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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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.
Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.
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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The Growing Technician Shortage in the Construction, Equipment, Gas Compression, Marine, and Mining Industries
Guest writer Jim Dettore returns to emphasize the importance of training in this week’s blog post: “The Growing Technician Shortage in the Construction, Equipment, Gas Compression, Marine, and Mining Industries.”
Training Matters More Than Ever!
The construction, equipment, gas compression, marine, and mining industries are all facing a critical challenge: a severe shortage of skilled service technicians. As global demand in these sectors continues to rise, the number of qualified technicians to maintain and repair the highly specialized equipment used in these fields is dwindling.
The Technician Shortage: A Cross-Industry Challenge
Several factors are driving the technician shortage across these industries:
Aging Workforce: Many technicians are transitioning to Service Management roles or nearing retirement age, and there are not enough new entrants to replace them.
Decline in Trade School Enrollment: Fewer young people are choosing technical career paths, leading to a lack of fresh talent in industries that rely on hands-on expertise.
Technological Advancements: As equipment becomes more complex and automated, the skill requirements for technicians have increased, creating a gap between available labor and the needs of modern equipment maintenance.
Industries like gas compression and marine are particularly affected because they rely on highly specialized, mission-critical equipment that must be maintained with precision. Whether it’s keeping a marine vessel’s engines running smoothly or ensuring that gas compression systems operate efficiently in the energy sector, these industries cannot afford equipment downtime. Yet, with fewer technicians available, companies are finding it harder to meet these demands.
The Impact on Each Industry
THE ROLE OF TRAINING IN ADDRESSING THE SHORTAGE
The shortage of technicians across these industries underscores the importance of training. Given that fewer people are entering the workforce, the solution lies in ensuring that those who do are exceptionally skilled. High-quality training programs offer a way to close the gap, equipping technicians with the expertise to maintain, diagnose, and repair increasingly complex equipment.
By investing in comprehensive training, companies can:
Improve Efficiency: Highly trained technicians are more effective at diagnosing and resolving issues, reducing the time equipment is out of service.
Adapt to Technology: As industries adopt more advanced technologies such as automation, artificial intelligence, and sophisticated diagnostics, training ensures technicians stay ahead of the curve and can handle modern machinery.
Enhance Safety and Compliance: Well-trained technicians help ensure that equipment operates within safety standards and regulations, reducing the risk of accidents or environmental damage.
Why Quality Over Quantity Makes Sense
With fewer technicians entering the workforce, focusing on training is more crucial than ever. The idea is simple: if there are fewer people to maintain equipment, those individuals must be highly skilled to manage the increased workload and complexity.
In industries like gas compression and marine, where downtime is extremely costly, investing in the education and skill development of service technicians pays long-term dividends. Training programs that emphasize problem-solving, cutting-edge diagnostic tools, and preventive maintenance can help build a workforce of elite technicians who can handle more responsibility, more efficiently.
The Path Forward: Addressing the Talent Gap with Training
The technician shortage is a significant challenge across the construction, equipment, gas compression, marine, and mining industries. But the solution lies in adapting to this reality by focusing on developing a smaller pool of highly trained, elite technicians. By doing so, companies can offset the lack of personnel with higher skill levels and better overall productivity.
A Message to the Next Generation: Why You Should Get into These Industries
Now, let’s talk to you, the next generation. If you’re someone who likes working with your hands, solving problems, and getting a little dirt under your nails, these industries are crying out for people like you. Let’s cut to the chase—you don’t need a four-year degree and a mountain of student debt to have a successful career. What you need is the right training, a strong work ethic, and the guts to take on the kind of work that keeps the world running.
The truth is, we need more young people stepping into these technical roles—not just because the jobs are there, but because these jobs offer something you won’t always find in an office. There’s pride in being able to point to a project, a machine, or an entire operation and say, “I helped make that happen.” There’s a deep sense of satisfaction that comes from knowing your skills are indispensable. And let’s not forget about the money—skilled technicians can make a solid living, often starting at salaries that rival those of many college graduates, without the student loans.
