This week we introduce our new guest writer, Troy Ottmer. He joins us with his blog post “Re-Inventing Customer Service: Improving the Employee Experience in the Modern Era.” Troy Ottmer began his career in 1987 as an automotive technician, with a specialization in electronics, including drivability diagnostics, anti-lock brakes and other new emerging technologies for that era. Over the years, he expanded his technical expertise across automotive, light-duty, medium-duty, and heavy-duty trucks, eventually venturing into off-road construction equipment. His early career included roles in shop and mobile technical repairs, as well as fleet management, culminating in his entry into the John Deere dealer network in 1998.
From 1998 to 2017, Troy built a reputation as a leader in dealer operations, excelling in areas such as New & Used Sales, Rental & Lease, Parts, Service, and General Operations. His tenure in the John Deere dealer world provided him with a solid foundation in customer-centric leadership and operational excellence.
Troy’s leadership journey continued with prominent executive roles, including Vice President of Fixed Operations at Doggett Equipment Services (2010–2017) and Vice President of Operations at Koppers (2017–2020). At Koppers, he managed operational efficiency and spearheaded strategic growth in specialized industries, including material recovery services for biomass materials. From 2020 to 2024, he served as General Manager at Rush Truck and Bus Centers, where he successfully oversaw operations and drove business growth.
In addition, Troy held the position of Director of Parts, Service, and General Operations at Rush Enterprises John Deere Construction from 1998 to 2010, until the franchise transitioned to Doggett.
With a robust technical foundation in both on-road and off-road equipment, Troy combines strategic acumen with hands-on expertise. His extensive executive experience spans over a decade, marked by a proven ability to enhance operational efficiency and implement innovative solutions in the transportation, industrial, and equipment services sectors.
In today’s highly connected world, customer service is more critical than ever. Yet, to deliver exceptional customer service, businesses must start by focusing on their employees. Happy, empowered, and well-supported employees are the foundation of a superior customer experience. Metrics like the Customer Satisfaction Index (CSI) and Employee Satisfaction Index (ESI) serve as vital tools to measure and improve both experiences, but the core truth is simple: a happy, productive employee will almost always translate to a happy and very satisfied customer.
Customer Expectations in the Digital Age
Customers today are more informed and connected than ever before. With social media and search engines, word-of-mouth travels at lightning speed. A single negative experience can reach thousands of people instantly, while a positive interaction has the power to build lasting loyalty.
Beyond satisfaction, customers increasingly value authenticity, transparency, and ethical practices. They care not only about how businesses treat them but also about how companies treat their employees. A company’s employee satisfaction often influences customer perceptions, making the Employee Satisfaction Index (ESI) a critical factor in boosting the Customer Satisfaction Index (CSI).
The Employee-Customer Connection
The connection between employee happiness and customer satisfaction cannot be overstated. Employees who are engaged, motivated, and empowered are more likely to:
- Provide proactive and personalized customer service.
- Go above and beyond to resolve issues.
- Build genuine, positive relationships with customers.
This is because an employee’s energy, attitude, and commitment to their work are directly felt by the customer. A disengaged employee, on the other hand, can inadvertently communicate indifference or frustration, leading to subpar customer experiences. By creating a work environment that prioritizes employee well-being and productivity, businesses set the stage for consistently high customer satisfaction.
Using ESI to Improve CSI
The Employee Satisfaction Index (ESI) measures how happy and engaged employees are with their roles, workplace, and leadership. A high ESI score often correlates with a high Customer Satisfaction Index (CSI) because:
- Engaged employees are better problem-solvers. They approach customer issues with creativity and determination.
- Happy employees create a positive atmosphere. Customers notice and appreciate this energy.
- Satisfied employees are more loyal. They develop deeper institutional knowledge and stronger customer relationships over time.
To ensure employees are happy and productive, focus on these key areas:
Equip employees with the skills, tools, and autonomy they need to excel in their roles. Confidence in their abilities translates to confidence in customer interactions.
Provide ongoing training in areas like communication, conflict resolution, and technical expertise.
Foster a culture of respect, recognition, and inclusivity. Employees who feel valued are more likely to treat customers with care and empathy.
Create opportunities for collaboration and camaraderie, which enhance job satisfaction and productivity.
- Feedback and Communication
Regularly conduct ESI surveys to identify areas for improvement. Employees who feel heard are more likely to stay engaged.
Share CSI results with employees and involve them in strategies to improve customer satisfaction.
Recognize employees for exceptional performance. Whether it’s a simple thank-you, a shoutout during team meetings, or formal rewards programs, recognition motivates employees to continue exceeding expectations.
Reinventing Customer Service with CSI and ESI
Both the Customer Satisfaction Index (CSI) and Employee Satisfaction Index (ESI) should be central to your customer service strategy. Here’s how to use them effectively:
Track and Compare
Monitor CSI and ESI regularly and analyze their correlation. A dip in employee satisfaction often signals potential issues in customer satisfaction.
Identify patterns: Are specific teams or locations excelling? Are certain departments struggling? Use this data to replicate successes and address challenges.
Proactive Engagement
Anticipate customer and employee needs. For example, ensure employees have clear schedules and manageable workloads, which allows them to serve customers with more focus and energy.
Align Goals
Set shared goals for improving ESI and CSI. For instance, initiatives like reducing customer complaints or increasing first-call resolution rates benefit both metrics.
Measure the Impact of Changes
Test new strategies or tools and assess their effects on both indexes. For example, implementing a new CRM system could make employees’ jobs easier and improve customer service quality.
