Redefining Excellence – Beyond Firefighting

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Redefining Excellence – Beyond Firefighting

Guest writer Sara Hanks highlights the importance of existing beyond the emergency situation in “Redefining Excellence – Beyond Firefighting.”

In today’s business environment, the spotlight often shines brightest on those who extinguish fires rather than those who prevent fires from igniting. This dynamic has increasingly highlighted the misalignment within companies regarding quality and continuous improvement principles. While saving the day deserves recognition, the diligence of preventing problems goes unrecognized. Over time the motivation to be proactive and focus on process improvement diminishes. This trend undermines the core values of continuous improvement and quality management, but also creates long-term risks to operational excellence and customer satisfaction. When competition is low, this is exponentially worse.

The recent events with United Airlines suggest that companies may have lost their way when it comes to quality and operational excellence. A quick Google Search, or CoPilot prompt can show that 3 incidents occurred recently, which I find rather alarming. If the aviation industry, which is notorious for high regulation, has visible mistakes, what is the culture like in other companies? 

Historical shifts in quality and operational excellence often arise from moments of intense challenge and competition. A classic example is the U.S. automotive industry’s response to the introduction of superior-quality Japanese vehicles in the latter half of the 20th century. American companies to adopted Lean Six Sigma and other continuous improvement methodologies that emphasized defect reduction, efficiency, and customer satisfaction. This begs the question: Are we waiting for another moment to realign our priorities towards prevention and quality, or are we already in the thick of challenge, driven by a post-covid rut.

Regardless, it’s imperative for organizations to adopt a culture of continuous improvement. Here are some recommendations for individuals and organizations looking to instigate meaningful change:

Establish a Rewards System for Prevention

Create a rewards system that equally acknowledges both the resolution of existing problems and the identification and prevention of potential issues before they arise. As part of regular operating rhythms and meetings, highlight success stories related to prevention, or good corrective actions that prevent recurrence. Share stories and case studies within the organization to provide examples for people to learn from, and more importantly give credit to those who implemented the projects.

Build Comprehensive Training Programs

Training programs should include basic overview training for all employees in the company, and in-depth measures that include application. Here are a couple suggested training topics:

  • Process Mapping and Waste Evaluation – develop training programs for employees at all levels on how to conduct process mapping exercises and evaluate processes for waste, inefficiencies, and opportunities for improvement.
  • Data Analysis and Problem-Solving Technologies – offer training on the latest data analysis tools and technologies that facilitate problem identification and resolution, including visualization tools and artificial intelligence.

Create a Mentoring Program for Projects

Create a mentoring program that pairs less experienced employees with seasoned veterans to foster a culture of learning, sharing, and continuous improvement. If the expertise is not available within your company, hire a consultant to develop key talent internally, then expand. Promote cross-functional teams to work on improvement projects, facilitating knowledge transfer and a broader understanding of the business processes.

Set Ambitious Continuous Improvement Goals

Tell me how you will measure me, and then I will tell you how I will behave. If you measure me in an illogical way, don’t complain about illogical behavior. — Eli Goldratt

It’s amazing when people’s job performance is tied to a metric, actions are taken to meet the goal. Here are a few examples of continuous improvement goals:

  • Cost Reduction – evaluate non-value add cost, such as scrap, rework, redesign, or warranty.
  • Defect Reduction – focus on areas of process rework or physical defects.
  • Cycle Time Improvement – focus on reducing cycle times for key processes and product deliveries, enhancing responsiveness and customer satisfaction.

Leadership Commitment and Involvement

Conduct regular reviews of continuous improvement initiatives, adjusting based on results and feedback to ensure alignment with overall business objectives. Ensure that leadership actively participates in and supports continuous improvement efforts, setting the tone for the entire organization. Educate the leaders on asking questions that prompt investigation and plans to prevent recurrence, as opposed to demanding explanations or expecting action before root cause is understood.

By embracing these strategies, companies can shift their cultures towards valuing and rewarding the crucial work of preventing problems before they occur, thereby laying the foundation for sustained excellence and competitiveness.

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Turning Off Warranty Losses

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Turning Off Warranty Losses

Guest writer Christ Kohart is back this week with a continuation of his topic on warranties with his blog post, “Turning Off Warranty Losses.”

In our last discussion, we reviewed the cost (financial loss to our dealership) of replacing a simple hydraulic tube covered by an OEM standard new equipment warranty. We also discussed the importance of sharing our dealership’s value-add with our customers; that example was a small hypothetical of what a dealer’s service operations extend to support our customer base daily.

How do we properly allocate these write-offs without dumping them into a general cost bucket? Here are two ideas:

Simple Method: We can look at our warranty write-offs for the previous fiscal year and allocate a percentage as a line-item cost to each new whole goods sale during the upcoming fiscal year. While the cost recovery trails the expense by one year and is subject to market fluctuations (good vs. bad years), it is a starting point. In this example, let’s assume that our write-off account shows a net negative balance of $200,000 at the close of our current fiscal year. To fairly allocate this loss to our upcoming fiscal year, we can’t divide our forecast unit sales count by the $200K loss as it will unfairly allocate to lower-cost machines. For this example, we use our forecasted OEM whole goods cost (exclusive of rebates, allowances, freight, etc.) of $10,000,000. If we do some quick and simple math, adding 2% to the cost of each new machine we bring in during the year should net us out with a close to $0 warranty loss. This 2% becomes a line in your build spreadsheet, just like inbound freight, receiving, PDI, standard prep, etc. Beware: the downside to this simple method is that one specific large warranty hit during the year can skew the numbers and hurt your competitive position – you’ll have to carefully gut-check your results.