These industries are the backbone of the economy. From building cities to powering homes, from transporting goods across oceans to extracting resources that fuel innovation—the work you do matters. And with the right training, you can step into a role where you’re valued, where every day brings new challenges, and where you can build a rewarding career.
So, if you’re considering your future, think about what you want it to look like. These industries offer not just jobs, but careers with purpose. And the best part? You can start now.
About Us. At FAS, Inc. we specialize in providing technical training programs for the construction, equipment, gas compression, marine, and mining industries. Our courses are designed to give you the skills you need to succeed in these high-demand fields. If you’re ready to take the first step toward a challenging, well-paying, and fulfilling career, contact us today!
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Cybercrime, AI, and the Equipment Dealership
Guest writer Kevin Landers returns this week to highlight the relevance of cybersecurity in “Cybercrime, AI, and the Equipment Dealership.”
It sounds like the beginning of a bad film, but the reality is that the world of digital crime is continuing to develop as technology evolves. The latest and greatest evolution is AI. As AI unlocks our world to provide us with tools to improve our performance and capabilities in business, criminals are also increasingly using it to target equipment dealerships through sophisticated fraud tactics. Unfortunately, they are leveraging AI’s capabilities for social engineering, deepfakes, and synthetic identity creation.
Social engineering has always been difficult to protect against, but AI is taking it to new heights. Cybercriminals use AI to automate and personalize phishing campaigns. Phishing is a type of cyberattack that involves tricking people into sharing sensitive information through fraudulent emails, text messages, phone calls, or websites.
Phishing is the most common form of cybercrime, with an estimated 3.4 billion spam emails sent daily. Notoriously, over 10% of employees worldwide clicked on malicious links, and over 60% of those who clicked submitted a password on malicious websites. And dealerships need to have this on their radar, as employees at small organizations are more likely to click on malicious links.
AI is changing the face of phishing attacks.
AI-driven tactics enable attackers to craft highly believable emails and messages that mimic real business correspondence, including the language, style, and branding typical of a dealership’s internal or external communications.
Without the proper training and awareness in the desire to be helpful, do the right thing, or even do what the boss says, criminals can trick employees into clicking malicious links, sharing sensitive information, or transferring funds under the guise of routine transactions.
Voice cloning technology is particularly alarming for equipment dealerships. Attackers use AI to create convincing voice calls that imitate senior executives or trusted partners. These calls often instruct employees to execute financial transactions or disclose sensitive data, leveraging the urgency and familiarity associated with an executive’s voice.
AI allows criminals to scale these attacks rapidly. Automated AI-powered scripts can launch large-scale attempts to breach systems, such as through credential stuffing, where stolen usernames and passwords are systematically tested across multiple platforms. This capability makes it easier for attackers to find vulnerabilities in dealership systems and gain unauthorized access.
For example, when the CDK data breach and outage took place earlier this year, dealerships suddenly began receiving calls “from CDK support” and emails from “CDK support” that were saying “hey, let us connect remotely with you so that we can get your CDK systems back up and running”. The issue was that these were all malicious actors posing as CDK that were attempting to trick dealerships into allowing them access to their systems. Taking advantage of the situation in seconds, not days.
And don’t underestimate the power of a chatbot. AI chatbots can engage in real-time interactions with employees, adapting their responses to seem more authentic and trustworthy, thereby increasing the success rate of these scams. It can feel like you are having a relationship with a real person or discussing plans with your boss. And with many businesses using tools like WhatsApp to discuss businesses outside of email or your network, it can be easy to fall for things when your attention is distracted. And criminals are taking advantage of this.
How can Dealerships defend themselves from AI phishing attacks?
As AI fraud evolves, equipment dealerships must stay proactive, combining advanced technology with a culture of vigilance and verification to safeguard against these sophisticated threats.
Werner’s Tech Leader Talks Cybersecurity
An article by a Senior Editor of Commercial Carrier Journal is part of our content this week. Read on for Angel Coker Jones‘ report, “Werner’s Tech Leader Talks Cybersecurity.”