Why Employee Happiness Translates to Customer Satisfaction
When employees feel supported and valued, they are more motivated to provide outstanding service. Their enthusiasm and commitment create a ripple effect:
- Higher Productivity: Engaged employee’s complete tasks more efficiently, leading to faster resolutions for customers.
- Better Communication: Happy employees communicate with clarity and warmth, creating positive interactions.
- Customer Loyalty: Satisfied customers are more likely to return and recommend the business to others.
Conversely, a workplace that neglects employee well-being risks disengaged staff, higher turnover, and ultimately dissatisfied customers. The connection is so strong that many businesses now see employee experience as the backbone of customer experience.
Modern Best Practices for Reinventing Customer Service
- Personalized Customer Interactions
Use CRM systems to track customer preferences and history, enabling employees to deliver tailored service. Employees benefit from streamlined processes, and customers feel valued.
2. Omnichannel Support
Provide consistent service across platforms, from phone and email to social media and live chat. This ensures employees have the tools they need to provide seamless support.
3. Transparency
Keep employees and customers informed at every step. Transparent communication builds trust on both sides of the service equation.
4. Celebrate Wins
Celebrate both customer and employee milestones, such as achieving high CSI scores or completing team projects. Recognition strengthens the bond between employees and the organization.
A Symbiotic Cycle of Success
Happy employees drive customer satisfaction, and happy customers boost employee morale—a symbiotic cycle that fuels long-term success. Investing in the employee experience isn’t just good for business; it’s essential in today’s competitive landscape.
By prioritizing both the Employee Satisfaction Index (ESI) and Customer Satisfaction Index (CSI), businesses create a thriving environment where employees and customers feel valued, heard, and connected. This dual focus is the cornerstone of reinventing customer service and securing a competitive edge in the modern era.
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Behind the Scenes of 2024
Behind the Scenes of 2024
Guest writer Alex Kraft recaps the year that was in his guest blog: “Behind the Scenes of 2024.”
I hate it when things slow down, but that’s the reality when Christmas and New Year’s both fall on Wednesdays. On the other side, I guess it’s a good time to reflect on 2024 and our company’s progress.
In 2023, Heave was an idea. Everything started with a “What if…?” I still remember our first service call and our first technician. I managed our jobs on a spreadsheet. The first twelve months focused on proving that the idea created value and solved customer pain points. This past year, 2024, was about building a real company. As more customers came on board, we discovered more problems. Not shut-the-doors type problems, but rather more ‘we need the ability to do XYZ’ type problems. Truthfully, 2024 was probably the most fun I’ve ever had professionally. We grew the team from five to twenty-one employees. Our service revenue grew every month, we onboarded hundreds of customers who all had similar first-time reactions to Heave: “How has this not existed before?” “This is so needed!”, “Are you kidding? I can get a tech today!” “What’s the catch?”… Feeling this enthusiasm from our customer base was a first for me. We were making a difference.
Because things at a start-up move so quickly, one needs to focus on the present with one eye toward the future. As silly as this sounds, I’d gotten so used to how Heave operates today that I forgot some of the early days and the scrappy environment in 2023. Preparing for our year-end meeting and holiday party forced me to go back through the year and share our twelve months’ progress. Some of our key product advancements this year include:
Launched a desktop version of Heave! From our inception in January 2023 up until Q2 2024, the only way customers could order service/book technicians by using the mobile app. While smartphones dominate the world, most customer fleet managers are confined to the office. A desktop application was long overdue for our core users.
It’s been incredibly exciting to see our technology change so much in the past year. The same can be said for our company overall. I mentioned above how we’ve grown from 5 employees to twenty-one. Our footprint grew from Florida and Texas to now helping customers in the following states: Indiana, Ohio, North Carolina, Tennessee, and Georgia. We’ve repaired 100+ different brands and added 150+ new technicians in 2024. New types of customers gave Heave a try, as we started to partner with rental companies and dealerships to help repair their large fleets. Sometimes I have to pinch myself, as much as I thought this was all possible, seeing it build and take shape is surreal.
What does 2025 look like for Heave? We have financial goals like everyone else as well as a product roadmap to build. I love that we’re the ones blazing the trail on service—and I love that people are paying attention! Customers may not have necessarily been searching for a tech company to solve their service woes, but at our core Heave is a customer service company. We just use technology to help create the best overall experience to minimize downtime and cost for our customers. Year three will be focused on maturing as a company, and opening new geographies, all while not losing the hunger of the early days. While it will never get old to me, seeing a customer’s first reaction when they learn what Heave does, Year 3 will be a success when we become a recognized brand. When Heave is synonymous with on-demand field service and same-day response, that’s when the tipping point occurs…
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The Importance of Email Distribution Lists for Equipment Dealers
The Importance of Email Distribution Lists for Equipment Dealers
Guest writer Debbie Frakes brings digital marketing front and center in her blog post this week: “The Importance of Email Distribution Lists for Equipment Dealers.”
Making the Most of Your Equipment Dealer Email Marketing
For equipment dealers, maintaining a strong email marketing program is essential for reaching customers about new inventory, service promotions, and parts availability. The foundation of successful dealer communications starts with a well-maintained distribution list. Regular database cleaning helps ensure your messages reach active customers and prospects, whether they’re contractors, fleet managers, or municipal buyers, improving your marketing effectiveness.
Ensure your customer database stays current
Contact information changes frequently as personnel move between construction companies, municipalities hire new procurement officers, and contractors expand or restructure their businesses. It’s important to create a systematic approach to verify and update contact details, particularly for high value customers and major fleet accounts. You need to confirm the right contacts for equipment purchasing, service management, and parts ordering. Regular phone verification and database updates ensure your communications reach the right decision makers.