More Accurate Method:  Consider allocating the warranty costs by OEM, model type, and, potentially, application. Depending on your dealership’s software, this can be relatively easy or complicated. Due to the limitations of the software platform deployed in my old dealership, this was an arduous exercise but well worth it once we began extracting meaningful data. While this will take some time to assemble, once the data model has been created, you should be able to run a routine to update your numbers regularly.

I’m going to limit the sample for our example, but this formula works for almost any size dealership:

  1. Three-year lookback
  2. Two OEMs represented.
  3. Three different model classes (types) spread between the two OEMs.
    1. Class 1 = 15-30 MT hydraulic excavator
    2. Class 4 = 80-150 HP tractor dozer
    3. Class 10 = Medium skid steer loader

High-level steps to make the data meaningful:

Run a detailed report and export it to any solution that can manipulate data, by OEM, of all whole goods sold by model class. You need this information to establish the quantity of each model class.

Run a detailed warranty report and export it using the same criteria. Ensure the report includes all costs and all recovery; this should include any additional policy or extraordinary cost reimbursements received from your OEMs.

Let’s review some of the information in this spreadsheet. We can quickly see what our average warranty loss per machine costs our dealership to support – we’ll discuss the lost profit potential on all those labor hours given away at cost in an upcoming blog. We can also see trends if the average loss varies yearly; in our example, they stayed close. 

We now have data that is accurate by OEM and model class, we’ll discuss adding application as a factor in a future blog. It makes sense that a small skid steer will cost us much less in terms of warranty support than an excavator. This report would also highlight an outlier you would want to adjust manually; using the “simple method,” this would not stand out.

Run this model for your dealership – hopefully, the results are not a surprise when you review them, although they usually are. If you think the numbers are overstated, start with a percentage – even at 50% of the numbers presented above, our sample dealership will add approximately $421,000 to the bottom line in the upcoming fiscal year if you use a three-year average as your basis. While the numbers used have been kept low for this example, I hope they shed some light on the power of accurately tracking these costs. 

Set up at least one revenue GL account (preferably by OEM and model class) to begin recording the offset to your warranty loss account(s).

This is an example of setting up your company to stop writing off warranty losses. If your business system cannot provide this information, many excellent third-party products integrate with most of our industry’s business systems and will ease your journey. The cost of your investment in the project, and perhaps the third-party product, will be returned quickly.

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Aged Work Orders

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Aged Work Orders

Guest writer John Dowling is back this week to cover the topic of timing and timelines in your dealership in “Aged Work Orders.”

How long or how many days should it take to complete a repair on a customer’s machine? How many days does it take for your service department to close out a service work order? I have been asked the ideal number of days or average days to close a work order. The answer to that question is less than what it is now. However, many days it takes your service department to close out a work order, it’s too many! Unless you’re running a perfect service department. If that’s the case, stop reading and forward this to somebody else to read.

An aged work order is a work order over 30 days old. Depending on your location and industry, this number may go up or down, but 30 days is a good rule of thumb. Aged work orders should be a concern at every level of management within a dealership. The dealership that aged work orders are not a concern at every level of management, that dealership will struggle with cash flow, profitability, and customer satisfaction. These are all the symptoms of aged work orders.

How do we address or correct an aged work order problem? One way we should not address it is by criticizing the service manager, making many threats, shouting, screaming, and telling them to fix the problem. That rarely works. Most service and branch managers need a better understanding of the service process. They believe that service managers’ job is to fix equipment, and that’s partially true. It’s a technician’s job to fix equipment. It is the service manager’s job to manage the process of repairing the customers’ equipment—similar roles or jobs but not the same.

We must break down the service process to discover where the bottlenecks and issues are causing our prolonged work order lifecycle. A prolonged lifecycle will lead to an aged work order. How have I broken down the service process? Well, I’ve broken it down into ten steps or stages. In my book Service by the Boxes, I refer to these steps as boxes. We are looking for how many days it takes to move the work order through each step or box.

We need to know how many days it takes from the day the customer drops off his piece of equipment at your dealership to open a work order. If it takes more than 24 hours, that is too long. All work orders should be opened the same day the equipment is dropped off.

Once the work order is opened, how many days does it take to have that work order assigned to a technician and the technician to start the diagnostics process? This must occur within 24 hours to be best in class.

After the technician has diagnosed the equipment and created a parts list, how long does it take your parts department to estimate the parts? Parts estimates should be completed daily.

How many hours does it take for the service department to complete the service estimate and get the customer’s approval? This should occur within 24 hours of the parts estimate being created.

When the estimate has been approved, the required parts should be ordered on the same day. How long does it take your parts department to order approved parts? If it is days or weeks, you have a problem.

Once the parts have been received, do you have an assigned location to stage them for the technician? What is the process of informing the technician or the service manager that their ordered parts have been received? How long does it take? I hope the parts were staged the same day they were received.

This next stage of the work order process usually kills most service departments, especially those struggling with aged work orders. Once the technician receives the parts and completes the repair, how many days, if not weeks, does it take your technician to turn in a completed service report? Technicians should complete and turn in service reports the same day they complete the repair without exception.

Once the service report is turned in to the service manager or office, how long does it take them to process, i.e., close the work order? I have seen service managers hold on to completed work orders until the last week of the month before they even start processing them. Completely asinine. Completed work orders should be closed within 24 hours if not on the same day the service report is turned in. All the work has been done; we need to close the work order. That’s cash just sitting in your service office. 

After the work has been completed and the work order has been closed, how long does it take to collect payment for the repair? This may be the most crucial step in the entire process. It does not matter how efficient your technicians are, how many turns your parts department has, or even if your service manager keeps all his work orders up to date. It is all for not until you collect the money. The transaction is complete once you get paid. 