Ahead of an all-hands meeting, the information security team at Werner Enterprises (CCJ top 250, No. 14) combined all video archives of CEO Derek Leathers and, using a cheap AI tool, created a deepfake message announcing to employees that the company was removing all vacation time for cost cutting measures.
Many employees bought it until Leathers walked into the meeting an hour-and-a-half later, reporting that it was a fake AI-generated message. Daragh Mahon, executive vice president and chief information officer at Werner, shared this story last week at the National Motor Freight Traffic Association’s annual cybersecurity conference hosted in Cleveland, Ohio.
He said it was his team’s effort to further educate its employees on the importance of cybersecurity. Cybersecurity, he said, is the biggest thing that keeps him up at night because “that’s the one thing that can shut us down.”
The infosec team – not the corporate training team – at Werner hosts quarterly mandatory cybersecurity training for all employees, including drivers. The team also broadcasts cybersecurity messages across TVs throughout its terminals and regularly performs its own phishing testing on employees, who after three failures (by clicking on a link in a phishing email) must take additional training. If there’s another failure in the next three months, you get written up.
“We’ve taken a very hard-fisted approach to it. Employees don’t enjoy it. Yes, it scares them. Yes, it makes them worried. But that’s sort of the goal. We want them to understand the risk … and it’s not just the company; it’s their own jobs,” Mahon said. “We’re one of the biggest carriers in the United States. If we were down for a couple of weeks, that is an impact on the supply chain… It’s an impact on their jobs. It’s an impact on the prices they and their family pay at the store. So we try to get that message across and say, ‘Hey, we’re not doing this because we’re trying to be assholes. We’re doing this because we want you to understand the gravity of the situation.’”
Presented by Michelin Connected Fleet
While newer technology like AI is a rising cybersecurity concern, Mahon said he’s still most worried about older technologies, especially email because 90% of all attacks on corporate America last year came through email, yet companies use it every day.
Bare metal attacks
While internal attacks via methods like phishing (the top method of ransomware) and even piggybacking into the building with a fake employee ID are more common, he said bare metal attacks are coming.
“It’s never happened but it will. Ransomware never happened until it happened … These are the types of things we have to prepare ourselves for. We have to start thinking like the bad guys,” Mahon said. “I really do believe the bad guys who are targeting the U.S., but in general are targeting trucking, think about how to get onto the truck and utilize the hardware on the truck to cause problems. Not steal the software, not steal the data. How do we take the truck, shut it down, so we can shut down transportation? Or even weaponize it in the worst-case scenario in the case of terrorists.
Werner is working with all the top providers in autonomous trucking, and he said he has been impressed with their level of focus on securing the operating systems that run robotics and data on the trucks, but he wasn’t impressed with their lack of focus on the possibility of bare metal attacks.
“If somebody were to get on the CAN (Controller Area Network) bus hardware, install their own primitive OS and take over the robotics, they can weaponize the truck to say run into a school bus,” he said. “Do that with a couple hundred thousand trucks across the U.S., which is what autonomy will bring to us at some point, and our enemies have a very easy way to get ahold of us. Let alone just taking over the truck and shutting it down and shutting down transportation in the United States.”
Playing defense
Mahon said he met the founder of a company called Fleet Defender, which offers a hardware device that plugs into the CAN bus to monitor anomalous traffic on and off the truck. Fleet Defender, which is deployed on Platform Science, provides real-time cyber threat detection before security is compromised. Mahon said Werner is working to deploy that across its entire fleet and its network and technical operations centers.
Werner is also moving away from the use of email.
“What does everybody do before Valentine’s Day? They break up,” he said. “We’re doing a campaign (called) ‘we’re breaking up with email,’” when the company rolls out its new corporate media platform in February.
The platform will provide alternatives to email like secure chat channels and secure file sharing through systems like Sharepoint and OneDrive.
“I feel like we don’t need email anymore; we just perpetuate the use because it’s something we’ve gotten used to even though it is the single most dangerous thing we have in our toolbox,” Mahon said. “It will kill us, and every one of us at some point are going to experience a phishing attack.”