Grow your contact list
Expand your customer base by analyzing your current successful accounts. Look at the types of contractors, construction companies, and municipal departments that consistently do business with your dealership. Use industry classifications (SIC/NAICS) to identify similar organizations in your territory. Develop targeted outreach to connect with equipment managers, maintenance supervisors, and purchasing directors at these organizations.
When approaching new prospects, focus on understanding their equipment needs, machine preferences, and service requirements before adding them to your distribution list. Doing so ensures your database grows with qualified contacts who are genuinely interested in your equipment offerings and support services.
Properly segment your email distribution list
Transform your basic customer list into a strategic marketing tool by segmenting contacts based on their specific needs. Group customers by the type of equipment they own, service history, parts purchasing patterns, or industry focus. This practice helps you to send targeted communications about relevant equipment models, seasonal service promotions, or specific parts inventory. Use your email platform to create focused groups, enabling you to craft messages that resonate with each segment’s unique requirements.
Use the right technical tools
The technical foundation of a dealer’s email marketing system is vital for its success. It’s important to choose a comprehensive platform that offers advanced management features, including automatic bounce processing, interaction monitoring, and compliance capabilities. Set up key email security protocols including SPF, DKIM, and DMARC to enhance delivery rates and prevent email fraud. Ensure your management practices comply with global privacy regulations like GDPR and CAN-SPAM, maintaining clear policies on data collection and usage.
Find expert marketing support for equipment dealers
Taking on effective email marketing alongside running a busy equipment dealership can be challenging. That’s where our partner, Winsby, comes in. They specialize in equipment dealer marketing, and they create and send out emails for most of their clients. They understand the equipment industry and handle everything from database management to developing content that causes recipients to act. Topics include machine inventory, parts specials, service promotions, plus development of best practices for various segments of your customer list. They manage the entire process—from verifying customer contacts to designing and sending targeted emails. You simply review and approve the communications.
Want to start sending out emails that generate sales?
Contact Winsby today!
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Amazon and the endangered future of the middle manager
Amazon and the endangered future of the middle manager
Amazon and the endangered future of the middle manager, published Sun, Dec 15 20249:06 AM EST. By Trevor Laurence Jockims. Amazon CEO Andy Jassy speaks during a keynote address at AWS: Invent 2024, a conference hosted by Amazon Web Services. The Venetian Las Vegas on December 3, 2024, in Las Vegas, Nevada.
Amazon CEO Andy Jassy’s note sent this fall to employees about corporate culture drew headlines for his five-day-in-the-office mandate. But Jassy’s messaging on an increased ratio of individual contributors to managers raises a much bigger question about organizational structure: What is the right balance between individual workers and managers in overall headcount? It’s a question that corporations have long struggled to define with anything but anecdotal findings.
With companies now firmly in a post-Covid world, organizational experts say Amazon may be leading the way in a new look at efficiency gains related to corporate bloat, and especially middle management bloat.
“We have grown our teams quickly and substantially,” said an Amazon spokesperson, echoing the message in Jassy’s note: “When I think about my time at Amazon, I never imagined I’d be at the company for 27 years … Part of why I’ve stayed has been the unprecedented growth (we had $15M of annual revenue the year before I joined—this year should be well north of $600B).”
That growth, the spokesperson said, inevitably led to adding a lot of managers. Comparing Amazon’s plan to Meta’s recent year of efficiency, the spokesperson said the company ended up adding more layers than it had before due to its growth and now is the right time to bring the structure “closer to our customers” and reinforce Amazon’s “culture of ownership.”
Over the past few years, layoffs have been as prominent as hiring in the tech sector. In 2022-2023, the sector was in what could be called the years of the layoff. While that headcount continues, the Amazon thinking involves a broader rethink of how to right size the largest corporations.
Morgan Stanley analysts suggested that Amazon could cut as many as 14,000 management positions, with the corporate efficiencies accounting for $2 billion-$4 billion in savings. Morgan Stanley’s forecast was based on an assumption that Jassy made in the note that Amazon is targeting an increase in the ratio of individual contributors to managers “by at least 15% by the end of 1Q25, across all divisions.”
Jassy pointed to “artifacts” of headcount growth, such as the “pre-meetings for the pre-meetings for the decision meetings,” and has created a “Bureaucracy Mailbox” for employees to share processes that slow down decision-making and that he said, “crept in and we can root out.”
This is not a process that is unique to Amazon, said Joseph Roh, professor at the Neeley School of Business at Texas Christian University. Rapid growth can lead to the rapid addition of “management layers without reassessing whether these roles are necessary,” he said. In general, the flatter structure is in, and there is now greater emphasis on individual contributors across corporations. There is no exact formula, no “golden ratio” for contributor-to-manager. “My understanding is that the ideal ratio of individual contributors to managers depends largely on the nature of the work,” Roh said, but he added that it is generally in the neighborhood of 7 to 10 individual contributors per manager.
Investor and economic pressure play a role, and at a time when technology giants are spending billions on AI without being able to deliver to Wall Street immediate proof of the return on investment, a conscious effort to rein in other costs will be rewarded. And despite the fact that companies like Amazon want everyone back in the office, spit-balling ideas around the proverbial whiteboard or watercooler, there is a sense that AI already may be playing a role in a more direct way, with some middle management positions redundant.
“Digital transformation plays a significant role,” Roh said, “as automation and advanced technologies reduce the need for middle managers to oversee tasks that can now be monitored by software.”