So, how many days should a work order’s life cycle be? Run a report to find the average age of your work orders. Your work order life cycle should be less than that number. Review the steps we discussed and record how long your service department takes to get from step to step or box to box. Ask why it takes so long and find ways to decrease the time. It is challenging work, but it will pay dividends in cash flow, profitability, and customer satisfaction.

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The Current U.S. Labor-Market Conundrum

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The Current U.S. Labor-Market Conundrum

Guest writer Edward Gordon has returned with his February Gordon Report: “The Current U.S. Labor-Market Conundrum.”

The February 2024 BLS jobs report showed a surge of 353,000 jobs added in January, more than double than what was predicted in economic surveys. This follows a gain of 330,00 jobs in December. Another surprise in this February report is that average hourly wages grew rather than holding steady. Over the past year they have grown 4.5 per cent. What factors may be behind these unexpected numbers?

 An average of 10,000 workers from the large baby-boomer population have been retiring each day. This year the average will grow as the baby-boomer retirements peak. This flood of retirees will continue until 2030. Therefore, this year and until the end of this decade, many job openings will arise from the need to replace retirees.

 In at least some sectors of the economy, it appears that employers are raising wages to find workers with the skills they need. Chief Economist Bill Dunkelberg of the NFIB (an association of small business owners) reported on their January survey, “owners continue to raise compensation to retain and attract workers with the skills and willingness to do the job, but hiring remains a struggle in a tight labor market.” So far, this strategy has not been very successful. In that same survey 39 percent of the respondents reported having unfilled job openings. Members of the Association of General Contractors also have high levels of unfilled jobs despite providing a wage premium of almost 19 percent over that of the average for private-sector production employees.

 In some cases, higher wages may attract people who have not been participating in the labor force to seek a job if the pay level would offset the costs of childcare, a long commute, or obtaining additional training. A recent Korn Ferry survey of job seekers, however, found that many applicants do not have the skills required for open jobs. In some case this is due to the development of new types of jobs with recently updated skill sets.

 The above data points to a current labor market with a significant skills-jobs mismatch. But the Training Industry Annual Survey of 2023 reported that business investment in employee training remained flat. Going forward, predictions are that companies will cut their training budgets. The irony is that one way or the other business will have to pay more to find skilled workers either through continuing to raise wages or by investing in more in-house or collaborative training programs.

 Edward E. Gordon is the founder and president of Imperial Consulting Corporation in Chicago. His firm’s clients have included companies of all sizes from small businesses to Fortune 500 corporations, U.S. government agencies, state governments, and professional/trade associations. He taught in higher education for 20 years and is the author of numerous books and articles. More information on his background can be found at  www.imperialcorp.com. As a professional speaker, he is available to provide customized presentations on contemporary workforce issues.

  We invite you to submit your questions or comments by email or calling us in Chicago at 312.664.5196.

Thank you for your continued interest in our publication.

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Rollin’ with the Wrenches

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Rollin’ with the Wrenches

Our newest guest writer at Learning Without Scars, Kenneth Johnson joins us this week ready to close the deal! In his inaugural blog post, “Rollin’ with the Wrenches,” Kenneth takes readers through the world of Field Service Technicians. But first, here’s Kenneth in his own words:

I CLOSE therefore I AM sums up my work mantra. I am the epitome of what every commercial truck buyer fears. The “Master Peddler” “The Salesman “The Smooth Talker with the golden tongue. Formally trained, armed with superior product knowledge, charm and wit plus an arsenal of tools that will separate you from your wallet. The average consumer is no match for folks like me. 

I’m currently a Regional Sales Manager for a nationally recognized Vocational Body Builder with prior employment as a State Licensed Professional Financial Planner, Insurance Agency Owner, Auto Dealer General Manager, Fleet Director, Finance Director, Certified Vehicle Leasing Executive, Director of Business Development for DBE Federal Contractor, NABCEP Board Certified Sales Professional and Small Business Owner,

After four decades in the relentless pursuit of prey I have decided to seek a new path and put my skills to work for you.  Remember the Terminator started out as a really bad Dude!

Rollin’ with the Wrenches: Navigating Hurdles in the World of Field Service Technicians

Hey gearheads, grease monkeys, and heavy equipment wizards! Buckle up for a more extended journey into the fascinating realm of Field Service Technicians, where fixing trucks and repairing yellow iron brings a heap of challenges. From critical part shortages to soaring prices and not enough hands on deck, today’s Field Service Technicians are steering through some serious twists and turns. Let’s dive even deeper under the hood and explore what’s revving in this extended road trip!

Running Low on Truck and Yellow Iron Bits: The Great Parts Hunt Continues

So, you know that frustrating feeling when you’re elbows deep, fixing a machine and suddenly the part you need is playing hide and seek? Well, that’s the prolonged situation for Field Service Technicians everywhere. Parts are scarcer than ever, leaving our mechanics stuck in a real pickle. Trucks and heavy equipment remain in limbo, waiting for those elusive missing pieces – downtime that nobody enjoys.

DIY Solutions Evolve:

As our truck and heavy equipment fixers, the Field Service Professional Technicians, continue their journey, thinking local is just the start. They’re now diving deeper into innovative approaches, like forming local part-sharing networks and collaborating with neighboring mechanics to keep those wheels and bulldozer treads rolling.

Price Hikes: The Budget Buster Persists

Have you ever noticed the numbers on the gas pump going up faster than your heartbeat during a close call? Well, Field Service Technicians have been living this reality. Inflation continues to pinch pockets, turning every wrench turn or PM into a financial head-scratcher.

