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Parts Campaigns and Promotions

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Parts Campaigns and Promotions

This week, owner and managing director Ron Slee talks to readers about the importance of campaigns and promotions in your parts department.

Have you ever considered the counter or telephone sales job functions at an equipment dealership? High stress, work comes in tsunamis, or there is a lull in the action and it gets tedious. I have bad memories of how much the parts counter and telephone sales job functions can become an endurance test to get to the end of the day. The phone is ringing constantly, customers and others are walking in for service, and they seem to comes in hard and fast nearly all day long. It is almost impossible at times during the day to keep up.

One of the many challenges that I faced was how to make the job exciting. How to put some sizzle into it.

I wrote last week about the fact that we didn’t have enough people to regularly contact all of our customers, and yes that is very true. BUT I want to add to the problem. I want to create some excitement in the department. To make it a “cool” place to work.

In one of our subject-specific classes “What’s Your Why” I ask the question of “What Do You Do? If you are at a party or a church social or a pub and someone asks you what you do, what is your answer? Think about that. Then in the class, I ask them to tell me how they do it. Some can tell me, however, many will struggle with the explanation. But I really stop the room when I ask them “Why Do You Do It?” And I tell them they can’t say it is to make money.

Oh, I sell parts to owners of construction equipment. I sit at a desk and make telephone calls to sell parts and I answer calls from customers wanting to purchase parts. Sounds really exciting, doesn’t it?

So, I asked everyone involved how can I help you with this job? How can I help make this exciting for you? Nobody came up with anything very good. We all agreed on that. So, we talked about it and argued about it and we finally agreed to do something beneficial for the customer and rewarding for the employees. And campaigns and promotions were born. We had fun, which was what I was trying to do and yes, we sold a lot of parts. The group of us, there were eight people on the counter and I started exploring different ideas and we had as much fun designing these things as well as executing them. Then we put together a plan. We called it a Promotion Planning Tree. I have put these campaigns and promotions into many dealers since. I would estimate over one hundred different dealerships around the world.

At Learning Without Scars, we have a Campaigns and Promotions class that goes through all of the ins and outs of putting these programs together. It is a three-hour program with reading materials, pretests, a video of power points with audio tracks and embedded film clips with some ten or quizzes inserted into the class before a final assessment and a customer experience survey leads the students who achieve an 80% score obtaining a certificate of accomplishment.

A little later we started naming these programs – “January Jumps” “February Frenzy” “March Madness” “April Angst” – I am sure you get the idea. Then we started having a Parts Managers Special of the week, month, or quarter depending on what the objective was for that particular program. We had GOALS for all of them. Of course, we paid commissions for these programs but we also built in individual and store competitions. The highest number of Sales, by person and store; the most improved sales performance, by a person and by a store. And we added a “booby prize.” The last place also won an award. This we did only by store. We had a trophy made. Use your imagination for what that trophy should be and go get one made. It doesn’t cost much. Have an award ceremony, and with what we have learned with Teams Meetings and Zoom you can get everyone on the line at the same time. Make a BIG deal out of this. NOTE: We do the same thing for the service department and the product support sales team. Have some fun. Enjoy yourself. It is not unprofessional to have fun, especially when you can get everyone excited about their jobs and create some friendly competition. It is also great to see your high performers get the public recognition that they deserve. We would put our results in the company newsletter. Get pictures taken and frame them (especially for the low-performance store – I never saw a store repeat as a low-performance store – people truly are competitive).

Who said that we couldn’t have fun doing our work, our jobs? Not me. Try it. I am sure you will like it, and yes you will sell more parts.

The time is now.

 

Training Tidbits for the Parts Department

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Here’s some food for thought and training tidbits for members of your Parts Department.  I’ve had the thought of keeping “current” on my mind lately, and so wanted to share this with you.

You have the responsibility to maintain your skills and knowledge. How are you doing in that regard? Don’t miss the opportunity to attend one of our Parts Management seminars in a few weeks in Dallas.

For as long as I can remember, the No. 1 requirement for customers from an equipment dealership’s parts department is parts availability. I want to review what we do in parts inventory management, expediting and delivery systems to live up to this availability challenge.

Inventory Control Systems and Processes. The business system suppliers (DMS) and vendors have not been sitting still. The use of statistical probabilities and the demand pattern matching with various statistics models has helped dramatically. The statistical approaches vary by vendor; MMI from Volvo, Poisson from Caterpillar, John Deere with their Critical Codes, and Komatsu’s shared approach with their dealers. Yet they all are aiming at the same target: higher availability for customers via the supply chain. The main software providers have been making adjustments as well. From lead times by part numbers to abnormal demand recognition and much stronger interfaces between vendors and distributors and worldwide search patterns on shortages, systems are much more responsive to the needs of customers and dealers.

Replenishment Cycles. Over my career, the replenishment cycles (lead times) have been reduced dramatically. It starts with the order frequency being increased. Most of the major vendors today offer daily stock orders. From a biweekly or weekly stock order to daily is a very significant improvement. With the increased order frequency the order size is reduced, allowing the vendors to turn around stock orders much more quickly. Transportation logistics have also improved. Today “best practice” vendors have replenishment cycles consistently approaching two to three days. That consistency leads to differing inventory levels and much better serviceability. That is truly something to brag about in the marketplace.

Delivery Systems. From customers walking into dealer/distributor stores to using the telephone, to the Internet and parts kiosks, delivery systems have become much more user friendly. Electronic catalogs allow customers and technicians to determine their own parts requirements, and use of the “shopping cart” online order style for customer convenience and responsiveness has become much more common.

Operating Standards. The goals are more evident, clear and visible. Put away every stock order the same day it is received. Find every part that the dealer is short the day of the order, and communicate with the customer as to where the part is available before the end of the day. Ship every order the same day it is ordered. Simple goals that make a difference to the customers. Isn’t that what we are here to do?

So with all of these improvements, why shift the emphasis? I am not sure we can do much better in the support systems, but I want to move the solution closer to the customers. In the words of Jack Welsh, “When the world around you is changing at a faster pace than you are, the end is near.” Let’s look at the world around us.

Amazon offers a “club” for frequent buyers called Prime. This comes with perks for the customers – access to a lending library, access to streaming videos, elimination of freight charges, to name a few. American Express has their “member rewards” and catalog and Internet retail sales, plus entertainment venues for select card members. Visa and Master Card offer their programs, too. Everyone is trying hard to differentiate themselves in the retail world from their competitors.

I believe that the differentiation that used to exist with parts availability has been eliminated. Almost every major vendor in the capital goods industries provides similar levels of availability. The large differences have completely disappeared. Availability is good from everyone. So, we need to find enhanced serviceability standards and methods.

Perhaps convenience will become more of an issue. We could have supply items “stores” more conveniently located to the customer jobsites. We could bring our parts to jobsites with vans and “Sprinter” type vehicles, rather than waiting for our customers to order from us. We should help customers with their purchasing. We could deliver parts to the customer – what a concept.

With the Opportunity Model in the PSOH, we should know what the customer will need, discuss this with the customer, and make buying easier for them – not just easier for those of us in the distribution channel.

The time is now.