‘What you saw from Amazon is just the beginning’
“What you saw from Amazon is just the beginning,” said Naeem Zafar, a professor at UC Berkeley Haas School of Business and Northeastern University, with the downsizing of the managerial layer a larger trend set to play out across corporate America. Technology companies that have dominated the economy and grown rapidly are leading the way, preaching the return to an approach of being nimble and innovative, but Zafar said there are also cultural factors at work. “The new generation of employees are different and work differently,” he said, citing growing use of communication tools and a general work culture ethos that privileges freedom and balks at micro-management.
According to Roh, organizations are adapting to the preferences of a younger workforce that “values less hierarchy and more autonomy in their roles.”
Zafar said the rise of AI alongside a new generation of workers reinforces this evolving view of managers. “Amazon’s slashing of manager roles isn’t just about cost-cutting; it’s a glimpse into the future of work. Technology is eating away at the traditional corporate ladder, and middle management is feeling the bite,” Zafar said.
For decades, managers have been seen as “the glue holding companies together” and a key to translating strategy into action. But today, Zafar said, “AI-powered tools can analyze data, assign tasks, and track performance with unprecedented efficiency.” That makes it inevitable that the question will arise, “Why pay for a middleman when a machine can do it better?” he added.
Roh said Amazon’s growth may make it an extreme example, but it is perhaps also a leading indicator. “Amazon’s rebalancing reflects a broader corporate trend toward leaner, more efficient organizational structures, driven by the need for cost control, innovation, and competitiveness in rapidly evolving markets,” he said.
From health care to finance, companies are realizing that flatter hierarchies mean faster decisions and potentially bigger profits. As with any effort to improve efficiency and the bottom line, there are risks in an era of corporate flattening. Sacrificing employee well-being and the crucial human elements of leadership and innovation are challenges that will be at the center of this reshuffling in corporate America, Zafar said. But he added, “The future belongs to companies that can build lean, agile structures, empowering employees to thrive in a world where machines do the heavy lifting.”
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Our Electric Engine Transition
Our Electric Engine Transition
Founder Ron Slee returns this week to write about “Our Electric Engine Transition” as professionals.
Many of you have already read of my using the Steam Engine change to the Electric Engine as an indication on how we actually deal with change as a society. Society took advantage of the technology change by acquiring electric engines and replacing their old steam engines. However, if took a change in generation before the true benefits of the electric engine were realized. I attribute this to society not being able to absorb too much change at one time.
I want to revisit changes that have existed over the last seventy-five years and draw a comparison.
1950 The Computer
1960 Disk Storage and Operating System Software
1970 The Internet
1980 Cell Phone
1990 Telematics and GPS
2000 Sensors and Computerized Components
2010 Subscription Services
2020 Artificial Intelligence.
This list is not a completely true representation of when these changes have taken place, but it is close.
Now consider the approach taken during the 1800’s that it took a generation, twenty years, to take advantage of the change in the tool. Now transfer that approach to my list of the eight major changes since 1950. Do any of you think that we have done a good job of exploiting these major changes in technology? These changes in the tools that are available to us.
Let me use one simple example.
Put the computer (1950) with the internet (1970) and tell me the impact that we have realized in the customer service delivery systems of parts ordering.
Some questions please?
What percentage of your parts business comes through the internet?
How do your technicians order the parts they need for a repair or a rebuild?
What percentage of your parts invoices are paid online with a direct transfer of funds?
What percentage of your parts order pickups use a signature pad?
Do you see what I am trying to expose to you?
I bet you order more things online as a percentage of your personal purchases than your company does for their parts order. Isn’t there something wrong with that?
Let’s go in a different direction now. Please consider the following when you sell a machine.
Do you sell a maintenance agreement at the same time?
Do you sell extended warranties at the same time?
Do you sell a machine tracking system at the same time?
Do you sell an “alert” system when there is something going wrong with the machine?
Do you sell Oil Sampling at the same time?
Do you sell a field service response guarantee at the same time?
Do you sell parts delivery services at the same time?
Each of these items can be sold on a “monthly subscription” basis.
In the 1990’s Jeff Bezos started Amazon. He started by selling books. He listened very seriously to his buyers, his customers. He found out what they wanted and needed. He acted on those things that he could and that made sense to him. Go further and look at Steve Jobs and the cell phone or Sam Walton and Walmart.
One of my favorite elements is Artificial Intelligence. The field of artificial intelligence is considered to have begun at the 1956 Dartmouth Summer Research Project that was organized by John McCarthy. The man that is considered to be the “father of AI” is Allan Turing. Let me bring this forward to the world today. ChatGPT was created by OpenAI, an AI Research company. The CEO of ChatGPT is Sam Altman. That has taken seventy years to become a common subject for discussion.
Have you used AI? Have you used ChatGPT? I bet most of you have used both. I do.
At Learning Without Scars is our purpose to help people identify your personal and professional potential. We are aiming at the Lifelong Learning market. By the way, that market doesn’t really exist at the moment. Typically, we go to Grade School, Middel School, and High School. The we either get a job and go to work making a living and a productive member of society or we continue with school. We have the choice of one of three tracks.
Each of these options uses a campus and facilities and what I call “The Sage on the Stage” teaching.
Lifelong Learning covers people who are already in the workforce. This would be single people and married people. The problem is these people are all remarkably busy. It is extremely hard to hold a job and also go to school. I went to night school to get more understanding of special statistical models. It was really hard to do.
For adult education we have designed our classes to take five plus hours to complete. We suggest that our students take one hour and fifteen minutes each week and take a class. You will be finished at the end of the month. You can select an individual class to upgrade your skills, or you can take class bundles, four classes to eight classes in a bundle.
To close this circle now is very premature. You can expect me to address this subject again. We as a society are in trouble. We have spent trillions of dollars on technology. However, we have not spent very much money on Sociology. Ed Gordon, one of our celebrated Contributors, says that by the year 2030 half of the workforce in the United States will not have the skills to be employable. That is quite a statement, isn’t it? I might argue it to be 2036 but that is nitpicking something that I agree with completely.