Navigating Financial Waters:

Our unsung heroes are mastering the art of financial finesse. Balancing the books becomes an even more intricate dance as they figure out how to tighten belts without compromising the top-notch fixin’ they’re known for, both on trucks and heavy yellow iron.

Not Enough Wrench Wizards: The Search for More Hands Continues

Picture this – you’re up to your ankles in mud and engine grease, and you look around, only to realize your partner in crime is MIA. That’s the ongoing reality for Field Service Technicians; there just aren’t enough hands to get the job done.

More Hands-on-Deck Strategies:

To fill the wrench-shaped gaps, our truck and heavy equipment champs, the shop owners, mobile equipment repair business owners, are not just recruiting; they’re orchestrating strategic training sessions, pulling in new recruits, and maybe even giving their teenager a crash course in tire changing and bulldozer tune-ups.

Cruisin’ through Challenges: Shifting into High Gear with Service Trux USA Directory

All right, enough doom and gloom – let’s explore even more solutions. Field Service Technicians are diving headfirst into new tech, with tools like the Service Trux USA Directory now playing an even more pivotal role. It’s like a GPS for truck and yellow iron fixes, helping them not just find the right path but establishing new routes in this maze of ongoing shortages and price hikes.

On-Highway Truck Repair vs. Heavy Equipment Technicians: Unveiling Unique Challenges and Common Ground

While both groups, on-highway truck repair mechanics, and heavy equipment technicians, face similar challenges, the distinctions are becoming even more apparent. On-highway mechanics navigate specific truck parts shortages, while heavy equipment technicians, specializing in yellow iron like trenchers, excavators, bulldozers, and cranes, face unique diagnostic and repair challenges for these robust machines.

And here’s a pro tip: collaboration remains the secret sauce. By sharing more tricks of the trade and lending a helping wrench, Field Service Technicians are building a community that’s as tight knit as a lug nut.

Unveiling the Service Trux USA Directory: A Deeper Dive into Tech-Driven Solutions

Now, let’s shed a brighter light on the Service Trux USA Directory. This tech marvel is not just a tool anymore; it’s a beacon guiding Field Service Technicians through the challenges of their ever-evolving landscape. It’s their go-to resource, their GPS navigating them through the digital highways of data aggregation, Business development and strategic sourcing.

Leveraging the Directory:

As they harness the power of the Service Trux USA Directory, Field Service Technicians are not merely accessing information; they’re orchestrating smoother operations, reducing downtime, and streamlining collaboration within their community.

Collaborative Resilience: The Heart of the Field Service Technician Community

So, fellow road warriors and heavy equipment maestros, as we extend this journey, next time you see a Field Service Technician at work, give ’em more than a nod. They’re not just fixing trucks and heavy equipment; they’re conquering a highway and construction site full of evolving challenges, keeping our wheels and yellow iron turning.

Extended Cheers:

Here’s to the ones who keep the world rollin’ and heavy metal rumblin’, expanding their toolbox of solutions, and revving up for an even more resilient future! 🛠️🚚🚜

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What Would You Have Done

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What Would You Have Done

Thomas Barry – ‘Tom’ has long taken to heart the fortuitous occasions and high value of being prepared and focused when the opportunity to be considered, called upon, and compete align.  This was a necessary mindset fostered and forged when seeking to make the youth baseball, soccer, hockey, and chess tournament teams while growing up in both Massachusetts & New Jersey having moved several times.  He makes his first blog post for Learning Without Scars with, “What Would You Have Done?”

Attending High School in both MA & NJ, illuminated the precept that demonstrating your value was only evidenced by your repeatedly proven capacity to generate stellar results within those brief moments of timely relevance.  As does earning a spot on the Soccer & Baseball Teams within new schools with 5,000+ students. The application of this internalized set of motivators has proved useful and beneficial as it has translated into a long list of both individual and corporate leadership business awards.  Recognitions, bestowed for sales, marketing, share of market, and comprehensive KPI metric performances repeatedly recognized by world leading OEMs, heavy equipment stocking distribution businesses, as well as governments on Local, State, and Federal levels; for National, North American, and Global Sales and Export performances.    

A Graduate of the University of California, Berkeley, there… Tom applied for and was accepted into a highly selective Independent Studies degree program within the College of Letters & Science while also a member of the PAC10 Cal Baseball Team.  His focus was professional sales and as such was permitted to take coursework from all 14 UCB campus colleges including 2 years of MBA studies in the Principles of Corporate Finance, Engineering, Business Law, Accounting, Statistics, Computer Science, Political Economies of Industrialized Nations, Sentential Calculus, and the completion of a culminating Senior Thesis which earned an ‘A’. 

Tom and his wife Eileen met in High School and are now married 36 years and reside in Columbus, OH.  Their two adult sons were very active in Travel Soccer & Tennis which initiated a great band of parents that routinely gather for the next Ohio State Buckeye Football or Columbus Crew Soccer Games!      

You can find Tom on LinkedIn.

A true-life heavy construction equipment sales presentation story shares insight of contrasting styles of differentiating value propositions.
Several of the competing OEM distributorships’ senior leadership emerged from behind their desks to present a product of three (3+) of the world’s leading competitive OEMs to my unit.
Unique styles and approaches collided in a high-profile opportunity wherein a purchase of a 147,000 lbs. excavator is on the table to be selected by the winner ‘Bill’ of a State Government low bid public service energy project!

Preamble: Within a typical sales career launch… many representatives will start off at a level of skillset capacity descriptively referred to that of Unconscious Incompetence. If you’re slow to embrace and internalize key precepts available from training… you’ll likely be lacking at your needed industry skills, and you will often not even know it or know why. Nevertheless, with some initiative and persistent engagement, you’ll advance to a level of Conscious Incompetence wherein you’ll perform under par, and you’ll be aware that you’re not as good or as effective as desired from yourself and others. Self-awareness is needed!

