Applying Services Marketing within the Equipment Dealers Business Model

Applying Services Marketing within the Equipment Dealers Business Model

Guest writer Ron Wilson offers an instructive guide in this week’s blog post: “Applying Services Marketing within the Equipment Dealers Business Model.”

Marketing plays a critical role within the equipment dealership. Two of the basic functions are to promote the Products and Services for the equipment the dealership sells and services. To successfully accomplish this there are two types of marketing utilized:

  • Product Marketing- focuses on a specific product, features/benefits, comparing one product to another, product application. 
  • Services MarketingUtilizes marketing strategies that apply customer-centric approaches, builds trust with the customers, and how the dealer’s services can support the customer and the products that were purchased. The offerings will often include benefits, promises, commitments in savings, safety improvements, turn time commitments, and firm pricing. All of which are focused on building trust and relationships.

The remainder of the article will focus on the history and application of Services Marketing.

A Brief Timeline of Key Developments in the History of Services Marketing 

  • 1950s-1960s:  The Services Sector arises as the economies shift from manufacturing to service-oriented markets.
  • 1970s: The 4Ps of marketing were expanded to include People, Physical Evidence, and Processes.
  • 1980s: Growth of Services Marketing Literature grew to academic research and focus services marketing, which included an emphasis on service quality and customer satisfaction.
  • 1990s:  Digital transformation and customer experience evolved due to the internet and digital technologies/
  • 21st Century:  Services marketing continues to advance with the inclusion of data analytics and artificial intelligence with a focus on improving interactions and personalizing of the customer experience.

The formation of Services Marketing has focused on the challenges and addressing opportunities within a unique market.

Apply Services Marketing in the Heavy Equipment Dealers Business Model

Services Marketing applied in the heavy equipment dealer’s business model will contribute to the enhancement of customer satisfaction, customer loyalty, revenue growth, and introduction of new product support offerings.


Strategies to Effectively Implement Services Marketing within the Dealers Territory

    • Identify and Understand the Customers’ Needs:
      • Understand the specific needs and preferences of the customers within specific markets. For example, in many cases the needs of the small fleet owner will be different than a large fleet owner, or governmental agencies.
      • Identify the challenges faced by the customers, including frequency and severity of the application.
  • Segmenting and Targeting of the Market:
      • Segment the market based on factors such as fleet size, industry, type/size of machines, local work environments (weather, altitude, job site restrictions)
      • Identify how tailoring the services can assist in meeting the needs of each segment.
    • Develop Value-Added Services:
      • Offer value-added services such as equipment maintenance, machine inspections, mobile air conditioning repairs, field machining services, extended warranties, hydraulic component rebuilds, machine second life rebuild options.
      • Operator and equipment maintenance/repair training for customers.
      • Proactive services connecting machine GPS data to schedule PM services, notifications of machine alerts such as overheats and over speed occurrences focused on preventing down time, improving utilization, and extended the life of the components of the machine while providing touch points with the customer.
    • Communication of the dealer offerings:
      • Clearly communicate the value-added service offering that includes additional benefits and features based on the needs of the customer. These needs would have been collected through customer surveys, focus groups, historical customer response surveys.
      • Utilizing various channels to communicate the offerings through online platforms, brochures, Product Support, Sales Representatives, and Parts Counter Sales personnel are a few examples of communicating the offer to the customer.
    • Build a strong online presence:
      • Establish and continually review and update the user-friendly website.
      • Utilize social media platforms, customer events, community events, local industry trade events that will provide an opportunity to share customer success stories and provide insight to the dealer’s approach of addressing customers business needs.
    • Customer Education and Training:
      • Offer training programs for customers that provide an opportunity to expose and familiarize the customers with the features and benefits of the services provided.
      • Provide educational content, reference materials, and tutorials that empower the customers and enhance their skills.
    • Responsive Customer Support:
      • Implement a responsive customer service process that addresses questions and concerns quickly.
      • Offer multiple channels of communication, including phone, email, and live chat. Quick and accurate responses are important.
      • Utilize the information received to modify and improve the messaging of the services offered.
    • Services Guarantees:
      • Provide service guarantees such as quick response times for maintenance requests, warranty offerings, firm pricing, timely invoicing.
      • Clearly outline the terms and conditions of the service guarantees to avoid confusion both with the customer and within the dealership’s service areas, such as the service department and the warranty department.
  • Feeback Mechanism:
    • Establish a feedback process to gather insights from customers about their experiences with the new service offerings.
    • Utilize the feedback to continually improve and modify the service offerings.
  • Collaborate with the OEM:
    • Partnering with the OEM can enhance the service offerings through program support, technical and historical information of other dealers that may have implemented a similar service offering.
    • Leverage the OEM certifications to build trust and credibility to the dealer’s offering. Fluids Lab certification, Root Cause Failure Analysis Certification, Hydraulic Technician Specialist, Certified Equipment Training Instructors are examples of certifications that can add value to an offering.
  • Promotions and Loyalty Programs:
    • Promotional campaigns will highlight the new service offerings.
    • Implement or link to an existing loyalty program to encourage utilizing the new offering, reward repeat business, bundle with other offerings. All are intended to build long-term partnerships.
  • Networking and Industry Involvement:
    • Participate in industry events, trade shows, and associations to stay updated on industry trends and build a network of contacts.
    • Collaborate with other businesses in the heavy equipment industry to expand the service offerings. An example would expand the hose and fitting business from the customer’s machines to re-hosing of garbage truck fleets as an expanded service offering within the waste/landfill customer base.

The above strategies can effectively assist the dealer apply the services marketing principles to create a competitive advantage and build long-term relationships with the customers.

Closing Remarks

While both services marketing and product marketing share common marketing principles, the unique characteristics of the dealer’s services offerings require different strategies and approaches to meet the marketing needs of the various customers.

Services marketing emphasizes the crucial elements such as customer-centric, variability (among customers), intangible (the tractor business is a people business), relationship building and delivery of exceptional customer experiences.

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