That is why adult education is so important. Get ready. You will need to accept changes coming at you faster and faster over the rest of your lives. Are you up to that? I sure hope so.
The time is now.
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VoIP: The Missing Opportunity for Equipment Dealerships
VoIP: The Missed Opportunity for Equipment Dealerships
Guest writer Kevin Landers brings fresh insights into technology and its benefits to our businesses in “VoIP: The Missed Opportunity for Equipment Dealerships.”
Running an equipment dealership is a complex and dynamic challenge. Success hinges on precision and the ability to connect the right customer with the right solution at the right time. However, in an industry so reliant on communication, many dealerships are still using outdated tools. This results in long hold times, confusing call transfers, and missed opportunities. Voice over Internet Protocol (VoIP), a technology that has transformed industries ranging from healthcare to retail, remains an underutilized asset in this sector.
When margins are tight and environments are challenging, it is critical that there is a flow between equipment sales, service, and rentals; communication is the linchpin. It is the friendly voice that reassures a frustrated customer when their machinery breaks down. It is the seamless call transfer that connects a sales lead to the right specialist before their interest cools. It is the quick, responsive service that turns a one-time customer into a lifelong partner. And yet, many dealerships find themselves hampered by legacy phone systems that cannot keep up.
VoIP is more than just a modern replacement for traditional phone systems; it is a strategic advantage waiting to be harnessed. At its core, VoIP transforms communication from a necessity into a competitive asset. But what makes it such a missed opportunity for equipment dealerships?
The Costs of Sticking to the Status Quo.
Picture this: a customer’s excavator breaks down on a construction site. The clock is ticking, and every minute of downtime is costing them money. They call your dealership for help, only to be met with long hold times, confusing call transfers, or even a voicemail box. Frustration mounts, and by the time they reach someone who can help, they are already considering calling your competitor.
This scenario is all too common in dealerships relying on outdated communication systems. Missed calls, delayed responses, and disorganized customer interactions are not just operational nuisances – they are revenue killers. And they are entirely avoidable.
VoIP offers a way out. By integrating intelligent call routing, VoIP ensures that customers are connected to the right person on the first try. Its analytics capabilities allow dealerships to monitor call volumes, track response times, and identify bottlenecks in service. These are not just technical upgrades; they are tools that directly impact the bottom line by improving customer satisfaction and retention.
A New Frontier in Customer Experience.
For dealerships, the value of VoIP extends far beyond operational efficiency. It is a tool for creating exceptional customer experiences that differentiate your business in a crowded market.
Take the example of after-hours support. Machinery does not conveniently break down during business hours. With VoIP, dealerships can offer 24/7 support, giving customers peace of mind that help is always a phone call away. Better yet, premium after-hours support can be a new revenue stream for dealerships willing to go the extra mile.
Then, there is the opportunity to turn everyday interactions into moments of engagement. With features like on-hold messaging, VoIP allows dealerships to replace generic hold music with targeted messages about promotions, maintenance tips, or new offerings. It is a minor change with a significant impact, transforming passive wait times into active marketing moments.
Learning From Other Industries.
Other industries have already discovered the transformative potential of VoIP, and equipment dealerships stand to benefit from their lessons. In healthcare, telemedicine has expanded access to care by enabling virtual consultations. Dealerships can adopt a similar approach, offering virtual equipment demonstrations or consultations to reach customers in remote locations. Meanwhile, e-commerce businesses use VoIP analytics to refine marketing strategies, a practice that could help dealerships target their campaigns more effectively.
Even within the world of field service, VoIP is proving its worth. Imagine a service technician arriving at a job site armed with a VoIP-powered mobile solution. They can access customer history, communicate seamlessly with the dealership, and provide real-time updates, all from their smartphone. It is a level of professionalism and responsiveness that builds trust and loyalty.
Bridging the Gap Between IT and Business Growth.
For many dealerships, the idea of investing in VoIP can feel daunting. IT is often seen as a cost center rather than a driver of growth, and VoIP may appear to be just another expense. But this perspective misses the bigger picture.
VoIP is not just a communication tool; it is a business enabler. By streamlining operations, unlocking new revenue opportunities, and enhancing customer experiences, VoIP shifts the role of IT from a necessary overhead to a strategic asset. It is an investment in resilience, adaptability, and long-term growth.
At Rocketwise, we have seen firsthand how VoIP can transform dealerships. It is not about adding another piece of technology to an already complex landscape. It is about simplifying, optimizing, and elevating the way dealerships communicate and operate.
The Time to Act is Now.
The equipment dealership industry is at a crossroads. Economic pressures, shifting customer expectations, and technological advancements are reshaping the landscape. Dealerships that embrace tools like VoIP will be better positioned to navigate these changes, while those that stick to outdated systems risk being left behind.
VoIP represents a missed opportunity for many dealerships today. But it does not have to stay that way. By recognizing its potential and acting, dealerships can turn communication from a pain point into a powerful driver of success.
Are you ready to make the leap? At rocketwise, we are here to help you fall in love with IT again. Let us show you how VoIP can be the competitive advantage your dealership needs to thrive in a challenging market.
Download our guide on how VoIP can add value to your dealership.
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Protecting, Respecting, Remembering and Building of a Legacy
Protecting, Respecting, Remembering and Building of a Legacy
Guest writer Ron Wilson returns this week with a blog post on family businesses and the honoring of legacies in “Protecting, Respecting, Remembering, and Building of a Legacy.”