As you practice, drill, and rehearse your early skillset, pivotal personality traits, product knowledge, and practiced presentation choice of words nuances, you’ll start to notice and appreciate marked strides towards improvement. The results will often equate to some level of competence along with periodic moments of success that fuel an onwards and upwards spirit to endeavor towards continuous improvement!

Continue to hone your skills and you’ll reach a level of Conscious Competence…You’ll be prepared and skilled and self-aware of such. Down the road…staying the course and with a mind to continuous improvement… and striving for excellence… the phase of your career wherein you attain Unconscious Competence awaits. Therein is the stage at which you can earn self-satisfaction and rewarding recognition levels familiar to many that enter the arenas of sports. More importantly, you’ll find that the professional field of sales is a lot of fun and full of gratifying moments of satisfaction of helping to uniquely solve customers’ problems! The journey of taking a Brand Mark to another level of Brand __________! 

This capacity for professional growth and career satisfaction will be a function of your capacity to act with sincerity, to do more for your customers than anybody else is willing to wield to deliver, so that they and their opportunities can be as successful as possible!

As I waited in the entry foyer… of an existing customer’s visitor’s chair that morning, I was greeted by the President’s Office Manager, whom I knew quite well of this fast-growing construction firm; on the matter of a recently secured heavily competitive bid for a large public service energy project. The very familiar banter which was commensurate between us was suspended as the President emerged from his office and spoke with an energetic/pleasant business tenor… 

“Busy day Tom, I have no time for pleasantries… I’d like to meet with you today…I’ve got a meeting set already to meet with (OEM Distributor Competitor #1) in 15 minutes from now – this morning… who, by the way, isn’t happy that you sold me the last 20 machines I’ve purchased. They are embarrassed and have assured me that their final pricing and enthusiasm expressed is going to reflect that point to say the least. I’m also meeting with (OEM Distributor Competitor #2 & #3) this afternoon as they each related to me this order is going to be theirs…that should be interesting. Do you want to meet me before I meet with (OEM Distributor Competitor #2 & or #3)?”  

I replied, thank you for asking but no thank you Bill, … I’ll be pleased to take the last appointment of the day. I’ll catch up with you at 5:00PM, if that works, as I doubt that my perspective and comments will need to take very long…and I can answer any questions you may have that stemmed from your prior meetings.

Bill replied: “OK… Sounds good Tom, see you then.”

Upon my return, I arrived ten minutes early and soon was summoned to sit across from the Contractors’ President’s desk to relate the following with a high degree of matter-of-fact confidence. “Bill, as always thank you for your time to speak with you and for the opportunity to be compared so that our value can be identified – as always that is highly appreciated! Bill as you are keenly aware… you’re buying a tool for a job. The tool you need for this job is very soon to start am I correct? Bill replied Yes! 

I added, the importance of this job is enormous. Everyone will be watching, and this will likely be the most important job in the history of your company…am I correct in saying that? Bill replied ‘Yes’! If you would be so kind Bill, please share just a bit about your project… is it the same as what I’ve heard (he knew I assisted with his bidding team of engineers)? Indeed, it was the same.

I summarized and related OK Bill, thank you for that feedback as it is largely the same specs as I had recalled from my prior meeting notes. {As I was about to begin my presentation comments, Bill interrupted me and stated} … 

“Tom your proposal to me is at $675,000 for your excavator package vs. Competitor #1 at $545,000 and Competitor #2 is at $475,000 and Competitor #3 is at $425,000 with an additional caveat of “Make me an Offer” comment from their V.P. of Sales… who related that the factory is going to make sure that this deal is theirs! (Bill added) … ‘that has turned my head…Tom, you know I like you… so let’s keep this conversation about meat and potatoes because that is at least $250,000 we’re talking about.”

Thank you for that feedback, Bill… much appreciated. I took the liberty to stop by the facilities of Competitor #2 & #3 today. I drove through their equipment inventory yards as if I owned the place and despite some of the looks, I got, I took these pictures of their machinery, buckets, and excavator arm inventory positions on their respective grounds as I wanted to assess their capacity to support you considering the difficulty and importance of this project.  We’re talking about very hard shale & dolomite seams that cannot be blasted as I recall from conversations with your estimators (I referred to them by names)! 

Competitors #2 & #3 have just one bucket each in inventory… and that is only the ones already mounted onto their only inventoried excavator unit they are quoting you. They both have 65” soil bailing buckets installed – not matched for the early job phases. You’re going to need quick disconnects on the bucket couplers with a capacity to switch between at least 3 buckets so that you can maximize your productivity and reduce the amount of stone that will support the trench with the appropriate amount of stone bedding and backfill. You will likely be entertaining the prospect of even taking a 2nd longer arm for the excavation effort as this job is pulling triple boxes for safety requirements as you near the end. This shale you are excavating at the bottom of the trench will require a rock bucket that is a $55,000 item. Such bucket specs take 6 weeks to order and arrive if all goes well. 

As to Competitor #2 & #3, offering… forget about the very close machinery specifications on brochures and the bucket issues which are significant…and the critical and hoped for parts and service support desired for a limited number of units present in the region, as compared to what you are already aware of and confident of with our support.  Nobody knows Competitors #2 & #3 offer better than the guys who pitched you on it earlier today. As to Competitor #3, do you really want to consider owning a machine that costs over $400,000 wherein your opportunity to sell it when you’re done with this project has to include the line “Make me an Offer”? Bill, Competitor #2, hasn’t sold a single 75,000 lbs. or larger excavator in this State since the undercarriage wore out on their 100,000 lbs. excavator in 1,800 hours in the next county over which required the purchase of a new $45,000 undercarriage for the project to be completed. This isn’t a dozer working in high-speed reverse in sand and should never see that kind of wear. Their undercarriage and Triple Grouser Shoe specs are not only thinner, the material of their cast pins, bushings and pads are suspect at best. I have the name and number for that owner who would be only too happy to take your call to share that experience and his ‘lessons learned’ story.

