to handwritten bills and take cash, but that makes me old.  Some people have never seen this type of POS terminal, it’s completely foreign, so they would avoid a store that still uses it. Furthermore, our youngest generations have always been able to find the information they needed, when ever they wanted. When they wanted something, they can order it from their phone. This collision of generational experience gap and changing expectations will drive the fastest change in business to business buying and business process we have ever seen. Change we’re already seeing in other industries.

Information has both contributed to the prediction of change and the resetting of expectations in all areas of commerce. Many of the most admired and referenced companies in our world have been the best at applying information and technology to their business, vaulting them over competitors, or blasting from obscurity to relevance. Information, and more importantly the analysis and application of information, has allowed organizations to foresee changes in the business. They have fine tuned their operations to trim waste and better apply capital.   Furthermore, the analysis has driven action and change. Change in how companies engage with their customers and meet their customers’ growing expectations. While personal relationships and partnership remain a cornerstone of any business relationship, the expectation for partnership now includes deeper integration and focus on improving the transactional efficiencies. Information has inspired a massive improvement in understanding the drivers in a buyer’s decision making. It has highlighted the small differences in presentation and product definition that impact sales. The best competitors have combined this insight with a growing database of customer data to capture increases in total sales and market share.

When the acceleration of changing expectations come together with information, we see the genetics of the best of the best organizations. Those “Most Admired”. These organizations have used the information they are collecting daily to see the growing rate of change coming from new generations, and new expectations fueled by technology, social media and digital systems.  They apply this analysis to all aspects of the business, changing the structure of the organization.  In some industries we’ve seen long standing businesses either change or be replaced by new entrants who understand what a modern organization need to be. For dealers in our industry, both mainline OEM and independents, it’s no longer adequate to meet these changes with partial measures. Your website can no longer be a billboard, your social media engagement can’t just be advertising, your parts department can’t remain a “call for availability” or a “call to place an order” department. Your sales department won’t survive on “call for details”.   The growing rate of changing expectations is your opportunity to succeed.

Each one of you have no doubt worked with family-owned contractors that saw a change in generational management. The original owner handing the business to their children came not just with a change of faces but came with changes in the approach to business relationships, focus of the business and new expectations on your role and how to be a partner.

The Digital dealership looks at all these items in more details. We will also look at actions any dealer can take to assess the impact of these changes in their business. We will look at what actions can be taken to implement new approaches to the business and remain a leading competitor in the field.

If you’re going to AED, I look forward to seeing you in the Digital Dealership session, and if you’re not, I’ll continue to develop the details in this blog series.

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