How does a third/fourth generation family business protect and respect the legacy of previous leaders and apply the lessons learned toward the successes of the future?
While looking back over the history of a dealership there were critical high and low points that shaped the future of the organization. For the most part we can identify those critical points and understand the impact the events had on the organization.
Very seldom can we identify the specific individuals that were the critical influencers. Even more complicated is remembering what actions were taken that lead us in and out of specific events.
Recently I was visiting with a young director at a semiconductor company that was about to go through a layoff. As a leader this young director had not experienced laying people off, what was involved during the layoff, and the repercussions a layoff has on the employees showing up for work after the layoff.
I asked the young director what advise his Vice President (supervisor) had shared based on his previous experience. The response was the Vice President (supervisor) had not been through a layoff either.
Here is an example of one, maybe two, generations of leaders that have not been through some of the most difficult challenges of leadership. In your dealership what were one or two critical events that shaped the organization and who is still around to provide input and share the experiences?
Third and fourth-generation family businesses face unique challenges in preserving and respecting the legacy of their predecessors while adapting to the modern demands of the business.
Here are a few strategies to balance these priorities effectively:
By combining these strategies, family businesses can honor the achievements and values of past leaders while remaining dynamic and relevant in an ever-changing world.
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Absorption in 2024 and Beyond: The Lifeblood of Dealership Profitability
Absorption in 2024 and Beyond: The Lifeblood of Dealership Profitability
Guest writer Troy Ottmer returns this week with a timely blog post for our industry: Absorption in 2024 and Beyond: The Lifeblood of Dealership Profitability.
What is Absorption?
In the modern dealership landscape, absorption remains a critical measure of success. Defined as the percentage of a dealership’s total operating expenses covered by the gross profits from parts and service, it underscores the importance of back-end operations. Whether managing an automotive, truck, agricultural, or construction equipment dealership, a strong absorption rate is essential for weathering economic fluctuations.
This metric reflects the back-end’s ability to sustain the dealership’s overall financial health, independent of variable income from new or used vehicle sales. High absorption rates ensure stability and profitability, especially during periods of economic uncertainty or reduced sales activity.
Why Absorption Still Matters
The economic and technological changes of the past decade have only amplified the importance of absorption. Challenges such as supply chain disruptions, inflationary pressures, and shifting consumer behaviors demand that dealerships maximize profitability from service and parts operations.
The rise of electric vehicles (EVs) or Alternative Fuel Vehicles, Connected Technologies, and
AI-driven Diagnostics has reshaped the service landscape. While EVs require less frequent servicing than internal combustion engine (ICE) vehicles, the complexity of repairs and the specialized tooling required have made dealership service departments indispensable. These industry changes underscore the need for a sharper focus on absorption.
A Historical Perspective
Historically, dealerships relied on gross profits from new vehicle sales as their primary revenue source. Higher margins and steady demand allowed parts and service operations to function to some degree as secondary gross profit generating departments.
By the 2000s, however, the industry began shifting:
By the early 2020s, parts and service departments had become critical profit centers. Absorption transformed from a success metric to a survival strategy, helping dealerships navigate challenges like economic downturns, supply chain issues, and changing consumer preferences.
Today, absorption remains a cornerstone for dealerships, enabling them to adapt to an evolving landscape marked by electrification, connected technologies, and changing ownership models.
Adapting Absorption Strategies for the Modern Dealership
Modern dealership challenges demand innovative strategies to maximize absorption. Below are the key trends reshaping the industry:
EVs, Alternative Fuels and other Advanced Technologies have shifted service demands. Although EVs require less frequent maintenance, their repairs involve complex software updates and high-voltage systems. Similarly, Alternative Fuel vehicles add another level of complexity, as does the extensive list of other Advanced Technologies.
AI-driven diagnostic tools and over-the-air updates also transform service models. Investments in these technologies improve efficiency, reduce costs, and enhance customer satisfaction.
As with the Covid-19 inspired supply chain disruption during calendar years 2020 to 2023, dealerships continue to face continued supply chain disruptions and along with other inflation related side effects. Dealerships must adopt data-driven inventory management, leveraging AI and predictive analytics to optimize stock levels, reduce carrying costs, and maintain parts availability.
Subscription-based services, such as extended warranties, telematics monitoring, and software upgrades, are growing. These services boost gross profits and strengthen customer retention, creating a virtuous cycle for parts and service departments.
The evolution from “mechanics” to “technicians” highlights the growing need for IT expertise. Today’s technicians must navigate complex software and advanced systems. To thrive, dealerships must:
Calculating and Leveraging Absorption
The formula for absorption remains simple:
Parts & Service Gross Profit ÷ Total Dealership Expense* = Absorption Percentage
*Note: there are various methods/philosophies as to what all goes into the “total dealership expense” calculation. Consult with your controller or CFO for your specific calculation.
Example Scenarios:
Absorption = 120% → The dealership generates an additional $200,000 in gross profit, boosting profitability.
Absorption = 80% → A $200,000 shortfall puts pressure on sales to close the gap.
High absorption rates protect dealerships from reliance on volatile vehicle sales, creating a financial safety net during economic downturns.
The Symbiotic Relationship Between Sales, Parts, and Service
The ongoing synergy between sales, parts, and service drives dealership success. New vehicle sales bring in future service opportunities, while exceptional service experiences build customer loyalty, ensuring repeat sales.
By fostering collaboration between these departments, dealerships can create a sustainable profit model that thrives even in challenging times.
The Bottom Line: Absorption is the Sum of a Unified Focus on Maintaining Profitability
In 2024, absorption is no longer just a measure of back-end performance. It represents a holistic strategy for managing dealership profitability across all departments.