As to Competitor #1, knowing they would be touting the glory of their Market Resale Value… I shared ‘keep in mind that 70 Units of this size excavator sold in our state over last decade’. ‘We have sold 56 of them…they have sold 14, and Competitors #2 & #3 haven’t sold any. Trade in Value – the opportunity to take it in trade on the next tool that you are required to have as this job concludes is of enormous relevance and importance. On that note we’re clearly a better designed machine and value as Competitor #1 doesn’t measure up and that is why we have sold 56 out of the last 70 units in this size class and 56 out of the last most recent 59 units sold. Again, you’re buying a tool for a specific job!’  

Moreover, Resale Values for used equipment reflect all buyers’ preferences for new if they could afford them. For all such reasons our offer is the preferred machine of an informed buyer. Our confidence in keeping them in our fleet and supporting them includes our buying them as or if they make it to an auction. Our preference is to take them in trade… which would also position you to save on the taxes when buying new! 

Just as you have purchased the last 20 machines from us, Bill, this next unit is the right decision… if and when you decide the unit is surplus to your next project needs and seek to pick up the next set of tools best matched, you will know that we have every interest to get that unit back for the right price that reflects the proven and established demand for that product in this State.  The breadth of our product offering is well positioned to support your future needs. Note: I have 54 buckets in inventory for this size excavator along with that specialty rock bucket we discussed, numerous arm length choices, along with 16 of these excavator units in stock and in my rental fleet.

{NOTE: In what follows below is referred to as “An Alternate of Choice Closing Question}:  

‘Bill, I know you have a quick start date for this project, so do you want the excavator delivered to the site by this Friday morning or afternoon or is Monday soon enough and which of the three buckets do you prefer to have mounted to start the job?’ (upon which time I shut my mouth and didn’t utter a word for the next 7 seconds of room silence) …   Bill paused, sat back in his chair shook his head side to side and smiled, & then nodded… he stated “Wow… Tom! I did not think I would be saying this today… Monday morning… and the Rock Bucket so to have a wow factor at the Groundbreaking – there is going to be some Press & Dignitaries’ there” – he just purchased a $675,000 excavation package! 

The satisfaction of a favorable outcome attained is a function of earning the customers endorsement of your opportunity to be compared in the process of addressing their needs. Gently leading that customer to identify and navigate the merit of your differentiating value proposition to a new and improved reality of added value – The Life-Cycle-Cost assessments of both ownership and time tested/trusted business relationships of Brand Insistence!

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EI vs. AI: Emotional Intelligence vs. Artificial Intelligence

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EI vs. AI: Emotional Intelligence vs. Artificial Intelligence

This week, our guest writer John Andersen helps us see the clear difference between reality and the artificial in “EI vs. AI: Emotional Intelligence vs. Artificial Intelligence.”

With all the technology and buzzwords floating around it is easy to get lost, confused or sometimes plain lied to. Marketing spin, new names and great acronyms can supplant common sense and knowing better. Manufactured solutions are different than organic solutions and the commitment to following it is also vastly different.

 

Let me give you an example. I have the good fortune to live minutes from Walt Disney World for much of the year. While I am getting a little old for most of the rides and have done everything you can imagine, I still manage to go to one of the parks about once a week. I have taken to studying how they manufacture a guest experience. From avoidance of shadows in high photo locations to the smell of popcorn that seemingly is pumped into the air during parades or fireworks. Subtle music, barely audible in quiet zones to bring down your pulse rate, or rhythmic tones during a line cue to help build anticipation. The imagineers continue to tweak, study, and implement new ways to enhance the guest experience. The intel they gather and maintain on guests is astounding, overwhelming and valuable. They spend millions of dollars maintaining the experience and finding new unique ways to entice the money from your wallet and keep you onsite and engaged. If it’s all you know and all you see, you could believe it is real, but eventually your inner voice will call out, “Artificial!!!”

 

In contrast, this week I have parked my home on the seawall of the Atlantic Ocean. There are still thousands of people around me as we prepare for the Daytona 500. Much like Disney, it’s all business and profit driven. At the urging of a wise old friend, I got up to see the sunrise since there is nothing between me and the ocean except thirty yards of sand. It was predawn when I went outside and stood on the sea wall. On both left and right were people standing quietly with cups of coffee, dogs, and partners. Nobody looked awake and all were silent. It started as a pink glow but within minutes the sun was breaking from the water and fully exposed. My face warmed and the hairs on my arms stood up. It was like I was being filled up with faith, hope and energy. Bathed with light that nobody else had seen yet. We all stood there for 20 minutes or so before one by one our tanks read full, and we left to start our day. Sunrise is so much different than sunset. It radiates peaceful enthusiasm, and positive momentum. A sunrise sends specific signals to the brain and body that can’t be manufactured. In this case your inner voice doesn’t call out, it whispers…” Thank you.”