Like many others, the company is also on a tech journey, transitioning from legacy systems to cloud-based platforms.
“We’re in this sort of weird place where I have to have perimeter security around the old on-prem stuff … and then as we transition into SaaS space … we have to be ready there as well,” he said.
Though he’s more concerned about on-prem security, he said the shift to the cloud has its own cybersecurity challenges.
NMFTA COO Joe Ohr said a company is only as strong as its weakest link, and oftentimes the weakest link is a third-party vendor. Many breaches come via a third-party avenue.
Mahon said as Werner moves from SaaS to the cloud, his team evaluates third-party providers for things like sales and back-office software not only based on functionality but also reputation. While a carrier can’t abdicate responsibility for their security to those platforms, he said they should still choose vendors that are know for being secure.
“The second thing is vet the hell out of them,” he said. “Every single vendor we sign up, they go through a security assessment … We have anywhere from, depending on the type of company, from 40 to 80 to 100 questions that they must answer, and we go through them line by line and make sure that they have the security we would expect them to have, that they have the controls in place.”
Werner then monitors its vendor platforms and assesses them quarterly for security.
“You have to watch it all day every day because you never know when somebody’s in there,” he said. “In fact, you just have to assume that (a bad actor) is in there.”
Angel Coker Jones is a senior editor of Commercial Carrier Journal, covering the technology, safety and business segments. In her free time, she enjoys hiking and kayaking, horseback riding, foraging for medicinal plants and napping. She also enjoys traveling to new places to try local food, beer and wine. Reach her at An********@***********ly.com.
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The Key Tool for Business Retention: Essential Tools for Maximizing Business Retention
Ron Slee brings our skills for retention back to the forefront in “The Key Tool for Business Retention: Essential Tools for Business Retention.”
Building and maintaining strong customer loyalty is essential for your company’s sustainable growth. Success depends on keeping your customers engaged with your products and services rather than losing them to competitors. It requires dedicated effort across all dealer departments, from sales and customer service to parts and service teams—anyone who interacts with customers.
Key business retention tactics
Here are several proven approaches to strengthen your retention rates:
Regular customer engagement
Listen to customer input
Provide support after the sale
Monitor essential metrics
Two powerful retention tools
Among the many available strategies, two tools stand out as particularly effective for enhancing equipment dealer business retention: satisfaction surveys and email campaigns.
Customer satisfaction surveys
Understanding customer needs and satisfaction levels is fundamental to improving retention. Surveys conducted by a third party, especially phone surveys, provide valuable unfiltered feedback about potential issues. Phone surveys achieve a 33% response rate, far exceeding the 2% response rate for email surveys, helping you identify concerns before customers leave you for the competition. Companies that actively respond to survey feedback can boost retention rates by up to 30%. Plus, customers whose issues are addressed become particularly loyal advocates.
Strategic email marketing
The return on investment for email marketing campaigns can be remarkable. Equipment dealers working with our partner Winsby, for example, see annual ROI ranging from 208% to 10,205% – meaning customers receiving emails spend between $208 and $10,205 more than non-recipients for every $1 invested in email marketing. This exceptional performance largely stems from the ability of emails to boost purchase frequency and retention rates. Regular emails keep your brand top of mind, showcase your offerings, highlight service quality, and reinforce your value proposition. Higher purchase frequency typically correlates with stronger retention.
While satisfaction surveys and email marketing can serve as powerful retention tools, their effectiveness depends on proper implementation. Reach out to Winsby today to implement these strategies and begin improving your retention metrics and customer purchase frequency.
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Another Business Transition. This is the critical one…and we are missing it.
Today our Founder and Managing Member Ron Slee writes about adapting to our current realities in “Another Business Transition. This is the critical one…and we are missing it.”
I have had an interesting and extremely rewarding career in the equipment world. I never dreamt about working in this industry. It just happened.
I was 22 years old, and it was a tough time to get a job in the data processing world. I wanted to work for IBM. I had a mathematics -physics education with minors in statistics and computer science. I made a choice on education that didn’t make a lot of sense, looking back. I was a generalist by nature and a teacher by aptitude.