To succeed, dealerships must:
By focusing on absorption, dealerships can not only survive but thrive in today’s competitive environment, ensuring long-term profitability and resilience.
In conclusion, absorption is more than a financial metric—it is the heartbeat of a dealership’s sustainability. By adapting to industry shifts and investing in technology, workforce development, and customer-centric strategies, dealerships can ensure steady profitability amidst change. A unified focus across departments empowers dealerships to weather economic fluctuations and emerge stronger in an evolving marketplace.
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Transforming Indian CE Dealerships: A Guide to Sustainable Profitability
Guest writer Sanjay Pendharkar brings a broader view of the equipment industry in this week’s blog post: Transforming Indian CE Dealerships: A Guide to Sustainable Profitability.
Introduction
The Indian construction equipment and material handling market stands at a crucial crossroads. With infrastructure development driving demand, the sector presents immense opportunities. However, dealers face unprecedented challenges in converting this market potential into sustainable profits. Traditional revenue models are under pressure, and the complexity of operations has increased manifold.
Today’s dealers navigate a landscape where equipment sales alone no longer guarantee business sustainability. The market demands more sophisticated operational models, enhanced service capabilities, and innovative approaches to customer engagement. This evolution requires dealers to reassess their business strategies and adapt to changing market dynamics.
Understanding the Dealer Landscape
Multi-Franchise Dealerships
The multi-franchise model has become the norm rather than the exception in India’s CE market. While this approach offers dealers broader market coverage and risk distribution, it introduces significant complexities:
Revenue Constraints
The traditional dealer revenue model faces severe pressure:
Challenges to Profitability
Dependence on Service and Parts
The aftermarket has become the lifeline for dealer profitability:
Competition from Replacement Parts
The genuine parts business faces unprecedented challenges:
OEM Branded Lubricants vs. Direct Oil Brands
The lubricants market presents a unique challenge:
Talent Retention Issues
Engineer Turnover and Freelancing
The exodus of trained technicians presents a critical challenge:
Impact on Service Revenue
The talent drain directly affects business sustainability:
Operational Inefficiencies Impacting Profitability
Process Gaps
Significant revenue leakage occurs through process inefficiencies:
Technology Underuse
Many dealers lag in technology adoption:
Resource Management
Inefficient resource utilization affects profitability:
Customer Service Gaps
Service inconsistencies lead to business losses:
Strategies for Improved Business Performance
Parts Business Enhancement
Pricing Strategies
Inventory Optimization
Service Revenue Protection
AMC Programs
Technician Retention
Additional Revenue Streams
Financial Management
Digital Transformation
Strategic Partnerships
Conclusion
The transformation of CE dealerships requires a comprehensive approach addressing multiple challenges simultaneously. Success depends on:
Dealers must act now to implement these changes. The market will increasingly favour those who can deliver efficient, professional services while maintaining profitability through multiple revenue streams. The future belongs to dealers who can transform challenges into opportunities through innovation, efficiency, and customer focus.
The path forward requires commitment, investment, and a willingness to change. Those who adapt will not just survive but thrive in this evolving market landscape.
Re-Inventing Customer Service: Improving the Employee Experience in the Modern Era
This week we introduce our new guest writer, Troy Ottmer. He joins us with his blog post “Re-Inventing Customer Service: Improving the Employee Experience in the Modern Era.” Troy Ottmer began his career in 1987 as an automotive technician, with a specialization in electronics, including drivability diagnostics, anti-lock brakes and other new emerging technologies for that era. Over the years, he expanded his technical expertise across automotive, light-duty, medium-duty, and heavy-duty trucks, eventually venturing into off-road construction equipment. His early career included roles in shop and mobile technical repairs, as well as fleet management, culminating in his entry into the John Deere dealer network in 1998.
From 1998 to 2017, Troy built a reputation as a leader in dealer operations, excelling in areas such as New & Used Sales, Rental & Lease, Parts, Service, and General Operations. His tenure in the John Deere dealer world provided him with a solid foundation in customer-centric leadership and operational excellence.
Troy’s leadership journey continued with prominent executive roles, including Vice President of Fixed Operations at Doggett Equipment Services (2010–2017) and Vice President of Operations at Koppers (2017–2020). At Koppers, he managed operational efficiency and spearheaded strategic growth in specialized industries, including material recovery services for biomass materials. From 2020 to 2024, he served as General Manager at Rush Truck and Bus Centers, where he successfully oversaw operations and drove business growth.
In addition, Troy held the position of Director of Parts, Service, and General Operations at Rush Enterprises John Deere Construction from 1998 to 2010, until the franchise transitioned to Doggett.
With a robust technical foundation in both on-road and off-road equipment, Troy combines strategic acumen with hands-on expertise. His extensive executive experience spans over a decade, marked by a proven ability to enhance operational efficiency and implement innovative solutions in the transportation, industrial, and equipment services sectors.
In today’s highly connected world, customer service is more critical than ever. Yet, to deliver exceptional customer service, businesses must start by focusing on their employees. Happy, empowered, and well-supported employees are the foundation of a superior customer experience. Metrics like the Customer Satisfaction Index (CSI) and Employee Satisfaction Index (ESI) serve as vital tools to measure and improve both experiences, but the core truth is simple: a happy, productive employee will almost always translate to a happy and very satisfied customer.
Customer Expectations in the Digital Age
Customers today are more informed and connected than ever before. With social media and search engines, word-of-mouth travels at lightning speed. A single negative experience can reach thousands of people instantly, while a positive interaction has the power to build lasting loyalty.