 

That’s the difference between AI and EI. Artificial Intelligence versus Emotional Intelligence. AI will be pervasive in so many areas of your life over the next decade. It will change the way you do business and how you operate inside and outside of work. You can expect higher levels of service, refined experiences, and likely better and cheaper products. In this utopian environment setting yourself apart will require something organic, real, and different. That requires a skill AI can’t learn. That is where the great will become the exceptional and businesses and customers alike will seek you out. That is harnessing emotional intelligence. We all have it, but the drive is being overshadowed by the noise of AI. Finding a blend of both will lead you to the top of your potential markets and success. Last week I attended a symposium virtually with the greatest leaders in AI and technology. Each had a viewpoint about how technology would change the world for the better and the worse. However, one phrase stood out and much like the sunrise this morning, I can’t ignore what it meant. AI will never supplant EI because AI doesn’t have a gut. Surround yourself with data, predictive models, and AI of all types. Use it to elevate your abilities, skills and services but seek out EI. EI is found in Passion, Wisdom, and Instinct where AI is based on Data, Intelligence, and Modeling. 

 

This brings me back to my Daytona 500 outing. A computer could generate the race, but it’s the spirit of the drivers that engage us. Like the sunrise, you need to feel it!

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The Basics of Marketing, how to avoid the “What were they thinking” Moments

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The Basics of Marketing, How to Avoid the “What were they thinking” Moments

Guest writer Bonnie Feigenbaum introduces her lecture series with this debut blog post: The Basics of Marketing, how to avoid the “What were they thinking” Moments.

Marketing is all about creating a connection between your company and your customer, a permanent place in their lives for your product and a permanent place in their heart for your brand.  In 1971, as a very young child I remember belting “I’d like to teach the world to sing in perfect harmony, I’d like to buy the world a coke and keep them company… “learning the iconic Coca-Cola Hillside singers’ ad by heart.  The ad was so popular that Coca Cola had Hilltop Reunion in 1990 and brought back the singers to recreate the commercial.

There are many times I watch marketing campaigns roll out and wondered who was the marketing genius who came up with that! For example, McDonald’s does so many customer connection points right and really raised the bar on creativity in my mind when they launched their pizza line in 1989. The traditional golden arches were angled to make the Zs in pizza to communicate with one picture and one word that this is McDonald’s Pizza, a logo within a logo.

In 2018, I was intrigued by Nike’s decision to use Colin Kaepernick as their brand ambassador. I read the article by the Montreal Gazette columnist Scott Stinson, “Nike stands with a bet that outcry from Trump and his allies won’t cost them business.”   Kaepernick choose to “take a knee” using the moment of the U.S. national anthem to protest racial injustice and lost his football career in the process. The US was sharply divided on whether Kaepernick protesting during the anthem was disrespecting the flag. Nike, it would seem, was placing a large bet on the support their target market has for the issue and on Kaepernick’s sacrifice connecting with them.   Would the tagline, “Believe in something.  Even if it means sacrificing everything” resonate?

Nike’s choice did create a social media fervor as some more ardent opponents of their choice of influencer created a boycott hashtag and posted videos of them burning their own Nike shoes, socks and carving the Nike swoosh out of their garments. I would like you to remember one thing these people already paid for the products. Nike already had their money. The only person who was losing was them, as they had to spend money to replace the martyred items. Ironically, putting in practice the Nike/Kaepernick tagline. Nike did their research right, sales increased in the wake of the controversial advertising campaign, with online sales growing by 31% in the holiday weekend after the ad launched, according to researcher Edison Trends.

However, there are other times where I wonder to myself, what were they thinking and how did nobody throughout the whole creative and control process clue into the customer disconnect.

Let us go through some of my favorite fails

Urbn Outfitter was founded in Philadelphia in 1970 and is an international clothing corporation that has retail stores located in Montreal.  My fashion marketing students were trying to determine why there was a significant decrease in sales over the past year.  The Urbn Outfitter store brand sales were declining while the parent corporation’s other brands Anthropologie and Free People’s net sales had increased by 2% and 5% respectively at the same time. Through research the students were able to prove that in general the retail sales for the target demographic had been enjoying a continuous increase in revenue. So, what was the problem?

They investigated further and discovered that the year earlier Urbn Outfitter had launched controversial clothing lines featuring edgy and questionable mental health and body shaming crop tops with messaging like “depressed” and “eat less” while their direct competitor, Forever 21 T-shirts proclaimed positivity with “eat more” and “love yourself” on their tops.

 

We also discovered that some of their product line choices left a lot to be desired.  There was a Kent State University sweatshirt with blood spatters on it, a black and white horizontal striped T shirt with a 6-point yellow star on it reminiscent of the Holocaust and T-shirts in a colour Urban Outfitter identified as “Obama black”.  For the life of me I cannot understand how these items got through the approval process.

 

Another example of product fails because the company did not even think to take the customer reaction into account is Simons, a Quebec retailer. In September 2018, Simons launched a line of bralettes, a type of women’s lingerie. The story goes that when the Simons team was looking for a vision for their new lingerie line, they looked at inspiring Canadian women that were respected and admired. The line was meant to honour women who made historic contributions to Canada. The bralettes were called the Elsie, the Clara, the Nellie and the Beverley. So, while the last names were never used, the ad copy made it clear that the designs were inspired by aeronautical engineer Elsie MacGill, trailblazing lawyer Clara Brett Martin, suffragette and politician Nellie McClung and jurist Beverley McLachlin, the first woman to be appointed Chief Justice of the Supreme Court of Canada.

Now Simon’s never sought permission from the estates of the first three women to use their names or even to ask if they wanted to be bralette brand ambassadors. Nor did they ask the sole living “honoree,” the Right Honourable Beverley McLachlin who had just retired in December after spending 28 years at the Supreme Court including almost eighteen as Chief Justice.

After receiving a call from McLachlin, the president Peter Simons, immediately gave in to her demands for her a public apology and a request to get involved with fund raising campaign for the Cornerstone Housing for women emergency shelter organization in Ottawa.