I was skiing north of Montreal after leaving a job working in a custodial role at a place called “Boys Farm and Training School.” It was started by my maternal great grandfather, and I wanted to see what it was all about. I had a group interview, kind of like a casting call, and got hired as a “control figure.” I had been a serious swimmer and had a physique then. I learned a lot at that work particularly in personality profiling as that is what they trained me to do. It was too much for me, working 7:00 AM to 11:00 PM daily and being on call overnight. I had one day off every two weeks. I needed a rest.
The VP Finance for the Caterpillar dealer in Quebec, John Swift, called my home looking for me. I had taught two of his children at university, so he knew me a bit. He asked me to come for an interview and see if there was mutual interest in an opening they were trying to fill. I got the job and was hired on a one-year contract to find and fix a problem in the business system that they had installed. Before the year was up, I was hired full time.
I spent ten years there and it was one of the most impactful ten years of my life. I was given the opportunity to get involved wherever they wanted to make changes and improve things. In other works, look at a system, determine how it could be performed in a different and better manner, create the change plan, and implement it. It was absolutely a perfect fit for what would keep me challenged. My work even today continues to be a perfect fit.
Currently we are developing a lifelong learning platform for people between the ages of 16 and 76. What I call Workforce Development. I still teach in the conventional manner, what I call the “Sage on the Stage,” but it is rare these days.
I started in March of 1969. That was 55 years ago. Suffice it to say I have seen a lot of change in my career. Some of it has been good, making performance better and improving customer satisfaction. Some of them not so good, economic changes, which caused pain.
Throughout that time, however, the business has been transaction driven. Process things. Orders, complaints, physical counts, monthly reporting etc.
During that time, we have experienced serious changes in prices. Inflation was causing some of it. Some of it is caused by dealers wanting to increase their revenue lines. The thing that was missing was data. Working in Canada, and Quebec, in the parts business we had to contend with foreign exchange, custom duties and taxes. That meant that a part number could have up to six different prices depending on its end use. Our customers were having fits with it as they had purchased parts that could have been six different prices. I was asked to look at it and see if I could produce a solution that was good for the dealer and also the customer. That was my first dive into data.
I went through everything and created what I called “Matrix Pricing.” It was based on the price of the part. It aggregated all demand and put it into one “Bucket.” That way we “normalized” the distribution of partes sales across multiple duty and tax applications. I was able to use my mathematical statistics education for the first time. I have been data driven ever since.
The industry, however, has not become data driven, they are still transaction driven.
Over the years we have experienced many economic cycles. Each cycle has resulted in actions at the dealer level. Most of the action has been a combination of increasing prices and decreasing expenses. When I talk about decreasing expenses, we should never forget that personnel are the largest single expenses in a distribution channel. That to many of you will explain why I have been telling anyone who would listen that we have chosen profit over people in how we operate our business. We have reduced the number of people doing the work to maintain a reasonable net income.
We were still a transaction driven world.
The results are quite clear. Price increases caused customers to look for other suppliers. Personnel reduction meant that customer service declined. That led to more and more of the same to survive. As we have seen many did not survive. As an example, today we have two Caterpillar dealers in Canada. When I started there were ten. You can look around and see the same thing in every geographical area and every product line in the capital goods industry.
Meanwhile we have had some serious changes in technology. We have also had some “Revolutionary Reformers.” That is what I have named the “disruptors.”
Jeff Bezos is an easy example. He saw a transaction business that had not changed in any meaningful way for a century. We brought the purchasing of books online. Then, however, he had data. He was wise enough to look at the data and change his business to be the supplier of anything and everything that a consumer wanted. He became the largest retailer in the world. I don’t want to forget Sam Walton. He changed distribution in very meaningful ways as well. He told his suppliers that they would be his only source for their products, but he had two conditions. They were never to let his shelf be empty and he would pay for their products when he got paid by the customer at check out.