Beyond satisfaction, customers increasingly value authenticity, transparency, and ethical practices. They care not only about how businesses treat them but also about how companies treat their employees. A company’s employee satisfaction often influences customer perceptions, making the Employee Satisfaction Index (ESI) a critical factor in boosting the Customer Satisfaction Index (CSI).
The Employee-Customer Connection
The connection between employee happiness and customer satisfaction cannot be overstated. Employees who are engaged, motivated, and empowered are more likely to:
This is because an employee’s energy, attitude, and commitment to their work are directly felt by the customer. A disengaged employee, on the other hand, can inadvertently communicate indifference or frustration, leading to subpar customer experiences. By creating a work environment that prioritizes employee well-being and productivity, businesses set the stage for consistently high customer satisfaction.
Using ESI to Improve CSI
The Employee Satisfaction Index (ESI) measures how happy and engaged employees are with their roles, workplace, and leadership. A high ESI score often correlates with a high Customer Satisfaction Index (CSI) because:
To ensure employees are happy and productive, focus on these key areas:
Equip employees with the skills, tools, and autonomy they need to excel in their roles. Confidence in their abilities translates to confidence in customer interactions.
Provide ongoing training in areas like communication, conflict resolution, and technical expertise.
Foster a culture of respect, recognition, and inclusivity. Employees who feel valued are more likely to treat customers with care and empathy.
Create opportunities for collaboration and camaraderie, which enhance job satisfaction and productivity.
Regularly conduct ESI surveys to identify areas for improvement. Employees who feel heard are more likely to stay engaged.
Share CSI results with employees and involve them in strategies to improve customer satisfaction.
Recognize employees for exceptional performance. Whether it’s a simple thank-you, a shoutout during team meetings, or formal rewards programs, recognition motivates employees to continue exceeding expectations.
Reinventing Customer Service with CSI and ESI
Both the Customer Satisfaction Index (CSI) and Employee Satisfaction Index (ESI) should be central to your customer service strategy. Here’s how to use them effectively:
Track and Compare
Monitor CSI and ESI regularly and analyze their correlation. A dip in employee satisfaction often signals potential issues in customer satisfaction.
Identify patterns: Are specific teams or locations excelling? Are certain departments struggling? Use this data to replicate successes and address challenges.
Proactive Engagement
Anticipate customer and employee needs. For example, ensure employees have clear schedules and manageable workloads, which allows them to serve customers with more focus and energy.
Align Goals
Set shared goals for improving ESI and CSI. For instance, initiatives like reducing customer complaints or increasing first-call resolution rates benefit both metrics.
Measure the Impact of Changes
Test new strategies or tools and assess their effects on both indexes. For example, implementing a new CRM system could make employees’ jobs easier and improve customer service quality.
Why Employee Happiness Translates to Customer Satisfaction
When employees feel supported and valued, they are more motivated to provide outstanding service. Their enthusiasm and commitment create a ripple effect:
Conversely, a workplace that neglects employee well-being risks disengaged staff, higher turnover, and ultimately dissatisfied customers. The connection is so strong that many businesses now see employee experience as the backbone of customer experience.
Modern Best Practices for Reinventing Customer Service
Use CRM systems to track customer preferences and history, enabling employees to deliver tailored service. Employees benefit from streamlined processes, and customers feel valued.
2. Omnichannel Support
Provide consistent service across platforms, from phone and email to social media and live chat. This ensures employees have the tools they need to provide seamless support.
3. Transparency
Keep employees and customers informed at every step. Transparent communication builds trust on both sides of the service equation.
4. Celebrate Wins
Celebrate both customer and employee milestones, such as achieving high CSI scores or completing team projects. Recognition strengthens the bond between employees and the organization.
A Symbiotic Cycle of Success
Happy employees drive customer satisfaction, and happy customers boost employee morale—a symbiotic cycle that fuels long-term success. Investing in the employee experience isn’t just good for business; it’s essential in today’s competitive landscape.
By prioritizing both the Employee Satisfaction Index (ESI) and Customer Satisfaction Index (CSI), businesses create a thriving environment where employees and customers feel valued, heard, and connected. This dual focus is the cornerstone of reinventing customer service and securing a competitive edge in the modern era.
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Disputed Work Orders Cause Delays in Payment and Increase Unnecessary Interest Expense
Guest writer Ron Wilson covers a crucial snowball effect we experience in our businesses in this week’s blog post: “Disputed Work Orders Cause Delays in Payment and Increase Unnecessary Interest Expense.”
We are all aware of the common causes that impact the accuracy of work order reviews, closing, and the customers invoices not being paid on time.
Digging a little deeper into the specific causes and frequency for the invoice being disputed by the customer can have a major impact on the reduction of the Service Department’s receivables. We often correct and resolve the disputed invoice without determining the root cause of the issue, and the problem often re-occurs.
Reducing the disputed and aged invoices also reduces the corporate interest expense due to not carrying the aged invoices within the accounts receivables. This can greatly improve profitability without much effort.
Some of the common reasons work orders are disputed are:
Strategies to Prevent Disputes
Below are some recommendations to prevent the disputes:
These steps can reduce misunderstandings and foster better customer-dealership relationships.
Sometimes the smallest, non-flashy improvements can yield the greatest improvements.
Below is a table and a chart showing some possible ways to prioritize reducing the number disputed work orders.
The chart above shows the data in a visual format that makes it easy to see that 84% of the overall causes are related to the first three areas.
Take each of the first three causes and identify which of the reasons listed on page one contributed to the invoicing dispute. Implementing the proper processes, training, policies, proper communication, and coaching can quickly reduce a costly issue and improve customer satisfaction.
Once the first three have been resolved take some time to review the remaining issues. Often addressing the first three issues will contribute to resolving the remaining issues.
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