 

In his apology, he stated that he sincerely regretted the naming mishap citing the lack of judgment on his part and that they decided to discontinue and destroy all materials related to the line following the call. During the media storm, I wondered where were the women in the room?  I noticed a line in one article, “Simons apologizes for bra named after former chief justice Beverley McLachlin,” by Tara Deschamps of the Canadian Press where Simons acknowledges that there is a deficiency in their corporate culture, a lack a comfort of the staff to stand up and express concerns.

That is what my basics of marketing series is all about.  I will give every employee the tools to spot the potential problems and recognize the opportunities to improve the customer experience.  But it is up to the management in the company to embed that into the corporate culture, empowering their employees to put customer connections above corporate politics.

We will start by reviewing the marketing process which is a good opportunity to show a relationship between several concepts we will be discussing, during the lecture series. During the first half of the series, I will focus on introducing marketing, the marketing environment and then market research. I will explain how we use the secondary data to develop marketing information systems. We will then delve into Consumer Buying Behaviour, comparing it with Business and Institutional Buyers’ Behaviour. We will then discuss the segmentation and positioning process that work in conjunction with the company’s marketing strategy. We will also cover the marketing mix, where we implement our strategy using our 4 Ps-Product, Price, Place & Promotion. In our final lecture, we will put it all together and discuss how to prepare the full marketing plan.

I look forward to helping you discover the full potential and powers of a full formed marketing process for your company.

If you have any questions or comments, please feel free to contact me by e-mail at bfeigenbaum@sympatico.ca.

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Applying Services Marketing within the Equipment Dealers Business Model

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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 Marketing– Utilizes 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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Market Share, Sales Participation and Closure

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Market Share, Sales Participation and Closure

Guest writer Kurt Pease is back with a blog post on the topic of “sales participation, market share, and closure,” and the ways these elements can be improved upon in your business.

Leadership teams at both the dealer and manufacturer levels dedicate considerable attention to strategizing ways to expand their customer base. The primary objective behind this effort is to increase revenue by attracting a larger number of customers. Stakeholders from both the dealer and manufacturer levels are inclined to invest in companies that consistently demonstrate year-over-year growth in profitability. The term market share is the most used metric to gauge growth. Participating and closing deals are both terms that directly impact market share. Let’s dive deeper into these concepts:

Market Share:

Market share refers to the percentage of total sales within a specific market that a company or product holds. It is an important sales metric that indicates a company’s competitiveness. A higher market share often leads to a larger customer base, increased parts and service needs, and higher dealer revenue. The Association of Equipment Manufacturers (AEM) collects data on new equipment sales from participating original equipment manufacturers (OEMs) to calculate market share. This data is categorized by county, machine type, and horsepower. Market share is determined by dividing new dealer settlements by the aggregate AEM data, typically reported on a monthly, year-to-date (YTD), fiscal year-to-date (FYTD), or rolling 12-month basis. Sales participation and closure directly impact market share.

Sales Participation:

Sales participation measures the engagement of a salesforce with their assigned customer base. The goal is to achieve a 100% participation rate, where every customer provides an opportunity to quote when purchasing equipment. This metric is calculated by the dealer or manufacturer using new dealer settlements and AEM industry data. The formula is:

(New Equipment Settlements + Quoted but Lost) / (Industry Settlements – Dealer Owned Rental Fleet)

“Quoted but lost” refers to quotes entered into the dealership’s customer relationship management (CRM) system, which either result in equipment purchases or are marked as lost customer sales. The dealer-owned rental fleet is excluded from the denominator to focus on sales influenced by the sales process.

Closure Rate:

The closure rate calculates the percentage of deals in which the sales team participates but does not close. Reasons for non-closure can vary, including customer brand preference, machine availability, salesman-customer relationship, and pricing. Price is often cited as a primary reason for non-closure. On average, dealers participate in 50% of opportunities and close approximately 50% of those deals. Multiplying these percentages together gives an estimated dealer market share of 25%. When forecasting an increase in market share, it is important to identify whether the focus will be on increasing participation, closure, or both.

Increasing Sales Participation:

One method for increasing sales participation is to utilize UCC1 data during sales meetings for salesperson coaching and customer engagement. For example, the UCC1 new equipment data can be downloaded into mapping software, which helps visualize customer and machine details. This approach enhances engagement and response from sales teams. Sales meetings provide an opportunity to review past sales details, use the map and data points to identify customers who purchased from a competitor, and check if quotes were generated by the assigned salesperson in the CRM.

Follow-up questions to be asked:

  1. Was the customer identified in the CRM?
  2. How is the customer call frequency classified in your CRM? (A, B, C, D, or E). For example, were they to be called on a weekly, monthly, quarterly, semiannually, or annual basis?
  3. Based on the CRM details, did the salesperson complete call reports based on call frequency?
  4. Did the salespeople participate in the deal?
  5. Why did we lose the sale (closure)? Possible reasons include price, availability, equipment features, and salesperson relationship.

If we participated and lost the deal, at least we earned the right to quote. However, if we did not establish a relationship by not calling on the customer, it presents an opportunity for further investigation. Sales managers can ask key questions based on CRM data to gain insights into customer engagement and sales performance. Understanding the reasons behind lost sales and integrating them into future strategies is crucial for increasing market share. Increasing market share requires actively participating in more deals and closing on those opportunities. Awareness alone is not enough; salespeople must quote to generate market share.

It’s worth noting that customers may not always share the real reason why they did not purchase from your salesperson, making it an imprecise science. Price is often given as the reason for a lost sale. Understanding how sales participation and closure rates are calculated, as well as the underlying data that drives these metrics, is critical for effectively increasing market share.

By understanding the importance of market share and the data that drives this metric, leadership teams can manage their sales teams and lay a sound foundation to generate year-over-year growth in both revenue and profitability.

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