The internet arrived in the late 1960’s and became rather ubiquitous with America Online in the 1970’s. Most of us have and continue to use the internet. That change and disruption was HUGE. Social media has caused all manner of turbulence in society. Companies like Google and Meta and Twitter and TikTok have caused much debate. No matter because it is here.
How have we in the equipment world adapted to this reality? Not very well. Let me ask a few questions if you think I am being too critical.
What percentage of your parts business comes in over the internet?
What percentage of your service work, field, or shop, has appointments created on the internet?
What percentage of your equipment sales are done over the internet like TrueCar?
What percentage of your rentals are transacted over the internet?
What percentage of your receivables are paid directly to your bank?
How did you do?
Let’s turn the corner and look at the parts business.
How many of you measure your parts availability as a percentage of fill? A pretty common metric. Why not supply 100% of the customer parts needs next day? That is a data driven question. NOT a transaction question.
Here are two other quite easy data questions.
Market coverage is typically done by geography. Most of you use an 80:20 rule in market coverage. Very few of your equipment sales associates will call on a customer who does not own any equipment for your brand. Why is that? I can go on and on.
The point I want to make to you is remarkably simple. Hire some people who have a statistics background and let them look around your data and see what they find. The first thing they will find is that your data is not exactly accurate. You typically don’t have any database management protocols of discipline.
As Donald Rumsfeld is famous for saying “We don’t know what we don’t know.” Neither do you.
The time is now.
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How Construction Equipment Dealers Can Succeed (Or Fail) Faster
Our new guest writers, Jordan Arsenault and Nick Mavrick bring big data to their first blog post for Learning Without Scars, “How Construction Equipment Dealers Can Succeed (Or Fail) Faster.” Don’t dig for data. Let data dig for you.
Big trouble: that’s how we are ending 2024, most economists agree. Inflation, investment bubbles, over-the-top government spending, technology disruption, dealer margin and market share compression and the exceptional market power of two major rental companies. How can your dealership thrive with more instability ahead?
One may turn to Warren Buffet’s counsel: “I don’t look to jump over seven-foot bars. I look around for one-foot bars that I can step over.”
In your construction equipment dealership, would you allocate capital differently if you knew how much revenue and profits were created by the top 10, or 20 percent, of your customers? What if you learned that 5% of your customers generated over 70% of revenue & profits? Or that your top customers’ life-time value was 5X or 10X larger than that of your average customer?
Consider the following construction equipment cases:
None of the above had been using the proportionality of their data for 80/20 capital allocation, to manage their salesforce, or in short – replicate what they are doing well, to do more of it – faster. They kept going by raising prices, cutting employee expenses, and taking incremental actions while remaining perilously close to a vicious doom cycle. Why?
For the solution, one may turn to Charlie Munger for advice: “There is an old two-part rule that often works wonders in business, science, and elsewhere: take a simple, basic idea and take it very seriously.”
To solve data problems, BiltData.ai has constructed a Continuous Insights portal to transform a dealer’s data to quickly identify patterns and establish proportionality – which are referred to as the 80/20 rule.
The results: construction equipment companies can move quicker to take the most ‘profitable’ share, grow best customers, find the best prospects, grow share of wallet by upselling, launch new markets profitably and adopt new sales and pricing models
“In God we trust; all others bring data.” -W. Edwards Deming
Relentlessly pursue data for your continued success!
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Jordan Arsenault is Board Chair of BiltData.ai. Jordan is the Board Chair of BiltData.ai. With an extensive career in sales management, Jordan is an expert in using data to accelerate revenue and ROI. She currently serves as Chief Strategy Officer for Southland Resources, a leading raw material energy producer.
Nick Mavrick is the CEO of Biltdata.ai. With decades of B2B data science expertise, BiltData.ai provides a tailored industry solution. We enable the construction equipment industry to get going with X-Ray vision for customer and prospect data. Nick is an expert in CRM and data mining, as the cornerstone to segmented marketing, strategy, operations and driving ROI. He has vast experience in supporting B2B sales teams including VOLVO Rents, NationsRent, multi-brand dealers and more.